Document:

fgen-ex106_129.htm

 

Exhibit 10.6

 

FibroGen, Inc.

Non-Employee Director Compensation Policy

 

This Non-Employee Director Compensation Policy (the “Policy”) documents the terms and conditions of the cash and equity compensation that non-employee members of the Board of Directors (the “Board”) of FibroGen, Inc. (“FibroGen”) may earn for their service on the Board from and after the initial public offering of the common stock of FibroGen.

 

Eligible Directors

Only members of the Board who are not concurrently employees of FibroGen are eligible for compensation under this Policy (each such member, a “Director”). Any director may also decline compensation per policy of their affiliated entity or for any other reason prior to the start of the period of service to which the compensation relates.

 

Annual Cash Compensation

The annual cash compensation set forth below is payable in equal quarterly installments, in arrears, on the last day of each quarter in which the service occurred, pro-rated for any partial quarters of service. All annual cash fees are vested upon payment. 

 

	
1.
	
Annual Board Service Retainer: 

All Directors: $ 50,000

 

2.Annual Committee Chair Service Fee:

a.Chairman of the Audit Committee: $20,000

b.Chairman of the Compensation Committee: $ 17,500

c.Chairman of the Nominating and Governance Committee: $10,000

 

3.Annual Committee Member (non-Chair) Service Fee: 

a.Audit Committee: $10,000

b.Compensation Committee: $7,500

c.Nominating and Governance Committee: $5,000

 

	
4.
	
Annual Lead Independent Director Retainer: 

Lead Director: $22,500

 

Equity Compensation

Equity awards will be granted under the FibroGen, Inc. 2014 Equity Incentive Plan (or any successor thereto, the “Plan”). All stock options granted under this policy will be non-statutory stock options, with an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Company common stock on the date of grant, and a term of ten (10) years from the date of grant (subject to earlier termination in connection with a termination of service or a corporate transaction as provided in the Plan). All equity awards granted under this Policy will be documented on the applicable form of equity award agreement most recently approved for use by the Board (or a duly authorized committee thereof) for Directors. The terms of the equity awards described in this Policy will be automatically adjusted upon any Capitalization Adjustment (as defined and provided for under the Plan).

 

1.Initial Grant: On the date of the Director’s initial election or appointment to the Board (or, if such date is not a market trading day, the first market trading day thereafter), the Director will be automatically, and without further action by the Board, granted stock options covering 10,400 shares of FibroGen’s common stock. Such options will vest in equal quarterly installments over three years from the grant date, subject to the Director’s Continuous Service. A Director who, in the one year prior to his or her initial election to serve on the Board as a Director, served as an employee of FibroGen or one of its subsidiaries, will not be eligible for an initial grant.

1.

 

 

Exhibit 10.6

 

2.Annual Grant: On the date of each Company annual stockholder meeting, each person who is elected or appointed as a Director, and each other Director who continues to serve as a Director immediately after such annual stockholder meeting, will be automatically, and without further action by the Board, granted (a) stock options covering 7,800 shares of FibroGen’s common stock, and (b) RSUs covering 4,700 shares of FibroGen common stock. Such options and RSUs will vest upon the earlier of (x) June 6 of the following year and (y) the following year’s annual stockholder meeting, subject to the Director’s Continuous Service. 

 

3.Prorated Annual Grants. If a Director is elected or appointed to the Board at a time other than at the annual stockholder meeting, then on the date of such election or appointment (or, if such date is not a market trading day, the first market trading day thereafter), the Director will be automatically, and without further action by the Board, granted stock options covering the number of shares of FibroGen’s common stock equal to the product of each of (x) 7,800 shares and (y) 4,700 RSUs, by (z) the Applicable Fraction (a “Prorated Annual Grant”). The Applicable Fraction means a fraction with (a) a numerator equal to the number of days between the date of the Director’s initial election or appointment to the Board and the date which is the first anniversary of the date of the most recent annual stockholder meeting occurring before the Director is elected or appointed to the Board, and (b) a denominator equal to 365. 

 

4.Vesting. Vesting of awards granted under this Policy will cease if the Director resigns from the Board or otherwise ceases to serve as a Director, unless the Board determines that the circumstances warrant continuation of vesting. All equity awards granted under this Policy will vest in full immediately prior to a Change in Control (as defined in the Plan), subject to the Director’s Continuous Service (as defined in the Plan) as of the day prior to the closing of the Change in Control.

 

Reimbursement of Expenses

The Company will reimburse Directors for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in Board meetings.

 

Philosophy

This Policy is designed to attract and retain experienced, talented individuals to serve on the Board. The Board anticipates that the Board, or a duly authorized committee thereof, will generally review Director compensation on an annual basis following the initial public offering. The Policy, as amended from time to time, may take into account the time commitment expected of Directors, best practices and market rates in Director compensation, the economic position of FibroGen, broader economic conditions, historical compensation structure, the advice of the compensation consultant that the Compensation Committee or the Board may retain from time to time, and the potential dilutive effect of equity awards on our stockholders. 

 

Under this Policy, Directors receive cash compensation in the form of retainers to recognize their day to day contributions, the level of responsibility as well as the necessary time commitment involved in serving in a leadership role and/or on committees. Directors also receive equity compensation because we believe that stock ownership provides an incentive to act in ways that maximize long-term stockholder value. Further, we believe that stock-based awards are essential to attracting and retaining talented Board members. When options are granted, these options have an exercise price equal to not less than the fair market value of FibroGen’s Common Stock on the date of grant, so that options provide a return only if the fair market value appreciates over the period in which the option vests and remains exercisable. We believe that the vesting acceleration provided in the case of a change in control is consistent with market practices and is critical to attracting and retaining high quality Directors.

 

2.

 

Exhibit 10.6

 

Adopted: September 17, 2014

Amended: March 4, 2015

Amended: February 23, 2016, Effective as of the 2016 Annual Meeting of Stockholders

Amended: June 5, 2018

Amended: June 5, 2019

 

3.fgen-ex107_130.htm

 

Exhibit 10.7

 

September 18, 2019

 

James Schoeneck

4748 Plummer Court

San Diego, California 92130

 

Dear Jim,

 

FibroGen, Inc. is pleased to offer you the position of Interim Chief Executive Officer. The effective date ("Effective Date") of your employment was August 26, 2019. 

 

The terms of this offer of employment are as follows:

 

	
1.
	
Compensation. Per approval of the FibroGen Compensation Committee on September 18, 2019 FibroGen will pay you a salary of $66,666 semi-monthly (equivalent to $1,600,000 per year), payable in periodic installments on our regular paydays in accordance with FibroGen's standard payroll policies. Your salary will be payed retroactively to August 26, 2019. The position is classified as exempt and therefore not eligible for overtime pay. The first and last payment by FibroGen to you will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

 

	
2.
	
Stock Options and Restricted Stock Units. Per approval of the FibroGen Compensation Committee on September 18, 2019, you have been granted the following equity incentive grants pursuant to the terms and conditions of the Equity Plan (the “Equity Plan”), as may be amended or modified from time to time:

	
 
	
•
	
a stock option to purchase 97,100 shares of FibroGen's Common Stock with an exercise price set at the fair market value on the date of grant (“Stock Options”); and 

	
 
	
•
	
a grant of 57,300 restricted stock units relating to shares of FibroGen’s Common Stock (“RSUs”).

 

The vesting schedule for the above equity awards will be as follows:

 

50% of the Awards shall vest, subject to continued service as Interim CEO, on the earlier of February 26, 2020 or the hiring of a new CEO, and

 

50% shall vest on August 26, 2020, subject to continued service as Interim CEO, provided that if your Interim CEO service terminates between February 26, 2020 and August 26, 2020, the Awards vest pro-rata at the time service terminates based on the number of months of Interim CEO service past February 26, 2020 (rounding up for partial months) as a fraction of the 6-month period 

 

The actual number of shares subject to the grant hereunder may be adjusted, if required, for events such as stock splits, stock dividends, etc. pursuant to the Equity Plan. 

 

Expenses. FibroGen will reimburse you for: 

	
 
	
o
	
Lodging and related household/incidental expenses in San Francisco

	
 
	
o
	
Airfare and ground transportation, including car rental expenses if needed, while traveling to/from and within San Francisco 

	
 
	
o
	
Meals and groceries while in San Francisco or in transit

	
 
	
o
	
Any business related expenses will be covered by FibroGen as would normally be covered as an employee of the company

 

Additionally any expense that is deemed taxable will be grossed up as part of the agreement.

 

 

 

Exhibit 10.7

 

	
3.
	
Benefits. During the term of your employment, you will be eligible to participate in FibroGen’s benefits program, which may include FibroGen's vacation benefits of 4 weeks’ vacation per service year and other employee benefits such as medical, vision and dental health insurance, covering employees and officers. These benefits may be modified or subject to change from time to time. A copy of FibroGen's current benefits summary has been provided to you.

 

	
4.
	
Employment Eligibility. You will also be required to sign the Employment Eligibility Verification (Form I-9).

 

	
5.
	
Proprietary Information. You will abide by FibroGen’s strict company policy that prohibits any new employee from using or bringing with them from any prior employer any proprietary information, trade secrets, proprietary materials or processes of such former employers. Moreover, because FibroGen’s proprietary information is extremely important, this offer of employment is expressly subject to your execution of the enclosed Confidential Information, Secrecy and Invention Agreement for Employees. 

 

	
6.
	
At Will Employment. You should be aware that your employment with FibroGen is for no specified period and constitutes "at-will" employment. As a result, both FibroGen and you are free to terminate the employment relationship at any time, for any reason or for no reason, and with or without advance notice. The changing needs of FibroGen could also result in changes to certain aspects of your employment, such as compensation, responsibilities, location, etc. These provisions expressly supersede any previous representations, oral or written. Your at-will employment cannot be modified or amended except by written agreement signed by both you and the Chair of the Board of Directors of FibroGen.

 

	
7.
	
Arbitration. Any dispute or claim, including all contract, tort, discrimination, and statutory claims, arising under or relating to your employment or termination of your employment with FibroGen (“Arbitrable Claim(s)”) shall be resolved by arbitration. “Arbitrable Claims” shall not include: (1) claims under applicable workers’ compensation law, (2) unemployment insurance claims, and (3) any disputes or claims relating to or arising out of the misuse or misappropriation of trade secrets. You and FibroGen hereby waive any rights each may have to a jury trial in regard to Arbitrable Claims. Arbitration for Arbitrable Claims will be conducted by the American Arbitration Association (“AAA”) in San Francisco (or other mutually agreed upon city) under the Employment Arbitration Rules and Mediation Procedures (“AAA Rules”). The AAA Rules are available at https://www.adr.org/sites/default/files/EmploymentRules_Web_0.pdf, or can be obtained by contacting the FibroGen Human Resources department or by calling AAA at 800-778-7879. FibroGen will pay the fees and costs of the arbitrator. The arbitrator shall have the same authority as a court to award equitable relief, damages, costs, and fees (excluding the costs and fees for the arbitrator) as provided by law for the particular claims asserted. The arbitrator shall also have exclusive authority to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, enforceability or validity of the arbitration agreement. Such arbitration shall be final and binding on the parties and shall be the exclusive remedy for Arbitrable Claims.

 

In the event of conflict between the terms contained in this offer letter and any other document, the terms of this offer letter (including any amendment to this letter) shall control. FibroGen reserves the right to amend the terms contained in this offer letter from time to time. 

 

Enclosed are two original copies of this offer letter. If all of the foregoing terms are satisfactory and acceptable to you, please sign each original and (i) return one to me within in the enclosed envelope, and (ii) save the other original for yourself. Please also complete the following enclosed forms and return them to me with your countersigned offer letter:

 

	
•
	
FibroGen Arbitration Agreement

	
•
	
Confidential Information, Secrecy and Inventions Agreement

 

 

 

 

Exhibit 10.7

 

Please do not hesitate to contact me should you have any questions or if I can be of additional assistance. Thank you.

 

Sincerely,

 

 

 

	
/s/ Richard Farley

	
Richard Farley 

Vice President, Human Resources 

 

 

 

ACCEPTED AND AGREED TO:

 

 

 

	
/ s/ James Schoeneck
	
 
	
10/3/19

	
James Schoeneck 
	
 
	
Date

 

 

 

 

	
Enclosures:
	
FibroGen Arbitration Agreement

	

	
Confidential Information, Secrecy and Inventions Agreement

	

	
Duplicate Letter

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