Exhibit 10.1

 

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September 25, 2018

Dear Greg:

This letter will confirm the terms and conditions of your employment with Zosano
Pharma Corporation, a Delaware corporation (the “Company”).

1.    Position and Duties. Effective October 15, 2018 or such other date
mutually agreed in writing between you and the Company (such date when you
actually commences employment with the Company, the “Effective Date”), the
Company shall employ you as the Chief Financial Officer of the Company. You will
report to the Chief Executive Officer of the Company (the “CEO”). You agree to
perform the duties of your position and such other duties as may reasonably be
assigned to you from time to time by the CEO. You also agree that, while
employed by the Company, you will devote your full business time and your best
efforts, business judgment, skill and knowledge to the advancement of the
business and interests of the Company and its respective Affiliates (as defined
in Section 6) and to the discharge of your duties and responsibilities for them.

2.    Compensation and Benefits. During your employment, as compensation for the
services performed by you for the Company and its Affiliates, the Company will
provide you the following pay and benefits:

(a)     Base Salary. Effective on the Effective Date, the Company will pay you a
base salary at the rate of $350,000 per year, payable in accordance with the
regular payroll practices of the Company and subject to increase from time to
time by the Board of Directors of the Company (the “Board”) or the Compensation
Committee of the Board (the “Compensation Committee”) in its sole discretion.

(b)     Bonus Compensation. During employment, you will be considered annually
for a bonus. Your bonus target for each year is an amount equal to 40% of your
base salary as of the end of such year. Your bonus, if earned, for the year in
which the Effective Date occurs shall be pro-rated for your partial employment
based on the number of days that you are employed by the Company during the
calendar year in which the Effective Date occurs. The amount of any bonus
awarded will be determined by the Board or the Compensation Committee in its
discretion after consideration of a proposal from the CEO, and will be based on
your performance and the performance of the Company against goals established
annually by the Board or the Compensation Committee. Any such bonus will be paid
to you in a lump sum prior to March 15 of the year following the year in which
your right to the bonus became vested.

(c)     Stock Option. Subject to the approval of the Board, the Company will
grant to you an option (the “Initial Option”) to purchase 100,000 shares of the
Company’s common stock at a price per share equal to the closing price on the
date of grant, as determined by the Board, subject

 

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to your continued employment through the date of grant. Twenty-five percent
(25%) of the shares subject to the Initial Option will vest and become
exercisable on the first anniversary of the Effective Date, and 1/48th of the
shares subject to the Initial Option shall vest and become exercisable on each
monthly anniversary thereafter, such that the Initial Option will be fully
vested and exercisable on the fourth anniversary of the Effective Date, subject
to your continued employment with the Company through each such vesting date.
Subject to the approval of the Board, upon attainment of performance goal(s) to
be established by the Board or the Compensation Committee following the
Effective Date, the Company will also grant to you an option (the “Performance
Option”) to purchase 25,000 shares of the Company’s common stock at a price per
share equal to the closing price on the date of grant, as determined by the
Board, subject to your continued employment through the date of grant.
Twenty-five percent (25%) of the shares subject to the Performance Option will
vest and become exercisable on the first anniversary of the grant date, and
1/48th of the shares subject to the Performance Option shall vest and become
exercisable on each monthly anniversary thereafter, such that the Initial Option
will be fully vested and exercisable on the fourth anniversary of the grant
date, subject to your continued employment with the Company through such vesting
date. The Initial Option and the Performance Option will be subject to the terms
of the Company’s equity incentive plan and an applicable award agreement by and
between you and the Company.

(d)    Participation in Employee Benefit Plans. You shall be entitled to
participate in any and all employee benefit plans from time to time in effect
for the full-time employees of the Company generally, but the Company shall not
be required to establish any such program or plan. Such participation shall be
subject to (i) the terms of the applicable plan documents and (ii) generally
applicable Company policies. The Company may alter, modify, add to or delete its
employee benefit plans at any time as it, in its sole discretion, determines to
be appropriate.

(e)     Vacations. You will be entitled to three weeks of paid vacation per
year, in addition to holidays observed by the Company, subject to the Company’s
policies, as may be amended from time to time. Vacation may be taken at such
times and intervals as you shall determine, subject to the reasonable business
needs of the Company.

(f)     Business Expenses. The Company will pay or reimburse you for all
reasonable business expenses incurred or paid by you in the performance of your
duties and responsibilities for the Company, subject to any maximum annual limit
and other restrictions on such expenses set by the Company and to such
reasonable substantiation and documentation as it may specify from time to time.

3.    Confidential Information and Restricted Activities.

(a)     Confidential Information. During the course of your employment with the
Company, you will learn of Confidential Information (as defined in Section 6),
and you may develop Confidential Information on behalf of the Company. You agree
that you will not use or disclose to any Person (as defined in Section 6) any
Confidential Information obtained by you incident to your employment or any
other association with the Company or any of its Affiliates,

 

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except as required by applicable law or for the proper performance of your
regular duties and responsibilities for the Company. You understand that this
restriction shall continue to apply during all times after your employment
terminates, regardless of the reason for such termination. In addition, you
agree to continue to abide by the terms of the Company’s standard form of
confidentiality and invention assignment agreement, which are hereby
incorporated by reference into this letter agreement, as a condition of your
employment hereunder.

(b)      Protection of Documents. All documents, records and files, in any media
of whatever kind and description, relating to the business, present or
otherwise, of the Company or any of its Affiliates, and any copies, in whole or
in part, thereof (the “Documents”), whether or not prepared by you, shall be the
sole and exclusive property of the Company. You agree to safeguard all Documents
and to surrender to the Company, at the time your employment terminates or at
such earlier time or times as the CEO may specify, all Documents then in your
possession or control. Following termination, you shall not retain any written
or other tangible material containing any proprietary information of the Company
or its subsidiaries or affiliates.

(c)     Non-Solicitation. You acknowledge that in your employment with the
Company you will have access to Confidential Information which, if disclosed,
would assist in competition against the Company and its Affiliates, and that you
will also generate good will for the Company and its Affiliates in the course of
your employment. Therefore, you agree that the following restrictions on your
activities during and after the termination of your employment are necessary to
protect the good will, Confidential Information and other legitimate interests
of the Company and its Affiliates: While you are employed by the Company and
during the 12 months immediately following termination of your employment for
whatever reason, you shall not, directly or through any other Person, (A) seek
to persuade any employee of the Company or any of its Affiliates to discontinue
employment or (B) solicit or encourage any customer, distributor, vendor, or
other business partner of the Company or any of its Affiliates or any
independent contractor providing services to the Company or any of its
Affiliates to terminate or diminish its relationship with them. For purposes of
the foregoing, the terms “employee,” “customer,” “distributor,” and “vendor”
shall also include any person or party who held such status during the
immediately preceding six (6) months.

(d)    Enforcement of Restrictions. In signing this letter agreement, you give
the Company assurance that you have carefully read and considered all the terms
and conditions of this letter agreement, including the restraints imposed on you
under this Section 3. You agree without reservation that these restraints are
necessary for the reasonable and proper protection of the Company and its
Affiliates, and that each and every one of the restraints is reasonable in
respect to subject matter, length of time and geographic area. You further agree
that, were you to breach any of the covenants contained in this Section 3, the
damage to the Company and its Affiliates would be irreparable. You therefore
agree that the Company, in addition to any other remedies available to it, shall
be entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by you of any of those covenants, without having to post bond.
You also agree that the period of restriction in Section 3(c) shall be tolled
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violation thereof. You and the Company further agree that, in the event that any
provision of this Section 3 is determined by any court of competent jurisdiction
to be unenforceable by reason of its being extended over too great a time, too
large a geographic area or too great a range of activities, that provision shall
be deemed to be modified to permit its enforcement to the maximum extent
permitted by law. It is also agreed that each of the Company’s Affiliates shall
have the right to enforce all of your obligations to that Affiliate under this
letter agreement, including without limitation pursuant to this Section 3. It is
agreed and understood that the terms of this letter agreement are severable, and
that no breach of any provision of this letter agreement or any other purported
violation of law by the Company shall operate to excuse you from the performance
of your obligations under this Section 3.

4.     Termination of Employment. Your employment under this letter agreement
shall continue for no definite term until terminated pursuant to this Section 4.
The Company and you acknowledge that your employment is and shall continue to be
at-will, as defined under applicable law. This means that it is not for any
specified period of time and can be terminated by you or by the Company at any
time, with or without advance notice, and for any or no particular reason or
cause.

(a)    The Company may terminate your employment for Cause upon written notice
to you setting forth in reasonable detail the nature of the Cause (as defined
below); provided that the failure by the Company to set forth in the notice all
of the facts and circumstances which contribute to a showing of Cause shall not
waive any right of the Company hereunder or preclude the Company from asserting
such fact or circumstance in enforcing their rights hereunder. The following, as
determined by the Company in its reasonable judgment, shall constitute “Cause”
for termination: (i) your conviction of, or plea of nolo contendere to, a felony
or other crime involving moral turpitude; (ii) your persistent and willful
refusal to follow reasonable directives of the CEO; (iii) gross negligence or
willful misconduct in the performance of your duties and responsibilities to the
Company or any of its Affiliates; (iv) your material breach of this letter
agreement or any other agreement between you and the Company or any of its
Affiliates, which breach continues for more than 15 days after the Company gives
you written notice which sets forth in reasonable detail the nature of such
breach; or (v) other conduct by you that is or could reasonably anticipated to
be materially harmful to the business, interests or reputation of the Company or
any of its Affiliates. The Company also may terminate your employment other than
for Cause upon written notice to you.

(b)    You may terminate your employment for Good Reason (as defined below)
subject to the conditions set forth below. The following shall constitute “Good
Reason” for termination: (i) any action by the Company that results in a
material diminution in your position, authority, duties or responsibilities, or
(ii) the material reduction of your annual base salary or annual bonus
opportunity in accordance with the terms of Section 2, above, for more than ten
(10) business days after notice from you specifying in reasonable detail the
nature of such failure, except in connection with a decrease in salary affecting
each senior management employee of the Company in a proportionate manner,
(iii) relocation of your principal place of employment to a

 

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location other than the greater San Francisco Bay area, California, or (iv) the
Company’s material breach of this letter agreement or the failure of the
Company’s successor to assume the Company’s obligations under this agreement
upon a Change in Control. You will not be deemed to have Good Reason unless
(i) you first provides the Company with written notice of the condition giving
rise to Good Reason within thirty (30) days of its initial occurrence, (ii) the
Company or the successor company fails to cure such condition within thirty
(30) days after receiving such written notice (the “Cure Period”), and
(iii) your resignation based on such Good Reason is effective within thirty
(30) days after the expiration of the Cure Period.

(c)    In the event you become disabled during employment and, as a result, are
unable to continue to perform substantially all of your duties and
responsibilities under this letter agreement, either with or without reasonable
accommodation, subject to your continued compliance with the terms of this
letter agreement, the Company will continue to pay you your base salary and to
provide you benefits in accordance with Section 2(d) above, to the extent
permitted by plan terms, for up to twelve (12) weeks of disability during any
period of three hundred and sixty-five (365) consecutive calendar days. If you
are unable to return to work after twelve (12) weeks of such disability, the
Company may terminate your employment, upon notice to you. If the Company
sponsors a disability plan, the determination of whether you have a disability
shall be made by the person or persons required to make disability
determinations under the Company’s long-term disability plan. At any time the
Company does not sponsor a long-term disability plan, if any question shall
arise as to whether you are disabled to the extent that you are unable to
perform substantially all of your duties and responsibilities for the Company
and its Affiliates, you shall, at the Company’s request, submit to a medical
examination by a physician selected by the Company to whom you or your guardian,
if any, has no reasonable objection to determine whether you are so disabled,
and such determination shall for the purposes of this letter agreement be
conclusive of the issue. If such a question arises and you fail to submit to the
requested medical examination, the Company’s determination of the issue shall be
binding on you.

5.    Severance Payments and Other Matters Related to Termination.

(a) Involuntary Termination. Subject to your continued compliance with the terms
of this letter agreement, in the event of termination of your employment by the
Company other than for Cause, or in the event of your termination of employment
for Good Reason in either case outside the Change in Control period stated in
Section 5(b), and provided you execute and not revoke an effective Employee
Release (as defined below), the Company will (i) continue to pay you your base
salary in effect at the time of such termination (disregarding any decrease that
forms the basis of a resignation for Good Reason pursuant to Section 4(b)(ii))
for a period of six (6) months from and after the date of termination with such
installments to commence on the first regularly-scheduled Company payroll date
your signed Employee Release pursuant to Section 5(c) is effective and
irrevocable; and (ii) if you elect to receive continued healthcare coverage
pursuant to the provisions of COBRA, the Company shall directly pay, or
reimburse you for, the premium for you and your covered dependents through the
earlier of (i) a period of six (6) months from and after the date of your
termination and (ii) the date you and your covered dependents, if any, become

 

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eligible for healthcare coverage under another employer’s plan(s).
Notwithstanding the foregoing, (i) if any plan pursuant to which such benefits
are provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section 409A
(“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”)
under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Company is
otherwise unable to continue to cover you under its group health plans without
penalty under applicable law (including without limitation, Section 2716 of the
Public Health Service Act), then, in either case, an amount equal to each
remaining Company subsidy shall thereafter be paid to you in substantially equal
monthly installments. The Company will also pay you on the date of termination
any base salary, bonus and other wages earned but not paid through the date of
termination, and pay for any vacation time accrued but not used to that date. In
addition, the vesting for any stock options and other equity incentive awards
outstanding on the date of termination will automatically accelerate so that 25%
of any then unvested option shares and other equity incentive awards shall
immediately vest and become exercisable upon such termination. Except as set
forth in clause (ii) of the first sentence of this Section 5(a), benefits shall
terminate in accordance with the terms of the applicable benefit plans based on
the date of termination of your employment.

(b)    Involuntary Termination within One Year after Change in Control. Subject
to your continued compliance with the terms of this letter agreement, in the
event of termination of your employment by the Company (or its successor) other
than for Cause, or in the event of your termination of employment for Good
Reason, in either case during the one (1)-year period following a Change in
Control (a “Constructive Termination Event”), the Company (or its successor)
will, in lieu of any severance under Section 5(a) above, pay you, subject to and
on the first regularly-scheduled Company payroll date your signed Employee
Release pursuant to Section 5(c) is effective and irrevocable: (i) a lump sum
severance payment equal to (x) twelve (12) months of your base salary in effect
at the time of such termination (disregarding any decrease that forms the basis
of a resignation for Good Reason pursuant to Section 4(b)(ii)) plus (y) an
amount equal to your bonus, if any, earned for the immediately prior fiscal year
(provided, that, if the Constructive Termination Event occurs in 2019, the
amount tied to your bonus shall not reflect any pro-ration based on your partial
employment during 2018) and (ii) if you elect to receive continued healthcare
coverage pursuant to the provisions of COBRA, the Company shall directly pay, or
reimburse you for, the premium for you and your covered dependents through the
earlier of (i) a period of twelve (12) months from and after the date of your
termination and (ii) the date you and your covered dependents, if any, become
eligible for healthcare coverage under another employer’s plan(s).
Notwithstanding the foregoing, (i) if any plan pursuant to which such benefits
are provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section 409A under
Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Company is otherwise
unable to continue to cover you under its group health plans without penalty
under applicable law (including without limitation, Section 2716 of the Public
Health Service Act), then, in either case, an amount equal to each remaining
Company subsidy shall thereafter be paid to you in substantially equal monthly
installments. The Company (or its successor) will also pay you on the date of
termination any base salary, bonus and other wages earned but not paid through
the date of termination, and pay for any vacation time accrued but not used to
that date. In addition, the

 

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vesting for any stock options and other equity incentive awards outstanding on
the date of termination will automatically accelerate so that 100% of any then
unvested option shares and other equity incentive awards shall immediately vest
and become exercisable upon such termination. Except as set forth in clause
(ii) of the first sentence of this Section 5(b), benefits shall terminate in
accordance with the terms of the applicable benefit plans based on the date of
termination of your employment.

(c)    Severance Conditional Upon Release. Any obligation of the Company to
provide you severance payments under Sections 5(a) and 5(b) above shall be
conditioned upon your signing a general release of claims in the form provided
by the Company and reasonably acceptable to you (the “Employee Release”) within
twenty-one (21) days after the date on which you receive such Employee Release
(the “Release Expiration Date”) and upon your not revoking the Employee Release
thereafter. All severance payments will be payable in accordance with the normal
payroll practices of the Company and will begin at the Company’s (or its
successor’s) next regular payroll period following the date of the Employee
Release is effective and irrevocable, but shall be retroactive to the date of
termination, if applicable; provided that in any case where your date of
termination and the Release Expiration Date fall in two separate taxable years,
any payments required to be made to you that are conditioned on the Employee
Release and are treated as nonqualified deferred compensation for purposes of
Section 409A shall be made in the later taxable year. For the avoidance of
doubt, no cash compensation that may be earned by you pursuant to employment or
a consulting arrangement with a Person other than the Company during the period
of time that the Company (or its successor) is making payments to you pursuant
to this Section 5 shall be credited toward the Company’s severance obligations
under this Section 5.

(d)    Section 409A. Notwithstanding anything in this Agreement to the contrary,
any compensation or benefits payable under this agreement that is considered
nonqualified deferred compensation under Section 409A and is designated under
this agreement as payable upon your termination of employment shall be payable
only upon your “separation from service” with the Company within the meaning of
Section 409A (a “Separation from Service”). Notwithstanding anything to the
contrary contained in this letter agreement, in the event that at the time of
your separation from service you are a “specified employee,” as hereinafter
defined, any and all amounts payable under this Section 5 in connection with
such Separation from Service that constitute deferred compensation subject to
Section 409A, as determined by the Company in its sole discretion, and that
would (but for this sentence) be payable within six (6) months following such
Separation from Service, shall instead be paid on the earlier of (i) the first
business day that follows the date of such Separation from Service by six
(6) months or (ii) the date of your death. For purposes of the preceding
sentence, the term “specified employee” shall mean an individual determined by
the Company to be a specified employee as defined in subsection (a)(2)(B)(i) of
Section 409A. For purposes of Section 409A (including, without limitation, for
purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), your right to
receive installment payments under this letter agreement shall be treated as a
right to receive a series of separate payments and, accordingly, each
installment payment hereunder shall at all times be considered a separate and
distinct payment.

 

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(d)    Termination for Cause or Voluntary Termination. In the event of
termination of your employment by the Company for Cause or your termination
other than for Good Reason, the Company will pay you any base salary and other
wages earned but not paid through the date of termination and pay for any
vacation time accrued but not used to that date. The Company shall have no
obligation to pay you any bonus compensation or severance payments. Except for
any right you may have under COBRA to continue participation in the Company’s
group health and dental plans at your cost, benefits shall terminate in
accordance with the terms of the applicable benefit plans based on the date of
termination of your employment.

(e)    Survival of Certain Provisions. Provisions of this letter agreement shall
survive any termination if so provided in this letter agreement or if necessary
or desirable to accomplish the purposes of other surviving provisions, including
without limitation your obligations under Section 3 of this letter agreement.
The obligation of the Company (or its successor) to make severance payments to
you under Section 5(a) or 5(b) above, and your right to retain such payments,
are expressly conditioned upon your continued full performance of your
obligations under Section 3 hereof. Upon termination by either you or the
Company, all rights, duties and obligations of you and the Company to each other
shall cease, except as otherwise expressly provided in this letter agreement.

6.    Definitions. For purposes of this letter agreement, the following
definitions apply:

“Affiliates” means all persons and entities directly or indirectly controlling,
controlled by or under common control with the Company, where control may be by
management authority, equity interest or otherwise.

“Confidential Information” means any and all information of the Company and its
Affiliates that is not generally available to the public. Confidential
Information also includes any information received by the Company or any of its
Affiliates from any Person with any understanding, express or implied, that it
will not be disclosed. Confidential Information does not include information
that enters the public domain, other than through your breach of your
obligations under this letter agreement.

“Change in Control” shall have the meaning set forth in the Company’s 2014
Equity and Incentive Plan, as amended or restated from time to time.

“Person” means an individual, a corporation, a limited liability company, an
association, a partnership, an estate, a trust or any other entity or
organization, other than the Company or any of its Affiliates.

7.    Dispute Resolution. To ensure the timely and economical resolution of
disputes that arise in connection with this agreement, you and the Company agree
that any and all controversies, claims and disputes arising out of or relating
to this agreement, including without limitation any alleged violation of its
terms, shall be resolved be resolved solely and exclusively by final and

 

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binding arbitration held in San Mateo County, California through JAMS in
conformity with California law and the then-existing JAMS employment arbitration
rules, which can be found at
https://www.jamsadr.com/rules-employment-arbitration/. The arbitrator shall:
(a) provide adequate discovery for the resolution of the dispute; and (b) issue
a written arbitration decision, to include the arbitrator’s essential findings
and conclusions and a statement of the award. The arbitrator shall award the
prevailing party attorneys’ fees and expert fees, if any. Notwithstanding the
foregoing, it is acknowledged that it will be impossible to measure in money the
damages that would be suffered if the parties fail to comply with any of the
obligations imposed on them under Section 3, and that in the event of any such
failure, an aggrieved person will be irreparably damaged and will not have an
adequate remedy at law. Any such person shall, therefore, be entitled to
injunctive relief, including specific performance, to enforce such obligations,
and if any action shall be brought in equity to enforce any of the provisions of
Section 3, none of the parties shall raise the defense that there is an adequate
remedy at law. You and the Company understand that by agreement to arbitrate any
claim pursuant to this Section 7, you will not have the right to have any claim
decided by a jury or a court, but shall instead have any claim decided through
arbitration. You and the Company waive any constitutional or other right to
bring claims covered by this agreement other than in your individual capacities.
Except as may be prohibited by applicable law, the foregoing waiver includes the
ability to assert claims as a plaintiff or class member in any purported class
or representative proceeding.

8.    Golden Parachute Excise Tax.

(a)    Best Pay. Any provision of this agreement to the contrary
notwithstanding, if any payment or benefit you would receive from the Company
pursuant to this agreement or otherwise (“Payment”) would (i) constitute a
“parachute payment” within the meaning of Section 280G of the Code and (ii) but
for this sentence, be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount
(as defined below). The “Reduced Amount” will be either (A) the largest portion
of the Payment that would result in no portion of the Payment (after reduction)
being subject to the Excise Tax or (B) the entire Payment, whichever amount
after taking into account all applicable federal, state, and local employment
taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate, net of the maximum reduction in federal income taxes which could
be obtained from a deduction of such state and local taxes), results in your
receipt, on an after-tax basis, of the greater economic benefit notwithstanding
that all or some portion of the Payment may be subject to the Excise Tax. If a
reduction in a Payment is required pursuant to the preceding sentence and the
Reduced Amount is determined pursuant to clause (A) of the preceding sentence,
the reduction shall occur in the manner (the “Reduction Method”) that results in
the greatest economic benefit for you. If more than one method of reduction will
result in the same economic benefit, the items so reduced will be reduced pro
rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the
Reduction Method or the Pro Rata Reduction Method would result in any portion of
the Payment being subject to taxes pursuant to Section 409A (as defined below)
that would not otherwise be subject to taxes pursuant to Section 409A, then the
Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall
be modified so as to avoid

 

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the imposition of taxes pursuant to Section 409A as follows: (1) as a first
priority, the modification shall preserve to the greatest extent possible, the
greatest economic benefit for you as determined on an after-tax basis; (2) as a
second priority, Payments that are contingent on future events (e.g., being
terminated without cause), shall be reduced (or eliminated) before Payments that
are not contingent on future events; and (3) as a third priority, Payments that
are “deferred compensation” within the meaning of Section 409A shall be reduced
(or eliminated) before Payments that are not deferred compensation within the
meaning of Section 409A.

(b)    Accounting Firm. The accounting firm engaged by the Company for general
tax purposes as of the day prior to the Change in Control will perform the
calculations set forth in Section 8(a) above. If the firm so engaged by the
Company is serving as the accountant or auditor for the acquiring company, the
Company will appoint a nationally recognized accounting firm to make the
determinations required hereunder. The Company will bear all expenses with
respect to the determinations by such firm required to be made hereunder. The
accounting firm engaged to make the determinations hereunder will provide its
calculations, together with detailed supporting documentation, to the Company
within thirty (30) days before the consummation of a Change in Control (if
requested at that time by the Company) or such other time as requested by the
Company. If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, either before or after the application of the Reduced
Amount, it will furnish the Company with documentation reasonably acceptable to
the Company that no Excise Tax will be imposed with respect to such Payment. Any
good faith determinations of the accounting firm made hereunder will be final,
binding and conclusive upon the Company and you.

9.    Conflicting Agreements. You hereby represent and warrant that your signing
of this letter agreement and the performance of your obligations under it will
not breach or be in conflict with any other agreement to which you are a party
or are bound, and that you are not now subject to any covenants against
competition or similar covenants or any court orders that could affect the
performance of your obligations under this letter agreement. You agree that you
will not disclose to or use on behalf of the Company any proprietary information
of a third party without that party’s consent.

10    Withholding. All payments made by the Company under this letter agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.

11.    Assignment. Neither you nor the Company may make any assignment of this
letter agreement or any interest in it, by operation of law or otherwise,
without the prior written consent of the other parties; provided, however, that
the Company may assign its rights and obligations under this letter agreement
without your consent to one of its Affiliates or to any Person with whom it
shall hereafter effect a reorganization, consolidate with, or merge into or to
whom it transfers all or substantially all of its properties or assets. This
letter agreement shall inure to the benefit of and be binding upon you, the
Company, and each of our respective successors, executors, administrators, heirs
and permitted assigns.

 

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12.    Severability. If any portion or provision of this letter agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this letter agreement, or the application of
such portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this letter agreement shall be valid and enforceable to
the fullest extent permitted by law.

13.    Miscellaneous. This letter agreement sets forth the entire agreement
between you and the Company and replaces all prior and contemporaneous
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of your employment with the Company. This letter
agreement may not be modified or amended, and no breach shall be deemed to be
waived, unless agreed to in writing by you and the Company. The headings and
captions in this letter agreement are for convenience only and in no way define
or describe the scope or content of any provision of this letter agreement. The
words “include,” “includes” and “including” when used herein shall be deemed in
each case to be followed by the words “without limitation.” This letter
agreement may be executed in two or more counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
This is a California contract and shall be governed and construed in accordance
with the laws of the State of California, without regard to the conflict of laws
principles thereof. Nothing in this letter agreement or any other Company
agreement, policy, practice, procedure, directive or instruction limits your
ability to (a) file a charge or complaint with any governmental agency,
governmental commission or other governmental authority (“Governmental
Authority”), (b) report possible violations of law or regulation to any
Governmental Authority, (c) make other disclosures that are protected under the
whistleblower provisions of applicable law or regulation, or (d) receive a
whistleblower or other award from a Governmental Authority for information
provided to a Governmental Authority. You do not need permission from anyone at
the Company or the Company’s legal counsel in order to take any of the actions
described in the preceding sentence, and you do not have to notify the Company
that you have taken or intend to take any of these actions. In addition, nothing
in this Agreement is intended to interfere with or restrain the immunity
provided under 18 U.S.C. section 1833(b) for confidential disclosures of trade
secrets (x) to lawyers or government officials solely for the purpose of
reporting or investigating a suspected violation of law or (y) in a sealed
filing in court or another legal proceeding.

14.    Notices. Any notices provided for in this letter agreement shall be in
writing and shall be effective when delivered in person or deposited in the
United States mail, postage prepaid, and addressed to you at your last known
address on the books of the Company or, in the case of the Company, to it at its
principal place of business, or to such other address as either party may
specify by notice to the other actually received.

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At the time this letter agreement is signed by you and on behalf of the Company,
it will take effect as a binding agreement between you and the Company on the
basis set forth above.

 

ZOSANO PHARMA CORPORATION     EMPLOYEE: By:  

/s/ John Walker

   

/s/ Greg Kitchener

Name:   John Walker     Greg Kitchener Title:   President and Chief Executive
Officer           Date signed: September 25, 2018

 

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