Non-Employee Director Compensation Policy
TALARIS THERAPEUTICS, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
The purpose of this Non-Employee Director Compensation Policy (the Policy) of Talaris Therapeutics, Inc. (the Company) is to provide a total compensation package that enables the Company to attract and retain, on a long-term basis, high-caliber directors who are not employees or officers of the Company or its subsidiaries (Outside Directors). This Policy will become effective as of the effective time of the registration statement for the Companys initial public offering of equity securities (the Effective Date). In furtherance of the purpose stated above, all Outside Directors shall be paid compensation for services provided to the Company as set forth below:
Annual Retainer for Board Membership: $35,000 for general availability and participation in meetings and conference calls of our Board of Directors, to be paid quarterly in arrears, pro-rated based on the number of actual days served by the director during such calendar quarter. No additional compensation will be paid for attending individual meetings of the Board of Directors.
Additional Annual Retainer for Non-Executive Chair:
Additional Annual Retainers for Committee Membership:
Audit Committee Chair:
Audit Committee member:
Compensation Committee Chair:
Compensation Committee member:
Nominating and Corporate Governance Committee Chair:
Nominating and Corporate Governance Committee member:
Chair and committee member retainers are in addition to retainers for members of the Board of Directors. No additional compensation will be paid for attending individual committee meetings of the Board of Directors.
Initial Award: An initial, one-time stock option award (the Initial Award) to purchase 29,002 shares will be granted to each new Outside Director upon his or her election to the Board of Directors, which shall vest in equal annual installments over three years from the date of grant, provided, however, that all vesting shall cease if the director ceases to provide services to the Company in any capacity. The Initial Award shall expire ten years from the date of grant, and
shall have a per share exercise price equal to the Fair Market Value (as defined in the Companys 2021 Stock Option and Incentive Plan) of the Companys common stock on the date of grant. This Initial Award applies only to Outside Directors who are first elected to the Board of Directors subsequent to the Effective Date.
Annual Award: On each date of each Annual Meeting of Stockholders of the Conmpany following the Effective Date (the Annual Meeting), each continuing Outside Director, other than a director receiving an Initial Award, will receive an annual stock option award (the Annual Award) to purchase/covering 14,501 shares, which shall vest in full upon the earlier of (i) the first anniversary of the date of grant or (ii) the date of the next Annual Meeting; provided, however, that all vesting shall cease if the director ceases to provide services to the Company in any capacity, unless the Board of Directors determines that the circumstances warrant continuation of vesting. Such Annual Award shall expire ten years from the date of grant, and shall have a per share exercise price equal to the Fair Market Value (as defined in the Companys 2021 Stock Option and Incentive Plan) of the Companys common stock on the date of grant.
Sale Event Acceleration: All outstanding Initial Awards and Annual Awards held by an Outside Director shall become fully vested and exercisable upon a Sale Event (as defined in the Companys 2021 Stock Option and Incentive Plan).
The Company will reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending meetings of the Board of Directors or any committee thereof.
Maximum Annual Compensation
The aggregate amount of compensation, including both equity compensation and cash compensation, paid by the Company to any Outside Director in a calendar year for services as an Outside Director shall not exceed $800,000; provided, however, that such amount shall be $1,200,000 for the calendar year in which the applicable Outside Director is initially elected or appointed to the Board of Directors; (or such other limits as may be set forth in Section 3(b) of the Companys 2021 Stock Option and Incentive Plan or any similar provision of a successor plan). For this purpose, the amount of equity compensation paid in a calendar year shall be determined based on the grant date fair value thereof, as determined in accordance with FASB ASC Topic 718 or its successor provision, but excluding the impact of estimated forfeitures related to service-based vesting conditions.
Adopted April 15, 2021.