AERI Aerie Pharmaceuticals Inc

An initial term which will commence on the Start Date and will expire on December 20, 2024, with automatic extensions for successive one (1) year periods thereafter, unless either party provides written notice of non-renewal at least 90 days prior to the end of the applicable term;

An annual base salary of $700,000 payable in accordance with regular payroll practices and, beginning January 1, 2022, eligibility to receive a target annual bonus equal to 70% of his base salary, with the actual amount of the annual bonus to be determined by the Board based on achievement of the relevant performance goals to be determined by the Board in consultation with Mr. Kannan. Mr. Kannan’s base salary may be increased annually at the discretion of the Board, and may be decreased only in connection with an overall reduction in executive officer salaries;

Grants of equity awards under the Company’s Inducement Award Plan including (i) on the Start Date, an award with an aggregate grant date fair market value equal to $3,500,000, 50% of which will be in the form of stock options to purchase shares of the Company’s common stock and 50% of which will be in the form of restricted stock; and (ii) on the same date in February 2022 as the other senior executives receive an annual equity grant from the Company, an award with an aggregate grant date fair market value equal to $2,000,000, 50% of which will be in the form of stock options to purchase shares of the Company’s common stock and 50% of which will be in the form of performance-vested restricted stock. The stock option grants will each vest 25% on the one-year anniversary of the applicable date of grant and in 36 monthly installments thereafter. The restricted stock grant will vest on the first four annual anniversaries of the date of grant. The performance period and performance vesting conditions applicable to the performance-vested restricted stock award will be determined by the Board in consultation with Mr. Kannan prior to the award’s grant. Each award will be subject to the terms of the Company’s Inducement Award Plan and an individual award agreement.

Mr. Kannan is eligible to participate in the standard benefit programs for senior executives. In addition, Mr. Kannan is entitled to receive reimbursement of costs related to Mr. Kannan’s relocation to the Durham, North Carolina area including (i) up to 18 months of reasonable commuting expenses, (ii) up to 30 months of housing costs (limited to $5,000 per month) and (iii) reasonable and customary relocation costs related to the sale of his current residence and purchase of a new residence that occurs during the 30 month transition period following the Start Date. To the extent these relocation benefits are taxable to Mr. Kannan, an additional payment will be made to Mr. Kannan to cover the cost of the applicable tax.

Continued payment of Mr. Kannan’s base salary at the rate in effect at the time of termination for a period of 12 months, or 24 months if such termination of employment occurs in connection with or within 12 months following a Change in Control (as defined in the Kannan Employment Agreement);

Payment of a pro-rated portion of Mr. Kannan’s annual bonus for the year of termination, assuming target level performance, and if the prior year’s annual bonus has not been paid at the time of termination, payout of the annual bonus amount that would have been earned in the normal course had the termination of employment not occurred;

If the termination occurs in connection with or within 12 months following a Change in Control, an amount equal to 1.5 times the greater of (x) 70% of Mr. Kannan’s base salary at the time of termination and (y) the average of the annual performance bonuses received by Mr. Kannan for the two years immediately preceding the date of termination;

Company-paid health insurance continuation coverage less the amount payable by an active employee for such coverage, for a period of 12 months, or 24 months if such termination of employment occurs in connection with or within 12 months following a Change in Control; and

Unless treatment more favorable to Mr. Kannan is provided in the applicable equity plan or award agreement, the portion of each equity award that is outstanding at the time of the termination of employment that would have vested in the 12 months immediately following the termination date will vest and become exercisable, as applicable, as of the termination date, and Mr. Kannan will have a post-termination exercise period of 90 days during which he may exercise the portion of his options to purchase shares of common stock of the Company that was vested as of the termination date. If the termination occurs in connection with or within 12 months following a Change in Control, all equity awards outstanding as of the date of termination will fully vest.