Exhibit 10.16
ARYX THERAPEUTICS,
INC.
NON-EMPLOYEE DIRECTOR
COMPENSATION
Cash Compensation
Arrangements
In 2008, the Compensation Committee
retained Radford Surveys + Consulting, or Radford, an
independent compensation consulting firm, to provide us and the
Compensation Committee with assistance in reviewing our
non-employee director compensation. After reviewing the Radford
report and related recommendations, the Compensation Committee and
Board revised our cash compensation arrangement for non-employee
directors, effective January 1, 2009, as follow:
·
a $20,000 annual retainer for
service as a Board member;
·
a $15,000 or $7,500 supplemental
annual retainer for service as chairman or member of the Audit
Committee, respectively;
·
a $10,000 or $5,000 supplemental
annual retainer for service as chairman or member of the
Compensation Committee, respectively;
·
a $5,000 or $2,500 supplemental
annual retainer for service as chairman or member of the Nominating
and Corporate Governance Committee, respectively;
·
a $5,000 supplemental annual
retainer for services as lead independent director of the Board;
and
·
$2,000 for each Board meeting
attended in person ($1,000 for meetings attended by video or
telephone conference).
We continue to reimburse our
non-employee directors for their reasonable expenses incurred in
attending meetings of our Board and committees of the
Board.
2007 Non-Employee
Directors’ Stock Option Plan
Our 2007 Non-Employee
Directors’ Stock Option Plan, or 2007 Directors’ Plan,
became effective in connection with our initial public offering in
November 2007. The 2007 Directors’ Plan provides for the
automatic grant of nonstatutory stock options to purchase shares of
our common stock to our non-employee directors over their period of
service on our Board. As of December 31, 2008, the number of
shares of common stock that may be issued under the 2007
Directors’ Plan is 266,662 shares. The number of shares
of common stock reserved for issuance will automatically increase
on January 1st of each year through and including
January 1, 2017, by the excess of (a) the number of
shares of common stock subject to options granted during the
preceding calendar year, over (b) the number of shares added
back to the share reserve during the preceding calendar year. If
any option expires or terminates for any reason, in whole or in
part, without having been exercised in full, the shares of common
stock not acquired under such option will become available for
future issuance under the 2007 dire
