Document:

EX-10.2

 Exhibit 10.2 

Employment Agreement 

This Employment Agreement (this “Agreement”), dated as of February 16, 2022 (the “Effective Date”), is
made by and between Lyra Therapeutics, Inc., a Delaware corporation (together with any successor thereto, the “Company”), and Harlan Waksal (“Executive”) (collectively referred to herein as the
“Parties” or individually referred to as a “Party”). 
 RECITALS 

 

	A.	 It is the desire of the Company to assure itself of the services of Executive as of the Effective Date and
thereafter by entering into this Agreement. 

  

	B.	 Executive and the Company mutually desire that Executive provide services to the Company on the terms herein
provided. 

 AGREEMENT 

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the Parties hereto agree as
follows: 
  

	1.	 Employment. 

(a) General. Effective on the Effective Date, the Company shall employ Executive, and Executive shall be employed by the Company, for
the period and in the positions set forth in this Section 1, and subject to the other terms and conditions herein provided. 

(b) 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, and that Executive’s employment with the Company may be terminated by either Party at any time for any or no reason
(subject to the notice requirements of Section 3(b)). 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 officer of the Company. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits,
damages, award or compensation other than as provided in this Agreement or otherwise agreed to in writing by the Company or as provided by applicable law. The term of this Agreement (the “Term”) shall commence on the Effective Date
and end on the date this Agreement is terminated under Section 3. 
 (c) Positions and Duties. During the
Term, Executive shall serve as Executive Chair of the Company, with such responsibilities, duties and authority normally associated with such position and as may from time to time be assigned to Executive by the Board of Directors of the Company or
an authorized committee thereof (in either case, the “Board”). Executive shall devote substantially all of Executive’s working time and efforts to the business and affairs of the Company (which shall include service to its
affiliates, if applicable) and shall not engage in outside business activities (including serving on outside boards or committees) without the consent of the Board (which consent shall not be unreasonably withheld), provided that Executive shall be
permitted to (i) manage Executive’s personal, financial and legal affairs, (ii) participate in trade associations, and (iii) serve on the board of directors of
not-for-profit or tax-exempt charitable organizations, in each case, subject to compliance with this Agreement and provided that
such activities do not materially interfere with Executive’s performance of Executive’s duties and responsibilities hereunder. Executive agrees to observe and comply with the rules and policies of the Company as adopted by the Company from
time to time, in each case, as amended from time to time, and as delivered or made available to Executive (collectively, the “Policies” and, each, a “Policy”). 

 (d) Location. The Executive shall be permitted to work from his home office in
Florida, provided that Executive shall be present at the principal offices of the Company as reasonably required to perform his duties or as requested by the Board. In addition, from time to time the Executive may be required to travel to other
locations in the proper conduct of his responsibilities under this Agreement. 
  

	2.	 Compensation and Related Matters. 

(a) Annual Base Salary. During the Term, Executive shall receive a base salary at a rate of $200,000 per annum, which shall be paid in
accordance with the customary payroll practices of the Company and shall be pro-rated for partial years of employment. Such annual base salary shall be reviewed (and, may be increased and may not be decreased,
except to the extent described in Section 7(f)(i) below) from time to time by the Board (such annual base salary, as it may be adjusted from time to time, the “Annual Base Salary”). 

(b) Bonus. Unless otherwise determined by the Board, Executive will not be eligible to participate in the Company’s annual or other
incentive bonus programs established by the Board. 
 (c) Equity Grants. 

(i) Subject to the approval of the Board, as soon as reasonably practicable following the Effective Date, Executive will be
granted an option to purchase 520,000 shares of the Company’s common stock (the “Initial Option”) subject to the terms of a stock option award agreement in the form of Performance Stock Option Grant Notice and Stock Option
Agreement attached as Exhibit A attached hereto (the “Option Agreement”). 
 (ii)
It is the intention of the Parties that the shares subject to the Initial Option represent approximately four percent (4%) of the Capitalization (as defined below) as of the Effective Date. In the event the shares subject to the Initial Option
represent less than 4% of the Capitalization of the Company following the closing of a bona fide equity financing of the Company following the date hereof and prior to March 31, 2023 (the “Financing Closing”), subject to the
approval of the Board, as soon as reasonably practicable following the Financing Closing, the Company shall grant to Executive an additional option (“Additional Option”) to purchase common stock of the Company so that the shares
subject to the Initial Option plus the shares subject to such Additional Option equal not less than 4% of the Capitalization as of immediately following such Financing Closing, as determined by the Board. The exercise price of the Additional Option
will be equal to the fair market value per share of the common stock of the Company as of the date of grant (as determined in accordance with the terms of the equity plan under which the Additional Option is granted). The vesting and exercisability
terms of the Additional Option shall be the same as those set forth in the Option Agreement, with such changes as may be reasonably necessary to account for the different dates of grant. For the purposes hereof, the “Capitalization” means,
as of the Effective Date for purposes of the Initial Option and as of the Financing Closing for purposes of the Additional Option, the total number of shares of common stock of the Company outstanding (assuming the exercise or conversion of all
outstanding preferred stock and all options, warrants, and other securities of the Company that are exercisable for or convertible into shares of common stock of the Company). 

  
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 (iii) Except as otherwise determined by the Board, Executive will not be
eligible to receive equity awards in 2022 and 2023 in connection with the Company’s normal course annual equity award grant practice to executives and employees. 

(d) Transaction Bonus. In connection with a Change in Control in which the Market Capitalization of the Company equals or exceeds
$750 million, Executive shall be entitled to a cash bonus in the amount of 1.0% of the Market Capitalization (the “Transaction Bonus”). The Transaction Bonus shall be payable within thirty (30) days after the completion of
the Change in Control transaction, subject to Executive’s continued employment with the Company through the completion of the Change in Control transaction and execution, within thirty (30) days after the completion of the Change in
Control transaction, of a release of claims in favor of the Company in the form of the release attached as Exhibit B to this Agreement (subject to modifications for any specific dates or similar
non-substantive amendments). 
 (e) Benefits. During the Term, Executive shall be eligible to
participate in employee benefit plans, programs and arrangements of the Company (including medical, dental and 401(k) plans), subject to the terms and eligibility requirements thereof and as such plans, programs and arrangements may be amended from
time to time. In no event shall Executive be eligible to participate in any severance plan or program of the Company, except as set forth in Section 4 of this Agreement. 

(f) Vacation. During the Term, Executive shall be entitled to paid personal leave in accordance with the Company’s Policies. Any
vacation shall be taken at the reasonable and mutual convenience of the Company and Executive. 
 (g) Business Expenses. During the
Term, the Company shall reimburse Executive for all reasonable travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in accordance with the Company’s expense reimbursement Policy.

 (h) Key Person Insurance. At any time during the Term, the Company shall have the right (but not the obligation) to insure the life
of Executive for the Company’s sole benefit. The Company shall have the right to determine the amount of insurance and the type of policy. Executive shall reasonably cooperate with the Company in obtaining such insurance by submitting to
physical examinations, by supplying all information reasonably required by any insurance carrier and by executing all necessary documents reasonably required by any insurance carrier, provided that any information provided to an insurance company or
broker shall not be provided to the Company without the prior written authorization of Executive. Executive shall incur no financial obligation by executing any required document and shall have no interest in any such policy. 

 

	3.	 Termination. 

Both Executive’s employment hereunder and the Term may be terminated by the Company or Executive, as applicable, without any breach of
this Agreement under the following circumstances: 
 (a) Circumstances. 

(i) Death. Executive’s employment hereunder shall terminate upon Executive’s death. 

(ii) Disability. If Executive has incurred a Disability, as defined below, the Company may terminate Executive’s
employment. 

  
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 (iii) Termination for Cause. The Company may terminate
Executive’s employment for Cause, as defined below. 
 (iv) Termination without Cause. The Company may terminate
Executive’s employment without Cause. 
 (v) Resignation from the Company with Good Reason. Executive may resign
Executive’s employment with the Company with Good Reason, as defined below. 
 (vi) Resignation from the Company
without Good Reason. Executive may resign Executive’s employment with the Company for any reason other than Good Reason or for no reason. 

(b) Notice of Termination. Any termination of Executive’s employment by the Company or by Executive under this
Section 3 (other than termination pursuant to Section 3(a)(i)) shall be communicated by a written notice to the other Party hereto (i) indicating the specific termination provision in this
Agreement relied upon, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, if applicable, and (iii) specifying a
Date of Termination (as defined below) which, if submitted by Executive, shall be at least thirty (30) days following the date of such notice (a “Notice of Termination”); provided, however, that in the event that
Executive delivers a Notice of Termination to the Company, the Company may, in its sole discretion, change the Date of Termination to any date that occurs following the date of the Company’s receipt of such Notice of Termination and is prior to
the date specified in such Notice of Termination, but the termination will still be considered a resignation by Executive. A Notice of Termination submitted by the Company may provide for a Date of Termination on the date Executive receives the
Notice of Termination, or any date thereafter elected by the Company. The failure by either Party to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of
the Party hereunder or preclude the Party from asserting such fact or circumstance in enforcing the Party’s rights hereunder. 
 (c)
Company Obligations upon Termination. Upon termination of Executive’s employment pursuant to any of the circumstances listed in this Section 3, Executive (or Executive’s estate) shall be entitled to receive
the sum of: (i) the portion of Executive’s Annual Base Salary earned through the Date of Termination, but not yet paid to Executive; (ii) any expense reimbursements owed to Executive pursuant to Section 2(g);
and (iii) any amount accrued and arising from Executive’s participation in, or benefits accrued under any employee benefit plans, programs or arrangements, which amounts shall be payable in accordance with the terms and conditions of such
employee benefit plans, programs or arrangements (collectively, the “Company Arrangements”). Except as otherwise expressly required by law (e.g., the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”)) or as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other compensatory amounts hereunder (if any) shall cease upon the termination of Executive’s employment
hereunder. 
 (d) 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 subsidiaries. 

  
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	4.	 Severance Payments. 

(a) Termination for Cause, or Termination Upon Death, Disability or Resignation from the Company Without Good Reason. If
Executive’s employment shall terminate as a result of Executive’s death pursuant to Section 3(a)(i), as a result of Disability pursuant to Section 3(a)(ii), for Cause pursuant to
Section 3(a)(iii) or for Executive’s resignation from the Company without Good Reason pursuant to Section 3(a)(iv), then Executive shall not be entitled to any severance payments or benefits,
except as provided in Section 3(c). 
 (b) Termination without Cause, or Resignation from the Company with Good
Reason. If Executive’s employment terminates without Cause pursuant to Section 3(a)(iv), or pursuant to Section 3(a)(v) due to Executive’s resignation with Good Reason, then, subject
to Executive signing a release agreement in the form of Exhibit B (the “Release”) hereto on or before the twenty-first (21st) day following Executive’s receipt of the Release from the Company following Executive’s
Separation from Service (as defined below), which shall be provided within ten (10) days of the date of the Separation from Service, or in the event that such Separation from Service is “in connection with an exit incentive or other
employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967, as amended) on or before the forty-fifth (45th) day following Executive’s receipt of the Release from the Company, as the case
may be, and provided that Executive does not revoke, the Release, and Executive’s continued compliance with Section 5, Executive shall receive, in addition to payments and benefits set forth in
Section 3(c), the following: 
 (i) an amount in cash equal to one times the Annual Base Salary,
payable in the form of salary continuation in regular installments over the 12-month period following the date of Executive’s Separation from Service (the “Severance Period”) in
accordance with the Company’s normal payroll practices; 
 (ii) if Executive timely elects to receive continued medical,
dental or vision coverage under one or more of the Company’s group medical, dental or vision plans pursuant to COBRA, then the Company shall directly pay, or reimburse Executive for, the COBRA premiums for Executive and Executive’s covered
dependents under such plans, less the amount Executive would have had to pay to receive such coverage as an active employee based on the cost sharing levels in effect on the Date of Termination, during the period commencing on Executive’s
Separation from Service and ending upon the earliest of (X) the last day of the Severance Period, (Y) the date that Executive and/or Executive’s covered dependents become no longer eligible for COBRA or (Z) the date Executive
becomes eligible to receive medical, dental or vision coverage, as applicable, from a subsequent employer (and Executive agrees to promptly notify the Company of such eligibility). Notwithstanding the foregoing, if the Company determines in its sole
discretion that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise tax, the Company shall in lieu thereof
provide to Executive a taxable monthly payment in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue Executive’s and Executive’s covered dependents’ group health coverage in effect on the
Date of Termination (which amount shall be based on the premium for the first month of COBRA coverage), less the amount Executive would have had to pay to receive group health coverage as an active employee for Executive and his or her covered
dependents based on the cost sharing levels in effect on the Date of Termination, which payments shall be made regardless of whether Executive elects COBRA continuation coverage and shall commence in the month following the month in which the Date
of Termination occurs and shall end on the earliest of (X) the last day of the Severance Period, (Y) the date that Executive and/or Executive’s covered dependents become no longer eligible for COBRA or (Z) the date Executive
becomes eligible to receive healthcare coverage from a subsequent employer (and Executive agrees to promptly notify the Company of such eligibility); and 

  
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 (iii) any vested and exercisable options (or options that become vested and
exercisable under any governing grant agreement or document following the Date of Termination, including without limitation the Initial Option and the Additional Option), under the equity plans maintained by the Company (any such plan, an
“Equity Plan”) held by Executive as of the Date of Termination, will remain outstanding and exercisable for twelve (12) months from the Date of Termination (provided that (A) in no event will any such option remain
outstanding past the final expiration date set forth in the applicable option award agreement, and (B) all such options will in all events remain subject to earlier termination in connection with a corporate transaction or event in accordance
with the applicable option award agreement and Equity Plan). 
 (c) Change in Control. In lieu of the payments and benefits set forth
in Section 4(b), in the event Executive’s employment terminates without Cause pursuant to Section 3(a)(iv), or due to Executive’s resignation with Good Reason pursuant to
Section 3(a)(v), in either case, within three (3) months prior or twelve (12) months following the date of a Change in Control, subject to Executive signing on or before the twenty-first (21st) day following
Executive’s receipt of a Release from the Company following such Separation from Service, which shall be provided within ten (10) days of the date of the Separation from Service, or in the event that such Separation from Service is
“in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967, as amended) on or before the forty-fifth (45th) day following Executive’s
receipt of a Release from the Company following such Separation from Service, and not revoking the Release, and Executive’s continued compliance with Section 5, Executive shall receive, in addition to the payments and
benefits set forth in Section 3(c), the following: 
 (i) an amount in cash equal to 1.5 times the
Annual Base Salary, payable in equal installments over the 18-month period following the date of Executive’s Separation from Service (the “CIC Severance Period”) in accordance with the
Company’s normal payroll practices; 
 (ii) the benefits set forth in Section 4(b)(ii),
provided that the “Severance Period” will mean the CIC Severance Period; 
 (iii) all unvested equity or
equity-based awards held by Executive under any Company equity compensation plans that vest solely based on the passage of time shall immediately become 100% vested (for the avoidance of doubt, with any such awards that vest in whole or in part
based on the attainment of performance-vesting conditions being governed by the terms of the applicable award agreement); 

(iv) the benefits set forth in Section 4(b)(iii); and 

(v) The Transaction Bonus, provided that the conditions for issuance of the Transaction Bonus are otherwise satisfied in
accordance with Section 2(d). 
 (d) Survival. Notwithstanding anything to the contrary in this Agreement,
the provisions of Sections 5 through 9 will survive the termination of Executive’s employment and the termination of the Term. 

  
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	5.	 Restrictive Covenants. 

As a condition to the effectiveness of this Agreement, Executive will have executed and delivered to the Company no later than
contemporaneously herewith the Employee Proprietary Information and Inventions Assignment Agreement, attached as Exhibit C (together, the “Restrictive Covenant Agreement”). Executive agrees to abide by the terms of the
Restrictive Covenant Agreement, which are hereby incorporated by reference into this Agreement. Executive acknowledges that the provisions of the Restrictive Covenant Agreement will survive the termination of Executive’s employment and the
termination of the Term for the periods set forth in the Restrictive Covenant Agreement. 
  

	6.	 Assignment and Successors. 

The Company may assign its rights and obligations under this Agreement to any of its affiliates or to any successor to all or substantially all
of the business or the assets of the Company (by merger or otherwise), and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its affiliates. This Agreement shall be binding upon and inure
to the benefit of the Company, Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or
obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will or operation of law. Notwithstanding the foregoing, Executive shall be entitled, to the extent
permitted under applicable law and applicable Company Arrangements, to select and change a beneficiary or beneficiaries to receive compensation hereunder following Executive’s death by giving written notice thereof to the Company. 

 

	7.	 Certain Definitions. 

(a) Cause. The Company shall have “Cause” to terminate Executive’s employment hereunder upon: 

(i) Executive’s willful refusal to (A) substantially perform the material duties associated with Executive’s
position with the Company or (B) carry out the reasonable and lawful instructions of the Board concerning material duties or actions consistent with the Executive’s position with the Company; 

(ii) Executive’s willful breach of a material provision of this Agreement; 

(iii) Executive’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation
for any felony or crime involving moral turpitude; 
 (iv) Executive’s unlawful use (including being under the
influence) or possession of illegal drugs on the Company’s (or any of its affiliate’s) premises or while performing Executive’s duties and responsibilities under this Agreement; or 

(v) Executive’s commission of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty
against the Company or any of its affiliates; 
 provided, however, no Cause will have occurred unless and until the Company
has: (A) provided Executive, within sixty (60) days of the Company’s knowledge of the occurrence of the facts and circumstances underlying the Cause event, written notice stating with specificity the applicable facts and circumstances
underlying such finding of Cause; (B) that with respect to clause (i) or (ii) of this definition and to the extent reasonably susceptible to cure, provided Executive with an opportunity to cure the same within thirty (30) days after
the receipt of such notice; and (C) Executive shall have failed to so cure within such period (if any). 

  
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 (b) Change in Control. “Change in Control” shall have the meaning set forth
in the Lyra Therapeutics, Inc. 2020 Incentive Award Plan. 
 (c) Code. “Code” shall mean the Internal Revenue Code of 1986,
as amended, and the regulations and guidance promulgated thereunder. 
 (d) Date of Termination. “Date of Termination” shall
mean (i) if Executive’s employment is terminated by Executive’s death, the date of Executive’s death; or (ii) if Executive’s employment is terminated pursuant to Section 3(a)(ii) – (vi)
either the date indicated in the Notice of Termination or the date specified by the Company pursuant to Section 3(b), whichever is earlier. 

(e) Disability. “Disability” shall mean, at any time the Company or any of its affiliates sponsors a long-term disability plan
for the Company’s employees, “disability” as defined in such long-term disability plan for the purpose of determining a participant’s eligibility for benefits, provided, however, if the long-term disability plan contains
multiple definitions of disability, “Disability” shall refer to that definition of disability which, if Executive qualified for such disability benefits, would provide coverage for the longest period of time. The determination of whether
Executive has a Disability shall be made by the person or persons required to make disability determinations under the long-term disability plan. At any time the Company does not sponsor a long-term disability plan for its employees,
“Disability” shall mean Executive’s inability to perform, with or without reasonable accommodation, the essential functions of Executive’s positions hereunder for a total of six months during any twelve-month period as a result
of incapacity due to mental or physical illness as determined by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative, with such agreement as to acceptability not to be unreasonably
withheld or delayed. Any refusal by Executive to submit to a medical examination for the purpose of determining Disability shall be deemed to constitute conclusive evidence of Executive’s Disability. 

(f) Good Reason. For the sole purpose of determining Executive’s right to severance payments and benefits as described above,
Executive’s resignation will be with “Good Reason” if Executive resigns within ninety (90) days after any of the following events, unless Executive consents in writing to the applicable event: (i) a reduction in
Executive’s Annual Base Salary, other than a reduction of ten percent (10%) or less of Executive’s Annual Base Salary implemented as part of an across the board, proportionate reduction of base salaries for other members of the
Company’s senior management team, (ii) a decrease in Executive’s authority or areas of responsibility as are commensurate with Executive’s title or position with the Company, (iii) the relocation of Executive’s primary
office to a location more than fifty (50) miles from the Executive’s primary office as of the date of this Agreement; or (iv) the Company’s breach of a material provision of this Agreement, including the failure of the Board (or
a committee thereof) to approve the Initial Option or the Additional Option, as the case may be, in accordance with the terms hereof. Notwithstanding the foregoing, no Good Reason will have occurred unless and until Executive has: (a) provided
the Company, within sixty (60) days of Executive’s knowledge of the occurrence of the facts and circumstances underlying the Good Reason event, written notice stating with specificity the applicable facts and circumstances underlying such
finding of Good Reason; (b) provided the Company with an opportunity to cure the same within thirty (30) days after the receipt of such notice; and (c) the Company shall have failed to so cure within such period. 

  
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 (g) Market Capitalization. “Market Capitalization” shall mean an amount
equal to the product of (i) the cash price per share of the Company’s common stock (a “Share”) paid by an acquiror in connection with a Change in Control, or, if the consideration in the Change in Control transaction is
payable in a form other than a fixed amount of cash per Share, the closing price per Share on the last trading day preceding the closing date of the Change in Control, and (ii) the number of Shares outstanding as of immediately prior to the
Change in Control. 
  

	8.	 Parachute Payments. 

(a) Notwithstanding any other provisions of this Agreement or any Company equity plan or agreement, in the event that any payment or benefit
by the Company or otherwise to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (all such payments and benefits, including the payments and benefits under
Section 4 hereof, being hereinafter referred to as the “Total Payments”), would be subject (in whole or in part) to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the Total Payments shall be reduced (in the order provided in Section 8(b)) to the minimum extent necessary to avoid the imposition of the Excise Tax on the Total Payments, but only if (i) the net
amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income and employment taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal
exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income and employment taxes
on such Total Payments and the amount of the Excise Tax to which Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such
unreduced Total Payments). 
 (b) The Total Payments shall be reduced in the following order: (i) reduction on a pro-rata basis of any cash severance payments that are exempt from Section 409A of the Code (“Section 409A”), (ii) reduction on a
pro-rata basis of any non-cash severance payments or benefits that are exempt from Section 409A, (iii) reduction on a
pro-rata basis of any other payments or benefits that are exempt from Section 409A and (iv) reduction of any payments or benefits otherwise payable to Executive on a
pro-rata basis or such other manner that complies with Section 409A; provided, in case of clauses (ii), (iii) and (iv), that reduction of any payments attributable to the acceleration of vesting of
Company equity awards shall be first applied to Company equity awards that would otherwise vest last in time. 
 (c) All determinations
regarding the application of this Section 8 shall be made by an accounting firm or consulting group with experience in performing calculations regarding the applicability of Section 280G of the Code and the Excise Tax
selected by the Company and reasonably acceptable to the Executive (the “Independent Advisors”). For purposes of determinations, no portion of the Total Payments shall be taken into account which, in the opinion of the Independent
Advisors, (i) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) or (ii) constitutes reasonable compensation for
services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation. The costs of obtaining
such determination and all related fees and expenses (including related fees and expenses incurred in any later audit) shall be borne by the Company. 

(d) In the event it is later determined that a greater reduction in the Total Payments should have been made to implement the objective and
intent of this Section 8, the excess amount shall be returned promptly by Executive to the Company. In the event it is later determined that a lesser reduction in the Total Payments should have been made to implement the
objective and intent of this Section 8, the underpayment amount shall be paid promptly by the Company to the Executive. 

  
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	9.	 Miscellaneous Provisions. 

(a) Governing Law. This Agreement shall be governed, construed, interpreted and enforced in accordance with its express terms, and
otherwise in accordance with the substantive laws of the Commonwealth of Massachusetts without reference to the principles of conflicts of law of the Commonwealth of Massachusetts or any other jurisdiction that would result in the application of the
laws of a jurisdiction other than the Commonwealth of Massachusetts, and where applicable, the laws of the United States. 
 (b)
Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

(c) Notices. Any notice, request, claim, demand, document and other communication hereunder to any Party shall be effective upon receipt
(or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid, as follows: 

(i) If to the Company, to the Chief Financial Officer of the Company at the Company’s headquarters, 

(ii) If to Executive, to the last address that the Company has in its personnel records for Executive, or 

(iii) At any other address as any Party shall have specified by notice in writing to the other Party. 

(d) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of
which together will constitute one and the same Agreement. Signatures delivered by facsimile or PDF shall be deemed effective for all purposes. 

(e) Entire Agreement. The terms of this Agreement, and the Restrictive Covenant Agreement incorporated herein by reference as set forth
in Section 5, are intended by the Parties to be the final expression of their agreement with respect to the subject matter hereof and supersede all prior understandings and agreements, whether written or oral, including any
prior employment offer letter or employment agreement between Executive and the Company. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever
may be introduced in any judicial, administrative or other legal proceeding to vary the terms of this Agreement. 
 (f) Amendments;
Waivers. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Executive and a duly authorized officer of Company. By an instrument in writing similarly executed, Executive or a duly authorized
officer of the Company may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy or power hereunder will preclude any other or further exercise of any other right, remedy
or power provided herein or by law or in equity. 

  
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 (g) Construction. This Agreement shall be deemed drafted equally by both the Parties.
Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any Party shall not apply. The headings in this Agreement are only for convenience and are not
intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly
indicates to the contrary, (i) the plural includes the singular and the singular includes the plural; (ii) “and” and “or” are each used both conjunctively and disjunctively; (iii) “any,” “all,”
“each,” or “every” means “any and all” and “each and every”; (iv) “includes” and “including” are each “without limitation”; (v) “herein,” “hereof,”
“hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (vi) all pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require. 

(h) Arbitration. Any controversy, claim or dispute arising out of or relating to this Agreement, shall be settled solely and exclusively
by a binding arbitration process administered by JAMS/Endispute in Boston, Massachusetts. Such arbitration shall be conducted in accordance with the then-existing JAMS/Endispute Employment Rules of Practice and Procedure, with the following
exceptions if in conflict one arbitrator who is a retired judge shall be chosen by JAMS/Endispute. Each Party shall bear its own attorney’s fees and expenses; provided that the arbitrator may assess the prevailing Party’s fees and costs
against the non-prevailing Party as part of the arbitrator’s award. The Parties agree to abide by all decisions and awards rendered in such proceedings. Such decisions and awards rendered by the
arbitrator shall be final and conclusive. All such controversies, claims or disputes shall be settled in this manner in lieu of any action at law or equity; provided, however, that nothing in this subsection shall be construed as precluding the
bringing of an action for injunctive relief or specific performance as provided in this Agreement or the Restrictive Covenant Agreement. This dispute resolution process and any arbitration hereunder shall be confidential and neither any Party nor
the neutral arbitrator shall disclose the existence, contents or results of such process without the prior written consent of all Parties, except where necessary or compelled in a court to enforce this arbitration provision or an award from such
arbitration or otherwise in a legal proceeding. If JAMS/Endispute no longer exists or is otherwise unavailable, the Parties agree that the American Arbitration Association (“AAA”) shall administer the arbitration in accordance with
its then-existing rules as modified by this subsection. In such event, all references herein to JAMS/Endispute shall mean AAA. 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. 
 (i) Enforcement. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective during the Term, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never
comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable. 
 (j) Withholding. 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 the advice of counsel if any questions as to the amount or requirement of
withholding shall arise. 

  
 11 

 (k) Section 409A. 

(i) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt
from Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. The Company and the Executive agree that they will execute any and all amendments to this Agreement
permitted under applicable law as they mutually agree in good faith may be necessary to ensure compliance with the distribution provisions of Section 409A of the Code or as otherwise needed to ensure that this Agreement complies with
Section 409A of the Code. 
 (ii) Separation from Service. Notwithstanding anything in this Agreement to the
contrary, any compensation or benefits payable under this Agreement that is designated under this Agreement as payable upon Executive’s termination of employment shall be payable only upon Executive’s “separation from service”
with the Company within the meaning of Section 409A (a “Separation from Service”) and, except as provided below, any such compensation or benefits described in Section 4 shall not be paid, or, in the
case of installments, shall not commence payment, until the sixtieth (60th) day following Executive’s Separation from Service (the “First Payment Date”). 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 First Payment Date and the remaining payments shall be made as provided in this Agreement.

 (iii) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the
Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, 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, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death. Upon the first business day following the earlier of expiration
of the applicable six-month delay period or the date of Executive’s death, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executive’s estate or
beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein. 

(iv) Expense Reimbursements. To the extent that any reimbursements under this Agreement are subject to
Section 409A, any such reimbursements payable to Executive shall be paid to Executive no later than December 31 of the year following the year in which the expense was incurred. The Executive will submit Executive’s reimbursement
request promptly following the date the expense is incurred, and the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, other than medical expenses referred to in
Section 105(b) of the Code. Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit. 

(v) Installments. Executive’s right to receive any installment payments under this Agreement, including without
limitation any continuation salary payments that are payable on Company payroll dates, 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 as permitted under Section 409A. Except as otherwise permitted under Section 409A, no payment hereunder shall be accelerated or deferred unless such acceleration or deferral would not result in additional tax or
interest pursuant to Section 409A. 

  
 12 

	10.	 Executive Acknowledgement. 

Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance
upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment. 

[Signature Page Follows] 
  

  
 13 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written
above.     
  

			
	LYRA THERAPEUTICS, INC.
		
	By:	 	 /s/ Maria Palasis, Ph.D.

		 	Name: Maria Palasis, Ph.D.
		 	Title: President and Chief Executive Officer
	
	EXECUTIVE
	
	 /s/ Harlan Waksal, M.D.

Harlan Waksal, M.D.

 [Signature Page to Employment Agreement] 

 EXHIBIT A 

Option Agreement 
 [See
Exhibit 10.4] 

 Exhibit B 

Separation Agreement and Release 

This Separation Agreement and Release ( this “Release”) is made by and between Harlan Waksal (“Executive”)
and Lyra Therapeutics, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”). Capitalized terms used but not defined in this Release shall have
the meanings set forth in the Employment Agreement (as defined below). 
 WHEREAS, the Parties have previously entered into that certain
Employment Agreement, dated as of Februrary 16, 2022 (the “Employment Agreement”) and that certain Employee Proprietary Information and Inventions Assignment Agreement, dated as of Februrary 16, 2022 (the “Restrictive
Covenant Agreement”); and 
 WHEREAS, in connection with Executive’s termination of employment with the Company or a
subsidiary or affiliate of the Company effective ________, 20__, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that Executive may have against the Company and any of the
Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Executive’s employment with or separation from the Company or its subsidiaries or affiliates but, for the avoidance of doubt,
nothing herein will be deemed to release any rights or remedies in connection with Executive’s ownership of vested equity securities of the Company, vested benefits or Executive’s right to indemnification by the Company or any of its
affiliates pursuant to contract or applicable law (collectively, the “Retained Claims”). 
 NOW, THEREFORE, in
consideration of the severance payments and benefits described in Section 4 of the Employment Agreement, which, pursuant to the Employment Agreement, are conditioned on Executive’s execution and
non-revocation of this Release, and in consideration of the mutual promises made herein, the Company and Executive hereby agree as follows: 

1. Severance Payments and Benefits; Salary and Benefits. The Company agrees to provide Executive with the severance payments and
benefits described in Section [4(b)][4(c)] of the Employment Agreement, payable at the times set forth in, and subject to the terms and conditions of, the Employment Agreement. In addition, to the extent not already paid, and subject to the terms
and conditions of the Employment Agreement, the Company shall pay or provide to Executive all other payments or benefits described in Section 3(c) of the Employment Agreement, subject to and in accordance with the terms thereof. The severance
payments and benefits described in Section [4(b)][4(c)] of the Employment Agreement shall be provided in lieu of any Garden Leave payment (as such term is used in the Restrictive Covenants Agreement) and Executive will not be eligible to receive any
Garden Leave payment. 
 2. Release of Claims. Executive agrees that, other than with respect to the Retained Claims, the foregoing
consideration represents settlement in full of all outstanding obligations owed to Executive by the Company, any of its direct or indirect subsidiaries and affiliates and any of its or their current and former officers, directors, equityholders,
managers, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, subsidiaries, predecessor and successor corporations and assigns (collectively, the
“Releasees”). Executive, on Executive’s own behalf and on behalf of any of Executive’s affiliated companies or entities and any of their respective heirs, family members, executors, agents and assigns, other than with
respect to the Retained Claims, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute or pursue, any claim, complaint, charge, duty, obligation or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or unsuspected, that Executive may possess against any of the Releasees arising from any omissions, acts, facts or damages that have occurred up until and including the date
Executive signs this Release, including, without limitation: 

  
 A-2 

 (a) any and all claims relating to or arising from Executive’s employment or service
relationship with the Company or any of its direct or indirect subsidiaries or affiliates and the termination of that relationship; 
 (b)
any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of any shares of stock or other equity interests of the Company or any of its affiliates, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state law and securities fraud under any state or federal law; 

(c) any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment;
conversion; and disability benefits; 
 (d) any and all claims for violation of any federal, state or municipal statute, including, but not
limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act
of 2002; the Massachusetts Fair Employment Practices Act, M.G.L. c. 151B, § 1 et seq.; the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ IIH and 111; the Massachusetts Equal Rights Act, M.G.L. c. 93, § 102 and M.G.L. c.
214, § IC; the Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq.; the Massachusetts Privacy Act, M.G.L. c. 214, § 1B; and the Massachusetts Maternity Leave Act, M.G.L. c. 49, § 105D; 

(e) any and all claims for violation of the federal or any state constitution; 

(f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; 

(g) any claim for any loss, cost, damage or expense arising out of any dispute over the non-withholding
or other tax treatment of any of the proceeds received by Executive as a result of this Release; 
 (h) any and all claims arising out of the
wage and hour and wage payments laws and regulations of the state or states in which Executive has provided service to the Company or any of its affiliates (including without limitation the Massachusetts Payment of Wages Law); and 

(i) any and all claims for attorneys’ fees and costs. 

  
 A-3 

 Executive agrees that the release set forth in this section shall be and remain in effect in all respects as
a complete general release as to the matters released. This Release does not release claims that cannot be released as a matter of law, including, but not limited to, Executive’s right to report possible violations of federal law or regulation
to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower
protection provisions of state or federal law or regulation and any right to receive an award for information provided thereunder, Executive’s right to file a charge with or participate in a charge by the Equal Employment Opportunity
Commission, or any other local, state or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company for discrimination (with the understanding that Executive’s
release of claims herein bars Executive from recovering such monetary relief from the Company or any Releasee for any alleged discriminatory treatment), claims for unemployment compensation or any state disability insurance benefits pursuant to the
terms of applicable state law, claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, claims to any
benefit entitlements vested as the date of separation of Executive’s employment, pursuant to written terms of any employee benefit plan of the Company or its affiliates, any claims that Executive may have by virtue of Executive’s status as
a shareholder in the Company, and Executive’s right under applicable law and any Retained Claims. This Release further does not release claims for breach of Section 3(c) or Section 4 of the Employment Agreement. 

3. Acknowledgment of Waiver of Claims under ADEA. Executive understands and acknowledges that Executive is waiving and releasing any
rights Executive may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Executive understands and agrees that this waiver and release does not apply to
any rights or claims that may arise under the ADEA after the date Executive signs this Release. Executive understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Executive
was already entitled. Executive further understands and acknowledges that Executive has been advised by this writing that: (a) Executive should consult with an attorney prior to executing this Release; (b) Executive has [twenty-one (21)][forty-five (45)] days within which to consider this Release following Executive’s receipt of this Release from the Company, and the Parties agree that such time period to review this Release
shall not be extended upon any material or immaterial changes to this Release; (c) Executive has seven (7) business days following Executive’s execution of this Release to revoke this Release pursuant to written notice to the General
Counsel of the Company; (d) this Release shall not be effective until after the revocation period has expired; and (e) nothing in this Release prevents or precludes Executive from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law. In the event Executive signs this Release and returns it to the Company in less than
the [twenty-one (21)][forty-five (45)] day period identified above, Executive hereby acknowledges that Executive has freely and voluntarily chosen to waive the time period allotted for considering this
Release. 
  

	 	4.	 Restrictive Covenants. 

(a) Executive acknowledges and agrees that the restrictive covenants and other post-termination obligations set forth in the Restrictive
Covenant Agreement, including without limitation Executive’s obligations relating to non-use and non-disclosure of confidential information, non-competition and non-solicitation, are hereby incorporated by reference and shall remain in full force and effect pursuant to their terms to the maximum extent permitted by
applicable law, except that the Parties expressly agree to modify the Restrictive Covenant Agreement by removing the words “, if I am terminated by the Company for Cause or if I resign for any reason” from Section 6.1(a) and removing
Section 6.1(c) of the Restrictive Covenant Agreement, which deleted provisions shall be of no further force or effect upon the Effective Date (as defined below). 

  
 A-4 

 (b) Executive’s continued compliance with the terms of Section 9 of the Employment
Agreement (as modified in Section 4(a) above) (collectively, the “Restrictive Covenants”) is a material condition to receipt of the severance payments and benefits set forth in Section 1 of this Agreement. In the event
Executive breaches any part of such Restrictive Covenants, then, in addition to any remedies and enforcement mechanisms set forth in the Employment Agreement and this Agreement, and any other remedies available to the Company (including equitable
and injunctive remedies), Executive shall forfeit any additional consideration owing and shall be obligated to promptly return to the Company (within fifteen (15) business days of any breach) the full gross amount of all severance payments and
benefits provided. 
 5. Severability. In the event that any provision or any portion of any provision hereof or any surviving
agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable or void, this Release shall continue in full force and effect without said provision or portion of provision. 

6. No Oral Modification. This Release may only be amended in a writing signed by Executive and a duly authorized officer of the Company.

 7. Governing Law; Dispute Resolution. This Release shall be subject to the provisions of Sections 9(a), 9(c) and 9(h) of the
Employment Agreement. 
 8. Effective Date. Executive understands that this Release shall become effective, irrevocable, and binding
upon Executive on the day following the seventh (7th) business day from the date upon which Executive signs this Release, so long as Executive has not revoked it within the time period and in the manner specified in Section 3 above. Executive
further understands that Executive will not be given any severance benefits under the Agreement unless this Release becomes effective pursuant to its terms. 

9. Voluntary Execution of Agreement. Executive understands and agrees that Executive executed this Release voluntarily, without any
duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of Executive’s claims against the Company and any of the other Releasees. Executive acknowledges that: (a) Executive
has read this Release; (b) Executive has not relied upon any representations or statements made by the Company that are not specifically set forth in this Release; (c) Executive has been represented in the preparation, negotiation and
execution of this Release by legal counsel of Executive’s own choice or has elected not to retain legal counsel; (d) Executive understands the terms and consequences of this Release and of the releases it contains; and (e) Executive
is fully aware of the legal and binding effect of this Release. 
 [Signature Page Follows] 

  
 A-5 

 IN WITNESS WHEREOF, the Parties have executed this Release on the respective dates set forth
below. 
  

							
		 		 		 	EXECUTIVE
				
	Dated:
                                        
	 		 		 	  
 Harlan Waksal

				
		 		 		 	LYRA THERAPEUTICS, INC.
				
	Dated:
                                        
	 		 		 	 By:
                                         
                                       

        Name: Maria Palasis, Ph.D.

        Title: President and Chief Executive Officer

  
 A-6 

 EXHIBIT C 

Restrictive Covenant Agreement 

[attached] 
 [intentionally
omitted]EX-10.3

 Exhibit 10.3 

 

LYRA THERAPEUTICS, INC. 

2020 INCENTIVE AWARD PLAN 

PERFORMANCE STOCK OPTION GRANT NOTICE 

Capitalized terms not specifically defined in this Performance Stock Option Grant Notice (the “Grant Notice”) have the
meanings given to them in the 2020 Incentive Award Plan (as amended from time to time, the “Plan”) of Lyra Therapeutics, Inc. (the “Company”). 

The Company has granted to the participant listed below (“Participant”) the stock option described in this Grant
Notice (the “Option”), subject to the terms and conditions of the Plan and the Performance Stock Option Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into
this Grant Notice by reference. 
  

			
	Participant:	  	Maria Palasis
		
	Grant Date:	  	February 16, 2022
		
	Exercise Price per Share:	  	$4.21
		
	Shares Subject to the Option:	  	175,000
		
	Final Expiration Date:	  	February 15, 2032
		
	Vesting Conditions:	  	The Option will vest based on the achievement of both Performance Vesting Conditions and Service Vesting Conditions, in each case, as set forth in Exhibit A and Schedule I to this Grant Notice.
		
	Type of Option	  	Incentive Stock Option

 By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice,
the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of
the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

  

					
	LYRA THERAPEUTICS, INC.	  	PARTICIPANT
			
	By:	 	/s/ C. Ann Merrifield	  	 /s/ Maria Palasis, Ph.D.

	Name:	 	C. Ann Merrifield	  	
	Title:	 	Chair of the Compensation Committee of the Board of Directors	  	

 Exhibit A 

PERFORMANCE STOCK OPTION AGREEMENT 

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant
Notice, in the Plan. 
 ARTICLE I. 

GENERAL 
 1.1 Grant of
Option. The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the “Grant Date”). 

1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which
is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control. 

1.3 Defined Terms. As used in this Agreement: 

(a) “Employment Agreement” means the employment agreement entered into by and between the Company and Participant,
dated April 27, 2020, as it may be amended from time to time. 
 (b) “Good Reason” shall have the meaning set
forth in the Employment Agreement. 
 (c) “Market Capitalization” means, on a particular trading day for purposes of
each Market Capitalization Goal, an amount equal to the product of (i) the Thirty-Day VWAP, and (ii) the average of the total number of outstanding Shares during such
Thirty-Day VWAP period, as determined by the Company. 
 (d) “Market Capitalization
Goal” means, for each applicable Tranche, the Market Capitalization goal set forth next to such Tranche as shown on the attached Schedule I. 

(e) “Performance Period” means the period beginning on the Grant Date and ending on the fifth (5th) anniversary of the Grant Date. 
 (f) “Performance Vesting
Conditions” means the achievement of each Market Capitalization Goal. 
 (g) “Service Vesting
Conditions” means the service-based vesting conditions set forth in Section 2.1(b). 
 (h) “Thirty-Day VWAP” means the volume weighted average trading price per Share measured over any rolling thirty trading day period within the Performance Period. 

(i) “trading day” means a day on which the primary stock exchange or national market system on which the Shares trade
is open for trading. 
 ARTICLE II. 

PERIOD OF EXERCISABILITY 

2.1 Commencement of Exercisability. The Option shall be divided into three (3) tranches (each a
“Tranche”), as shown on the attached Schedule I, and, subject to Section 2.2 and Section 2.3, the Option will vest and become exercisable with respect to each Tranche upon satisfaction of both (i) the
applicable Performance Vesting Condition and (ii) the applicable Service Vesting Condition, as follows: 

 (a) Each Tranche shall satisfy the Performance Vesting Condition if and when during
the Performance Period the Company’s Market Capitalization equals or exceeds the applicable Market Capitalization Goal, subject to Participant’s remaining a Service Provider with the Company through such
time, and subject further to the Administrator’s determination, approval and certification that the applicable Market Capitalization Goal for such Tranche has been satisfied (a “Certification”). During
the Performance Period, the Administrator shall periodically assess whether the Performance Vesting Conditions have been satisfied. The Administrator shall also engage in such assessment reasonably promptly upon the reasonable request of
Participant. 
 (b) Tranche 1 in the attached Schedule I will satisfy the Service Vesting Condition if Participant remains a Service Provider
through the first anniversary of the Grant Date. Tranche 2 in the attached Schedule I will satisfy the Service Vesting Condition if Participant remains a Service Provider through the second anniversary of the Grant Date. Tranche 3 in the attached
Schedule I will satisfy the Service Vesting Condition if Participant remains a Service Provider through the third anniversary of the Grant Date. 

(c) In no event may the Option become vested and exercisable with respect to more than the number of Shares subject to the Option shown on the
Grant Notice. 
 2.2 Change in Control. Notwithstanding anything to the contrary in this Agreement, if a Change in Control occurs
during the Performance Period, then, subject to Participant remaining a Service Provider through the date of the Change in Control, except as provided in Section 2.3(a), (i) if not earlier satisfied, the Market Capitalization Goal for each
Tranche will be deemed satisfied upon the effective time of the Change in Control and (ii) any Tranche that has satisfied or is deemed to satisfy the Performance Vesting Condition as of the date of the Change in Control, pursuant to this
Section 2.2, but has not yet satisfied the Service Vesting Conditions as of the date of the Change in Control shall, to the extent the Option is assumed, substituted or continued in such Change in Control, continue to be eligible to vest upon
satisfaction of the Service Vesting Conditions, subject to Section 2.3, or to the extent the Option is not assumed, substituted or continued in such Change in Control become vested as of the immediately prior to such Change in Control. 

2.3 Termination.  
 (a) In
the event of Participant’s Termination of Service by the Company without Cause or due to Participant’s resignation with Good Reason, in either case, within three (3) months preceding or twelve (12) months following the date of a
Change in Control, any Tranches that have satisfied the Performance Vesting Condition as of the date of such Termination of Service or that are deemed to satisfy the Performance Vesting Condition upon the Change in Control pursuant to
Section 2.2, shall vest immediately as of the effective time of the Change in Control or, if later, upon such Termination of Service (and for the avoidance of doubt, in the event of such a Termination of Service within three (3) months
prior to a Change in Control, Tranches that have not satisfied the Performance Vesting Condition as of such Termination of Service will remain eligible to vest upon the occurrence of a Change in Control within three (3) months after such
Termination of Service and will thereafter be forfeited to the extent not vested). Unless otherwise determined by the Administrator, the vesting set forth in this Section 2.3(a) shall be subject to Participant’s execution (and non-revocation) of a general release of claims in substantially the form attached to the Employment Agreement within the time limits prescribed therein. 

(b) In the event of Participant’s Termination of Service other than as set forth in Section 2.3(a), all then-unvested Tranches will
immediately and automatically be cancelled and forfeited without consideration therefor, except as otherwise determined by the Administrator. 

  
 A-2 

 (c) The Administrator shall make a final assessment reasonably promptly following the last
day of the Performance Period as to whether any Tranche satisfied the applicable Performance Vesting Condition as of the last day of the Performance Period. Any Tranche that has not become vested on or prior to the last day of the Performance Period
will immediately and automatically be cancelled and forfeited without consideration therefor. 
 2.4 Duration of Exercisability. Any
portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires. The Option will be forfeited immediately upon its expiration. 

2.5 Expiration of Option. The Option may not be exercised to any extent by anyone after, and will expire on, the first of the following
to occur: 
 (a) The final expiration date in the Grant Notice; 

(b) Except as the Administrator may otherwise approve or as provided in the Employment Agreement, the expiration of three (3) months from
the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Cause or by reason of Participant’s death or Disability; 

(c) Except as the Administrator may otherwise approve, the expiration of one (1) year from the date of Participant’s Termination of
Service by reason of Participant’s death or Disability; and 
 (d) Except as the Administrator may otherwise approve, Participant’s
Termination of Service for Cause. 
 ARTICLE III. 

EXERCISE OF OPTION 
 3.1
Person Eligible to Exercise. During Participant’s lifetime, only Participant may exercise the Option. After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by
Participant’s Designated Beneficiary as provided in the Plan. 
 3.2 Partial Exercise. Any exercisable portion of the Option or
the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole
Shares. 
 3.3 Tax Withholding. 

(a) The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance
with the Plan of any withholding tax arising in connection with the Option as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Option. 

(b) Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless
of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any
tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate
Participant’s tax liability. 

  
 A-3 

 ARTICLE IV. 

OTHER PROVISIONS 
 4.1
Adjustments. Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan. 

4.2 Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in
care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and
addressed to Participant (or, if Participant is then deceased, to the person entitled to exercise the Option) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice
given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt
requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile
transmission confirmation. 
 4.3 Titles. Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement. 
 4.4 Conformity to Securities Laws. Participant acknowledges that the Plan, the
Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws. 

4.5 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this
Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal
representatives, successors and assigns of the parties hereto. 
 4.6 Limitations Applicable to Section 16
Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option will be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent
Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule. 
 4.7 Entire
Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with
respect to the subject matter hereof. 
 4.8 Agreement Severable. In the event that any provision of the Grant Notice or this
Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement. 

  
 A-4 

 4.9 Limitation on Participant’s Rights. Participation in the Plan confers no
rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in
and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to
receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof. 
 4.10
Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the
rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided
otherwise in a written agreement between the Company or a Subsidiary and Participant. 
 4.11 Counterparts. The Grant Notice may be
executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument. 

4.12 Incentive Stock Options. If the Option is designated as an Incentive Stock Option: 

(a) Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect
to the shares is granted) with respect to which stock options intended to qualify as “incentive stock options” under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar
year exceeds $100,000 or if for any other reason such stock options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such stock options (including the Option) will be treated
as non-qualified stock options. Participant further acknowledges that the rule set forth in the preceding sentence will be applied by taking the Option and other stock options into account in the order in
which they were granted, as determined under Section 422(d) of the Code. Participant acknowledges that amendments or modifications made to the Option pursuant to the Plan that would cause the Option to become a
Non-Qualified Stock Option will not materially or adversely affect Participant’s rights under the Option, and that any such amendment or modification shall not require Participant’s consent.
Participant also acknowledges that if the Option is exercised more than three (3) months after Participant’s Termination of Service as an Employee, other than by reason of death or disability, the Option will be taxed as a Non-Qualified Stock Option. 
 Participant will give prompt written notice to the Company of any
disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such Shares to
Participant. Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer. 

* * * * * 

  
 A-5 

 Schedule I 
  

									
	 Tranche
	  	Market Capitalization Goals
(Millions)	 	  	Number
of Shares	 
	 1
	  	$	250	 	  	 	58,333	 
	 2
	  	$	350	 	  	 	58,333	 
	 3
	  	$	500	 	  	 	58,334	 
		  				  	  
	  
	 
	 Total:
	  				  	 	175,000	 
		  				  	  
	  
	 

  
 A-6

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