NONQUALIFIED STOCK OPTION GRANT AGREEMENT
TIMBER PHARMACEUTICALS, INC.
This Stock Option Grant
Agreement (the “Grant Agreement”) is made and entered into effective on the Date of Grant set forth in Exhibit
A (the “Date of Grant”) by and between Timber Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the individual named in Exhibit A hereto (the “Optionee”).
WHEREAS, the Company
desires to provide the Optionee an incentive to participate in the success and growth of the Company through the opportunity to
earn a proprietary interest in the Company; and
WHEREAS, to give effect
to the foregoing intention, the Company desires to grant the Optionee an option pursuant to the Timber Pharmaceuticals, Inc. 2020
Omnibus Equity Incentive Plan (the “Plan”) to acquire the Company’s common stock, par value $0.001 per
share (the “Common Stock”);
NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for good and valuable consideration, the parties hereto agree as
The Company hereby grants the Optionee a Nonqualified Stock Option (the “Option”) to purchase up to the number
of shares of Common Stock (the “Shares”) set forth in Exhibit A hereto at the exercise price per Share
(the “Exercise Price”) set forth in Exhibit A, and on the vesting schedule set forth in Exhibit A,
subject to the terms and conditions set forth herein and the provisions of the Plan, the terms of which are incorporated herein
by reference. Capitalized terms used but not otherwise defined in this Grant Agreement shall have the meanings as set forth in
Period Following Termination of Continuous Service. This Option shall terminate and be canceled to the extent not exercised
within ninety (90) days after the Optionee’s Continuous Service terminates, except that if such termination is due to the
death or Disability of the Optionee, this Option shall terminate and be canceled twelve (12) months from the date of termination
of Continuous Service. Notwithstanding the foregoing, in the event that the Optionee’s Continuous Service is terminated for
Cause, then the Option shall immediately terminate on the date of such termination of Continuous Service and shall not be exercisable
for any period following such date. In no event, however, shall this Option be exercised later than the Expiration Date set forth
in Exhibit A and in no event shall this Option be exercised for more Shares than the Shares which otherwise have become
exercisable as of the date of termination.
of Exercise. This Option is exercisable by delivery to the Company of an exercise notice (the “Exercise
Notice”) in a form satisfactory to the Committee or by such other form or means as the Committee may permit or
require. Any Exercise Notice shall state or provide the number of Shares with respect to which the Option is being exercised
(the “Exercised Shares”), and include such other representations and agreements as may be required by the
Company pursuant to the provisions of the Plan. The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price for the Exercised Shares in (i) cash; (ii) check; or (iii) such other manner as is acceptable to the Committee,
provided that such form of consideration is permitted by the Plan and by applicable law. Upon exercise of the Option by the
Optionee and prior to the delivery of such Exercised Shares, the Company shall have the right to require the Optionee to
satisfy applicable Federal and state tax income tax withholding requirements and the
Optionee’s share of applicable employment withholding taxes in a method satisfactory to the Company. Notwithstanding
the foregoing, no Exercised Shares shall be issued unless such exercise and issuance complies with the requirements relating
to the administration of stock option plans and other applicable equity plans under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted,
and the applicable laws of any foreign country or jurisdiction where stock grants or other applicable equity grants are made
under the Plan; assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the
Optionee on the date the Option is exercised with respect to such Shares.
Agreement. This Option shall be subject to forfeiture at the election of the Company in the event that the Optionee breaches
any agreement between the Optionee and the Company with respect to noncompetition, nonsolicitation, assignment of inventions and
contributions and/or nondisclosure obligations of the Optionee.
By executing this Grant Agreement, Optionee acknowledges and agrees that Optionee is solely responsible for the satisfaction of
any applicable taxes that may be imposed on Optionee that arise as a result of the grant, vesting or exercise of the Option, including
without limitation any taxes arising under Section 409A of the Code (regarding deferred compensation) or Section 4999 of the Code
(regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever
to pay such taxes or otherwise indemnify or hold Optionee harmless from any or all of such taxes.
of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of the Plan and this Grant Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.
Matters. All Shares and Exercised Shares shall be subject to the restrictions on sale, encumbrance and other disposition
provided by Federal or state law. The Company shall not be obligated to sell or issue any Shares or Exercised Shares pursuant
to this Grant Agreement unless, on the date of sale and issuance thereof, such Shares are either registered under the
Securities Act of 1933, as amended (the “Securities Act”), and all applicable state securities laws, or
are exempt from registration thereunder. Regardless of whether the offering and sale of Shares under the Plan have been
registered under the Securities Act, or have been registered or qualified under the securities laws of any state, the Company
at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the
Company, such restrictions are necessary in order to achieve compliance with the Securities Act or the securities laws of any
state or any other law.
Purpose. The Optionee represents and warrants that unless the Shares are registered under the Securities Act, any and all Shares
acquired by the Optionee under this Grant Agreement will be acquired for investment for the Optionee’s own account and not
with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of
such Shares within the meaning of the Securities Act. The Optionee agrees not to sell, transfer or otherwise dispose of such Shares
unless they are either (1) registered under the Securities Act and all applicable state securities laws, or (2) exempt from such
registration in the opinion of Company counsel.
Agreement. The Optionee hereby agrees that in the event that the Optionee exercises this Option during a period in which any
directors or officers of the Company have agreed with one or more underwriters not to sell securities of the Company, then, as
a condition to such exercise, the Optionee shall enter into an agreement, in form and substance satisfactory to the Company, pursuant
to which the Optionee shall agree to restrictions on transferability of the Shares comparable to the restrictions agreed upon by
such directors or officers of the Company.
Plans. No amounts of income received by the Optionee pursuant to this Grant Agreement shall be considered compensation for
purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or its subsidiaries,
unless otherwise expressly provided in such plan.
Guarantee of Continued Service. The Optionee acknowledges and agrees that the right to exercise the Option pursuant to the
exercise schedule hereof is earned only through Continuous Service and such other requirements, if any, as are set forth in Exhibit
A (and not through the act of being hired, being granted an option or purchasing shares hereunder). The Optionee further acknowledges
and agrees that (i) this Grant Agreement, the transactions contemplated hereunder and the exercise schedule set forth herein do
not constitute an express or implied promise of continued employment or service for the exercise period or for any other period,
and shall not interfere with the Optionee’s right or the right of the Company or its Subsidiaries to terminate the employment
or service relationship at any time, with or without cause, subject to the terms of any written employment agreement that the Optionee
may have entered into with the Company or any of its Subsidiaries; and (ii) the Company would not have granted this Option to the
Optionee but for these acknowledgements and agreements.
Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means of a writing signed by the Company and the Optionee. In
the event of any conflict between this Grant Agreement and the Plan, the Plan shall be controlling, except as otherwise
specifically provided in the Plan. This Grant Agreement shall be construed under the laws of
the State of Delaware, without regard to conflict of laws principles.
for Review. Optionee and the Company agree that this Option is granted under and governed by the terms and conditions of the
Plan and this Grant Agreement. The Optionee has reviewed the Plan and this Grant Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Grant Agreement and fully understands all provisions of the Plan and this
Grant Agreement. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions relating to the Plan and this Grant Agreement. The Optionee further agrees to notify the Company upon
any change in the residence address indicated herein.
409A. This Option is intended to be excepted from coverage under Section 409A and shall be administered, interpreted
and construed accordingly. The Company may, in its sole discretion and without the Optionee’s consent, modify or amend
the terms of this Grant Agreement, impose conditions on the timing and effectiveness of the exercise of the Option by
Optionee, or take any other action it deems necessary or advisable, to cause the Option to be excepted from Section 409A (or
to comply therewith to the extent the Company determines it is not excepted).
In the event the Company restates its financial statements due to material noncompliance with any financial reporting requirements
under applicable securities laws, any shares issued pursuant to this Agreement for or in respect of the year that is restated,
or the prior three years, may be recovered to the extent the shares issued exceed the number that would have been issued based
on the restatement. In addition and without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment
in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder,
any clawback policy adopted by the Company or as is otherwise required by applicable law or stock exchange listing conditions.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
executed this Grant Agreement as of the date set forth in Exhibit A.
||TIMBER PHARMACEUTICALS, INC.|
NONQUALIFIED STOCK OPTION GRANT AGREEMENT
TIMBER PHARMACEUTICALS, INC.
|(c).||Number of Shares Subject to the Option:
|(d).||Exercise Price: $______ per Share