Non-Employee Director Compensation Policy
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
OF THE BOARD OF DIRECTORS
ROCKLEY PHOTONICS HOLDINGS LIMITED
Non-employee members of the board of directors (the Board) of Rockley Photonics Holdings Limited (the Company) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Policy (Policy). This Policy will be effective upon the closing of the business combination by and among SC Health Corporation, Rockley Photonics Limited, Rockley Mergersub Limited and the Company, and shall apply with respect to services rendered following such date. The cash compensation and equity grants described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a Non-Employee Director), unless such Non-Employee Director declines the receipt of such cash compensation or equity grants by written notice to the Company. This Policy shall remain in effect until it is revised or rescinded by further action of the Board. The terms and conditions of this Policy shall supersede any prior cash or equity compensation arrangements between the Company and its directors.
Annual Cash Compensation
Commencing at the beginning of the first calendar quarter following the effective date of this Policy, 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 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.
Annual Cash Retainer for Board Service
All Non-Employee Directors: $45,000
Lead Director: $23,000 (premium in addition to above)
Annual Cash Retainer for Committee Service
In addition, a Non-Employee Director shall be eligible to receive the following additional annual cash retainers for service in the following roles:
Nominating and Corporate Governance: $10,000
Nominating and Corporate Governance: $5,000
Non-Employee Directors shall be granted the following restricted stock unit (RSU) awards under the Companys 2021 Stock Incentive Plan or its successor (the Plan):
Annual Awards: On the first business day following the conclusion of each regular annual meeting of the Companys shareholders, commencing with the 2022 annual meeting, each Non-Employee Director who will continue serving as a member of the Board thereafter shall receive a grant of RSUs (Annual RSU Award) under the Plan with respect to a number of shares of common stock having an aggregate fair market value as determined under the Plan equal to $162,000 calculated on the date of grant. In addition, if a Non-Employee Director is elected to the Board after the 2022 annual meeting of shareholders and other than at an annual meeting of shareholders, the Non-Employee Director shall receive an Annual RSU Award upon election to the Board that is prorated based upon the number of calendar days remaining before (1) the next annual meeting of shareholders, if scheduled, or (2) the date of the first anniversary of the last annual meeting of shareholders, if the next annual meeting is not yet scheduled.
Each Annual RSU Award shall become fully vested, subject to the applicable Non-Employee Directors continued service as a director, on the earliest of the 12-month anniversary of the date of grant, the next annual meeting of shareholders following the date of grant or the consummation of a Change in Control (as defined in the Plan).
Initial Awards: Except as provided below, each Non-Employee Director who first joins the Board on or after the effective date of this Policy and who was not previously an employee of the Company or a parent or subsidiary thereof shall receive a grant of RSUs (Initial RSU Award) under the Plan on the date of his or her election to the Board with respect to a number of shares of common stock having an aggregate fair market value as determined under the Plan equal to $220,000 calculated on the date of grant. Subject to the applicable Non-Employee Directors continued service as a director, the Initial RSU Award shall initially vest as to 1/3 of the total number of shares subject to the award on the earlier of the first anniversary of the date of grant or the next annual meeting of the Companys shareholders, and in each of the next two calendar years following the year of the initial vesting date, 1/3 of the total number of shares shall vest on the earlier of the 12-month anniversary of the prior annual meeting of shareholders or the current year annual meeting of shareholders. Notwithstanding the foregoing, each Initial RSU Award shall become 100% vested if a Change in Control as defined in the Plan occurs during such Non-Employee Directors service.
Each Non-Employee Director who joins the Board before the effective date of this Policy but will continue serving as a member of the Board thereafter will be treated for purposes of this Policy as having first joined the Board on the effective date of this Policy and shall therefore be eligible for an Initial RSU Award.
Each Non-Employee Director who is eligible for an Initial RSU Award but who joins the Board prior to the date that the RSUs have been registered under applicable U.S. securities laws will not receive the grant until such registration is effective, and such grant shall be subject to the Non-Employee Directors continued service through such date of grant. However, for purposes of determining the number of shares of common stock subject to such Initial RSU Award and the applicable vesting schedule, the date on which the Non-Employee Director joins the Board (or if later, the effective date of this Policy) shall be treated as the date of grant of the award.
The RSUs shall be subject to the terms and conditions of the Plan (including the annual limits on non-employee director grants set forth in the Plan) and an RSU agreement, including attached exhibits, in substantially the same form approved by the Board for employee grants subject to the terms specified above.
Each Non-Employee Director may elect to defer 100% of their RSUs subject to the terms of a deferral program approved by the Board.
The Board may also approve other equity grants to Non-Employee Directors under the Plan in addition to or lieu of grants described in this Policy.
The Company shall reimburse directors for reasonable and customary out-of-pocket expenses incurred by the directors in attending board and committee meetings and otherwise performing their duties and obligations as directors.