UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

---

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.  )*

 

 (Name of Issuer)

 

 (Title of Class of Securities)

 

 (CUSIP Number)

 

John Bateman

CPMG, Inc.

2000 McKinney Ave, Suite 2125

Dallas, Texas 75201

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

(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 that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-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 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 the disclosures provided in a prior cover page.

 

The information required in 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 (“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).

 

 

SCHEDULE 13D

 

CUSIP No:  75615P103

Page 2 of 11 Pages

 

1	NAMES OF REPORTING PERSONS
	CPMG, INC.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) [   ] (b) [X]
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)
	[   ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER	0
		8	SHARED VOTING POWER	1,605,703 (1)
		9	SOLE DISPOSITIVE POWER	0
		10	SHARED DISPOSITIVE POWER	1,605,703 (1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	1,605,703 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
	[   ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	18.1%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	CO

 

 

(1) This amount includes shares of Class B Common Stock that are convertible, on a one-for-one basis, into shares of Class A Common Stock.  See Items 1 and 5 of this Schedule 13D for more details.

(2) This percentage has been calculated in accordance with Rule 13d-3(d)(1)(i)(D) and is based on the sum of the total shares of Class A Common Stock outstanding plus the shares of Class A Common Stock that the Reporting Person has the right to acquire upon conversion of the Class B Common Stock it owns.  See Item 5 of this Schedule 13D for more details.

 

(1) This amount includes shares of Class B Common Stock that are convertible, on a one-for-one basis, into shares of Class A Common Stock.  See Items 1 and 5 of this Schedule 13D for more details.

(2) This percentage has been calculated in accordance with Rule 13d-3(d)(1)(i)(D) and is based on the sum of the total shares of Class A Common Stock outstanding plus the shares of Class A Common Stock that the Reporting Person has the right to acquire upon conversion of the Class B Common Stock it owns.  See Item 5 of this Schedule 13D for more details.

 

 

Item 1.

Security and Issuer

 

This Schedule 13D is being filed by the undersigned, pursuant to §240.13d-1(a), with respect to the Class A Common Stock, $0.001 par value per share (the “Shares”), of Reata Pharmaceuticals, Inc. (the “Issuer” or the “Company”), whose principal executive offices are located at 2801 Gateway Drive, Suite 150, Irving, TX 75063.

The Shares reported herein include Shares that are obtainable upon conversion, at any time subject to conditions in the Lock-Up Agreement (defined an described in Item 6 herein) and on a one-for-one basis, of shares of Class B Common Stock (the “Class B Shares”) held by the Reporting Persons (defined in Item 2 herein).

 

1.  CPMG, Inc. (“CPMG”);

2.  R. Kent McGaughy, Jr., (“Mr. McGaughy”); and

3.  James W. Traweek, Jr., (“Mr. Traweek”).

This Schedule 13D relates to Shares and Class B Shares held by CPMG directly as well as Shares and Class B Shares held for the accounts of the following funds and managed account for which CPMG is the investment manager: (i) Kestrel Fund, L.P., a Texas limited partnership (“Kestrel Fund”); (ii) Willet Fund, L.P., a Texas limited partnership (“Willet Fund”); (iii) CD Fund, L.P., a Texas limited partnership (“CD Fund”); (iv) Mallard Fund, L.P., a Texas limited partnership (“Mallard Fund”); (v) Yellow Warbler, L.P., a Texas limited partnership (“Yellow Warbler”); (vi) Redbird Life Sciences Partners, L.P., a Texas limited partnership (“Redbird Life Sciences Partners”); (vii) Blackwell Partners, LLC, a Delaware limited liability company (“Blackwell Account”); (viii) Crested Crane, LP, a Delaware limited partnership (“Crested Crane”); (ix) Flamingo Fund, LP, a Texas limited partnership (“Flamingo Fund”); (x) Gallopavo, LP, a Texas limited partnership (“Gallopavo”); (xi) Roadrunner Fund, LP, a Texas limited partnership (“Roadrunner Fund”); and (xii) Sandpiper Fund, LP, a Texas limited partnership (“Sandpiper Fund”, and, together with Kestrel Fund, Willet Fund, CD Fund, Mallard Fund, Yellow Warbler, Redbird Life Sciences Partners, Blackwell Account, Crested Crane, Flamingo Fund, Gallopavo and Roadrunner Fund, the “CPMG Funds”).  Each of Mr. McGaughy and Mr. Traweek are the sole shareholders and directors of CPMG.

This Schedule 13D also relates to Shares and Class B Shares held by Mr. McGaughy directly and indirectly: (i) through Lagos Trust, of which Mr. McGaughy serves as trustee; (ii) through Traweek Children’s Trust, of which Mr. McGaughy serves as trustee; and (iii) in escrow for a charitable donee by American Stock Transfer & Trust Company, LLC.

This Schedule 13D also relates to Shares and Class B Shares held by Mr. Traweek directly and indirectly: (i) through JET Land & Cattle Company, Ltd., of which Mr. Traweek is the sole owner of the general partner; (ii) through 1 Thessalonians 5:18 Trust, of which Mr. Traweek serves as trustee; (iii) through Esme Grace McGaughy Trust, of which Mr. Traweek is trustee; (iv) through Mary Frances McGaughy Trust, of which Mr. Traweek is trustee; and (v) in escrow for a charitable donee by American Stock Transfer & Trust Company, LLC.

 

CPMG is a Texas corporation; each of Mr. McGaughy and Mr. Traweek are citizens of the United States of America.

 

In connection with the IPO, 171,202 Class B Shares held by the Reporting Persons were converted into Class A Shares for no additional consideration, as further described in Exhibit B to this Schedule 13D.  In connection with and following the closing of the IPO, CPMG purchased a total of 259,588 Shares for $3,071,966.54, as further described in Exhibit B to this Schedule 13D.  

The source of funds for the foregoing purchases was working capital of the CPMG Funds and other investment vehicles managed by CPMG.

 

The Reporting Persons acquired and hold the Shares for investment purposes, and such purchases have been made in the Reporting Persons' ordinary course of business. The Reporting Persons expect to review from time to time their investment in the Issuer and may, depending on the market and other conditions: (i) purchase additional Shares, options or related derivatives in the open market, in privately negotiated transactions or otherwise and (ii) sell all or a portion of the Shares, options or related derivatives now beneficially owned or hereafter acquired by them.

             Also, consistent with their investment intent, the Reporting Persons may engage in communications with, without limitation, one or more shareholders of the Company, one or more officers

of the Company and/or one or more members of the board of directors of the Company (the “Board”)  regarding the Company, including but not limited to its operations, governance and control.

             Mr. McGaughy is a member of the Company’s Board, a position he has held since December 2004.  Mr. McGaughy serves on the Board’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

             Except as set forth above, none of the Reporting Persons has any plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.

 

(a, b) CPMG may be deemed to be the beneficial owner of 1,605,703 Shares (approximately 18.1% of the total number of Shares outstanding).  This amount includes 370,557 Shares and 1,235,146 Shares obtainable upon conversion of Class B Shares.  These Shares are held for the following accounts:

 

(A)	27,651 Shares and 307,776 Shares obtainable upon conversion of Class B Shares held for the account of Kestrel Fund;

(B)	252,706 Shares and 12,826 Shares obtainable upon conversion of Class B Shares held for the account of Willet Fund;

(C)	11,076 Shares and 123,279 Shares obtainable upon conversion of Class B Shares held for the account of CD Fund;

(D)	14,323 Shares and 150,186 Shares obtainable upon conversion of Class B Shares held for the account of Mallard Fund;

(E)	57,974 Shares and 638,338 Shares obtainable upon conversion of Class B Shares held for the account of Yellow Warbler;

(F)	134 Shares and 1,490 Shares obtainable upon conversion of Class B Shares held for the account of Redbird Life Sciences Partners;

(G)	150 Shares held for the account of Blackwell Account;

(H)	380 Shares held for the account of Crested Crane;

(I)	440 Shares held for the account of Flamingo Fund;

(J)	1,600 Shares held for the account of Gallopavo;

(K)	1,680 Shares held for the account of Roadrunner Fund;

(L)	2,330 Shares held for the account of Sandpiper Fund; and

(M)	113 Shares and 1,251 Shares obtainable upon conversion of Class B Shares held directly by CPMG.

Mr. McGaughy may be deemed to be the beneficial owner of  2,001,308 Shares (approximately 21.7% of the total number of Shares outstanding).  This amount includes 403,171 Shares and 1,598,137 Shares obtainable upon conversion of Class B Shares, held as follows:

 

(A)	1,605,703 Shares beneficially owned by CPMG, over which Mr. McGaughy and Mr. Traweek share voting and investment control;

(B)	25,004 Shares and 278,309 Shares obtainable upon conversion of Class B Shares held by Mr. McGaughy, over which he has sole voting and investment control;

(C)	4,591 Shares and 51,095 Shares obtainable upon conversion of Class B Shares held by Lagos Trust, of which Mr. McGaughy is trustee and has shared voting and investment control with Emily M. McGaughy;

 

 

(A)	1,605,703 Shares beneficially owned by CPMG, over which Mr. Traweek and Mr. McGaughy share voting and investment control;

(B)	35 Shares and 380 Shares obtainable upon conversion of Class B Shares held by Mr. Traweek, over which he has sole voting and investment control;

(C)	16,645 Shares and 185,263 Shares obtainable upon conversion of Class B Shares held by JET Land & Cattle Company, Ltd., of which Mr. Traweek is the sole owner of the general partner and has sole voting and investment control;

(D)	7,056 Shares and 78,539 Shares obtainable upon conversion of Class B Shares held by 1 Thessalonians 5:18 Trust, of which Mr. Traweek is trustee and has shared voting and investment control with Emily W. Traweek;

(E)	572 Shares and 6,364 Shares obtainable upon conversion of Class B Shares held by Esme Grace McGaughy Trust, of which Mr. Traweek is trustee and has sole voting and investment control;

(F)	572 Shares and 6,364 Shares obtainable upon conversion of Class B Shares held by Mary Frances McGaughy Trust, of which Mr. Traweek is trustee and has sole voting and investment control; and

(G)	2,739 Shares and 30,478 Shares obtainable upon conversion of Class B Shares held in escrow for a charitable donee by American Stock Transfer & Trust Company, LLC, of which Mr. Traweek has sole voting control and shared investment control with the donee.

The beneficial ownership percentages reported herein were calculated in accordance with Rule 13d-3(d)(1)(i)(D) and are based on the sum of (1) the 7,643,401 Shares outstanding immediately following the IPO (based on information from the Issuer), and (2) the number of Shares the Reporting Person has the right to acquire upon conversion of their Class B Shares into Shares on a one-for-one basis.

(c) Please refer to Exhibit B of this Schedule 13D for transactions in the Issuer’s securities during the past sixty days, including the transaction date, number of Shares or Class B Shares acquired or disposed of, price per share (and, if weighted average price per share, the range of prices), identity of the person that effected the transaction, and where and how the transaction was effected.

(d) Certain persons identified in Items 2 and 4 are known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares covered by this Statement that may be deemed to be beneficially owned by the Reporting Persons. Such interest of Yellow Warbler relates to more than 5 percent of the class of Shares.

(e) This Item 5(e) is not applicable.

The Reporting Persons, as well as Kestrel Fund, Willet Fund, CD Fund, Mallard Fund, Yellow Warbler, Redbird Life Sciences Partners, Lagos Trust, Traweek Children’s Trust, JET Land & Cattle Company, Ltd., 1 Thessalonians 5:18 Trust, Esme Grace McGaughy Trust and Mary Frances McGaughy Trust, have each entered into a lock-up agreement with the Issuer and the underwriters of the IPO dated January 15, 2016, as extended on March 28, 2016 (the “Lock-Up Agreement”) in which they have agreed, for a period of 180 days following May 25, 2016, subject to certain exceptions, not to directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of or hedge any of the Issuer’s shares of common stock, any options or warrants to purchase any shares of the Issuer’s common stock, or any securities convertible into, or exchangeable for or that represent the right to receive shares of the Issuer’s common stock. Citigroup Global Markets Inc. and Cowen and Company, LLC, on behalf of the underwriters, may, in their sole discretion, at any time without prior notice, release all or any portion of the shares from the restrictions in any such agreement.

Mr. McGaughy separately entered into a lock-up agreement dated October 16, 2015, as extended on March 28, 2016 (the “Director Lock-Up Agreement”), which imposes similar restrictions as the Lock-Up Agreement plus provides for a pro-rata release of shares of the Issuer’s capital stock from the Director Lock-Up Agreement restrictions if any holder of 2% or more of the Issuer’s fully-diluted post-IPO capital stock, officer of the Issuer or director of the Issuer, each of whom is subject to a lock-up agreement related to the IPO similar to the Director Lock-Up Agreement, is released from the restrictions under their lock-up agreement, subject to certain exceptions.

The Reporting Persons, as well as CD Fund, Kestrel Fund, Mallard Fund, Redbird Life Sciences Partners, Willet Fund and Yellow Warbler, among others, are also parties to a Seventh Amended and Restated Registration Rights Agreement dated November 10, 2010 (the “Registration Rights Agreement”),  pursuant to which holders of more than 67% of the registrable shares of the Issuer, 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 registrable 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. Furthermore, if Form S-3 is available for an offering by the initiating holders, the initiating 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 determines to register any equity securities for its own account or the account of another security holder (other than in the IPO). The Issuer will pay the registration expenses, other than underwriting fees, discounts or commissions, of the shares registered pursuant to the registrations described above, but limited to four registrations on Form S-3. 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.

The summaries contained herein of the Lock-Up Agreement, Director Lock-Up Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, which are included as Exhibits C, D and E to this Schedule 13D and is incorporated by reference herein.

Except as set forth herein, there are no contracts, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to the Common Shares.

 

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.

 

		CPMG, INC.
	By:	/s/ John Bateman
		Name:	John Bateman
		Title:	Chief Operating Officer

 

June 6, 2016

Attention: Intentional misstatements or omissions of act constitute federal violations (see 18 U.S.C. 1001).

 

 

 

---

JOINT FILING AGREEMENT

The undersigned hereby agree that the statement on Schedule 13D with respect to the Class A Common Stock of Reata Pharmaceuticals, Inc., dated as of June 6, 2016 is, and any amendments thereto (including amendments on Schedule 13G) signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934.

 

June 6, 2016

 

---

EXHIBIT 99.B

 

SCHEDULE OF TRANSACTIONS

 

Name of Account	Date of Transaction	Nature of Transaction		Quantity of Shares				Price per Share
Willet Fund, LP	June 1, 2016 (1)	Open Market			56,739			$	11.4261	(2)
Willet Fund, LP	June 1, 2016 (1)	Open Market			127,691			$	12.7644	(3)
Willet Fund, LP	June 1, 2016 (1)	Open Market			8,233			$	13.2169	(4)
Willet Fund, LP	June 1, 2016 (1)	Open Market			28,797			$	13.2649	(5)
Willet Fund, LP	June 1, 2016 (1)	Open Market			6,203			$	14.2219	(6)
Willet Fund, LP	June 1, 2016 (1)	Open Market			23,890			$	14.1062	(7)
Blackwell Partners, LLC	June 1, 2016	Open Market			150			$	13.4199	(8)
Crested Crane, LP	June 1, 2016	Open Market			380			$	13.4199	(8)
Flamingo Fund, LP	June 1, 2016	Open Market			440			$	13.4199	(8)
Gallopavo, LP	June 1, 2016	Open Market			1,600			$	13.4199	(8)
Roadrunner Fund, LP	June 1, 2016	Open Market			1,680			$	13.4199	(8)
Sandpiper Fund, LP	June 1, 2016	Open Market			2,330			$	13.4199	(8)
Mallard Fund, LP	June 1, 2016	Open Market			830			$	13.4199	(8)
Yellow Warbler, LP	June 1, 2016	Open Market			625			$	13.4199	(8)
Kestrel Fund, LP	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			27,651				N/A	(9)
Willet Fund, LP	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			1,153				N/A	(9)
CD Fund, LP	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			11,076				N/A	(9)
Mallard Fund, LP	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			13,493				N/A	(9)
Yellow Warbler, LP	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			57,349				N/A	(9)
Redbird Life Sciences Partners, LP	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			134				N/A	(9)
CPMG, Inc.	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			113				N/A	(9)
R. Kent McGaughy, Jr.	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			25,004				N/A	(9)
Lagos Trust	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			4,591				N/A	(9)
Traweek Children’s Trust	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			280				N/A	(9)
McGaughy Escrow Account	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			2,739				N/A	(9)
James W. Traweek, Jr.	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			35				N/A	(9)
JET Land & Cattle Company, Ltd.	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			16,645				N/A	(9)
1 Thessalonians 5:18 Trust	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			7,056				N/A	(9)
Esme Grace McGaughy Trust	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			572				N/A	(9)
Mary Frances McGaughy Trust	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			572				N/A	(9)
Traweek Escrow Account	June 1, 2016	Automatic Conversion from Class B Shares to Class A Shares			2,739				N/A	(9)

3.  This price reflects the weighted average purchase price for open-market purchase orders placed by the Reporting Person with its broker on May 26, 2016, within a $1.00 range. The actual prices for these transactions range from $12.12 to $13.00, inclusive.

4.  This price reflects the weighted average purchase price for open-market purchase orders placed by the Reporting Person with its broker on May 26, 2016, within a $1.00 range. The actual prices for these transactions range from $13.17 to $13.25, inclusive.

6.  This price reflects the weighted average purchase price for open-market purchase orders placed by the Reporting Person with its broker on May 27, 2016, within a $1.00 range. The actual prices for these transactions range from $14.00 to $14.3099, inclusive.

7.  This price reflects the weighted average purchase price for open-market purchase orders placed by the Reporting Person with its broker on May 31, 2016, within a $1.00 range. The actual prices for these transactions range from $13.74 to $14.48, inclusive.

 

---

EXHIBIT 99.C

---

---

---

 

 

Reata Pharmaceuticals, Inc.
Public Offering of Common Stock

 

October 16, 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.

 

 

March 28, 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 the 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.

 

---