Document:

pirs12312019ex1025

                                                                         Exhibit 10.25   255 State Street, 9th Floor  Boston, MA 02109                                                      January 3, 2020   VIA EMAIL   Louis Matis, M.D.         Re: Separation Agreement   Dear Louis:         The purpose of this letter agreement (the “Agreement”) is to set forth the terms of your  separation from Pieris Pharmaceuticals, Inc. (“Pieris” or the “Company”). Payment of the  Separation Benefit described below is contingent on your agreement to and compliance with the  terms of this Agreement.  This Agreement shall become effective on the date that is the eighth  (8th) day following your execution of it, as explained more fully in Section 6 below (the “Effective  Date”).         1.    Separation of Employment.  As we discussed, your employment with Pieris shall terminate effective January 10, 2020 (the “Separation Date”). As of the Separation Date, all  salary payments from the Company shall cease and any benefits you currently have under  Company-provided benefit plans, programs, or practices shall terminate, except as required by  federal or state law or as otherwise set forth herein.  The Company shall provide you with all  wages owed through the Separation Date, and shall pay all normal and reasonable business  expenses that you have incurred or shall incur in the ordinary course through the Separation Date.  Receipts for any outstanding business expenses shall be submitted within ten (10) days of the  Separation Date.  You shall not represent yourself as an employee of Pieris after the Separation  Date.  By executing this Agreement, you hereby resign from any other positions, offices or  directorships you may have with the Company or any of its subsidiaries or affiliates.         2.    Separation Benefit.  In exchange for the promises and covenants contained herein, your compliance with the terms of your Employment Agreement dated July 20, 2015 (the  “Employment Agreement”) and this Agreement, and your execution and non-revocation of the  Release of Claims attached as Exhibit A (the “Release”), Pieris agrees to provide you with the  following:          (a)   Severance Payments.  Pieris shall provide you with (i) severance pay in the form of continued payment of your gross Base Salary (as defined in your Employment Agreement),  less applicable withholdings and deductions, for a period of six (6) months, payable in bi-monthly  installments commencing with the Company’s first payroll date following the effective date of the  Release; and (ii) a payment for your 2019 annual discretionary bonus, in the form of one (1) lump-                                        1 

 

    sum payment, less applicable withholdings and deductions, to be determined and paid with and  at the same time as all other employees at the end of February.                (b)   Vesting of Options.                       i.  Pieris shall accelerate the vesting of 75% of your issued but unvested stock                 options issued pursuant to any stock option grants, and such stock options                 shall be vested and exercisable as of the effective date of the Release in                 accordance of the terms of the applicable option agreement.                               ii.  You acknowledge and agree that the remaining 25% of all unvested stock                 options are hereby terminated as of the Separation Date, and you shall have                 no right(s) to exercise any portion of such stock options following the                 Separation Date.  You acknowledge and agree that the Company does not                 guarantee or make any representations regarding the tax consequences or tax                 treatment of any vested stock options.  Except as modified herein, the terms                 and conditions of each stock option agreement entered with you are                 incorporated herein by reference and shall survive the signing of this                 Agreement.                  (c)   Continued Healthcare.  By law, and regardless of whether you sign this  Agreement, you shall have the right to continue your medical and dental insurance pursuant to  the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).  The  COBRA qualifying event shall be deemed to have occurred on January 10, 2020. Upon  completion of the appropriate COBRA forms and your execution of this Agreement, and subject  to all the requirements of COBRA, you shall be allowed to continue participation in the Company’s  health and dental insurance plans at the Company’s expense (except for your co-pay or your  portion of premium payments, if any, which shall be paid directly by you), for the period  commencing on the first day of the full calendar month following the effective date of the Release   and irrevocable through the earlier of (i) the last day of the six (6) full calendar months following  the effective date of the Release and (ii) the date you and your covered dependents, if any,  become eligible healthcare coverage under another employer’s plan(s).  You agree to provide the  Company with written notice immediately upon securing such employment and upon becoming  eligible for such benefits.  Thereafter, your eligibility to continue participation in the Company’s  health and dental insurance plans under COBRA (including but not limited to the COBRA premium  payments required for same) shall be subject to COBRA rules and provisions.                The payments and benefits provided under this Section 2 shall be referred to as the  “Separation Benefit.” You acknowledge and agree that the Separation Benefit is not otherwise due  or owing to you under any Pieris policy or practice. For the avoidance of doubt, the above- described Separation Benefit shall be in lieu of (and not in addition to) any payments or benefits  described in Section 4(b) of the Employment Agreement.  You further acknowledge that except  for the Separation Benefit, your final wages, any accrued but unused vacation, and any properly  incurred but not yet reimbursed business expenses (each of which shall be paid or reimbursed,  as the case may be, in accordance with Pieris’ regular payroll practices and applicable law), you  are not now and shall not in the future be entitled to any other compensation from Pieris including,  without limitation, other wages, commissions, bonuses, vacation pay, holiday pay, equity, stock,  stock options, paid time off, or any other form of compensation or benefit.                 3. Cooperation.  You shall cooperate fully with Pieris in connection with any matter  or event relating to your employment or events that occurred during your employment, including,                                         2   

 

    without limitation: (a) being available upon reasonable notice to meet with Pieris regarding matters  in which you have been involved; (b) assisting Pieris in transitioning your job duties to other Pieris  personnel or contractors; (c) assisting with any audit, inspection, proceeding or other inquiry by a  private or public entity; and (d) as requested by Pieris, assisting in the defense or prosecution of  any claims or actions now in existence or which may be brought or threatened in the future against  or on behalf of Pieris (including claims or actions against its affiliates and its and their officers and  employees), including acting as a witness, providing affidavits, and preparing for, attending and  participating in any legal proceeding (including depositions, consultation, discovery or trial) in  connection with such claim or action.  You further agree that should you be contacted (directly or  indirectly) by any person or entity (for example, by any party representing an individual or entity)  adverse to the Company, you shall promptly notify the President and Chief Executive Officer of  the Company. You shall be reimbursed for any reasonable out-of-pocket costs and expenses  approved in advance by Pieris and incurred in connection with providing such cooperation under  this Section 3.                4. Your Additional Covenants.  You expressly acknowledge and agree to the  following:                (a)   You shall adhere to the ongoing obligations in your Employment Agreement  (including, but not limited to, Section 4(a)), the Corporate Code of Conduct and Ethics,  Whistleblower Policy and Insider Trading Policy, and any other agreements between you and the  Company regarding confidential information, intellectual property, and non-competition and non- solicitation (the “Agreements”), the terms of which are incorporated herein and shall survive the  signing of this Agreement.                (b)   You shall promptly return to the Company or destroy all Company documents (and  any copies thereof), equipment and property, and you shall abide by any and all common law and  statutory obligations relating to protection of the Company’s trade secrets and confidential and  proprietary information.                (c)   In the event that you receive an order, subpoena, request, or demand for  disclosure of the Company’s trade secrets and/or confidential and proprietary documents and  information from any court or governmental agency, or from a party to any litigation or  administrative proceeding, you shall notify the Company of same as soon as reasonably possible  and prior to disclosure, in order to provide the Company with the opportunity to assert its  respective interests in addressing or opposing such order, subpoena, request, or demand.                (d)   All information relating in any way to the negotiation of this Agreement, including  the terms and amount of financial consideration provided for in this Agreement, shall be held  confidential by you and shall not be publicized or disclosed to any person (other than an  immediate family member, legal counsel or financial advisor, provided that any such whom  disclosure is made agrees to be bound by these confidentiality obligations), to any government  agency (except as mandated by state or federal law), or to any business entity.                (e)   You shall not make any statements that are disparaging about the Company or its  officers, directors, managers or employees, including, but not limited to, any statements that  disparage any program, service, finances, financial condition, capability or any other aspect of  the business of the Company, and you shall not engage in any conduct which is intended to harm  professionally or personally the reputation of the Company or its officers, directors, managers or  employees.                                                  3   

 

          (f)   A breach of any provision of this Section 4 shall constitute a material breach of this  Agreement and, in addition to any other legal or equitable remedy available to the Company, shall  entitle the Company to recover the Separation Benefit provided to you under this Agreement.          5.    Your Release of Claims.                  (a)   Release. You hereby agree that by signing this Agreement and accepting the  Separation Benefit and other good and valuable consideration provided for in this Agreement, you  are waiving and releasing your right to assert any form of legal claim against the Company1/  whatsoever for any alleged action, inaction or circumstance existing or arising from the beginning  of time through the Effective Date.  Your waiver and release herein is intended to bar any form of  legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against  the Company seeking any form of relief including, without limitation, equitable relief (whether  declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary  recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages,  emotional distress damages, punitive damages, attorneys’ fees and any other costs) against the  Company, for any alleged action, inaction or circumstance existing or arising through the Effective  Date.  Without limiting the foregoing general waiver and release, you specifically waive and  release the Company from any Claim arising from or related to your employment relationship with  the Company or the termination thereof, including, without limitation:                (i)   Claims under any state or federal statute, regulation or executive order (as  amended through the Effective Date) relating to employment, discrimination, fair employment  practices, or other terms and conditions of employment, including but not limited to the Age  Discrimination in Employment Act and Older Workers Benefit Protection Act (29 U.S.C. § 621 et  seq.), the Civil Rights Acts of 1866 and 1871 and Title VII of the Civil Rights Act of 1964 and the  Civil Rights Act of 1991 (42 U.S.C. § 2000e et seq.), the Equal Pay Act (29 U.S.C. § 201 et seq.),  the Americans With Disabilities Act (42 U.S.C. § 12101 et seq.), the Genetic Information Non- Discrimination Act (42 U.S.C. §2000ff et seq.), the Massachusetts Fair Employment Practices  Statute (M.G.L. c. 151B § 1 et seq.), the Massachusetts Equal Rights Act (M.G.L. c. 93 §102),  the Massachusetts Civil Rights Act (M.G.L. c. 12 §§ 11H & 11I), the Massachusetts Privacy  Statute (M.G.L. c. 214 § 1B), the Massachusetts Sexual Harassment Statute (M.G.L. c. 214 §  1C), and any similar Massachusetts or other state or federal statute.                (ii) Claims under any state or federal statute, regulation or executive order (as  amended through the Effective Date) relating to leaves of absence, layoffs or reductions-in-force,  wages, hours, or other terms and conditions of employment, including but not limited to the  National Labor Relations Act (29 U.S.C. § 151 et seq.), the Family and Medical Leave Act (29  U.S.C. §2601 et seq.), the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1000  et seq.), COBRA (29 U.S.C. § 1161 et seq.), the Worker Adjustment and Retraining Notification  Act (29 U.S.C. § 2101 et seq.), the Uniformed Services Employment and Reemployment Rights  Act of 1994 (38 U.S.C. § 4301 et seq.), the Massachusetts Wage Act (M.G.L. c. 149 § 148 et.  seq.), the Massachusetts Minimum Fair Wages Act (M.G.L. c. 151 § 1 et. seq.), the  Massachusetts Equal Pay Act (M.G.L. c. 149 § 105A), and any similar Massachusetts or other  state or federal statute.  Please note that this section specifically includes a waiver and release  of Claims that you have or may have regarding payments or amounts covered by the  Massachusetts Wage Act or the Massachusetts Minimum Fair Wages Act (including, for instance,                                                             1/    For the purposes of this Section 5, the parties agree that the term “Company” shall include Pieris  Pharmaceuticals, Inc., its divisions, affiliates, parents and subsidiaries, and any of its and their respective  officers, directors, shareholders, employees, consultants, contractors, attorneys, agents and assigns.                                         4   

 

    hourly wages, salary, overtime, minimum wages, commissions, vacation pay, holiday pay, sick  leave pay, dismissal pay, bonus pay or severance pay), as well as Claims for retaliation under  the Massachusetts Wage Act or the Massachusetts Minimum Fair Wages Act.               (iii) Claims under any state or federal common law theory, including, without  limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust  enrichment, breach of a covenant of good faith and fair dealing, violation of public policy,  defamation, interference with contractual relations, intentional or negligent infliction of emotional  distress, invasion of privacy, misrepresentation, deceit, fraud or negligence or any claim to  attorneys’ fees under any applicable statute or common law theory of recovery.                (iv)  Claims under any state or federal statute, regulation or executive order (as  amended through the Effective Date) relating to violation of public policy or any other form of  retaliation or wrongful termination, under any federal or any similar Massachusetts or other state  or federal statute.               (v)   Claims under any Company employment, compensation, benefit, stock  option, incentive compensation, bonus, restricted stock, and/or equity plan, program, policy,  practice or agreement, including, without limitation the Employment Agreement and the Option  Agreement.               (vi)  Any other Claim arising under any other state or federal law.         You explicitly acknowledge that because you are over forty (40) years of age, you have  specific rights under the ADEA, which prohibits discrimination on the basis of age, and that the  releases set forth in this Section 5 are intended to release any right that you may have to file a  claim against the Company alleging discrimination on the basis of age.    (b) Release Exclusions. Notwithstanding the foregoing, this Section 5 does not: (i)  release the Company from any obligation expressly set forth in this Agreement or from any  obligation, including without limitation obligations under the Workers Compensation laws, which  as a matter of law cannot be released or any applicable option agreement; (ii) release any right  to indemnification under the Company’s Bylaws, Articles of Incorporation, and/or directors’ and  officers’ liability insurance policies as of the Separation Date, subject to the terms and conditions  of same (iii) prohibit you from filing a charge with the Equal Employment Opportunity Commission  (“EEOC”), the National Labor Relations Board, the Occupational Safety and Health  Administration, the Securities and Exchange Commission, or any other federal, state or local  governmental agency or commission (a “Government Agency”); (iv) prohibit you from participating  in an investigation or proceeding by a Government Agency, communicating with a Government  Agency, or providing information or documents to a Government Agency; or (v) prohibit you from  challenging or seeking a determination in good faith of the validity of this release or waiver under  applicable state or federal law, or impose any condition precedent, penalty, or costs for doing so  unless specifically authorized by state or federal law. Your waiver and release, however, are  intended to be a complete bar to any recovery or personal benefit by or to you with respect to any  claim whatsoever, including those raised through a charge with the EEOC or comparable federal,  state or local governmental agency, except those which, as a matter of law, cannot be released.      (c) Acknowledgment.  You acknowledge and agree that, but for providing this waiver  and release, and for providing the Release, you would not be receiving the Separation Benefit  being provided to you under the terms of this Agreement.  You further agree that should you  breach this Section 5 or the Release, the Company, in addition to any other legal or equitable                                         5   

 

    remedy available to the Company, shall be entitled to recover any the cost of the Separation  Benefit previously provided to you pursuant to Section 2 hereof.          6.    ADEA/OWBPA Review and Revocation Period.  You and Pieris acknowledge  that you are over the age of 40 and that you, therefore, have specific rights under the Age  Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit Protection Act  (the “OWBPA”), which prohibit discrimination on the basis of age.  It is Pieris’ desire and  intent to make certain that you fully understand the provisions and effects of this  Agreement.  To that end, you have been encouraged and given the opportunity to consult  with legal counsel for the purpose of reviewing the terms of this Agreement.  Consistent  with the provisions of the ADEA and OWBPA, Pieris also is providing you with twenty one  (21) days in which to consider and accept the terms of this Agreement by signing below  and returning it to Stephen S. Yoder, President and Chief Executive Officer, Pieris  Pharmaceuticals, Inc., 255 State Street, 9th Floor, Boston, MA 02129.  You agree that any  modifications, material or otherwise, made to this Agreement do not and shall not restart  or affect in any manner whatsoever, the original 21-day Review Period.  You may rescind  your assent to this Agreement if, within seven (7) days after you sign this Agreement, you  deliver by hand or send by mail (certified, return receipt and postmarked within such 7- day period) a notice of rescission at the above-referenced address.                7. Opportunity to Disclose.  You acknowledge that you have been provided the  opportunity to advise the Company as to any concerns regarding its financial statements, SEC  filings and other public disclosures or any other matters, and have confirmed to the Company that  you have no such concerns.                8. Taxes and Withholdings.  The Separation Benefit provided under this Agreement  shall be reduced by all applicable federal, state, local and other deductions, taxes, and  withholdings. Pieris does not guarantee the tax treatment or tax consequences associated with  any payment or benefit under this Agreement, including but not limited to consequences related  to Section 409A of the Code.                  9.    Modification; Waiver; Severability.  No variations or modifications hereof shall  be deemed valid unless reduced to writing and signed by the parties hereto. The failure of Pieris  to seek enforcement of any provision of this Agreement in any instance or for any period of time  shall not be construed as a waiver of such provision or of Pieris’ right to seek enforcement of such  provision in the future.  The provisions of this Agreement are severable, and if for any reason any  part hereof shall be found to be unenforceable, the remaining provisions shall be enforced in full.                10.   Choice of Law and Venue; Jury Waiver.  This Agreement shall be deemed to  have been made in Massachusetts, shall take effect as an instrument under seal within  Massachusetts, and shall be governed by and construed in accordance with the laws of  Massachusetts, without giving effect to conflict of law principles.  You agree that any action,  demand, claim or counterclaim relating to the terms and provisions of this Agreement, or to its  breach, shall be commenced in Massachusetts in a court of competent jurisdiction, and you  further acknowledge that venue for such actions shall lie exclusively in Massachusetts and that  material witnesses and documents would be located in Massachusetts.                11. Entire Agreement.  You acknowledge and agree that this Agreement and the  Release , along with the specific agreements that are expressly incorporated herein by reference  and stated as surviving the signing of this Agreement, supersede any and all prior or                                         6   

 

    contemporaneous oral and written agreements between you and Pieris, and set forth the entire  agreement between you and Pieris.                  12.   Knowing and Voluntary Agreement.  By executing this Agreement, you are  acknowledging that you have been afforded sufficient time to understand the terms and effects of  this Agreement, that your agreements and obligations hereunder are made voluntarily, knowingly  and without duress, and that neither Pieris nor its agents or representatives have made any  representations inconsistent with the provisions of this Agreement.                    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]                                               7   

 

    This Agreement may be signed on one or more copies, each of which when signed shall be  deemed to be an original, and all of which together shall constitute one and the same Agreement.   If the foregoing correctly sets forth our understanding, please sign, date and return the enclosed  copy of this Agreement to me. If Pieris does not receive your acceptance within twenty-one (21)  days, the Agreement shall terminate and be of no further force or effect.            Sincerely,                                        PIERIS PHARMACEUTICALS, INC.                                                                                                                  By:              Stephen S. Yoder         President and Chief Executive Officer                                                                                 Dated:         Agreed and Acknowledged:             Louis Matis, MD          Dated:                                                      8pirs12312019ex1026

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

 

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

 

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

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}]]