UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Reata Pharmaceuticals, Inc.
(Name of Issuer)
Class A Common Stock, par value $0.0001 per share
(Title of Class of Securities)
75615P 10 3
(CUSIP Number)
Thomas Dyrberg
Novo A/S
Tuborg Havnevej 19
Hellerup, Denmark DK-2900
+45 3527 6592
Copy to:
B. Shayne Kennedy, Esq.
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
Telephone: (714) 540-1235
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
May 25, 2016
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is subject of this Schedule 13D, and is filing this statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (the “Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No.: 75615P 10 3 |
| 1. | Name of Reporting Person:
Novo A/S | |||||
| 2. | Check the Appropriate Box if a Member of Group (See Instructions): (a) ¨ (b) x
| |||||
| 3. | SEC Use Only:
| |||||
| 4. | Source of Funds:
WC | |||||
| 5. | Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e):
¨ | |||||
| 6. | Citizenship or Place of Organization:
Denmark | |||||
| Number of Shares Beneficially Owned By Each Reporting Person With:
|
7. | Sole Voting Power:
3,367,763 (1) | ||||
| 8. | Shared Voting Power:
0 | |||||
| 9. | Sole Dispositive Power:
3,367,763 (1) | |||||
| 10. | Shared Dispositive Power:
0 | |||||
| 11. |
Aggregate Amount Beneficially Owned by Each Reporting Person:
3,367,763 (1) | |||||
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares:
¨ | |||||
| 13. | Percent of Class Represented By Amount In Row (11):
35.7% (2) | |||||
| 14. | Type of Reporting Person:
CO | |||||
| (1) | Comprised of 750,000 shares of Class A common stock and assumes the conversion of 2,617,763 shares of Class B common stock into Class A common stock on a one-for-one basis as more fully described herein. |
| (2) | As of May 26, 2016, the Issuer reported 6,818,401 shares of Class A common stock and 14,679,705 shares of Class B common stock outstanding (assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock) in the Issuer’s prospectus (Form 424B4) filed with the Securities and Exchange Commission on May 26, 2016. Beneficial ownership is based on conversion of only the 2,617,763 shares of Class B common stock held by Novo A/S into Class A common stock on a one-for-one basis. Assuming all 14,679,705 shares of Class B common stock are converted into Class A common stock, Novo A/S would beneficially own 15.7% of the Class A common stock. |
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| Item 1. | Security and Issuer |
On June 1, 2016, Reata Pharmaceuticals, Inc., a Delaware corporation (the “Issuer”), completed its initial public offering (“IPO”) of 5,500,000 shares of Class A common stock, par value $0.001 per share. The Issuer’s principal executive office is located at 2801 Gateway Drive, Suite 150, Irving, Texas 75063.
The Issuer has two classes of authorized common stock, Class A common stock and Class B common stock .The Class A common stock is registered under the Securities Exchange Act of 1934, as amended. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share, while each share of Class B common stock is entitled to three votes per share. Class B common stock is convertible at the election of the holder and (subject to certain limitations on conversion in the lock-up agreement discussed below) must irrevocably convert on a one-for-one basis into Class A common stock upon sale or transfer.
| Item 2. | Identity and Background |
| (a) | The reporting person (“Reporting Person”) is Novo A/S, a Danish limited liability company that is wholly owned by Novo Nordisk Fonden (the “Foundation”), a Danish commercial foundation. Novo A/S is the holding company in the group of Novo companies (currently comprised of Novo Nordisk A/S, Novozymes A/S and NNIT A/S) and is responsible for managing the Foundation’s assets, including its financial assets. Based on the governance structure of Novo A/S and the Foundation, the Foundation is not deemed to have any beneficial ownership of the securities of the Issuer held by Novo A/S. |
The name of each director and executive officer of both Novo A/S and the Foundation is set forth on Schedule I to this Schedule 13D.
| (b) | The business address of both Novo A/S and the Foundation is Tuborg Havnevej 19, 2900 Hellerup, Denmark. |
The residence or business address of each director and executive officer of both Novo A/S and the Foundation is set forth on Schedule I to this Schedule 13D.
| (c) | Novo A/S, a holding company that is responsible for managing the Foundation’s assets, provides seed and venture capital to development stage companies and invests in well-established companies within the life science and biotechnology sector. |
The Foundation is a Danish self-governing and profit-making foundation, whose objectives are to provide a stable basis for commercial and research activities undertaken by the group of Novo companies and to support scientific, humanitarian and social purposes through grants.
| (d) | Within the last five years, neither Novo A/S, the Foundation, nor any person named in Schedule I has been convicted in any criminal proceedings. |
| (e) | Within the last five years, neither Novo A/S, the Foundation, nor any person named in Schedule I was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. |
| Item 3. | Source and Amount of Funds or Other Consideration |
Between June 2006 and August 2010, through a series of financings, the Reporting Person purchased an aggregate of 16,701,334 convertible preferred shares (the “Preferred Stock”) of the Issuer (including shares accrued for dividends) at purchase prices ranging from $2.10 to $3.11 per share for an aggregate purchase price of $40,500,002. The purchase price of the Preferred Stock was paid by Novo A/S from its working capital. On November 30, 2010, the Preferred Stock was converted into common stock of the Issuer on a one-for-one basis. On January 6, 2016, the
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Issuer effected a 4.4-to-1 reverse split of its common stock and an automatic conversion for no additional consideration of such common stock into Class B common stock, which resulted in an aggregate of 3,795,757 shares of Class B common stock held by Novo A/S. On May 11, 2016, the Issuer effected a further 1.45-to-1 reverse split of its common stock, which resulted in an aggregate of 2,617,763 shares of Class B common stock held by Novo A/S prior to the Issuer’s initial public offering (the “IPO”).
The Reporting Person currently holds:
| (i) | an aggregate of 2,617,763 shares of Class B common stock (irrevocably convertible on a one-for-one basis into Class A common stock upon sale or transfer); and |
| (ii) | 750,000 shares of Class A common stock (the “IPO Shares”) purchased from the underwriters on June 1, 2016 (the closing date of the IPO) at $11.00 per share for an aggregate purchase price of $8,250,000 pursuant to the provisions of the Underwriting Agreement among the Issuer and the several underwriters for the offering (the “Underwriters”). The purchase price of the IPO Shares was paid by Novo A/S from its working capital. |
| Item 4. | Purpose of Transaction |
The acquisitions of Issuer securities made by Novo A/S, as described in this Schedule 13D, were for investment purposes. Novo A/S intends to review its investments in the Issuer on a continuing basis and any actions Novo A/S might undertake will be dependent upon its review of numerous factors from time to time, including, but not limited to: an ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments. Novo A/S may, at any time and from time to time, acquire additional securities of the Issuer, or retain or sell all or a portion of the securities of the Issuer then held, in the open market or in privately negotiated transactions. Other than as described herein, Novo A/S currently does not have any plans or proposals that relate to, or would result in, any of the matters listed in Items 4(a)–(j) of Schedule 13D, although, depending on the factors discussed herein, Novo A/S may change its purpose or formulate different plans or proposals with respect thereto at any time. Jack B. Nielsen., a member of the board of directors of the Issuer, is employed as a Senior Partner of Novo A/S. Mr. Nielsen is not deemed a beneficial owner of, and does not have a reportable pecuniary interest in, the Novo Shares (as defined below).
| Item 5. | Interest in Securities of the Issuer |
(a) Novo A/S beneficially owns an aggregate of 3,367,763 shares of Class A common stock (comprised of 750,000 shares of Class A common stock and assuming conversion of 2,617,763 shares of Class B common stock (irrevocably convertible on a one-for-one basis into Class A common stock upon sale or transfer) (the “Novo Shares”), or 35.7% of the Class A common stock (based on conversion of only the 2,617,763 shares of Class B common stock held by the Novo A/S into Class A common stock on a one-for-one basis). Assuming all 14,679,705 shares of Class B common stock are converted into Class A common stock, Novo A/S would beneficially own 15.7% of the Class A common stock. The foregoing percentage ownership calculations are based upon 6,818,401 shares of Class A common stock and 14,679,705 shares of Class B common stock (assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock) as reported in the Issuer’s prospectus (Form 424B4) filed with the Securities and Exchange Commission on May 26, 2016.
(b) Novo A/S is a Danish limited liability company wholly owned by the Novo Nordisk Foundation. Novo A/S, through its Board of Directors (the “Novo Board”), has the sole power to vote and dispose of the Novo Shares. The Novo Board, currently comprised of Sten Scheibye, Goran Ando, Jeppe Christiansen, Steen Riisgaard and Per Wold-Olsen, may exercise voting and dispositive control over the Novo Shares only with the support of a majority of the Novo Board. As such, no individual member of the Novo Board is deemed to hold any beneficial ownership or reportable pecuniary interest in the Novo Shares. Jack B. Nielsen, a member of the board of directors of the Issuer, is employed as a Senior Partner of Novo A/S. Mr. Nielsen is not deemed a beneficial owner of, and does not have a reportable pecuniary interest in, the Novo Shares. Except as described in this Schedule 13D, neither the Foundation nor any person listed on Schedule I has the power to direct the vote as to, or the disposition of the Novo Shares.
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(c) Except as set forth in Item 3 of this Schedule 13D, Novo A/S has not effected any transactions in the Issuer’s Class A common stock or Class B common stock within the past 60 days and neither the Foundation nor any person listed on Schedule I has effected any transactions in the Issuer’s Class A common stock or Class B common stock within the past 60 days.
(d) Novo A/S does not know of any other person having the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the Issuer’s Class A common stock or Class B common stock held in the name of the Novo A/S and reported herein.
(e) Not applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. |
Seventh Amended and Restated Registration Rights Agreement
The Issuer, Novo A/S and certain other holders of the Issuer’s securities are party to that certain Seventh Amended and Restated Registration Rights Agreement dated as of November 10, 2010 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, holders of more than 67% of the registerable shares (the “Initiating Holders”), at any time at least six months after the completion of the IPO, may twice request that the Issuer effect the registration of at least 50% of the registerable shares held by all holders of registration rights, or a lesser number of shares if the aggregate price to the public of the offering (net of underwriter discounts) will be at least $5 million. If Form S-3 is available for an offering by the Initiating Holders, such holders may request that the Issuer effect an unlimited number of registrations on Form S-3 at an aggregate offering price of at least $1,000,000 per registration on Form S-3. In addition, the holders of registrable securities have piggyback registration rights if the Issuer registers any equity securities for its own account or the account of another security holder (other than in the IPO). The Registration Rights Agreement terminates with respect to any holder who is permitted to sell, within a 90-day period, all of such holder’s registrable shares in compliance with Rule 144 of the Securities Act of 1933, as amended.
Lock-Up Agreement
Novo A/S entered into a letter agreement with the Issuer and the Underwriters on October 16, 2015, which was subsequently amended on March 28, 2016 (the “Lock-Up Agreement”), pursuant to which Novo A/S agreed that, during the “Lock-Up Period” as defined below and subject to certain limited exceptions specified in the Lock-Up Agreement, Novo A/S will not (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Class A common stock beneficially owned or any securities convertible into or exercisable or exchangeable for Class A common stock; (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Class A common stock; or (3) publicly disclose the intention to make any such offer, sale, pledge or disposition of shares of Class A common stock. In addition, Novo A/S has agreed in the Lock-Up Agreement that, without the prior written consent of the Underwriters, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any shares of the Issuer’s capital stock. The “Lock-Up Period” is defined in the Lock-Up Agreement as the period ending 180 days after the date of the final prospectus used to sell Class A common stock in the Issuer’s initial public offering. The Lock-Up Agreement automatically terminates and shall be of no further force or effect following the expiration of the Lock-Up Period.
The descriptions contained in this Statement on Schedule 13D of the Registration Rights Agreement and the Lock-Up Agreement are summaries only and are qualified in their entireties by the actual terms of each such agreement, which are incorporated herein by this reference. See Item 7 “Material to be Filed as Exhibits.”
Except for the Registration Rights Agreement and the Lock-Up Agreement, neither Novo A/S, the Foundation, nor any person named in Schedule I has entered into any contracts, arrangements, understandings or relationships with respect to securities of the Issuer.
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| Item 7. | Material to be Filed as Exhibits. |
Exhibit A – Seventh Amended and Restated Registration Rights Agreement, dated as of September 16, 2015 (incorporated by reference to Exhibit 4.3 of Form S-1 Registration Statement of the Issuer filed January 4, 2016 (File No. 333-208843)).
Exhibit B – Form of Lock-Up Agreement, as amended.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| Dated: June 2, 2016 | Novo A/S | |||
| /s/ Thomas Dyrberg | ||||
| By: Thomas Dyrberg | ||||
| Its: Chief Executive Officer | ||||
Schedule I
Information regarding each director and executive officer of both Novo A/S and the Novo Nordisk Foundation is set forth below.
| Novo A/S | ||||||
| Name, Title at Novo A/S |
Address |
Principal Occupation |
Citizenship | |||
| Sten Scheibye Chairman of the Board |
Rungsted Strandvej 197C 2960 Rungsted Kyst, Denmark |
Professional Board Director | Denmark | |||
| Göran Ando Director |
Essex Woodlands Berkeley Square House Berkeley Square London, W1J 6BD United Kingdom |
Self-employed Professional Board Director |
Sweden | |||
| Jeppe Christiansen Director |
Kollemose 37 2830 Virum Denmark |
Chief Executive Officer Fondsmaeglerselskabet Maj Invest A/S |
Denmark | |||
| Steen Riisgaard Director |
Hestetangsvej 155 3520 Farum Denmark |
Professional Board Director | Denmark | |||
| Per Wold-Olsen Director |
T7B22 Favray Court Tigne Point TP01 Malta |
Professional Board Director | Norway | |||
| Thomas Dyrberg Chief Executive Officer of Novo A/S and Managing Partner-Ventures |
Bengtasvej 9 a 2900 Hellerup Denmark |
Chief Executive Officer of Novo A/S and Managing Partner- Ventures |
Denmark | |||
| Michael Shalmi Managing Partner Large Investments |
Stigårdsvej 4 2900 Hellerup Denmark |
Head of Large Investments, Novo A/S |
Denmark | |||
| Novo Nordisk Foundation | ||||||
| Name, Title at Novo Nordisk Foundation |
Address |
Principal Occupation |
Citizenship | |||
| Sten Scheibye Chairman of the Board |
Rungsted Strandvej 197C 2960 Rungsted Kyst Denmark |
Professional Board Director | Denmark | |||
| Bo Ahrén Director |
Merkuriusgatan 11 S-224 57 Lund Sweden |
Professor of Medicine, Lund University Lund, Sweden |
Sweden | |||
| Karsten Dybvad Chief Executive Officer |
Carl Baggers Alle 15 2920 Charlottenlund Denmark |
Director General and Chief Executive Officer DI (Confederation of Danish Industry) |
Denmark | |||
| Lars Fugger Director |
Staunton Road 72 OX3 7TP Great Britain |
Professor, John Radcliffe Hospital University of Oxford, Oxford, Great Britain |
Denmark | |||
| Novo Nordisk Foundation | ||||||
| Name, Title at Novo Nordisk Foundation |
Address |
Principal Occupation |
Citizenship | |||
| Anne Marie Kverneland Director |
Nybrovej 216 2800 Kgs. Lyngby Denmark |
Laboratory Technician Novo Nordisk A/S |
Denmark | |||
| Lars Bo Køppler Director |
Anemonevej 7 3550 Slangerup Denmark |
Technician Novozymes A/S |
Denmark | |||
| Désirée J. Asgreen Director |
Strandhaven 105 2665 Vallensbæk Strand Denmark |
Project Director Novo Nordisk A/S |
Denmark | |||
| Marianne Philip Director |
Tranegårdsvej 5 2900 Hellerup Denmark |
Attorney | Denmark | |||
| Steen Riisgaard Vice Chairman of the Board |
Hestetangsvej 155 3520 Farum Denmark |
Professional Board Director | Denmark | |||
| Birgitte Nauntofte Chief Executive Officer |
Engbakkevej 24 2920 Charlottenlund Denmark |
Chief Executive Officer Novo Nordisk Foundation |
Denmark | |||
Exhibit B
Lock-up Agreement
Reata Pharmaceuticals, Inc.
Public Offering of Common Stock
, 2015
Citigroup Global Markets Inc.
Cowen and Company, LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”) between Reata Pharmaceuticals, Inc., a Delaware corporation (the “Company”), Citigroup Global Markets Inc. and Cowen and Company, LLC (together, the “Representatives”) as representatives of a group of Underwriters named therein, relating to an underwritten public offering of Class A Common Stock, $0.001 par value per share (the “Common Stock”), of the Company (the “Offering”).
In order to induce you and the other Underwriters to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement (other than the registration statement relating to the Offering) with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period from the date hereof until 180 days after the date of the Underwriting Agreement (the “Lock-Up Period”). If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing restrictions shall be equally applicable to any issuer-directed shares of Common Stock the undersigned may purchase in the Offering.
The provisions of the immediately preceding paragraph shall not apply to or prohibit any of the following: (i) transfers, dispositions, or distributions of shares of capital stock of the Company by the undersigned (or any security convertible into or exercisable or exchangeable for shares of common stock) (a) as a bona fide gift, (b) to limited partners,
members, stockholders or trust beneficiaries of the undersigned or to any investment fund or other entity controlled or managed by the undersigned, (c) by will or other testamentary document or by intestacy, and (d) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for the purposes of this letter, “immediate family” shall mean any relationship by blood, current or former marriage or adoption, not more remote than first cousin) in a transaction not involving a disposition for value, provided that, in the case of any transfer, disposition or distribution pursuant to the above four subclauses, each donee, transferee or distributee shall sign and deliver a lock-up letter in the form of this letter, and with respect to (a), (b) and (d) above, no filing under Section 16(a) of the Exchange Act, or other public announcement, reporting a reduction in beneficial ownership of shares of capital stock of the Company, shall be required or shall be voluntarily made by the undersigned or any other person in connection therewith during the Lock-Up Period; (ii) the exercise of options to purchase shares of capital stock of the Company granted under any stock incentive plan or stock purchase plan described in the prospectus filed in connection with the Offering, provided that the underlying shares issuable upon exercise thereof shall continue to be subject to the restrictions on transfer set forth in this letter; (iii) transfers of shares of capital stock of the Company to the Company in connection with the termination of the undersigned’s employment with the Company; (iv) establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of capital stock of the Company, provided that such plan does not provide for the transfer of such capital stock during the Lock-Up Period and no filing with the SEC or other public announcement shall be required or shall be voluntarily made by the undersigned or any other person in connection therewith during the Lock-Up Period; (v) transfers or dispositions of shares of Common Stock purchased in the Offering from the Underwriters (other than issuer-directed shares of Common Stock purchase in the Offering by an officer or director of the Company) or on the open market following the Offering; or (vi) transfers of shares of capital stock of the Company pursuant to a bona fide third-party tender offer for all outstanding shares of the Company, merger, consolidation or other similar transaction made to all holders of the Company’s securities involving a change of control of the Company that has been approved by the board of directors of the Company, provided that (a) the shares of capital stock of the Company held by the undersigned that are not transferred pursuant to such tender offer, merger, consolidation or other similar transaction shall remain subject to all of the restrictions set forth in this letter, (b) if such transaction is not completed, all shares of capital stock of the Company held by the undersigned shall remain subject to the provisions of this letter, and (c) for purposes of this paragraph, “change of control” shall mean the consummation of any bona fide third party tender offer for any and all of the Company’s share capital or any merger, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of 50% of the total voting power of the voting securities of the Company.
If the undersigned is an officer or director of the Company, (i) the Representatives agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of any shares of capital stock of the Company, the Representatives will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representatives
hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.
If any percentage of the shares of capital stock of the Company (or any security convertible into or exercisable or exchangeable for shares of such capital stock) held by any person or entity (other than the undersigned) that (1) is the holder of 2% or more of the outstanding shares of the Company’s capital stock (calculated on a fully-diluted, post-Offering basis) or (2) is a director or officer of the Company, that is subject to a lock-up agreement related to the Offering similar in form to this Lock-Up Agreement is released from any restrictions set forth in such lock-up agreement during the Lock-Up Period, the same percentage of shares of capital stock and such other securities held by the undersigned shall be immediately and fully released on the same terms from the lock-up restrictions set forth herein (the “Pro-rata Release”); provided, however, that such Pro-rata Release shall not occur (a) unless and until the Representatives have first waived such restrictions with respect to an aggregate number of shares of capital stock and such other securities representing more than 2% of the Company’s total outstanding shares of Common Stock calculated as of immediately following the closing of the Offering and assuming conversion, exercise and exchange of all securities convertible into or exercisable or exchangeable for Common Stock, or (b) in the event of a release in connection with any underwritten public offering, whether or not such offering or sale is wholly or partially a secondary offering of the Company’s Common Stock during the Lock-Up Period (the “Underwritten Sale”); provided, however, that the undersigned, to the extent the undersigned has a contractual right to demand or require the registration of the undersigned’s Common Stock or such other securities or otherwise “piggyback” on a registration statement filed by the Company for the offer and sale of securities, is offered the opportunity to participate on a basis consistent with such contractual rights in such Underwritten Sale. In the event that the undersigned is released from any of its obligations under this letter or, by virtue of this letter, becomes entitled to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock (or any securities convertible into or exercisable or exchangeable for shares of such capital stock) prior to the date that is 180 days after the date of the Underwriting Agreement, the Representatives shall use their commercially reasonable efforts to notify the undersigned within three (3) business days; provided that the failure to give such notice shall not give rise to any claim or liability against the Representatives or the Underwriters.
If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated, and the agreement set forth above shall automatically terminate if the Underwriting Agreement has not been entered into between the Representatives and the Company prior to May 1, 2016.
| Yours very truly, | ||
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, 2016
Citigroup Global Markets Inc.
Cowen and Company, LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentleman:
Reference is made to that certain lock-up agreement, the Lock-Up Agreement, by and among the undersigned and Citigroup Global Markets Inc. and Cowen and Company, LLC (together, the “Representatives”), in connection with the proposed public offering of Class A Common Stock, $0.001 par value per share, of Reata Pharmaceuticals, Inc. The undersigned hereby agrees that the last paragraph of the Lock-Up Agreement shall be replaced with the clause below, such that the Lock-Up Agreement shall not expire until December 15, 2016:
“If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated, and the agreement set forth above shall automatically terminate if the Underwriting Agreement has not been entered into between the Representatives and the Company prior to December 15, 2016.”
This letter agreement will not change or supersede any other terms of the Lock-Up Agreement and all other terms and conditions set forth therein shall remain in full effect.
| Yours very truly, | ||
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