pirs_9-30x21ex102






    1  EXHIBIT 10.2  EMPLOYMENT AGREEMENT    This Employment Agreement (the “Agreement”) is made and entered into by and between Tom  Bures (“Executive”) and Pieris Pharmaceuticals, Inc., a Nevada corporation (the “Company”)  (together referred to herein as the “Parties”), effective as of October 6, 2021 (the “Effective Date”).      R E C I T A L S    WHEREAS, Company currently employs Executive as Vice President, Finance and Treasurer,    WHEREAS, the Company desires to promote and employ Executive as Senior Vice President,  Chief Financial Officer and Treasurer of the Company and Executive desires to accept such  employment, subject to the terms and conditions contained in this Agreement,     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein,  and for other good and valuable consideration, the receipt and adequacy of which is hereby  acknowledged, the parties agree as follows:  1. Employment.   (a) Term of Agreement.  This Agreement shall become effective on the Effective Date  and shall continue unless terminated in accordance with the terms and conditions contained in  Sections 3 and 4 of this Agreement (the “Term”).  Executive’s employment shall begin on October  7, 2021, unless otherwise agreed to in writing by the Parties (the “Start Date”), and at all times  shall be “at-will.”  (b) Position and Duties.  Subject to the terms and conditions of this Agreement, the  Company agrees to employ Executive during the Term as Senior Vice President and Chief  Financial Officer of the Company and as such, Executive shall report to the Chief Executive  Officer of the Company.  Executive shall perform such duties and bear the responsibilities as are  customarily associated with this position as well as such other duties as shall be specified and  designated from time to time by the Company’s Chief Executive Officer, his or her designee,  and/or the Company’s board of directors (the “Board”).  (c) Location.  Executive may perform services for the Company at any location in the  United States; provided, however, that the Company may from time to time require Executive to  travel to other locations in connection with the Company’s business on a reasonable basis  (including the Company’s offices located in Boston, Massachusetts).    (d) Exclusivity.    (i) During the Term, Executive shall devote all of Executive’s business time  and energies to the business and affairs of the Company and its Affiliates and to the faithful  and diligent performance of the duties and responsibilities described herein. During the  Term, Executive shall not (A) accept any other employment or consultancy or (B) serve on  





 






    2  the board of directors or similar body of any entity, unless such position is approved by the  Chief Executive Officer as set forth in subsection (d)(ii) below (which such approval shall  continue until such time as the Company provides notice to Executive that, in its reasonable  judgment, such position is with a Competing Entity, interferes with Executive’s duties to  the Company or places Executive in a Competing Position with, or otherwise conflicts  with, the interests of the Company, at which time the Company and Executive will discuss  such conflict and the parties will use reasonable efforts to reach agreement on its  resolution); provided that Executive may engage in civic and not-for-profit activities, so  long as such activities, in the aggregate, do not conflict with the interests of the Company  or materially interfere with the performance of Executive’s duties to the Company and do  not otherwise conflict with subsection (d)(ii) below.   (ii) During Executive’s employment by the Company, Executive agrees not to  acquire, assume or participate in, directly or indirectly, any financial position, investment  or interest known by Executive to be adverse or antagonistic to the Company, its business  or prospects, financial or otherwise or in any Competing Entity, directly or indirectly;  provided, however, Executive may accept equity compensation related to the positions or  business activities engaged in which have been approved by the Company pursuant to  subsection (d)(i) above.  Ownership by Executive, as a passive investment, of less than two  percent (2%) of the outstanding shares of capital stock of any corporation with one or more  classes of its capital stock listed on a national securities exchange or publicly traded on a  national securities exchange or in the over-the-counter market shall not constitute breach  of this Section 1(d).  (iii) The Executive hereby represents to the Company that: (A) the execution  and delivery of this Agreement by Executive and the Company and the performance by  Executive of Executive’s duties hereunder do not and shall not constitute a breach of,  conflict with, or otherwise contravene or cause a default under, the terms of any other  agreement or policy to which Executive is a party or otherwise bound or any judgment,  order or decree to which Executive is subject; (B) in entering into this Agreement and  carrying out Executive’s duties under this Agreement, Executive will not disclose to the  Company any trade secret, confidential or proprietary information belonging to any other  Person, including any previous employer, and that Executive shall not bring with Executive  any such information to the Company; (C) Executive is not bound by any agreement with  any previous employer or other party to refrain from competing with the business of, which  would be violated by Executive’s employment with the Company; and (D) all facts  Executive has presented or will present to the Company in connection with entering into  this Agreement and an employment relationship with the Company are accurate and true,  and this includes all oral and written statements Executive has made to the Company  (including, but not limited to, those pertaining to any agreements Executive previously  entered into containing restrictive covenants, Executive’s prior work experience, and  Executive’s prior exposure to trade secrets, confidential and proprietary information), and  Executive understands that the Company will rely upon the accuracy and truth of the  representations and warranties of the Executive set forth herein and the Executive consents  to such reliance.  2. Compensation and Related Matters.  





 






    3  (a) Base Salary.  Executive’s annual base salary (“Base Salary”) will be $370,000 in  U.S. Dollars, less payroll deductions and all required withholdings, payable in accordance with  the Company’s normal payroll practices in effect from time to time.  The Board or a committee of  the Board shall review Executive’s Base Salary at least annually to determine if adjustments  upward to Executive’s Base Salary, if any, will be made solely at the discretion of the Board or a  committee of the Board.    (b) Bonus. Executive shall also be eligible for an annual discretionary bonus of up to  40% of Executive’s then-current Base Salary (the “Target Bonus Amount”) as determined by the  Board or a committee of the Board in its sole discretion, based upon the Board’s or a committee  of the Board’s evaluation (in its sole discretion) of the achievement of specific individual and/or  Company-wide performance goals as chosen and determined by the Board or a committee of the  Board in its sole discretion. The annual discretionary bonus, if any, shall be payable, less  authorized deductions and required withholdings, no later than March 15th of the calendar year  immediately following the calendar year in which it was earned.  The Target Bonus Amount of  any annual discretionary bonus for which Executive is eligible shall be reviewed by the Board or  a committee of the Board from time to time.  (c) Equity.  Executive shall remain subject to the terms of any outstanding equity  awards.  (d) Benefits.  During the Term, the Company shall provide Executive with coverage  under all employee benefit programs, plans and practices as are in effect from time to time, and  which the Company makes available from time to time to its senior executive officers, with at least  the same opportunity to participate as the other senior executive officers of the Company,  including, without limitation, if applicable, retirement, pension, medical, dental, hospitalization,  life insurance, short and long term disability, accidental death and dismemberment and travel  accident coverage.  (e) Vacation and Fringe Benefits.  Executive shall be subject to the Company’s  Unlimited Paid Time Off Policy, as applicable to all of the other Company employees and as may  be amended from time to time.   (f) Business Expenses.  During the Term, the Company shall reimburse Executive for  all reasonable business expenses incurred in the conduct of Executive’s duties hereunder in  accordance with the applicable expense reimbursement policies.  (g) Clawback. Any amounts paid pursuant to this Agreement shall be subject to  recoupment in accordance with any clawback policy that the Company has adopted or is required  in the future to adopt pursuant to the listing standards of any national securities exchange or  association on which the Company’s securities are listed or as is otherwise required by the Dodd- Frank Wall Street Reform and Consumer Protection Act or other applicable law.  3. Termination.  (a) At-Will Employment. The Company and Executive acknowledge that Executive’s  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 any of the parties hereto at  





 






    4  any time, with or without advance notice (other than as stated herein), and for any or no particular  reason or cause.  It also means that Executive’s job duties, title and responsibility, compensation  and benefits, as well as the personnel policies and procedures in effect, may be changed with  prospective effect, with or without notice, at any time in the sole discretion of the Company.  This  “at-will” nature of Executive’s employment shall remain unchanged during Executive’s tenure as  an employee and may not be changed, except in an express writing signed by Executive and a duly  authorized member of the Board.  If Executive’s employment terminates for any reason, Executive  shall not be entitled to any payments, benefits, damages, awards or compensation other than as  provided by this Agreement.     (b) Deemed Resignation.  Upon termination of Executive’s employment for any  reason, Executive shall be deemed to have resigned from all offices and directorships, if any, then  held with the Company or any of its Affiliates, and, at the Company’s request, Executive shall  execute such documents as are necessary or desirable to effectuate such resignations.    4. Obligations Upon Termination of Employment.  (a) Executive’s Obligations.  (i) Notice Period.  Anything in this Agreement notwithstanding, Executive  may voluntarily terminate Executive’s employment hereunder upon not less than sixty (60)  days prior written notice of Executive delivered to the Company, or upon such shorter  notice as Executive and the Company shall agree.  (ii) Confidentiality.  Executive shall not during the Term and thereafter, without  the prior written consent of the Company, knowingly (A) divulge, disclose or make  accessible any Confidential Information (as defined below) to any other person, firm,  partnership, corporation or other entity or (B) use any Confidential Information for  Executive’s own purposes or for the benefit of any other person, firm, partnership,  corporation or other entity (other than the Company), except (x) during the Term, in the  business of and for the benefit of the Company or (y) when required to do so by a court of  competent jurisdiction, by any governmental agency having supervisory authority over the  business of the Company, or by any administrative body or legislative body (including a  committee thereof) with jurisdiction to order Executive to divulge, disclose or make  accessible such Confidential Information or by state, federal, foreign or local law, rule or  regulation; provided that, in the event that Executive is so required to disclose Confidential  Information, Executive shall, prior to making any such disclosure, provide the Company  with prompt written notice of such requirement so that the Company may seek an  appropriate protective order. For purposes of this Agreement, “Confidential Information”  shall mean all confidential Company data, analyses, reports, interpretations, forecasts,  documents and information concerning the affairs of the Company and its Affiliates,  including, without limitation, confidential financial data, strategic business plans,  computer programs and documentation, product development data (or other proprietary  product data), customer lists and customer information, discoveries, practices, policies,  processes, methods, marketing plans, prospects, opportunities and other proprietary  information and trade secrets in whatever form, tangible or intangible; provided that  Confidential Information shall not include (x) information that has become generally  





 






    5  available to the public other than as a result of disclosure by Executive in a manner violative  of this Section 4, or (y) information that is rightly received by Executive without restriction  on disclosure from a third party legally entitled to possess and disclose such information  without restriction (other than information that Executive may learn or has learned by  reason of Executive’s association with any Affiliate).  Upon conclusion of the Term or at  any point prior on request of the Company, Executive shall immediately return to the  Company all Confidential Information, including copies, reproductions and summaries  thereof, in Executive’s possession and shall erase all such Confidential Information from  all media in Executive’s possession, and, if the Company so requests, shall certify in  writing that Executive has done so.  All Confidential Information is and shall remain the  property of the Company and its Affiliates.  (iii) Trade Secrets.  For purposes of this Agreement, the term “trade secrets,”  shall be given its broadest possible interpretation under applicable law and shall mean all  forms and types of financial, business, scientific, technical, economic, or engineering  information, including patterns, plans, compilations, program devices, formulas, designs,  prototypes, methods, techniques, processes, procedures, programs, or codes, whether  tangible or intangible, and whether or how stored, compiled, or memorialized physically,  electronically, graphically, photographically, or in writing that (A) the Company has taken  reasonable measures to keep secret, and that (B) derives independent economic value,  actual or potential, from not being generally known to, and not being readily ascertainable  through proper means by, another person who can obtain economic value from the  disclosure or use of the information.  (iv) Non-Competition.  During the Term and twelve (12) months thereafter,  Executive agrees that, without the prior written consent of the Board (which the Board may  grant or withhold in its discretion): Executive shall not serve in or otherwise occupy a  Competing Position at, or have any financial interest in, any Competing Entity, except that  Executive’s passive ownership of less than two (2%) percent of the stock of a publicly- held corporation whose stock is traded on a national securities exchange shall not, by itself,  be deemed a breach of this Section 4(a)(iv).  (v) Non-Solicitation. During the Term and for twelve (12) months thereafter,  Executive agrees that, without the prior written consent of the Board, Executive shall not,  on his or her own behalf or on behalf of any person or entity, directly or indirectly, (A)  solicit for employment any employee who has been employed by the Company or any  Affiliate at any time during the twelve (12) months immediately preceding such solicitation  or offer or (B) solicit for the business of or provide services to any client, customer, or  vendor of the Company or any Affiliate for which Executive or any subordinate provided  services during the Term.   (vi) Intellectual Property. All Intellectual Property (as defined below) and  Technology (as defined below) created, developed, obtained or conceived of by Executive  during the Term, and all business opportunities presented to Executive during the Term  shall be owned by and belong exclusively to the Company, provided that they directly  relate to the business of the Company, as of the date of such creation, development,  obtaining or conception, and Executive shall (A) promptly disclose to the Company any  





 






    6  such Intellectual Property or Technology or any viable business opportunity presented by  a third party to Executive during the Term and which the Company has not rejected and  (B) execute and deliver to the Company, without additional compensation, such  instruments (such as assignments of any Intellectual Property to the Company) as the  Company may require from time to time to evidence its ownership of any such Intellectual  Property or Technology or business opportunity. For purposes of this Agreement, (x) the  term “Intellectual Property” shall mean and include any and all trademarks, trade names,  service marks, service names, patents, copyrights and applications therefor and (y) the term  “Technology” shall mean and include any and all trade secrets, proprietary information,  inventions, discoveries, know-how, formulae, processes and procedures.  (vii) Non-disparagement.  During the Term and at all times thereafter, unless as  required by law, including through a valid subpoena, Executive shall not make, or cause to  be made, any statement or communicate any information (whether oral or written) that  disparages or reflects negatively on the Company or its Affiliates, officers, directors, board  members, investors, shareholders, agents or employees.  (viii) Response to Legal Process.  During the Term and for twelve (12) months  thereafter, Executive may respond to a lawful and valid subpoena or other legal process  but shall give the Company the earliest possible notice thereof, and shall, as much in  advance of the return date as possible, make available to the Company and its counsel the  documents and other information sought, and shall assist such counsel with his or her  reasonable requests in resisting or otherwise responding to such process.  (ix) Notice Pursuant to Defend Trade Secrets Act. Notwithstanding any  provision of this Agreement prohibiting the disclosure of trade secrets or other Confidential  Information, Executive understands that Executive may not be held criminally or civilly  liable under any federal or state trade secret law for the disclosure of a trade secret that (i)  is made (A) in confidence to a federal, state or local government official, either directly or  indirectly, or to an attorney representing Executive, and (B) solely for the purpose of  reporting or investigating a suspected violation of law, or (ii) is made in a complaint or  other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In  addition, if Executive files a lawsuit or other court proceeding against the Company for  retaliating against Executive for reporting a suspected violation of law, Executive may  disclose the trade secret to the attorney representing Executive and use the trade secret in  the court proceeding, so long as Executive files any document containing the trade secret  under seal and does not disclose the trade secret, except pursuant to court order.  (x) Survival of Provisions.  The provisions of this Section 4(a) shall survive the  termination or expiration of the applicable Executive’s employment with the Company and  shall be fully enforceable thereafter.  If it is determined by a court of competent jurisdiction  that any restriction in this Section 4(a) is excessive in duration or scope or is unreasonable  or unenforceable under the laws of that jurisdiction, it is the intention of the parties that  such restriction may be modified or amended by the court to render it enforceable to the  maximum extent permitted by the law of that jurisdiction.  





 






    7  (xi) Injunctive Relief. Executive and the Company agree that the restrictions  contained in Sections 4(a) hereof are a reasonable and necessary protection of the  immediate interests on the Company, that any violation of these restrictions would cause  substantial injury to the Company and that the Company would not have entered into this  Agreement without receiving the additional consideration offered by Executive in binding  his or her self to these restrictions. In the event of the breach or threatened breach by  Executive of any of such restrictions, the Company shall be entitled to apply to any court  of competent jurisdiction for an injunction restraining Executive for such breach or  threatened breach, including, but not limited to, a civil seizure order under the Defend  Trade Secrets Act; provided that the right of the Company to apply for an injunction shall  not be construed as prohibiting the Company from pursuing any other available remedies  for such breach or threatened breach. In the event that, notwithstanding the foregoing, a  restriction, or any portion thereof, contained in Section 4(a) is deemed to be unreasonable  by a court of competent jurisdiction, whether due to the passage of time, change of  circumstances or otherwise, Executive and the Company agree that such restriction, or  portion thereof, shall be modified in order to make it reasonable and shall be enforced  accordingly.  (b) Company’s Obligations.  (i) Payments of Accrued Obligations upon Termination of Employment.  Upon  a termination of Executive’s employment for any reason, Executive (or Executive’s estate  or legal representative, as applicable) shall be entitled to receive, within ten (10) days after  the date Executive terminates employment with the Company (or such earlier date as may  be required by applicable law): (A) any portion of Executive’s Base Salary earned through  Executive’s termination date not theretofore paid; (B) any expenses owed to Executive  under Section 2(f) above; (C) any accrued but unused vacation pay owed to Executive  pursuant to Section 2(e) above; and (D) any amount arising from Executive’s participation  in, or benefits under, any employee benefit plans, programs or arrangements under Section  2(d) above, which amounts shall be payable in accordance with the terms and conditions  of such employee benefit plans, programs or arrangements.  (ii) Separation Benefits upon a Covered Termination Other Than During a  Change in Control Period.  If Executive experiences a Covered Termination at any time  other than during a Change in Control Period, and if Executive executes and does not  revoke during any applicable revocation period a general release of all claims against the  Company and its Affiliates in a form acceptable to the Company (a “Release of Claims”)  within the sixty (60) day period immediately following Executive’s Separation from  Service and in compliance with applicable law, following such Covered Termination, then  in addition to any accrued obligations payable under Section 4(b)(i) above, the Company  shall provide Executive with the following:   (A) Separation Pay. Nine (9) months (the “Separation Pay  Period”) of Executive’s Base Salary in effect as of Executive’s termination  date (the “Separation Pay”), provided, however, that for a Covered  Termination other than during a Change in Control Period, the Separation  Pay shall represent seventy-five percent (75%) of Executive’s Base Salary.   





 






    8  Such amount will be subject to applicable withholdings and payable in equal  installments (the “Separation Pay Installments”) on the first regular payroll  date following the date the Release of Claims becomes effective and  irrevocable or if the payment is subject to Section 409A, the date set forth  in Section 10 hereof.    (B) Bonus.  Any annual discretionary bonus that the Company  awarded to Executive in the year prior to the termination but which  Company still had not paid to Executive as of the termination date.  Such  amount will be subject to applicable withholdings and payable in a single  lump sum cash payment on the first regular payroll date following the date  the Release of Claims becomes effective and irrevocable or if the payment  is subject to Section 409A, the date set forth in Section 10 hereof.  For the  avoidance of doubt, Executive shall not be entitled to a pro-rated bonus for  the year of termination.     (C) Equity Awards.  With respect to the then-outstanding equity  awards that remain subject to vesting or other forfeiture restrictions as of  the termination date (the “Unvested Awards”), such Unvested Awards shall  remain subject to their original vesting schedules.   (D) Continued Healthcare.  The Company shall notify Executive  of any right to continue group health plan coverage sponsored by the  Company or an Affiliate immediately prior to Executive’s date of  termination pursuant to the provisions of applicable law including, but not  limited to, the provisions of the Consolidated Omnibus Budget  Reconciliation Act of 1985, as amended (“COBRA”).  If Executive elects  to receive such continued healthcare coverage, the Company shall directly  pay, or reimburse Executive for, the premium for Executive and Executive’s  covered dependents, less the amount of Executive’s monthly premium  contributions for such coverage prior to termination, for the period  commencing on the first day of the first full calendar month following the  date the Release of Claims becomes effective and irrevocable through the  earlier of (i) the last day of the nine (9) full calendar months following the  date the Release of Claims becomes effective and irrevocable and (ii) the  date Executive and Executive’s covered dependents, if any, become eligible  for healthcare coverage under another employer’s plan(s).  Executive shall  notify the Company immediately if Executive becomes covered by a group  health plan of a subsequent employer.  After the Company ceases to pay  premiums pursuant to this subsection, Executive may, if eligible, elect to  continue healthcare coverage at Executive’s expense in accordance the  provisions of COBRA or other applicable law.  (iii) Separation Benefits upon a Covered Termination During a Change in  Control Period.  If Executive experiences a Covered Termination during a Change in  Control Period, and if Executive executes and does not revoke during any applicable  revocation period a Release of Claims within a reasonable period of time specified by the  





 






    9  Company, following such Covered Termination, then in addition to any accrued  obligations payable under Section 4(b)(i) above, the Company shall provide Executive with  the following:  (A) Separation Pay.  Twelve (12) months of Separation Pay.   Such amount will be subject to applicable withholdings and payable in  twelve equal installments on the first regular payroll date following the date  the Release of Claims becomes effective and irrevocable or if the payment  is subject to Section 409A, the date set forth in Section 10 hereof.    (B) Bonus.  Executive’s Target Bonus Amount in effect as of the  termination date; plus any annual discretionary bonus that the Company  awarded to Executive in the year prior to the termination but which  Company still had not paid to Executive as of the termination date.  Such  amount will be subject to applicable withholdings and payable in a single  lump sum cash payment on the first regular payroll date following the date  the Release of Claims becomes effective and irrevocable or if the payment  is subject to Section 409A, the date set forth in Section 10 hereof.    (C) Equity Awards. With respect to the Unvested Awards, one- hundred percent (100%) of the Unvested Awards shall, as applicable, vest  and have any forfeiture restrictions lapse, as of the date the Release of  Claims becomes effective and irrevocable; provided, however, that if the  equity award is subject to Section 409A and payable upon vesting or lapse  of restriction, as applicable, payment of such equity award shall be made on  the date set forth in Section 10 hereof.  (D) Continued Healthcare.  The Company shall notify Executive  of any right to continue group health plan coverage sponsored by the  Company or an Affiliate immediately prior to Executive’s date of  termination pursuant to the provisions of applicable law including, but not  limited to, the provisions of COBRA.  If Executive elects to receive such  continued healthcare coverage, the Company shall directly pay, or  reimburse Executive for, the premium for Executive and Executive’ s  covered dependents, less the amount of Executive’s monthly premium  contributions for such coverage prior to termination, for the period  commencing on the first day of the first full calendar month following the  date the Release of Claims becomes effective and irrevocable through the  earlier of (i) the last day of the twelve (12) full calendar months following  the date the Release of Claims becomes effective and irrevocable and (ii)  the date Executive and Executive’s covered dependents, if any, become  eligible for healthcare coverage under another employer’s plan(s).   Executive shall notify the Company immediately if Executive becomes  covered by a group health plan of a subsequent employer.  After the  Company ceases to pay premiums pursuant to this subsection, Executive  may, if eligible, elect to continue healthcare coverage at Executive’s  expense in accordance the provisions of COBRA or other applicable law.  





 






    10  (iv) No Other Severance.  The provisions of this Section 4(b) shall supersede in  their entirety any severance payment or other arrangement provided by the Company,  including, without limitation, any severance plan of the Company.   (c) Release of Claims.  The Company shall provide a form Release of Claims to  Executive within five (5) business days of Executive’s termination date.    (d) No Requirement to Mitigate; Separation Pay Offset; Survival.    (i) Executive shall not be required to mitigate the amount of any payment  provided for under this Agreement by seeking other employment or in any other manner.    (ii) In the case of Covered Termination Other Than During a Change in Control  Period under Section 4(b)(ii)(A), if Executive accepts a Bona Fide Offer of Employment  (as defined below) from another Person during the Separation Pay Period, Executive shall  no longer be entitled to each of the Separation Pay Installments under Section 4(b)(ii)(A).   Instead, in addition to the Separation Pay Installments Executive previously paid to  Executive (and in lieu of the Separation Pay Installments not yet paid):  (A) If Executive accepts a Bona Fide Offer of Employment on  or before the nine (9) month anniversary of the commencement of the  Separation Pay Period, then Executive shall be entitled to an amount equal  to nine (9) months, less the number of Separation Pay Installments  previously paid to Executive; or  (B) If Executive accepts a Bona Fide Offer of Employment after  the nine (9) month anniversary of the commencement of the Separation Pay  Period, then Executive shall not be entitled to receive any further Separation  Pay Installments.    For the sake of clarity, under no circumstances shall Executive receive less than nine (9)  months of Separation Pay in the case of a Covered Termination Other Than During a  Change in Control Period.    (iii) Executive shall notify the Company in writing of Executive’s acceptance of  a Bona Fide Offer of Employment within two (2) business days of such offer.  Executive  further agrees that the compensation paid in connection with any such Bona Find Offer of  Employment will be negotiated in good faith and as the result of arm’s-length bargaining  and not with the effect of diminishing the Company’s right to reduce the Separation Pay  under this Agreement.    (iv) Notwithstanding anything to the contrary in this Agreement, the termination  of Executive’s employment shall not impair the rights or obligations of any party.  





 






    11  5. Limitation on Payments. Notwithstanding anything in this Agreement to the  contrary, if any payment or distribution Executive would receive pursuant to this Agreement or  otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section  280G of the Internal Revenue Code of 1986, as amended (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 the Company shall cause to be determined, before any amounts of the Payment are paid to  Executive, which of the following alternative forms of payment would maximize Executive’s  after-tax proceeds: (x) payment in full of the entire amount of the Payment (a “Full Payment”), or  (y) payment of only a part of the Payment so that Executive receives that largest Payment possible  without being subject to the Excise Tax (a “Reduced Payment”), whichever of the foregoing  amounts, taking into account the applicable federal, state and local income taxes and the Excise  Tax (all computed at the highest 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  Executive’s receipt, on an after-tax basis, of the greater amount of the Payment, notwithstanding  that all or some portion the Payment may be subject to the Excise Tax.    (a) The independent registered public accounting firm engaged by the Company for  general audit purposes as of the day prior to the effective date of the Change in Control shall make  all determinations required to be made under this Section 5.  If the independent registered public  accounting firm so engaged by the Company is serving as accountant or auditor for the individual,  group or entity effecting the Change in Control, the Company shall appoint a nationally recognized  independent registered public accounting firm to make the determinations required hereunder.  The  Company shall bear all expenses with respect to the determinations by such independent registered  public accounting firm required to be made hereunder.  (b) The independent registered public accounting firm engaged to make the  determinations hereunder shall provide its calculations, together with detailed supporting  documentation, to the Company and Executive at such time as requested by the Company or  Executive.  If the independent registered public accounting firm determines that no Excise Tax is  payable with respect to a Payment, either before or after the application of the Reduced Payment,  it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive  that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations  of the accounting firm made hereunder shall be final, binding and conclusive upon the Company  and Executive.  6. Successors.  (a) Company’s Successors.  Any successor to the Company (whether direct or indirect  and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially  all of the Company’s business and/or assets shall assume the obligations under this Agreement and  agree expressly to perform the obligations under this Agreement in the same manner and to the  same extent as the Company would be required to perform such obligations in the absence of a  succession.  For all purposes under this Agreement, the term “Company” shall include any  successor to the Company’s business and/or assets which executes and delivers the assumption  agreement described in this Section 6(a) or which becomes bound by the terms of this Agreement  by operation of law.  





 






    12  (b) Executive’s Successors.  The terms of this Agreement and all rights of Executive  hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal  representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  7. Notices.  Notices and all other communications contemplated by this Agreement  shall be in writing and shall be deemed to have been duly given when personally delivered or one  day following mailing via Federal Express or similar overnight courier service.  In the case of  Executive, mailed notices shall be addressed to Executive at Executive’s home address that the  Company has on file for Executive.  In the case of the Company, mailed notices shall be addressed  to its corporate headquarters, and all notices shall be directed to the attention of the Chairman of  the Compensation Committee of the Company.  8. Dispute Resolution.  To ensure the timely and economical resolution of disputes  that arise in connection with this Agreement, Executive and the Company agree that any and all  disputes, claims, or causes of action arising from or relating to the enforcement, breach,  performance or interpretation of this Agreement, Executive’s employment, or the termination of  Executive’s employment, shall be resolved to the fullest extent permitted by law by final, binding  and confidential arbitration, by a single arbitrator, in Boston, Massachusetts, conducted by Judicial  Arbitration and Mediation Services, Inc. (“JAMS”) under the applicable JAMS employment rules.   By agreeing to this arbitration procedure, both Executive and the Company waive the right  to resolve any such dispute through a trial by jury or judge or administrative proceeding.   The arbitrator shall:  (i) have the authority to compel adequate discovery for the resolution of the  dispute and to award such relief as would otherwise be permitted by law; and (ii) issue a written  arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement  of the award.  The arbitrator shall be authorized to award any or all remedies that Executive or the  Company would be entitled to seek in a court of law.  The Company shall pay all JAMS’ arbitration  fees in excess of the amount of court fees that would be required if the dispute were decided in a  court of law.  Nothing in this Agreement is intended to prevent either Executive or the Company  from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any  such arbitration.  Notwithstanding the foregoing, Executive and the Company each have the right  to resolve any issue or dispute over intellectual property rights by Court action instead of  arbitration.  9. Miscellaneous Provisions.  (a) Withholdings and Offsets.  The Company shall be entitled to withhold from any  amounts payable under this Agreement any federal, state, local or foreign withholding or other  taxes or charges which the Company is required to withhold. The Company shall be entitled to  rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall  arise.    (b) Waiver.  No provision of this Agreement shall be modified, waived or discharged  unless the modification, waiver or discharge is agreed to in writing and signed by Executive and  by an authorized officer of the Company (other than Executive).  No waiver by either party of any  breach of, or of compliance with, any condition or provision of this Agreement by the other party  shall be considered a waiver of any other condition or provision or of the same condition or  provision at another time.  





 






    13  (c) Whole Agreement.  Except as expressly provided for in Section 2(c), this  Agreement represents the entire understanding of the parties hereto with respect to the subject  matter hereof and supersedes all prior arrangements and understandings regarding same, including,  without limitation, any severance plan of the Company.  (d) Choice of Law.  The validity, interpretation, construction and performance of this  Agreement shall be governed by the laws of the Commonwealth of Massachusetts.  (e) Severability.  The finding by a court of competent jurisdiction of the  unenforceability, invalidity or illegality of any provision of this Agreement shall not render any  other provision of this Agreement unenforceable, invalid or illegal.  Such court shall have the  authority to modify or replace the invalid or unenforceable term or provision with a valid and  enforceable term or provision which most accurately represents the intention of the parties hereto  with respect to the invalid or unenforceable term or provision.  (f) Interpretation; Construction.  The headings set forth in this Agreement are for  convenience of reference only and shall not be used in interpreting this Agreement.  This  Agreement has been drafted by legal counsel representing the Company, but Executive has been  encouraged to consult with, and has consulted with, Executive’s own independent counsel and tax  advisors with respect to the terms of this Agreement.  The parties hereto acknowledge that each  party hereto and its counsel has reviewed and revised, or had an opportunity to review and revise,  this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved  against the drafting party shall not be employed in the interpretation of this Agreement.   (g) Representations; Warranties.  Executive represents and warrants that Executive is  not restricted or prohibited, contractually or otherwise, from entering into and performing each of  the terms and covenants contained in this Agreement, and that Executive’s execution and  performance of this Agreement will not violate or breach any other agreements between Executive  and any other person or entity and that Executive has not engaged in any act or omission that could  be reasonably expected to result in or lead to an event constituting “Cause” for purposes of this  Agreement.  (h) Counterparts.  This Agreement may be executed in counterparts, each of which  shall be deemed an original, but all of which together will constitute one and the same instrument.  10. Section 409A.  The intent of the parties is that the payments and benefits under this  Agreement comply with or be exempt from Section 409A of the Code and the Department of  Treasury regulations and other interpretive guidance issued thereunder, including without  limitation any such regulations or other guidance that may be issued after the Effective Date,  (“Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be  interpreted to be in compliance therewith.  If the Company determines that any provision of this  Agreement would cause Executive to incur any additional tax or interest under Section 409A (with  specificity as to the reason therefor), the Company and Executive shall take commercially  reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A  through good faith modifications to the minimum extent reasonably appropriate to conform with  Section 409A, provided that any such modifications shall not increase the cost or liability to the  Company.  To the extent that any provision hereof is modified in order to comply with or be  





 






    14  exempt from Section 409A, such modification shall be made in good faith and shall, to the  maximum extent reasonably possible, maintain the original intent and economic benefit to  Executive and the Company of the applicable provision without violating the provisions of Section  409A.  (a) Separation from Service.  Notwithstanding any provision to the contrary in this  Agreement, no amount that is subject to Section 409A of the Code shall be payable pursuant to  Section 4 unless Executive’s termination of employment constitutes a “separation from service”  with the Company within the meaning of Section 409A (“Separation from Service”) and, except  as provided under Section 10(b) of this Agreement, any such amount shall be paid, or in the case  of installments, commence payment, on the sixtieth (60th) day following Executive’s Separation  from Service.  Any installment payments that would have been made to Executive during the sixty  (60) day period immediately following Executive’s Separation from Service but for the preceding  sentence shall be paid to Executive on the sixtieth (60th) day following Executive’s Separation  from Service and the remaining payments shall be made as provided in this Agreement.  (b) Specified Employee.  Notwithstanding any provision to the contrary in this  Agreement, if Executive is deemed at the time of his or her separation from service to be a  “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed  commencement of any portion of the benefits to which Executive is entitled under this Agreement  is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code,  such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (a)  the expiration of the six (6)-month period measured from the date of Executive’s Separation from  Service or (b) the date of Executive’s death.  Upon the first day of the seventh month following  the date of the Executive’s separation from service, all payments deferred pursuant to this Section  10(b) shall be paid in a lump sum to Executive, and any remaining payments due under this  Agreement shall be paid as otherwise provided herein.  (c) Expense Reimbursements.  To the extent that any reimbursements payable pursuant  to this Agreement are subject to the provisions of Section 409A, any such reimbursements payable  to Executive pursuant to this Agreement shall be paid to Executive no later than December 31 of  the year following the year in which the expense was incurred, the amount of expenses reimbursed  in one year shall not affect the amount eligible for reimbursement in any subsequent year, and  Executive’s right to reimbursement under this Agreement will not be subject to liquidation or  exchange for another benefit.  (d) Installments.  For purposes of Section 409A (including, without limitation, for  purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any  installment payments under this Agreement shall be treated as a right to receive a series of separate  payments and, accordingly, each such installment payment shall at all times be considered a  separate and distinct payment.  11. Definition of Terms.  The following terms referred to in this Agreement shall have  the following meanings:  (a) Affiliates.  “Affiliates” means any of the Company’s subsidiaries or joint ventures  currently existing or which shall be established during Executive’s employment by the Company.  





 






    15  (b) Bona Fide Offer of Employment.  “Bona Fide Offer of Employment” means an  offer to provide services in any capacity to another Person that during the first twelve (12) months  of providing such services shall entitle Executive to earn a base salary that equals or exceeds  Executive’s annual Base Salary in effect as of Executive’s termination date.    (c) Cause.  “Cause” means the occurrence of any of the following events, as determined  by the Board or a committee designated by the Board, in its sole discretion: (i) Executive’s  commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the  laws of the United States or any state thereof; (ii) Executive’s attempted commission of, or  participation in, a fraud against the Company; (iii) Executive’s material violation of any contract  or agreement between Executive and the Company or of any statutory duty owed to the Company,  including this Agreement; (iv) Executive’s unauthorized use or disclosure of the Company’s  confidential information or trade secrets; or (v) Executive’s gross misconduct.  (d) Change in Control.  “Change in Control” means:  Ownership.  Any “Person” (as such term is used in Sections 13(d) and 14(d) of the  Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the  “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or  indirectly, of securities of the Company representing 50% or more of the total  voting power represented by the Company’s then outstanding voting securities  (excluding for this purpose any such voting securities held by the Company or its  Affiliates or by any employee benefit plan of the Company) pursuant to a  transaction or a series of related transactions which the Board of Directors does not  approve; or  Merger/Sale of Assets.  (A) A merger or consolidation of the Company whether or  not approved by the Board of Directors, other than a merger or consolidation which  would result in the voting securities of the Company outstanding immediately prior  thereto continuing to represent (either by remaining outstanding or by being  converted into voting securities of the surviving entity or the parent of such  corporation) more than 50% of the total voting power represented by the voting  securities of the Company or such surviving entity or parent of such corporation, as  the case may be, outstanding immediately after such merger or consolidation; or  (B) the sale or disposition by the Company of all or substantially all of the  Company’s assets in a transaction requiring stockholder approval.  Notwithstanding  the foregoing, a “Change in Control” must also constitute a “change in control  event” as defined in Treasury Regulation §1.409A-3(i)(5).  (e) Change in Control Period.  “Change in Control Period” means the period beginning  with the agreement which if consummated is a Change in Control and ending twelve (12) months  after the effective date of a Change in Control.  (f) Covered Termination.  “Covered Termination” shall mean the termination of  Executive’s employment (i) by the Company other than for Cause, or (ii) by Executive for Good  Reason.  





 






    16  (g) Competing Entity.  “Competing Entity” shall mean any other person or entity  engaged or actively planning to be engaged in the business of developing, manufacturing or  marketing next generation protein therapeutics for respiratory, autoimmune, or oncology  conditions.  (h) Competing Position.  “Competing Position” shall mean engaging, directly or  indirectly, in any manner or capacity, as adviser, principal, agent, affiliate, promoter, partner,  officer, director, employee, stockholder, owner, co-owner, consultant, or member of any  association or otherwise, in any Competing Entity.  (i) Good Reason.  “Good Reason” means Executive’s resignation from all positions  he or she then holds with the Company if, without Executive’s consent: (i) (A) there is a material  diminution in Executive’s duties and responsibilities with the Company or in job title; (B) there is  a material reduction of Executive’s base salary; provided, however, that a material reduction in  Executive’s base salary pursuant to a salary reduction program affecting all or substantially all of  the employees of the Company and that does not adversely affect Executive to a greater extent  than other similarly situated employees shall not constitute Good Reason; or (C) Executive is  required to relocate Executive’s primary work location to a facility or location that would increase  Executive’s one-way commute distance by more than fifty (50) miles from Executive’s primary  work location as of immediately prior to such change, (ii) Executive provides written notice  outlining such conditions, acts or omissions to the Company within thirty (30) days immediately  following such material change or reduction, (iii) such material change or reduction is not  remedied by the Company within thirty (30) days following the Company’s receipt of such written  notice and (iv) Executive’s resignation is effective not later than thirty (30) days after the  expiration of such thirty (30) day cure period.  (j) “Person” means without limitation, an individual, a partnership, a limited liability  company, a corporation, an association, a joint stock company, a trust, a joint venture, an  unincorporated organization and a governmental entity or any department, agency or political  subdivision thereof.     





 






    17  IN WITNESS HEREOF, the Parties have signed this Agreement as of the date first above  written.    PIERIS PHARMACEUTICALS, INC.    _________________________________  By:  Name:  Title:      TOM BURES      _/s/_Thomas Bures__________________                          116751543v.4