Exhibit 10.3
Second Amended and Restated
Non-Employee Director Compensation Policy
DermTech, Inc.
The Board of Directors of DermTech, Inc. (the “Company”) has approved the following Second Amended and Restated Non-Employee Director Compensation Policy (this “Policy”), which establishes compensation to be paid to non-employee directors of the Company, effective as of July 18, 2022 (the “Effective Time”), to provide an inducement to obtain and retain the services of qualified persons to serve as members of the Company’s Board of Directors. This Policy amends and restates the Company’s Amended and Restated Non-Employee Director Compensation Policy, dated March 28, 2021, in its entirety.
Applicable Persons
This Policy shall apply to each director of the Company who is not an employee of the Company or any Affiliate (each, a “Non-Employee Director”). “Affiliate” means an entity which is a direct or indirect parent or subsidiary of the Company, as determined pursuant to Section 424 of the Internal Revenue Code of 1986, as amended.
Restricted Stock Unit Grants
1.Annual Restricted Stock Unit Grants to Incumbent Non-Employee Directors
Annually, on the date of the first meeting of the Board of Directors held following the Company’s annual meeting of stockholders in each year commencing in 2022 (each such meeting, the “Annual Stockholder Meeting”), each incumbent Non-Employee Director shall be granted a number of restricted stock units (“RSUs”) (each RSU representing the contingent right to receive one share of the Company’s common stock) that represents a market value of $170,000 based on the most-recent closing price of the Company’s common stock prior to the date of such grant, unless the Compensation Committee of the Board of Directors (the “Compensation Committee”) determines that such a grant would exceed a burn rate threshold as established by the Compensation Committee based on guidance from compensation consultants or from ISS (or similar organizations), and/or based on its own analysis, in which case the number of RSUs granted may be a reduced (but not by more than 50%) by the Compensation Committee (such grants, the “Annual Grants”).
2.Initial Restricted Stock Unit Grants for Newly Appointed or Elected Directors
Each new Non-Employee Director on or after the Effective Time shall be granted a New Director Grant and a Pro Rata Annual Grant, each in the form of RSUs approved by the Board of Directors effective on his or her initial appointment or election to the Board of Directors, as follows:
(i) A “New Director Grant” consisting of the same number of RSUs as the most recent Annual Grant made to each incumbent Non-Employee Director, unless the Board of Directors or the Compensation Committee determines to adjust this otherwise;
(ii) A “Pro Rata Annual Grant” consisting of a number of RSUs calculated as follows: (a) that same number of RSUs as the most recent Annual Grant made to each incumbent Non-Employee Director, unless the Board of Directors or the Compensation Committee determines to adjust this otherwise, multiplied by (b) the number of whole months between the date that such new Non-Employee Director is appointed to the Board and the first anniversary of the most recent annual meeting of the stockholders of the Company divided by 12.
4.Terms for All Restricted Stock Unit Grants
Second Amended and Restated Non-Employee Director Compensation Policy
Unless otherwise specified by the Board of Directors or the Compensation Committee at the time of grant:
(i) Annual Grants shall vest in four equal quarterly installments over the one-year period following the grant date, subject to the continued service of the Non-Employee Director. The release date for the shares underlying the RSUs shall be the date that the RSU grant is fully vested, unless an election is made in advance of the grant for the release date to be the first business day in January of the year following the date that the RSU grant is fully vested.
(ii) New Director Grants shall vest in three equal annual installments over the three-year period following the grant date, subject to the continued service of the Non-Employee Director. The release dates for vested shares underlying the RSUs shall be the three vesting dates described above unless an election is made in advance of the grant for the three release dates to be the first business day in January of the year following each vesting date, respectively.
(iii) Pro Rata Annual Grants shall vest in full on the last vesting date of the most recent Annual Grants made prior the grant date such Pro Rata Annual Grants, subject to the continued service of the Non-Employee Director. The release date for the shares underlying the RSUs shall be the date that the RSUs are fully vested, unless an election is made in advance of the grant for the release date to be the first business day in January of the year following the date that the RSU grant is fully vested.
All of the above RSU grants shall contain such other terms and conditions as set forth in the form of Restricted Stock Unit Agreement approved by the Board of Directors or the Compensation Committee.
Annual Fees
Each Non-Employee Director serving on the Board of Directors and the Audit Committee, Compensation Committee and/or Nominating and Corporate Governance Committee, as applicable, shall be entitled to annual fees in the following amounts (the “Annual Fees”):
Board of Directors or Committee of Board of Directors | Annual Retainer Amount for Member | Annual Retainer Amount for Chair | ||||||
| Board Member | $40,000 | $80,000 | ||||||
| Audit Committee | $10,000 | $20,000 | ||||||
| Compensation Committee | $7,000 | $14,000 | ||||||
| Nominating and Corporate Governance Committee | $5,000 | $10,000 | ||||||
Except as otherwise set forth in this Policy, all Annual Fees shall be paid for the period from January 1 through December 31 of each year. Such Annual Fees shall be paid in cash.
Annual Fees payable to Non-Employee Directors shall be paid quarterly in arrears promptly following the end of each fiscal quarter, provided that (i) the amount of such payment shall be prorated for any portion of such quarter that such director was not serving in the applicable capacity as a member or chair of the Board of Directors or committee thereof and (ii) no fee shall be payable in respect of any period prior to the date such director was elected or appointed to serve in the applicable capacity as a member or chair of the Board of Directors or committee thereof.
Expenses
Upon presentation of documentation of such expenses reasonably satisfactory to the Company, each Non-Employee Director shall be reimbursed for his or her reasonable out-of-pocket business
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Second Amended and Restated Non-Employee Director Compensation Policy
expenses incurred in connection with attending meetings of the Board of Directors and committees thereof or in connection with other business related to the Board of Directors.
Amendments
The Compensation Committee shall periodically review this Policy to assess whether any amendments in the type and amount of compensation provided herein should be made and shall make recommendations to the Board of Directors for its approval of any amendments to this Policy.
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