Summary of Oral Agreement for Payment of Services Between Adolor Corporation and Its Board of Directors (May 2008)
Adolor Corporation has an oral agreement with its non-employee directors outlining their compensation, effective May 2008. Non-employee directors receive a combination of cash payments, company stock, and stock options for their board and committee service. Compensation includes annual retainers, per-meeting fees, and additional payments for committee chairs and the board chairman. Directors are also granted stock options upon joining and annually, with specific vesting schedules and terms. The agreement is governed by the company's 2003 Stock-Based Incentive Compensation Plan.
Exhibit 10.21
Summary of Oral Agreement for Payment of Services
between Adolor Corporation
and
its Board of Directors
effective as of May 2008
Adolor Corporation (the “Company”) compensates its non-employee directors through a mix of base cash compensation and stock option grants. The elements of the non-employee directors’ compensation are as follows:
| Cash Compensation: | ||||
| • Board Service Annual Retainer ($15,000 cash, paid quarterly; $5,000 in Company common stock) | $ | 20,000 | ||
| • Per Meeting Fees | $ | 2,000/ | mtg. | |
| • Committee Service Fees | ||||
| - Audit Committee Chair Annual Retainer ($2,500 cash, paid quarterly; | $ | 6,500 | ||
| - Compensation and Governance Committee Chair Annual Retainers | $ | 2,500 | ||
| - Committee Chair Member Retainer (paid in cash, quarterly) | $ | 2,500 | ||
| • Chairman of the Board Annual Retainer (paid in Company common stock) | $ | 13,500 | ||
| Options: | ||||
| • Initial Grant (upon first election or appointment to Board) | 25,000 | shares | ||
| • Annual Grant (upon the date of the Annual Meeting) | 20,000 | shares | ||
Under the Company’s Amended and Restated 2003 Stock-Based Incentive Compensation Plan (the “2003 Plan”), the initial grant of 25,000 stock options to a non-employee director is made at the time of the earlier to occur of such director’s appointment as a director by the Board or first election to the Board by stockholders. This initial award vests over a three-year period, with 33.3% becoming exercisable on each anniversary of the grant date. Upon the date of re-election to the Board at the Annual Meeting, a non-employee director will receive an annual grant of 20,000 stock options that vest in full on the first anniversary of the date of grant. The Board of Directors also may grant options to non-employee directors in addition to the automatic grants described above. Stock options granted to non-employee directors have a ten-year term and are granted with an exercise price equal to the fair market value of our common stock on the date of grant.
