Exhibit 10.3

Option No. [________]

DERMTECH, INC.

Stock Option Grant Notice

Stock Option Grant under the

DermTech, Inc. 2020 Equity Incentive Plan

 

1.

 

Name and Address of Participant:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

Grant Date:

 

 

 

 

 

 

 

3.

 

Type of Grant:

 

 

 

 

 

 

 

4.

 

Maximum Number of Shares for

 

 

 

 

which this Option is exercisable:

 

 

 

 

 

 

 

5.

 

Exercise (purchase) price per share:

 

 

 

 

 

 

 

6.

 

Option Expiration Date:

 

 

 

 

 

 

 

7.

 

Vesting Start Date:

 

 

 

 

 

 

 

8.

 

Vesting Schedule:  This Option shall become exercisable (and the Shares issued
upon exercise shall be vested) as follows provided the Participant is an
Employee, director or Consultant of the Company or of an Affiliate on the
applicable vesting date set forth below:

 

 

 

 

 

 

 

Number of Shares

 

Vesting Date

 

The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement and the DermTech, Inc. 2020 Equity Incentive Plan.

The Company and the Participant acknowledge receipt of this Stock Option Grant
Notice and agree to the terms of the Stock Option Agreement attached hereto and
incorporated by reference herein, the DermTech, Inc. 2020 Equity Incentive Plan
and the terms of this Option Grant as set forth above.

 

DERMTECH, INC.

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

Participant

 

 

 

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Option No. [________]

DERMTECH, INC.

Executive Stock Option Grant Notice

Stock Option Grant under the

DermTech, Inc. 2020 Equity Incentive Plan

 

1.

 

Name and Address of Participant:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

Grant Date:

 

 

 

 

 

 

 

3.

 

Type of Grant:

 

 

 

 

 

 

 

4.

 

Maximum Number of Shares for

 

 

 

 

which this Option is exercisable:

 

 

 

 

 

 

 

5.

 

Exercise (purchase) price per share:

 

 

 

 

 

 

 

6.

 

Option Expiration Date:

 

 

 

 

 

 

 

7.

 

Vesting Start Date:

 

 

 

 

 

 

 

8.

 

Vesting Schedule: This Option shall become exercisable (and the Shares issued
upon exercise shall be vested) as follows provided the Participant is an
Employee, director or Consultant of the Company or of an Affiliate on the
applicable vesting date set forth below:

 

 

 

 

 

 

 

Number of Shares

 

Vesting Date

 

Notwithstanding the foregoing, in the event Participant (i) is terminated other
than for Cause (as defined below), death or Disability (as defined in the
DermTech, Inc. 2020 Equity Incentive Plan) or (ii) resigns for Good Reason (as
defined below); in either case during a period beginning three months prior to
and ending 18 months following a Change in Control (as defined below), the
portion of this Option then unvested shall vest in full upon such termination or
resignation.

“Cause” shall, for purposes of this Executive Stock Option Grant Notice and the
attached Stock Option Agreement, (i) have the meaning assigned to such term in
Participant’s employment agreement, written offer of employment or other
applicable written agreement between the Participant and the Company or an
Affiliate, or (ii) if not defined in such agreement, mean any of the following:
(a) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary
duty for personal profit, or falsification of the documents or records of the
Company or an Affiliate; (b) the Participant’s material failure to abide by the
code of conduct or other policies (including, without limitation, policies
relating to confidentiality and reasonable workplace conduct) of the

 

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Company or an Affiliate; (c) the Participant’s unauthorized use,
misappropriation, destruction or diversion of any tangible or intangible asset
or corporate opportunity of the Company or an Affiliate (including, without
limitation, the Participant’s improper use or disclosure of confidential or
proprietary information of the Company or an  Affiliate); (d) any intentional
act by the Participant which has a material detrimental effect on the reputation
or business of the Company or an Affiliate; (e) the Participant’s repeated
failure or inability to perform any reasonable assigned duties after written
notice from the Company or an Affiliate of, and a reasonable opportunity to
cure, such failure or inability; (f) any material breach by the Participant of
any employment or service agreement between the Participant and the Company or
an Affiliate, which breach is not cured pursuant to the terms of such agreement;
or (g) the Participant’s conviction (including any plea of guilty or nolo
contendere) of any criminal act involving fraud, dishonesty, misappropriation or
moral turpitude, or which impairs the Participant’s ability to perform his or
her duties with the Company or an Affiliate.

 

“Good Reason” shall, for purposes of this Executive Stock Option Grant Notice,
(i) have the meaning assigned to such term in Participant’s employment
agreement, written offer of employment or other applicable written agreement
between the Participant and the Company or an Affiliate, or (ii) if not defined
in such agreement, mean the occurrence of any of the following events or
conditions, without Participant’s express written consent: (a) a material
reduction in Participant’s base salary or bonus potential; (b) a material
reduction in Participant’s duties, responsibilities or authority, including,
without limitation, changes in Participant’s reporting structure resulting from
a Change in Control (as defined below); (c) a change in geographic location at
which Participant must perform services that results in an increase in the
one-way commute of Participant by more than 50 miles; or (d) a successor of the
Company does not assume Participant’s employment agreement, written offer of
employment or other similar agreement between the Participant and the Company or
an Affiliate; provided that Participant has provided notice to the Company of
the condition giving rise to “Good Reason” within one hundred twenty (120) days
of Participant’s knowledge of the existence of such condition, and the Company
has not remedied such condition in the thirty (30) days following such notice.

 

“Change in Control” shall (i) have the meaning assigned to such term in
Participant’s employment agreement, written offer of employment or other
applicable written agreement between the Participant and the Company or an
Affiliate, or (ii) if not defined in such agreement, mean the occurrence of any
of the following events:

 

(a)

Ownership.  Any “Person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities (excluding for this purpose any
such voting securities held by the Company or its Affiliates or any employee
benefit plan of the Company) pursuant to a transaction or a series of related
transactions which the Board of Directors does not approve; or

 

(b)

Merger/Sale of Assets.  (A) A merger or consolidation of the Company whether or
not approved by the Board of Directors, other than a merger or

2

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consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or the parent of such corporation) more than 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity or parent of such corporation, as the case may be, outstanding
immediately after such merger or consolidation; or (B) the sale or disposition
by the Company of all or substantially all of the Company’s assets in a
transaction requiring stockholder approval; or

 

(c)

Change in Board Composition.  A change in the composition of the Board of
Directors, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the Grant Date, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company).

 

(d)

“Change in Control” shall be interpreted, if applicable, in a manner, and
limited to the extent necessary, so that it will not cause adverse tax
consequences under Section 409A.

The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement and the DermTech, Inc. 2020 Equity Incentive Plan.

The Company and the Participant acknowledge receipt of this Executive Stock
Option Grant Notice and agree to the terms of the Stock Option Agreement
attached hereto and incorporated by reference herein, the DermTech, Inc. 2020
Equity Incentive Plan and the terms of this Option Grant as set forth above.

 

 

DERMTECH, INC.

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

Participant

 

 

3

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Option No. [________]

DERMTECH, INC.

Non-Employee Director Stock Option Grant Notice

Stock Option Grant under the

DermTech, Inc. 2020 Equity Incentive Plan

 

1.

 

Name and Address of Participant:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

Grant Date:

 

 

 

 

 

 

 

3.

 

Type of Grant:

 

 

 

 

 

 

 

4.

 

Maximum Number of Shares for

 

 

 

 

which this Option is exercisable:

 

 

 

 

 

 

 

5.

 

Exercise (purchase) price per share:

 

 

 

 

 

 

 

6.

 

Option Expiration Date:

 

 

 

 

 

 

 

7.

 

Vesting Start Date:

 

 

 

 

 

 

 

8.

 

Vesting Schedule:  This Option shall become exercisable (and the Shares issued
upon exercise shall be vested) as follows provided the Participant is an
Employee, director or Consultant of the Company or of an Affiliate on the
applicable vesting date set forth below:

 

 

 

 

 

 

 

Number of Shares

 

Vesting Date

 

Notwithstanding the foregoing, in the event of a Change in Control (as defined
below) while the Participant is a director of the Company the portion of this
Option then unvested shall vest in full immediately prior to the Change in
Control (as defined below).

“Change in Control” means the occurrence of any of the following events:

 

(a)

Ownership.  Any “Person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities (excluding for this purpose any
such voting securities held by the Company or its Affiliates or any employee
benefit plan of the Company) pursuant to a transaction or a series of related
transactions which the Board of Directors does not approve; or

 

--------------------------------------------------------------------------------

 

 

(b)

Merger/Sale of Assets.  (A) A merger or consolidation of the Company whether or
not approved by the Board of Directors, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or the parent of such corporation) more than 50% of the total voting power
represented by the voting securities of the Company or such surviving entity or
parent of such corporation, as the case may be, outstanding immediately after
such merger or consolidation; or (B) the sale or disposition by the Company of
all or substantially all of the Company’s assets in a transaction requiring
stockholder approval; or

 

(c)

Change in Board Composition.  A change in the composition of the Board of
Directors, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the Grant Date, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company).

 

(d)

“Change in Control” shall be interpreted, if applicable, in a manner, and
limited to the extent necessary, so that it will not cause adverse tax
consequences under Section 409A.

The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement and the Plan.

The Company and the Participant acknowledge receipt of this Non-Employee
Director Stock Option Grant Notice and agree to the terms of the Stock Option
Agreement attached hereto and incorporated by reference herein, the DermTech,
Inc. 2020 Equity Incentive Plan and the terms of this Option Grant as set forth
above.

 

 

DERMTECH, INC.

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

Participant

 

 

2

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DERMTECH, INC.

STOCK OPTION AGREEMENT - INCORPORATED TERMS AND CONDITIONS

 

 

AGREEMENT made as of the date of grant set forth in the Stock Option Grant
Notice by and between DermTech, Inc. (the “Company”), a Delaware corporation,
and the individual whose name appears on the Stock Option Grant Notice (the
“Participant”).

WHEREAS, the Company desires to grant to the Participant an Option to purchase
shares of its common stock, $0.0001 par value per share (the “Shares”), under
and for the purposes set forth in the Company’s 2020 Equity Incentive Plan (the
“Plan”);

WHEREAS, the Company and the Participant understand and agree that any terms
used and not defined herein have the same meanings as in the Plan; and

WHEREAS, the Company and the Participant each intend that the Option granted
herein shall be of the type set forth in the Stock Option Grant Notice.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto agree as
follows:

1.GRANT OF OPTION.  The Company hereby grants to the Participant the right and
option to purchase all or any part of an aggregate of the number of Shares set
forth in the Stock Option Grant Notice, on the terms and conditions and subject
to all the limitations set forth herein, under United States securities and tax
laws, and in the Plan, which is incorporated herein by reference.  The
Participant acknowledges receipt of a copy of the Plan.

2.EXERCISE PRICE.  The exercise price of the Shares covered by the Option shall
be the amount per Share set forth in the Stock Option Grant Notice, subject to
adjustment, as provided in the Plan, in the event of a stock split, reverse
stock split or other events affecting the holders of Shares after the date
hereof (the “Exercise Price”).  Payment shall be made in accordance with
Paragraph 10 of the Plan.

3.EXERCISABILITY OF OPTION.  Subject to the terms and conditions set forth in
this Agreement and the Plan, the Option granted hereby shall become vested and
exercisable as set forth in the Stock Option Grant Notice and is subject to the
other terms and conditions of this Agreement and the Plan.

4.TERM OF OPTION.  This Option shall terminate on the Option Expiration Date as
specified in the Stock Option Grant Notice and, if this Option is designated in
the Stock Option Grant Notice as an ISO and the Participant owns as of the date
hereof more than 10% of the total combined voting power of all classes of
capital stock of the Company or an Affiliate, such date may not be more than
five years from the date of this Agreement, but shall be subject to earlier
termination as provided herein or in the Plan.

 

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If the Participant ceases to be an Employee, director or Consultant of the
Company or of an Affiliate for any reason other than the death or Disability of
the Participant, or termination of the Participant for Cause (the “Termination
Date”), the Option to the extent then vested and exercisable pursuant to Section
3 hereof as of the Termination Date, and not previously terminated in accordance
with this Agreement, may be exercised within three months after the Termination
Date, or on or prior to the Option Expiration Date as specified in the Stock
Option Grant Notice, whichever is earlier, but may not be exercised thereafter
except as set forth below.  In such event, the unvested portion of the Option
shall not be exercisable and shall expire and be cancelled on the Termination
Date.

If this Option is designated in the Stock Option Grant Notice as an ISO and the
Participant ceases to be an Employee of the Company or of an Affiliate but
continues after termination of employment to provide service to the Company or
an Affiliate as a director or Consultant, this Option shall continue to vest in
accordance with Section 3 above as if this Option had not terminated until the
Participant is no longer providing services to the Company.  In such case, this
Option shall automatically convert and be deemed a Non-Qualified Option as of
the date that is three months from termination of the Participant's employment
and this Option shall continue on the same terms and conditions set forth herein
until such Participant is no longer providing service to the Company or an
Affiliate.

Notwithstanding the foregoing, in the event of the Participant’s Disability or
death within three months after the Termination Date, the Participant or the
Participant’s Survivors may exercise the Option within one year after the
Termination Date, but in no event after the Option Expiration Date as specified
in the Stock Option Grant Notice.

In the event the Participant’s service is terminated by the Company or an
Affiliate for Cause, the Participant’s right to exercise any unexercised portion
of this Option even if vested shall cease immediately as of the time the
Participant is notified his or her service is terminated for Cause, and this
Option shall thereupon terminate.  Notwithstanding anything herein to the
contrary, if subsequent to the Participant’s termination, but prior to the
exercise of the Option, the Administrator determines that, either prior or
subsequent to the Participant’s termination, the Participant engaged in conduct
which would constitute Cause, then the Participant shall immediately cease to
have any right to exercise the Option and this Option shall thereupon terminate.

In the event of the Disability of the Participant, as determined in accordance
with the Plan, the Option shall be exercisable within one year after the
Participant’s termination of service due to Disability or, if earlier, on or
prior to the Option Expiration Date as specified in the Stock Option Grant
Notice.  In such event, the Option shall be exercisable:

 

(a)

to the extent that the Option has become exercisable but has not been exercised
as of the date of the Participant’s termination of service due to Disability;
and

2

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(b)

in the event rights to exercise the Option accrue periodically, to the extent of
a pro rata portion through the date of the Participant’s termination of service
due to Disability of any additional vesting rights that would have accrued on
the next vesting date had the Participant not become Disabled.  The proration
shall be based upon the number of days accrued in the current vesting period
prior to the date of the Participant’s termination of service due to Disability.

In the event of the death of the Participant while an Employee, director or
Consultant of the Company or of an Affiliate, the Option shall be exercisable by
the Participant’s Survivors within one year after the date of death of the
Participant or, if earlier, on or prior to the Option Expiration Date as
specified in the Stock Option Grant Notice.  In such event, the Option shall be
exercisable:

 

(x)

to the extent that the Option has become exercisable but has not been exercised
as of the date of death; and

 

(y)

in the event rights to exercise the Option accrue periodically, to the extent of
a pro rata portion through the date of death of any additional vesting rights
that would have accrued on the next vesting date had the Participant not
died.  The proration shall be based upon the number of days accrued in the
current vesting period prior to the Participant’s date of death.

5.METHOD OF EXERCISING OPTION.  Subject to the terms and conditions of this
Agreement, the Option may be exercised by written notice to the Company or its
designee, in substantially the form of Exhibit A attached hereto (or in such
other form acceptable to the Company, which may include electronic
notice).  Such notice shall state the number of Shares with respect to which the
Option is being exercised and shall be signed by the person exercising the
Option (which signature may be provided electronically in a form acceptable to
the Company).  Payment of the Exercise Price for such Shares shall be made in
accordance with Paragraph 10 of the Plan.  The Company shall deliver such Shares
as soon as practicable after the notice shall be received, provided, however,
that the Company may delay issuance of such Shares until completion of any
action or obtaining of any consent, which the Company deems necessary under any
applicable law (including, without limitation, state securities or “blue sky”
laws).  The Shares as to which the Option shall have been so exercised shall be
registered in the Company’s share register in the name of the person so
exercising the Option (or, if the Option shall be exercised by the Participant
and if the Participant shall so request in the notice exercising the Option,
shall be registered in the Company’s share register in the name of the
Participant and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person
exercising the Option.  In the event the Option shall be exercised, pursuant to
Section 4 hereof, by any person other than the Participant, such notice shall be
accompanied by appropriate proof of the right of such person to exercise the
Option.  All Shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.

6.PARTIAL EXERCISE.  Exercise of this Option to the extent above stated may be
made in part at any time and from time to time within the above limits, except
that no fractional share shall be issued pursuant to this Option.

3

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7.NON‑ASSIGNABILITY.  The Option shall not be transferable by the Participant
otherwise than by will or by the laws of descent and distribution.  If this
Option is a Non-Qualified Option then it may also be transferred pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act or the rules thereunder.  Except as
provided above in this paragraph, the Option shall be exercisable, during the
Participant’s lifetime, only by the Participant (or, in the event of legal
incapacity or incompetency, by the Participant’s guardian or representative) and
shall not be assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process.  Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Option or of any rights granted hereunder contrary to
the provisions of this Section 7, or the levy of any attachment or similar
process upon the Option shall be null and void.

8.NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.  The Participant shall have no rights
as a stockholder with respect to Shares subject to this Agreement until
registration of the Shares in the Company’s share register in the name of the
Participant.  Except as is expressly provided in the Plan with respect to
certain changes in the capitalization of the Company, no adjustment shall be
made for dividends or similar rights for which the record date is prior to the
date of such registration.

9.ADJUSTMENTS.  The Plan contains provisions covering the treatment of Options
in a number of contingencies such as stock splits and mergers.  Provisions in
the Plan for adjustment with respect to stock subject to Options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference.

10.TAXES.  The Participant acknowledges and agrees that (i) any income or other
taxes due from the Participant with respect to this Option or the Shares
issuable pursuant to this Option shall be the Participant’s responsibility; (ii)
the Participant was free to use professional advisors of his or her choice in
connection with this Agreement, has received advice from his or her professional
advisors in connection with this Agreement, understands its meaning and import,
and is entering into this Agreement freely and without coercion or duress; (iii)
the Participant has not received and is not relying upon any advice,
representations or assurances made by or on behalf of the Company or any
Affiliate or any employee of or counsel to the Company or any Affiliate
regarding any tax or other effects or implications of the Option, the Shares or
other matters contemplated by this Agreement; and (iv) neither the
Administrator, the Company, its Affiliates, nor any of its officers or
directors, shall be held liable for any applicable costs, taxes, or penalties
associated with the Option if, in fact, the Internal Revenue Service were to
determine that the Option constitutes deferred compensation under Section 409A
of the Code.

If this Option is designated in the Stock Option Grant Notice as a Non-Qualified
Option or if the Option is an ISO and is converted into a Non-Qualified Option
and such Non-Qualified Option is exercised, the Participant agrees that the
Company may withhold from the Participant’s remuneration, if any, the minimum
statutory amount of federal, state and local withholding taxes attributable to
such amount that is considered compensation includable in such person’s gross
income.  At the Company’s discretion, the amount required to be withheld may be
withheld in cash from such remuneration, or in kind from the Shares otherwise
deliverable to the Participant on exercise of the Option.  The Participant
further agrees that, if the Company does not withhold an amount from the
Participant’s remuneration sufficient to satisfy the Company’s income tax
withholding obligation, the Participant will reimburse the Company on demand, in
cash, for the amount under-withheld.

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11.PURCHASE FOR INVESTMENT.  Unless the offering and sale of the Shares to be
issued upon the particular exercise of the Option shall have been effectively
registered under the Securities Act, the Company shall be under no obligation to
issue the Shares covered by such exercise unless the Company has determined that
such exercise and issuance would be exempt from the registration requirements of
the Securities Act and until the following conditions have been fulfilled:

 

(a)

The person(s) who exercise the Option shall warrant to the Company, at the time
of such exercise, that such person(s) are acquiring such Shares for their own
respective accounts, for investment, and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon any certificate(s) evidencing the
Shares issued pursuant to such exercise:

“The shares represented by this certificate have been taken for investment and
they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such
shares shall be effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel satisfactory to it that an
exemption from registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities laws;” and

 

(b)

If the Company so requires, the Company shall have received an opinion of its
counsel that the Shares may be issued upon such particular exercise in
compliance with the Securities Act without registration thereunder.  Without
limiting the generality of the foregoing, the Company may delay issuance of the
Shares until completion of any action or obtaining of any consent, which the
Company deems necessary under any applicable law (including without limitation
state securities or “blue sky” laws).

12.RESTRICTIONS ON TRANSFER OF SHARES.

 

(a)

The Participant agrees that in the event the Company proposes to offer for sale
to the public any of its equity securities and such Participant is requested by
the Company and any underwriter engaged by the Company in connection with such
offering to sign an agreement restricting the sale or other transfer of Shares,
then it will promptly sign such agreement and will not transfer, whether in
privately negotiated transactions or to the public in open market transactions
or otherwise, any Shares or other securities of the Company held by him or her
during such period as is determined by the Company and the underwriters, not to
exceed 180 days following the closing of the offering, plus such additional
period of time as may be required to comply with FINRA rules or similar rules
thereto promulgated by another regulatory authority (such period, the “Lock-Up
Period”).  Such agreement shall be in writing and in form and substance
reasonably satisfactory to the Company and such underwriter and pursuant to

5

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customary and prevailing terms and conditions.  Notwithstanding whether the
Participant has signed such an agreement, the Company may impose stop-transfer
instructions with respect to the Shares or other securities of the Company
subject to the foregoing restrictions until the end of the Lock-Up Period.

 

(b)

The Participant acknowledges and agrees that neither the Company, its
stockholders nor its directors and officers, has any duty or obligation to
disclose to the Participant any material information regarding the business of
the Company or affecting the value of the Shares before, at the time of, or
following a termination of the service of the Participant by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.

13.NO OBLIGATION TO MAINTAIN RELATIONSHIP.  The Participant acknowledges that:
(i) the Company is not by the Plan or this Option obligated to continue the
Participant as an employee, director or Consultant of the Company or an
Affiliate; (ii) the Plan is discretionary in nature and may be suspended or
terminated by the Company at any time; (iii) the grant of the Option is a
one-time benefit which does not create any contractual or other right to receive
future grants of options, or benefits in lieu of options; (iv) all
determinations with respect to any such future grants, including, but not
limited to, the times when options shall be granted, the number of shares
subject to each option, the option price, and the time or times when each option
shall be exercisable, will be at the sole discretion of the Company; (v) the
Participant’s participation in the Plan is voluntary; (vi) the value of the
Option is an extraordinary item of compensation which is outside the scope of
the Participant’s employment or consulting contract, if any; and (vii) the
Option is not part of normal or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.

14.IF OPTION IS INTENDED TO BE AN ISO. If this Option is designated in the Stock
Option Grant Notice as an ISO so that the Participant (or the Participant’s
Survivors) may qualify for the favorable tax treatment provided to holders of
Options that meet the standards of Section 422 of the Code then any provision of
this Agreement or the Plan which conflicts with the Code so that this Option
would not be deemed an ISO is null and void and any ambiguities shall be
resolved so that the Option qualifies as an ISO.  The Participant should consult
with the Participant’s own tax advisors regarding the tax effects of the Option
and the requirements necessary to obtain favorable tax treatment under Section
422 of the Code, including, but not limited to, holding period requirements.

Notwithstanding the foregoing, to the extent that the Option is designated in
the Stock Option Grant Notice as an ISO and is not deemed to be an ISO pursuant
to Section 422(d) of the Code because the aggregate Fair Market Value
(determined as of the Date of Option Grant) of any of the Shares with respect to
which this ISO is granted becomes exercisable for the first time during any
calendar year in excess of $100,000, the portion of the Option representing such
excess value shall be treated as a Non-Qualified Option and the Participant
shall be deemed to have taxable income measured by the difference between the
then Fair Market Value of the Shares received upon exercise and the price paid
for such Shares pursuant to this Agreement.

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Neither the Company nor any Affiliate shall have any liability to the
Participant, or any other party, if the Option (or any part thereof) that is
intended to be an ISO is not an ISO or for any action taken by the
Administrator, including without limitation the conversion of an ISO to a
Non-Qualified Option.

15.NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION OF AN ISO.  If this Option is
designated in the Stock Option Grant Notice as an ISO then the Participant
agrees to notify the Company in writing immediately after the Participant makes
a Disqualifying Disposition of any of the Shares acquired pursuant to the
exercise of the ISO.  A Disqualifying Disposition is defined in Section 424(c)
of the Code and includes any disposition (including any sale) of such Shares
before the later of (a) two years after the date the Participant was granted the
ISO or (b) one year after the date the Participant acquired Shares by exercising
the ISO, except as otherwise provided in Section 424(c) of the Code.  If the
Participant has died before the Shares are sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.

16.NOTICES.  Any notices required or permitted by the terms of this Agreement or
the Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:

If to the Company:

DermTech, Inc.

11099 N. Torrey Pines Rd., #100

La Jolla, CA 92037

Attention: Chief Financial Officer

If to the Participant at the address set forth on the Stock Option Grant Notice
or to such other address or addresses of which notice in the same manner has
previously been given.  Any such notice shall be deemed to have been given upon
the earlier of receipt, one business day following delivery to a recognized
courier service or three business days following mailing by registered or
certified mail.

17.GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflict of law principles thereof.  For the purpose of litigating any dispute
that arises under this Agreement, the parties hereby consent to exclusive
jurisdiction in the State of Delaware and agree that such litigation shall be
conducted in the state courts of Delaware or the federal courts of the United
States for the District of Delaware.

18.BENEFIT OF AGREEMENT.  Subject to the provisions of the Plan and the other
provisions hereof, this Agreement shall be for the benefit of and shall be
binding upon the heirs, executors, administrators, successors and assigns of the
parties hereto.

19.ENTIRE AGREEMENT.  This Agreement, together with the Plan, embodies the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior oral or written agreements
and understandings relating to the subject matter hereof (with the exception of
acceleration of vesting provisions contained in any

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other agreement with the Company).  No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement. Notwithstanding the foregoing in all events, this Agreement
shall be subject to and governed by the Plan.

20.MODIFICATIONS AND AMENDMENTS.  The terms and provisions of this Agreement may
be modified or amended as provided in the Plan.

21.WAIVERS AND CONSENTS.  Except as provided in the Plan, the terms and
provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by written document executed by the party entitled to
the benefits of such terms or provisions.  No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect to any other
terms or provisions of this Agreement, whether or not similar.  Each such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.

22.DATA PRIVACY.  By entering into this Agreement, the Participant:  (i)
authorizes the Company and each Affiliate, and any agent of the Company or any
Affiliate administering the Plan or providing Plan recordkeeping services, to
disclose to the Company or any of its Affiliates such information and data as
the Company or any such Affiliate shall request in order to facilitate the grant
of options and the administration of the Plan; (ii) to the extent permitted by
applicable law waives any data privacy rights he or she may have with respect to
such information, and (iii) authorizes the Company and each Affiliate to store
and transmit such information in electronic form for the purposes set forth in
this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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Exhibit A

NOTICE OF EXERCISE OF STOCK OPTION

To:DermTech, Inc.

IMPORTANT NOTICE:  This form of Notice of Exercise may only be used at such time
as the Company has filed a Registration Statement with the Securities and
Exchange Commission under which the issuance of the Shares for which this
exercise is being made is registered and such Registration Statement remains
effective.

Ladies and Gentlemen:

I hereby exercise my Stock Option to purchase _________ shares (the “Shares”) of
the common stock, $.0001 par value, of DermTech, Inc. (the “Company”), at the
exercise price of $________ per share, pursuant to and subject to the terms of
that Stock Option Grant Notice dated _______________, 202_.

I understand the nature of the investment I am making and the financial risks
thereof.  I am aware that it is my responsibility to have consulted with
competent tax and legal advisors about the relevant national, state and local
income tax and securities laws affecting the exercise of the Option and the
purchase and subsequent sale of the Shares.

I am paying the option exercise price for the Shares as follows:

_______________________________________________

Please issue the Shares (check one):

☐ to me; or

☐ to me and ____________________________, as joint tenants with right of
survivorship,

at the following address:

 

 

 

 

Exhibit A-1

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My mailing address for stockholder communications, if different from the address
listed above, is:

 

 

 

 

 

Very truly yours,

 

 

Participant (signature)

 

 

Print Name

 

 

Date

 

Exhibit A-2