Non-Employee Director Compensation Policy, as amended effective April 1, 2020
EX-10.3 4 exhibit103-q12020.htm EXHIBIT 10.3 Exhibit
CASTLE BIOSCIENCES, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
ADOPTED: JUNE 8, 2019
AMENDED: APRIL 1, 2020
Each member of the Board of Directors (the “Board”) of Castle Biosciences, Inc. (the “Company”) who is a non-employee director of the Company (each such member, a “Non-Employee Director”) will receive the compensation described in this Non-Employee Director Compensation Policy (the “Director Compensation Policy”) for his or her Board service following the closing of the initial public offering of the Company’s common stock (the “IPO”).
The Director Compensation Policy will be effective upon the execution of the underwriting agreement in connection with the IPO (the date of such execution being referred to as the “IPO Date”). The Director Compensation Policy may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.
A Non-Employee Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash is to be paid or equity awards are to be granted, as the case may be.
Annual Cash Compensation
Commencing at the beginning of the first calendar quarter following the IPO Date, each Non-Employee Director will receive the cash compensation set forth below for service on the Board. The annual cash compensation amounts will be payable in equal quarterly installments, in arrears following the end of each quarter in which the service occurred, pro-rated for any partial months of service. All annual cash fees are vested upon payment.
1. Annual Board Service Retainer:
a. All Eligible Directors: $40,000
2. Annual Board Chair Service Retainer (in addition to Board Service Retainer):
a. Chair of the Board: $40,000
3. Annual Committee Member Service Retainer (committee chairs will not receive this retainer in addition to the Committee Chair Service Retainer):
a. Member of the Audit Committee: $10,000
b. Member of the Compensation Committee: $7,500
c. Member of the Nominating and Corporate Governance Committee: $5,000
4. Annual Committee Chair Service Retainer:
a. Chair of the Audit Committee: $20,000
b. Chair of the Compensation Committee: $15,000
c. Chair of the Nominating and Corporate Governance Committee: $10,000
Equity awards will be granted under the Company’s 2019 Equity Incentive Plan (the “Plan”), adopted in connection with the IPO. All stock options granted under this policy will be Nonstatutory Stock Options (as defined in the Plan), with a term of ten years from the date of grant and an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying common stock of the Company on the date of grant.
(a)Automatic Equity Grants.
(i) Initial Grant for New Directors. Without any further action of the Board, each person who, after the IPO Date, is elected or appointed for the first time to be a Non-Employee Director will automatically, upon the date of his or her initial election or appointment to be a Non-Employee Director (or, if such date is not a market trading day, the first market trading day thereafter), be granted a Nonstatutory Stock Option to purchase 16,000 shares of common stock of the Company (the “Initial Option Grant”). 12/36ths of the Initial Option Grant will vest on the one year anniversary of the Vesting Commencement Date (as defined below) and 1/36th of the Initial Option Grant will vest in a series of 24 successive equal monthly installments over the two-year period measured from the Vesting Commencement Date. The “Vesting Commencement Date” means the 15th day of the month in which the Initial Option Grant was granted; provided that if the Initial Option Grant was granted after the 15th day of a month, the Vesting Commencement Date shall be the 1st day of the month immediately following the month in which the Initial Option Grant was granted.
(ii) Annual Grant. Without any further action of the Board, at the close of business on the date of each Annual Meeting of Stockholders following the IPO, each person who is then a Non-Employee Director will automatically be granted a Nonstatutory Stock Option to purchase 8,000 shares of common stock (the “Annual Option Grant”). Each Annual Option Grant will vest on the one-year anniversary of the date of grant.
(b) Vesting; Change in Control. All vesting is subject to the Non-Employee Director’s “Continuous Service” (as defined in the Plan) on each applicable vesting date. Notwithstanding the foregoing vesting schedules, for each Non-Employee Director who remains in Continuous Service with the Company until immediately prior to the closing of a “Change in Control” (as defined in the Plan), the shares subject to his or her then-outstanding equity awards that were granted pursuant to this policy will become fully vested immediately prior to the closing of such Change in Control.
(c) Remaining Terms. The remaining terms and conditions of each award, including transferability, will be as set forth in the Company’s Director Option Grant Package in the form adopted from time to time by the Board.
The Company will reimburse Non-Employee Director for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in Board and committee meetings; provided, that the Non-Employee Director timely submit to the Company
appropriate documentation substantiating such expenses in accordance with the Company’s travel and expense policy, as in effect from time to time.