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Exhibit 10.4

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.
 
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.
 
LUMOS PHARMA, INC.
 
STOCK OPTION AGREEMENT
 
Lumos Pharma, Inc. has granted to the Participant named in the Notice of Grant
of Stock Option (the “Grant Notice”) to which this Stock Option Agreement (the
“Option Agreement”) is attached an option (the “Option”) to purchase shares of
Stock upon the terms and conditions set forth in the Grant Notice and this
Option Agreement. The Option has been granted pursuant to and shall in all
respects be subject to the terms and conditions of the Lumos Pharma, Inc. 2016
Stock Plan (the “Plan”), as amended to the Date of Grant, the provisions of
which are incorporated herein by reference. By signing the Grant Notice, the
Participant: (a) acknowledges receipt of, and represents that the Participant
has read and is familiar with, the Grant Notice, this Option Agreement and the
Plan, (b) accepts the Option subject to all of the terms and conditions of the
Grant Notice, this Option Agreement and the Plan, and (c) agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under the Grant Notice, this Option Agreement or the Plan.
 
1.        DEFINITIONS AND CONSTRUCTION.
 
1.1         Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Grant Notice or the Plan.
 
1.2         Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.
 
2.        TAX CONSEQUENCES.
 
2.1         Tax Status of Option. This Option is intended to have the tax status
designated in the Grant Notice.
 
(a)      Incentive Stock Option. If the Grant Notice so designates, this Option
is intended to be an Incentive Stock Option within the meaning of Section 422(b)
of the Code, but the Company does not represent or warrant that this Option
qualifies as such. The Participant should consult with the Participant’s own tax
advisor regarding the tax effects of this Option and the requirements necessary
to obtain favorable income tax treatment under Section 422 of the Code,
including, but not limited to, holding period requirements. (NOTE TO
PARTICIPANT: If the Option is exercised more than three (3) months after the
date on which you cease to be an Employee (other than by reason of your death or
permanent and total disability as defined in Section 22(e)(3) of the Code), the
Option will be treated as a Nonstatutory Stock Option and not as an Incentive
Stock Option to the extent required by Section 422 of the Code.)
 

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(b)      Nonstatutory Stock Option. If the Grant Notice so designates, this
Option is intended to be a Nonstatutory Stock Option and shall not be treated as
an Incentive Stock Option within the meaning of Section 422(b) of the Code.
 
2.2      ISO Fair Market Value Limitation. If the Grant Notice designates this
Option as an Incentive Stock Option, then to the extent that the Option
(together with all Incentive Stock Options granted to the Participant under all
stock option plans of the Participating Company Group, including the Plan)
becomes exercisable for the first time during any calendar year for shares
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the portion of such options which exceeds such amount will be treated as
Nonstatutory Stock Options. For purposes of this Section, options designated as
Incentive Stock Options are taken into account in the order in which they were
granted, and the Fair Market Value of stock is determined as of the time the
option with respect to such stock is granted. If the Code is amended to provide
for a different limitation from that set forth in this Section, such different
limitation shall be deemed incorporated herein effective as of the date required
or permitted by such amendment to the Code. If the Option is treated as an
Incentive Stock Option in part and as a Nonstatutory Stock Option in part by
reason of the limitation set forth in this Section, the Participant may
designate which portion of such Option the Participant is exercising. In the
absence of such designation, the Participant shall be deemed to have exercised
the Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.
(NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that is,
the Exercise Price multiplied by the Number of Option Shares) plus the aggregate
exercise price of any other Incentive Stock Options you hold (whether granted
pursuant to the Plan or any other stock option plan of the Participating Company
Group) is greater than $100,000, you should contact the Chief Financial Officer
of the Company to ascertain whether the entire Option qualifies as an Incentive
Stock Option.)
 
3.        ADMINISTRATION.
 
All questions of interpretation concerning the Grant Notice, this Option
Agreement, the Plan or any other form of agreement or other document employed by
the Company in the administration of the Plan or the Option shall be determined
by the Board.  All such determinations by the Board shall be final, binding and
conclusive upon all persons having an interest in the Option, unless fraudulent
or made in bad faith.  Any and all actions, decisions and determinations taken
or made by the Board in the exercise of its discretion pursuant to the Plan or
the Option or other agreement thereunder (other than determining questions of
interpretation pursuant to the preceding sentence) shall be final, binding and
conclusive upon all persons having an interest in the Option.  Any Officer shall
have the authority to act on behalf of the Company with respect to any matter,
right, obligation, or election which is the responsibility of or which is
allocated to the Company herein, provided the Officer has apparent authority
with respect to such matter, right, obligation, or election.
 
4.        EXERCISE OF THE OPTION.
 
4.1         Right to Exercise. Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Vesting Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to exceed
the number of Vested Shares less the number of shares previously acquired upon
exercise of the Option, subject to the Company’s repurchase rights set forth in
Section 11. In no event shall the Option be exercisable for more shares than the
Number of Option Shares, as adjusted pursuant to Section 9.
 

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4.2         Method of Exercise. Exercise of the Option shall be by means of
electronic or written notice (the “Exercise Notice”) in a form authorized by the
Company. An electronic Exercise Notice must be digitally signed or authenticated
by the Participant in such manner as required by the notice and transmitted to
the Company or an authorized representative of the Company (including a
third-party administrator designated by the Company). In the event that the
Participant is not authorized or is unable to provide an electronic Exercise
Notice, the Option shall be exercised by a written Exercise Notice addressed to
the Company, signed by the Participant and delivered in person, by certified or
registered mail, return receipt requested, by confirmed facsimile transmission,
or by such other means as the Company may permit, to the Company, or an
authorized representative of the Company (including a third-party administrator
designated by the Company). Each Exercise Notice, whether electronic or written,
must state the Participant’s election to exercise the Option, the number of
whole shares of Stock for which the Option is being exercised and such other
representations and agreements as to the Participant’s investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement. Further, each Exercise Notice must be received by the Company
prior to the termination of the Option as set forth in Section 6 and must be
accompanied by full payment of the aggregate Exercise Price for the number of
shares of Stock being purchased. The Option shall be deemed to be exercised upon
receipt by the Company of such electronic or written Exercise Notice and the
aggregate Exercise Price.
 
4.3         Payment of Exercise Price.
 
(a)      Forms of Consideration Authorized. Except as otherwise provided below,
payment of the aggregate Exercise Price for the number of shares of Stock for
which the Option is being exercised shall be made (i) in cash, by check or in
cash equivalent, (ii) if permitted by the Company and subject to the limitations
contained in Section 4.3(b), by means of (1) a Stock Tender Exercise, (2) a
Cashless Exercise or (3) a Net-Exercise; or (iii) by any combination of the
foregoing.
 
 
(b)      Limitations on Forms of Consideration. The Company reserves, at any and
all times, the right, in the Company’s sole and absolute discretion, to
establish, decline to approve or terminate any program or procedure providing
for payment of the Exercise Price through any of the means described below,
including with respect to the Participant notwithstanding that such program or
procedures may be available to others.
 
(i)            Stock Tender Exercise. A “Stock Tender Exercise” means the
delivery of a properly executed Exercise Notice accompanied by (1) the
Participant’s tender to the Company, or attestation to the ownership, in a form
acceptable to the Company of whole shares of Stock having a Fair Market Value
that does not exceed the aggregate Exercise Price for the shares with respect to
which the Option is exercised, and (2) the Participant’s payment to the Company
in cash of the remaining balance of such aggregate Exercise Price not satisfied
by such shares’ Fair Market Value. A Stock Tender Exercise shall not be
permitted if it would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company’s stock. If
required by the Company, the Option may not be exercised by tender to the
Company, or attestation to the ownership, of shares of Stock unless such shares
either have been owned by the Participant for a period of time required by the
Company (and not used for another option exercise by attestation during such
period) or were not acquired, directly or indirectly, from the Company.
 

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(ii)           Cashless Exercise. A Cashless Exercise shall be permitted only
upon the class of shares subject to the Option becoming publicly traded in an
established securities market. A “Cashless Exercise” means the delivery of a
properly executed Exercise Notice together with irrevocable instructions to a
broker in a form acceptable to the Company providing for the assignment to the
Company of the proceeds of a sale or loan with respect to shares of Stock
acquired upon the exercise of the Option in an amount not less than the
aggregate Exercise Price for such shares (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System).
 
(iii)          Net-Exercise. A “Net-Exercise” means the delivery of a properly
executed Exercise Notice electing a procedure pursuant to which (1) the Company
will reduce the number of shares otherwise issuable to the Participant upon the
exercise of the Option by the largest whole number of shares having a Fair
Market Value that does not exceed the aggregate Exercise Price for the shares
with respect to which the Option is exercised, and (2) the Participant shall pay
to the Company in cash the remaining balance of such aggregate Exercise Price
not satisfied by such reduction in the number of whole shares to be issued.
Following a Net-Exercise, the number of shares remaining subject to the Option,
if any, shall be reduced by the sum of (1) the net number of shares issued to
the Participant upon such exercise, and (2) the number of shares deducted by the
Company for payment of the aggregate Exercise Price.
 
4.4         Tax Withholding.
 
(a)      In General. At the time the Option is exercised, in whole or in part,
or at any time thereafter as requested by a Participating Company, the
Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for
any sums required to satisfy the federal, state, local and foreign tax
(including social insurance) withholding obligations of the Participating
Company Group, if any, which arise in connection with the Option. The Company
shall have no obligation to deliver shares of Stock until the tax withholding
obligations of the Participating Company Group have been satisfied by the
Participant.
 
(b)      Withholding in or Directed Sale of Shares. The Company shall have the
right, but not the obligation, to require the Participant to satisfy all or any
portion of a Participating Company’s tax withholding obligations upon exercise
of the Option by deducting from the shares of Stock otherwise issuable to the
Participant upon such exercise a number of whole shares having a fair market
value, as determined by the Company as of the date of exercise, not in excess of
the amount of such tax withholding obligations determined by the applicable
minimum statutory withholding rates. The Company may require the Participant to
direct a broker, upon the exercise of the Option, to sell a portion of the
shares subject to the Option determined by the Company in its discretion to be
sufficient to cover the tax withholding obligations of any Participating Company
and to remit an amount equal to such tax withholding obligations to the Company
in cash.
 
4.5         Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all shares
acquired by the Participant pursuant to the exercise of the Option. Except as
provided by the preceding sentence, a certificate for the shares as to which the
Option is exercised shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
 

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4.6         Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED
THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE
SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.
 
4.7         Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
 
5.        NONTRANSFERABILITY OF THE OPTION.
 
During the lifetime of the Participant, the Option shall be exercisable only by
the Participant or the Participant’s guardian or legal representative. The
Option shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. Following the death of the Participant,
the Option, to the extent provided in Section 7, may be exercised by the
Participant’s legal representative or by any person empowered to do so under the
deceased Participant’s will or under the then applicable laws of descent and
distribution. Notwithstanding the foregoing, for so long as the Company is
relying on the exemption provided by Rule 12h-1(f) under the Exchange Act, the
Option and, prior to its exercise, the shares to be issued upon the exercise of
the Option, shall not be transferred except in compliance with the restrictions
on transfer under Rule 12h-1(f) (including the requirement under such rule that
any permitted transferee may not further transfer the Option) or be made subject
to any short position, “put equivalent position” or “call equivalent position”
by the Participant, as such terms are defined in Rule 16a-1 of the Exchange Act.
 
6.       TERMINATION OF THE OPTION.
 
The Option shall terminate and may no longer be exercised after the first to
occur of (a) the close of business on the Option Expiration Date, (b) the close
of business on the last date for exercising the Option following termination of
the Participant’s Service as described in Section 7, or (c) a Change in Control
to the extent provided in Section 8.
 
7.        EFFECT OF TERMINATION OF SERVICE.
 
7.1         Option Exercisability. The Option shall terminate immediately upon
the Participant’s termination of Service to the extent that it is then unvested
and shall be exercisable after the Participant’s termination of Service to the
extent it is then vested only during the applicable time period as determined
below and thereafter shall terminate.
 
(a)      Disability. If the Participant’s Service terminates because of the
Disability of the Participant, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the Participant’s guardian
or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Participant’s Service terminated, but in any
event no later than the Option Expiration Date.
 

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(b)      Death. If the Participant’s Service terminates because of the death of
the Participant, the Option, to the extent unexercised and exercisable for
Vested Shares on the date on which the Participant’s Service terminated, may be
exercised by the Participant’s legal representative or other person who acquired
the right to exercise the Option by reason of the Participant’s death at any
time prior to the expiration of twelve (12) months after the date on which the
Participant’s Service terminated, but in any event no later than the Option
Expiration Date. The Participant’s Service shall be deemed to have terminated on
account of death if the Participant dies within three (3) months after the
Participant’s termination of Service.
 
(c)      Termination for Cause. Notwithstanding any other provision of this
Option Agreement, if the Participant’s Service is terminated for Cause, the
Option shall terminate in its entirety and cease to be exercisable immediately
upon such termination of Service.
 
(d)      Other Termination of Service. If the Participant’s Service terminates
for any reason, except Disability, death or Cause, the Option, to the extent
unexercised and exercisable for Vested Shares by the Participant on the date on
which the Participant’s Service terminated, may be exercised by the Participant
at any time prior to the expiration of three (3) months after the date on which
the Participant’s Service terminated, but in any event no later than the Option
Expiration Date.
 
7.2         Extension if Exercise Prevented by Law. Notwithstanding the
foregoing other than termination of the Participant’s Service for Cause, if the
exercise of the Option within the applicable time periods set forth in Section
7.1 is prevented by the provisions of Section 4.6, the Option shall remain
exercisable until the later of (a) thirty (30) days after the date such exercise
first would no longer be prevented by such provisions or (b) the end of the
applicable time period under Section 7.1, but in any event no later than the
Option Expiration Date.
 
8.        EFFECT OF CHANGE IN CONTROL.
 
In the event of a Change in Control, except to the extent that the Board
determines to settle the Option in accordance with Section 9.1(c) of the Plan,
the surviving, continuing, successor, or purchasing corporation or other
business entity or parent thereof, as the case may be (the “Acquiror”), may,
without the consent of the Participant, assume or continue in full force and
effect the Company’s rights and obligations under all or any portion of the
Option or substitute for all or any portion of the Option a substantially
equivalent option for the Acquiror’s stock. For purposes of this Section, the
Option or any portion thereof shall be deemed assumed if, following the Change
in Control, the Option confers the right to receive, subject to the terms and
conditions of the Plan and this Option Agreement, for each share of Stock
subject to such portion of the Option immediately prior to the Change in
Control, the consideration (whether stock, cash, other securities or property or
a combination thereof) to which a holder of a share of Stock on the effective
date of the Change in Control was entitled (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding shares of Stock); provided, however, that if such
consideration is not solely common stock of the Acquiror, the Board may, with
the consent of the Acquiror, provide for the consideration to be received upon
the exercise of the Option for each share of Stock to consist solely of common
stock of the Acquiror equal in Fair Market Value to the per share consideration
received by holders of Stock pursuant to the Change in Control. If any portion
of such consideration may be received by holders of Stock pursuant to the Change
in Control on a contingent or delayed basis, the Board may, in its discretion,
determine such Fair Market Value per share as of the time of the Change in
Control on the basis of the Board’s good faith estimate of the present value of
the probable future payment of such consideration. The Option shall terminate
and cease to be outstanding effective as of the time of consummation of the
Change in Control to the extent that the Option is neither assumed or continued
by the Acquiror in connection with the Change in Control nor exercised as of the
time of the Change in Control. Notwithstanding the foregoing, shares acquired
upon exercise of the Option prior to the Change in Control and any consideration
received pursuant to the Change in Control with respect to such shares shall
continue to be subject to all applicable provisions of this Option Agreement
except as otherwise provided herein.
 

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9.        ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
 
Subject to any required action by the stockholders of the Company and the
requirements of Sections 409A and 424 of the Code to the extent applicable, in
the event of any change in the Stock effected without receipt of consideration
by the Company, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares, or similar change in the capital structure of the
Company, or in the event of payment of a dividend or distribution to the
stockholders of the Company in a form other than Stock (excepting normal cash
dividends) that has a material effect on the Fair Market Value of shares of
Stock, appropriate and proportionate adjustments shall be made in the number,
Exercise Price and kind of shares subject to the Option, in order to prevent
dilution or enlargement of the Participant’s rights under the Option. For
purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as “effected without receipt of consideration by
the Company.” Any fractional share resulting from an adjustment pursuant to this
Section shall be rounded down to the nearest whole number, and the Exercise
Price shall be rounded up to the nearest whole cent. In no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. Such adjustments shall be determined by the Board,
and its determination shall be final, binding and conclusive.
 
10.      RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.
 
The Participant shall have no rights as a stockholder with respect to any shares
covered by the Option until the date of the issuance of the shares for which the
Option has been exercised (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date the shares are issued, except as provided
in Section 9. If the Participant is an Employee, the Participant understands and
acknowledges that, except as otherwise provided in a separate, written
employment agreement between a Participating Company and the Participant, the
Participant’s employment is “at will” and is for no specified term. Nothing in
this Option Agreement shall confer upon the Participant any right to continue in
the Service of a Participating Company or interfere in any way with any right of
the Participating Company Group to terminate the Participant’s Service as a
Director, an Employee or Consultant, as the case may be, at any time.
 
11.      RIGHT OF FIRST REFUSAL.
 
11.1 Grant of Right of First Refusal. Except as provided in Section 11.7 and
Section 16 below, in the event the Participant, the Participant’s legal
representative, or other holder of shares acquired upon exercise of the Option
proposes to sell, exchange, transfer, pledge, or otherwise dispose of any Vested
Shares (the “Transfer Shares”) to any person or entity, including, without
limitation, any stockholder of a Participating Company, the Company shall have
the right to repurchase the Transfer Shares under the terms and subject to the
conditions set forth in this Section 11 (the “Right of First Refusal”).
 
11.2 Notice of Proposed Transfer. Prior to any proposed transfer of the Transfer
Shares, the Participant shall deliver written notice (the “Transfer Notice”) to
the Company describing fully the proposed transfer, including the number of
Transfer Shares, the name and address of the proposed transferee (the “Proposed
Transferee”) and, if the transfer is voluntary, the proposed transfer price, and
containing such information necessary to show the bona fide nature of the
proposed transfer. In the event of a bona fide gift or involuntary transfer, the
proposed transfer price shall be deemed to be the Fair Market Value of the
Transfer Shares, as determined by the Board in good faith. If the Participant
proposes to transfer any Transfer Shares to more than one Proposed Transferee,
the Participant shall provide a separate Transfer Notice for the proposed
transfer to each Proposed Transferee. The Transfer Notice shall be signed by
both the Participant and the Proposed Transferee and must constitute a binding
commitment of the Participant and the Proposed Transferee for the transfer of
the Transfer Shares to the Proposed Transferee subject only to the Right of
First Refusal.
 

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11.3 Bona Fide Transfer. If the Company determines that the information provided
by the Participant in the Transfer Notice is insufficient to establish the bona
fide nature of a proposed voluntary transfer, the Company shall give the
Participant written notice of the Participant’s failure to comply with the
procedure described in this Section 11, and the Participant shall have no right
to transfer the Transfer Shares without first complying with the procedure
described in this Section 11. The Participant shall not be permitted to transfer
the Transfer Shares if the proposed transfer is not bona fide.
 
11.4 Exercise of Right of First Refusal. If the Company determines the proposed
transfer to be bona fide, the Company shall have the right to purchase all, but
not less than all, of the Transfer Shares (except as the Company and the
Participant otherwise agree) at the purchase price and on the terms set forth in
the Transfer Notice by delivery to the Participant of a notice of exercise of
the Right of First Refusal within thirty (30) days after the date the Transfer
Notice is delivered to the Company. The Company’s exercise or failure to
exercise the Right of First Refusal with respect to any proposed transfer
described in a Transfer Notice shall not affect the Company’s right to exercise
the Right of First Refusal with respect to any proposed transfer described in
any other Transfer Notice, whether or not such other Transfer Notice is issued
by the Participant or issued by a person other than the Participant with respect
to a proposed transfer to the same Proposed Transferee. If the Company exercises
the Right of First Refusal, the Company and the Participant shall thereupon
consummate the sale of the Transfer Shares to the Company on the terms set forth
in the Transfer Notice within sixty (60) days after the date the Transfer Notice
is delivered to the Company (unless a longer period is offered by the Proposed
Transferee); provided, however, that in the event the Transfer Notice provides
for the payment for the Transfer Shares other than in cash, the Company shall
have the option of paying for the Transfer Shares by the present value cash
equivalent of the consideration described in the Transfer Notice as reasonably
determined by the Company. For purposes of the foregoing, cancellation of any
indebtedness of the Participant to any Participating Company shall be treated as
payment to the Participant in cash to the extent of the unpaid principal and any
accrued interest canceled. Notwithstanding anything contained in this Section to
the contrary, the period during which the Company may exercise the Right of
First Refusal and consummate the purchase of the Transfer Shares from the
Participant shall terminate no sooner than the completion of a period of eight
(8) months following the date on which the Participant acquired the Transfer
Shares upon exercise of the Option.
 
11.5 Failure to Exercise Right of First Refusal. If the Company fails to
exercise the Right of First Refusal in full (or to such lesser extent as the
Company and the Participant otherwise agree) within the period specified in
Section 11.4 above, the Participant may conclude a transfer to the Proposed
Transferee of the Transfer Shares on the terms and conditions described in the
Transfer Notice, provided such transfer occurs not later than ninety (90) days
following delivery to the Company of the Transfer Notice or, if applicable,
following the end of the period described in the last sentence of Section 11.4.
The Company shall have the right to demand further assurances from the
Participant and the Proposed Transferee (in a form satisfactory to the Company)
that the transfer of the Transfer Shares was actually carried out on the terms
and conditions described in the Transfer Notice. No Transfer Shares shall be
transferred on the books of the Company until the Company has received such
assurances, if so demanded, and has approved the proposed transfer as bona fide.
Any proposed transfer on terms and conditions different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by the
Participant, shall again be subject to the Right of First Refusal and shall
require compliance by the Participant with the procedure described in this
Section 11.
 

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11.6 Transferees of Transfer Shares. All transferees of the Transfer Shares or
any interest therein, other than the Company, shall be required as a condition
of such transfer to agree in writing (in a form satisfactory to the Company)
that such transferee shall receive and hold such Transfer Shares or interest
therein subject to all of the terms and conditions of this Option Agreement,
including this Section 11 providing for the Right of First Refusal with respect
to any subsequent transfer. Any sale or transfer of any shares acquired upon
exercise of the Option shall be void unless the provisions of this Section 11
are met.
 
11.7 Transfers Not Subject to Right of First Refusal. The Right of First Refusal
shall not apply to any transfer or exchange of the shares acquired upon exercise
of the Option if such transfer or exchange is in connection with an Ownership
Change Event. If the consideration received pursuant to such transfer or
exchange consists of stock of a Participating Company, such consideration shall
remain subject to the Right of First Refusal unless the provisions of Section
11.9 result in a termination of the Right of First Refusal.
 
11.8 Assignment of Right of First Refusal. The Company shall have the right to
assign the Right of First Refusal at any time, whether or not there has been an
attempted transfer, to one or more persons as may be selected by the Company.
 
11.9 Early Termination of Right of First Refusal. The other provisions of this
Option Agreement notwithstanding, the Right of First Refusal shall terminate and
be of no further force and effect upon (a) the occurrence of a Change in
Control, unless the Acquiror assumes the Company’s rights and obligations under
the Option or substitutes a substantially equivalent option for the Acquiror’s
stock for the Option, or (b) the existence of a public market for the class of
shares subject to the Right of First Refusal. A “public market” shall be deemed
to exist if (i) such stock is listed on a national securities exchange (as that
term is used in the Exchange Act) or (ii) such stock is traded on the
over-the-counter market and prices therefor are published daily on business days
in a recognized financial journal.
 
12.      STOCK DISTRIBUTIONS SUBJECT TO OPTION AGREEMENT.
 
If, from time to time, there is any stock dividend, stock split or other change,
as described in Section 9, in the character or amount of any of the outstanding
stock of the corporation the stock of which is subject to the provisions of this
Option Agreement, then in such event any and all new, substituted or additional
securities to which the Participant is entitled by reason of the Participant’s
ownership of the shares acquired upon exercise of the Option shall be
immediately subject to the Right of First Refusal with the same force and effect
as the shares subject to the Right of First Refusal immediately before such
event.
 
13.      NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.
 
The Participant shall dispose of the shares acquired pursuant to the Option only
in accordance with the provisions of this Option Agreement. In addition, if the
Grant Notice designates this Option as an Incentive Stock Option, the
Participant shall (a) promptly notify the Chief Financial Officer of the Company
if the Participant disposes of any of the shares acquired pursuant to the Option
within one (1) year after the date the Participant exercises all or part of the
Option or within two (2) years after the Date of Grant and (b) provide the
Company with a description of the circumstances of such disposition. Until such
time as the Participant disposes of such shares in a manner consistent with the
provisions of this Option Agreement, unless otherwise expressly authorized by
the Company, the Participant shall hold all shares acquired pursuant to the
Option in the Participant’s name (and not in the name of any nominee) for the
one-year period immediately after the exercise of the Option and the two-year
period immediately after Date of Grant. At any time during the one-year or
two-year periods set forth above, the Company may place a legend on any
certificate representing shares acquired pursuant to the Option requesting the
transfer agent for the Company’s stock to notify the Company of any such
transfers. The obligation of the Participant to notify the Company of any such
transfer shall continue notwithstanding that a legend has been placed on the
certificate pursuant to the preceding sentence.
 

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14.      LEGENDS.
 
The Company may at any time place legends referencing the Right of First Refusal
and any applicable federal, state or foreign securities law restrictions on all
certificates representing shares of stock subject to the provisions of this
Option Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired
pursuant to the Option in the possession of the Participant in order to carry
out the provisions of this Section. Unless otherwise specified by the Company,
legends placed on such certificates may include, but shall not be limited to,
the following:
 
14.1 “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.”
 
14.2 “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND REPURCHASE OPTIONS IN FAVOR OF THE CORPORATION OR
ITS ASSIGNEE SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE
REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”
 
14.3 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO
THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN
SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO”). IN ORDER
TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT
BE TRANSFERRED PRIOR TO [INSERT DISQUALIFYING DISPOSITION DATE HERE]. SHOULD THE
REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND
FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE
CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED
UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE
NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR U NTIL TRANSFERRED AS DESCRIBED
ABOVE.”
 
15.      LOCK-UP AGREEMENT.
 
The Participant hereby agrees that in the event of any underwritten public
offering of stock, including an initial public offering of stock, made by the
Company pursuant to an effective registration statement filed under the
Securities Act, the Participant shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering; provided,
further, however, that such one hundred eighty (180) day period may be extended
for an additional period, not to exceed twenty (20) days, upon the request of
the Company or the underwriter to accommodate regulatory restrictions on (i) the
publication or other distribution of research reports and (ii) analyst
recommendations and opinions, including but not limited to, the restrictions
contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor
provisions or amendments thereto). The foregoing limitation shall not apply to
shares registered in the public offering under the Securities Act. The
Participant hereby agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing within a reasonable timeframe if so
requested by the Company.
 

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16.      RESTRICTIONS ON TRANSFER OF SHARES.
 
At any time prior to the existence of a public market for the Stock, the Board
may prohibit the Participant and any transferee of such Participant from
selling, transferring, assigning, pledging, or otherwise disposing of or
encumbering any shares acquired pursuant to the Option (each, a “Transfer”)
without the prior written consent of the Board. The Board may withhold consent
for any reason, including without limitation any Transfer (i) to any individual
or entity identified by the Company as a potential competitor or considered by
the Company to be unfriendly, or (ii) if such Transfer increases the risk of the
Company having a class of security held of record by such number of persons as
would require the Company to register any class of securities under the Exchange
Act; or (iii) if such Transfer would result in the loss of any federal or state
securities law exemption relied upon by the Company in connection with the
initial issuance of such shares or the issuance of any other securities; or (iv)
if such Transfer is facilitated in any manner by any public posting, message
board, trading portal, Internet site, or similar method of communication,
including without limitation any trading portal or Internet site intended to
facilitate secondary transfers of securities; or (v) if such Transfer is to be
effected in a brokered transaction; or (vi) if such Transfer would be of less
than all of the shares of Stock then held by the stockholder and its affiliates
or is to be made to more than a single transferee. No shares acquired upon
exercise of the Option may be sold, exchanged, transferred (including, without
limitation, any transfer to a nominee or agent of the Participant), assigned,
pledged, hypothecated or otherwise disposed of, including by operation of law in
any manner which violates any of the provisions of this Option Agreement, and
any such attempted disposition shall be void. The Company shall not be required
(a) to transfer on its books any shares which will have been transferred in
violation of any of the provisions set forth in this Option Agreement or (b) to
treat as owner of such shares or to accord the right to vote as such owner or to
pay dividends to any transferee to whom such shares will have been so
transferred.
 
17.      MISCELLANEOUS PROVISIONS.
 
17.1 Termination or Amendment. The Board may terminate or amend the Plan or the
Option at any time; provided, however, that except as provided in Section 8 in
connection with a Change in Control, no such termination or amendment may have a
materially adverse effect on the Option or any unexercised portion thereof
without the consent of the Participant unless such termination or amendment is
necessary to comply with any applicable law or government regulation, including,
but not limited to Section 409A of the Code. No amendment or addition to this
Option Agreement shall be effective unless in writing.
 
17.2 Compliance with Section 409A. The Company intends that income realized by
the Participant pursuant to the Plan and this Option Agreement will not be
subject to taxation under Section 409A of the Code. The provisions of the Plan
and this Option Agreement shall be interpreted and construed in favor of
satisfying any applicable requirements of Section 409A of the Code. The Company,
in its reasonable discretion, may amend (including retroactively) the Plan and
this Agreement in order to conform to the applicable requirements of Section
409A of the Code, including amendments to facilitate the Participant’s ability
to avoid taxation under Section 409A of the Code. However, the preceding
provisions shall not be construed as a guarantee by the Company of any
particular tax result for income realized by the Participant pursuant to the
Plan or this Option Agreement. In any event, and except for the responsibilities
of the Company set forth in Section 4.4, no Participating Company shall be
responsible for the payment of any applicable taxes incurred by the Participant
on income realized by the Participant pursuant to the Plan or this Option
Agreement.
 

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17.3 Further Instruments. The parties hereto agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Option Agreement.

17.4 Binding Effect. This Option Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.
 
17.5 Delivery of Documents and Notices. Any document relating to participation
in the Plan, or any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given (except to the extent that this
Option Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by a Participating Company, or upon deposit in
the U.S. Post Office or foreign postal service, by registered or certified mail,
or with a nationally recognized overnight courier service, with postage and fees
prepaid, addressed to the other party at the address of such party set forth in
the Grant Notice or at such other address as such party may designate in writing
from time to time to the other party.
 
(a)      Description of Electronic Delivery. The Plan documents, which may
include but do not necessarily include: the Plan, the Grant Notice, this Option
Agreement, and any reports of the Company provided generally to the Company’s
stockholders, may be delivered to the Participant electronically. In addition,
if permitted by the Company, the Participant may deliver electronically the
Grant Notice and Exercise Notice called for by Section 4.2 to the Company or to
such third party involved in administering the Plan as the Company may designate
from time to time. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the Internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.
 
(b)      Consent to Electronic Delivery. The Participant acknowledges that the
Participant has read Section 17.5(a) of this Option Agreement and consents to
the electronic delivery of the Plan documents and, if permitted by the Company,
the delivery of the Grant Notice and Exercise Notice, as described in Section
17.5(a). The Participant acknowledges that he or she may receive from the
Company a paper copy of any documents delivered electronically at no cost to the
Participant by contacting the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. Similarly, the Participant understands that the Participant
must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 17.5(a) or may change the electronic
mail address to which such documents are to be delivered (if Participant has
provided an electronic mail address) at any time by notifying the Company of
such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant understands that he or she is not
required to consent to electronic delivery of documents described in Section
17.5(a).
 
17.6 Integrated Agreement. The Grant Notice, this Option Agreement and the Plan,
together with any employment, service or other agreement with the Participant
and a Participating Company referring to the Option, shall constitute the entire
understanding and agreement of the Participant and the Participating Company
Group with respect to the subject matter contained herein or therein and
supersede any prior agreements, understandings, restrictions, representations,
or warranties among the Participant and the Participating Company Group with
respect to such subject matter. To the extent contemplated herein or therein,
the provisions of the Grant Notice, the Option Agreement and the Plan shall
survive any exercise of the Option and shall remain in full force and effect.
 
17.7 Applicable Law. This Option Agreement shall be governed by the laws of the
State of Delaware as such laws are applied to agreements between Delaware
residents entered into and to be performed entirely within the State of
Delaware.
 
17.8 Counterparts. The Grant Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
 

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☐ Incentive Stock Option
Participant:
  ☐ Nonstatutory Stock Option
Date:
 

STOCK OPTION EXERCISE NOTICE
 
Lumos Pharma, Inc.
Attention: Chief Financial Officer
4200 Marathon Blvd., Suite 200
Austin, Texas 78756
 
Ladies and Gentlemen:
 
1.        Option. I was granted an option (the “Option”) to purchase shares of
the common stock (the “Shares”) of Lumos Pharma, Inc. (the “Company”) pursuant
to the Company’s 2016 Stock Plan (the “Plan”), my Notice of Grant of Stock
Option (the “Grant Notice”) and my Stock Option Agreement (the “Option
Agreement”) as follows:

Date of Grant:
 
       
Number of Option Shares:
 
        Exercise Price per Share: 

$  

 
2.        Exercise of Option. I hereby elect to exercise the Option to purchase
the following number of Shares, all of which are Vested Shares, in accordance
with the Grant Notice and the Option Agreement:
 
Total Shares Purchased:
       
Total Exercise Price (Total Shares X Price per Share)

$  

3.        Payments. I enclose payment in full of the total exercise price for
the Shares in the following form(s), as authorized by my Option Agreement:
 

☐ Cash:   $
   
  ☐ Check:   $

     
☐ Stock Tender Exercise:
 
Contact Plan Administrator
`

 
 
☐ Cashless Exercise:
 
Contact Plan Administrator
 
 
 
☐ Net Exercise:
 
Contact Plan Administrator

4.        Tax Withholding. I authorize payroll withholding and otherwise will
make adequate provision for the federal, state, local and foreign tax
withholding obligations of the Company, if any, in connection with the Option.
If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my
withholding taxes, if any, as follows:
 
(Contact Plan Administrator for amount of tax due.)
 
☐ Cash:

$
  ☐ Check:   $
 

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5.        Participant Information.

  My address is:  
 
 
 
 
 

My Social Security Number is:
 
 

6.        Notice of Disqualifying Disposition. If the Option is an Incentive
Stock Option, I agree that I will promptly notify the Chief Financial Officer of
the Company if I transfer any of the Shares within one (1) year from the date I
exercise all or part of the Option or within two (2) years of the Date of Grant.

7.        Binding Effect. I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the Grant
Notice, the Option Agreement, including the Right of First Refusal set forth
therein, and the Plan, to all of which I hereby expressly assent. This Agreement
shall inure to the benefit of and be binding upon my heirs, executors,
administrators, successors and assigns.

8.        Transfer. I understand and acknowledge that the Shares have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
and that consequently the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144 or Rule
701 under the Securities Act. I further understand and acknowledge that the
Company is under no obligation to register the Shares. I understand that the
certificate or certificates evidencing the Shares will be imprinted with legends
which prohibit the transfer of the Shares unless they are registered or such
registration is not required in the opinion of legal counsel satisfactory to the
Company.

I am aware that Rule 144 under the Securities Act, which permits limited public
resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied. I understand that any sale of the Shares that
might be made in reliance upon Rule 144 may only be made in limited amounts in
accordance with the terms and conditions of such rule and that a copy of Rule
144 will be delivered to me upon request.

I understand that I am purchasing the Shares pursuant to the terms of the Plan,
the Grant Notice and my Option Agreement, copies of which I have received and
carefully read and understand.

 
Very truly yours,
 
 
   
(Signature)

Receipt of the above is hereby acknowledged.

LUMOS PHARMA, INC.
 
 
 
 
By:
 
 
 
 
 
 
Title:
 
 
 
 
 
 
Dated:
 
 
 

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