[pirs12312019ex1026001.jpg]
Exhibit 10.26 PIERIS PHARMACEUTICALS, INC. AMENDED AND RESTATED NON-EMPLOYEE
DIRECTOR COMPENSATION POLICY The Board of Directors of Pieris Pharmaceuticals,
Inc. (the “Company”) has approved the following Amended and Restated
Non-Employee Director Compensation Policy (this “Policy”) which establishes
compensation to be paid to non-employee directors of the Company, effective as
of December 30, 2019 (“Effective Time”), to provide an inducement to obtain and
retain the services of qualified persons to serve as members of the Company’s
Board of Directors. Applicable Persons This Policy shall apply to each director
of the Company who is not an employee of the Company or any Affiliate (each, a
“Non-Employee Director”). “Affiliate” shall mean an entity which is a direct or
indirect parent or subsidiary of the Company, as determined pursuant to Section
424 of the Internal Revenue Code of 1986, as amended. Stock Option Grants All
stock option amounts set forth herein shall be subject to automatic adjustment
in the event of any stock split or other recapitalization affecting the
Company’s common stock, par value $0.001 per share (the “Common Stock”). Interim
Stock Option Grant On January 25, 2020, (i) each Non-Employee Director shall be
automatically granted a non-qualified stock option to purchase 20,000 shares of
Common Stock under the Company’s then-current Stock Incentive Plan, as of the
Effective Time the 2018 Stock Incentive Plan (the “Stock Plan”), and (ii) the
Chairperson of the Board of Directors (the “Chairperson”) shall be automatically
granted an additional non-qualified stock option to purchase 2,500 shares of
Common Stock under the Stock Plan (together, the “Interim Director Awards”).
Annual Stock Option Grants Beginning in calendar 2020, each calendar year, (i)
each Non-Employee Director shall be automatically granted a non-qualified stock
option to purchase 40,000 shares of Common Stock under the Stock Plan on the
date of the annual meeting of the Board of Directors coincident with or
immediately following the Company’s annual meeting of stockholders (the “Annual
Stockholders Meeting”), and (ii) the Chairperson shall be automatically granted
an additional non- qualified stock option to purchase 5,000 shares of Common
Stock under the Stock Plan (together, the “Annual Director Awards”). To the
extent that the Non-Employee Director or Chairperson, as applicable, has served
in that position for less than one year, then the Annual Director Award shall be
pro-rated with respect to such Non-Employee Director or Chairperson.

--------------------------------------------------------------------------------

 
[pirs12312019ex1026002.jpg]
Initial Stock Option Grant for Newly Appointed or Elected Directors and
Chairperson Each new Non-Employee Director shall be automatically granted a
non-qualified stock option to purchase 30,000 shares of Common Stock under the
Stock Plan at the first regularly scheduled meeting of the Board of Directors on
or after his or her initial appointment or election to the Board of Directors
(the “Initial Director Award”). The Chairperson shall be automatically granted
an additional non-qualified stock option to purchase 40,000 shares of Common
Stock under the Stock Plan at the first regularly scheduled meeting of the Board
of Directors on or after his or her initial appointment or election as
Chairperson (the “Initial Chairperson Award”). Terms for All Option Grants
Unless otherwise specified in this Policy or by the Board of Directors or the
Compensation Committee at the time of grant, all options granted under this
Policy shall: (i) vest, in the case of (A) the Annual Director Awards, at the
end of the “Directors’ Compensation Year”, which shall be defined as the
approximately one-year period beginning on the date of each regular Annual
Stockholders Meeting and ending on the date of the next regular Annual
Stockholders Meeting, subject to the Non-Employee Director’s continued service
on the Board of Directors through the applicable Directors’ Compensation Year,
and (B) the Interim Director Awards and the Initial Director Award, one (1) year
after the date of grant of such option, subject to the Non-Employee Director’s
continued service on the Board of Directors on the vesting date, and (C) the
Initial Chairperson Award, as to twenty-five percent (25%) of the shares
underlying the Initial Chairperson Award on the first anniversary of the date of
the Chairperson’s appointment or election as Chairperson (the “Initial Vesting
Date”), with the remaining seventy-five percent (75%) of the shares underlying
the Initial Chairperson Award vesting in twelve (12) equal quarterly
installments at the end of each full calendar quarter following the Initial
Vesting Date, subject to the Chairperson’s continued service as Chairperson on
the vesting date; (ii) have an exercise price equal to the fair market value of
the Common Stock on the grant date, as determined in the Stock Plan; (iii)
terminate ten years after the grant date; and (iv) contain such other terms and
conditions as set forth in the form of option agreement approved by the Board of
Directors or the Compensation Committee prior to the grant date. Annual Fees
Each Non-Employee serving on the Board of Directors and the Audit Committee,
Compensation Committee, Nominating and Corporate Governance Committee, and/or
Science and Technology Committee, as applicable, shall be entitled to the
following annual amounts (the “Annual Fees”): Board of Directors or Annual
Retainer Amount Annual Retainer Amount Committee of Board of for Member for
Chair Directors Board of Directors $35,000 $30,000* Audit Committee $7,500
$15,000** Science and Technology $5,000 $10,000** Committee 2

--------------------------------------------------------------------------------

 
[pirs12312019ex1026003.jpg]
Compensation Committee $5,000 $10,000** Nominating and Corporate $4,000 $8,000**
Governance Committee * The annual retainer amount for the Chair of the Board of
Directors is in addition to the annual retainer amount for a Member of the Board
of Directors. ** Annual retainer amounts for the Chair of Committees of the
Board of Directors are in lieu of the annual retainer amount for a Member of the
applicable Committee of the Board of Directors. Except as otherwise set forth in
this Policy, all Annual Fees shall be paid for the period from January 1 through
December 31 of each year. Such Annual Fees shall be paid in cash or a grant of
an option to purchase Common Stock under the Stock Plan, at the election of each
Non- Employee Director, as follows: • cash in the amount of each Non-Employee
Director’s Annual Fees; or • an option to purchase such number of shares of
Common Stock as is equal to the full dollar amount of each Non-Employee
Director’s Annual Fees (as calculated below under “Calculation of Shares and
Grant Terms”). Election Each Non-Employee Director shall make an annual election
on the form provided by the Company, indicating the combination of cash and/or
Common Stock elected in the year prior to the payment, indicating his or her
election for the following calendar year. If no election has been made prior to
the first date of the calendar year, then the Non-Employee Director shall
receive all Annual Fees in cash. Each newly elected or appointed Non-Employee
Director shall make an election prior to the beginning of the next calendar
quarter after his or her initial appointment or election. Payments Payments
payable to Non-Employee Directors shall be paid quarterly in arrears promptly
following the end of each calendar quarter, provided that (i) the amount of such
payment shall be prorated for any portion of such quarter that such director was
not serving on the Board or a committee or, in the case of the Annual Fees paid
for service as a chairperson, as a chairperson, and (ii) no fee shall be payable
in respect of any period prior to the date such director was elected to the
Board or a committee or, in the case of the Annual Fees paid for service as a
chairperson, as a chairperson. Calculation of Shares and Grant Terms If an
option to purchase Common Stock is to be received as payment, the number of
shares underlying such option shall equal the Black Scholes value of the options
computed in accordance with FASB Topic 718 on the 25th day of the month
following the end of each calendar quarter (the “Calculation Date”) (rounded
down to the nearest whole number so that no fractional shares 3

--------------------------------------------------------------------------------

 
[pirs12312019ex1026004.jpg]
shall be issued). The option shall be automatically and without any further
action required by the Board of Directors issued as of the Calculation Date and
shall be fully vested as of the date of grant. Expenses Upon presentation of
documentation of such expenses reasonably satisfactory to the Company, each
Non-Employee Director shall be reimbursed for his or her reasonable out-of-
pocket business expenses incurred in connection with attending meetings of the
Board of Directors and committees thereof or in connection with other business
related to the Board of Directors. Amendments The Compensation Committee shall
periodically review this Policy to assess whether any amendments in the type and
amount of compensation provided herein should be made and shall make
recommendations to the Board of Directors for its approval of any amendments to
this Policy. 4

--------------------------------------------------------------------------------