POLARITYTE, INC.

NOTICE OF GRANT OF STOCK OPTION

 

Notice is hereby given of the following stock option grant (the “Option”) to
purchase shares of the Common Stock of PolarityTE, Inc. (the “Company”) under
the Company’s 2017 Equity Incentive Plan adopted by the Board of Directors on
December 1, 2016, and as subsequently amended from time to time (the “Plan”).
Capitalized terms used herein and not otherwise defined shall have the meaning
ascribed to such terms in the Plan.

 

Optionee: Paul Mann

Grant Date: June 20, 2018

Expiration Date: June 20, 2028

Exercise Price: $31.88 per share

Number of Option Shares: 350,000

Type of Option:                         ____ Incentive Stock Option X
Non-Statutory Option

 

Vesting Schedule: The Option shall vest in twenty-four (24) equal monthly
installments commencing on the one (1) month anniversary of the Grant Date. The
Optionee shall have the right to purchase Common Shares underlying the vested
portion of the Option at any time until the Expiration Date, provided the
Optionee’s employment has not been terminated as of the applicable vesting date.

 

Optionee understands and agrees that the Option is granted subject to and in
accordance with the express terms and conditions of the Plan. Optionee further
agrees to be bound by the terms and conditions of the Plan and the terms and
conditions of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A. The Company shall provide to Optionee a copy of the Plan
upon written request to the Company.

 

Dated: June 20, 2018

 

PolarityTE, Inc.   Optionee           By: /s/ Denver Lough   Signature: /s/ Paul
Mann           Title:  Chief Executive Officer   Name: Paul Mann

 

   

 

 

POLARITYTE, INC.

STOCK OPTION AGREEMENT

 

A. The Board of Directors (the “Board”) and stockholders of PolarityTE, Inc.
(“the Company”) have adopted the 2017 Equity Incentive Plan, as amended from
time to time (the “Plan”) for the purpose of attracting and retaining the
services of employees (including officers and directors), non-employee Board
members and consultants and other independent advisors. Capitalized terms used
herein and not otherwise defined shall have the meaning ascribed to such terms
in the Plan.

 

B. Optionee is an individual who is to render valuable services to the Company
or one or more Subsidiaries, and this Agreement is executed pursuant to, and is
intending to carry out the purposes of, the Plan in connection with the grant of
a stock option to purchase shares of the Company’s common stock (“Common Stock”)
under the Plan.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1. Grant of Option. Subject to and upon the terms and conditions set forth in
this Agreement, the Company hereby grants to Optionee, as of the grant date (the
“Grant Date”) specified in the accompanying Notice of Grant of Stock Option (the
“Grant Notice”), a stock option to purchase up to that number of shares of the
Company’s Common Stock (the “Option Shares”) as is specified in the Grant
Notice. Such Option Shares shall be purchased from time to time during the
option term at the exercise price (the “Exercise Price”) specified in the Grant
Notice.

 

2. Option Term. This option shall expire at the close of business on the earlier
of the expiration date specified in the Grant Notice, the date specified in
Section 6.1 of the Plan, Section 7.3 of the Plan, or the date specified by
modification or amendment of this stock option under the terms of the Plan (any
such date the “Expiration Date”).

 

3. Limited Transferability. This option shall be exercisable only by Optionee
during Optionee’s lifetime and shall not be transferable or assigned by Optionee
other than by will or by the laws of descent and distribution following
Optionee’s death.

 

4. Exercisability. This option shall become exercisable for the Option Shares in
accordance with the vesting schedule specified in the Grant Notice. As the
option becomes exercisable for one or more installments of Option Shares, those
installments shall accumulate, and the option shall remain exercisable for the
accumulated installments until the Expiration Date. This option shall not become
exercisable for any additional Option Shares following Optionee’s cessation of
service to the Company or a Subsidiary.

 

5. Privilege of Stock Ownership. The holder of this option shall not have any of
the rights of a stockholder with respect to the Option Shares until such
individual shall have exercised the option and paid the Exercise Price for the
purchased Option Shares.

 

6. Exercising Option. In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee’s death, Optionee’s
executor, administrator, heir or legatee, as the case may be) must take the
following actions and otherwise comply with the requirements of the Plan:

 

(a) Deliver to the Corporate Secretary of the Company an executed notice of
exercise in substantially the form of Exhibit I to this Agreement (the “Exercise
Notice”) in which there is specified the number of Option Shares that are to be
purchased under the exercised option.

 

(b) Pay the aggregate Exercise Price for the purchased shares through one or
more of the following alternatives, subject to any limitations or restrictions
set forth in the Plan:

 

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(1) full payment in cash or by check made payable to the Company’s order;

 

(2) full payment in shares of Common Stock held for the requisite period
necessary to avoid a charge to the Company’s earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date;

 

(3) full payment through a combination of shares of Common Stock held for the
requisite period necessary to avoid a charge to the Company’s earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date and cash or check payable to the Company’s order; or

 

(4) full payment effected through a broker-dealer sale and remittance procedure
pursuant to which Optionee shall provide concurrent irrevocable written
instructions (i) to a Company-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld in
connection with such purchase and (ii) to the Company to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale transaction.

 

7. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the state of Delaware without resort
to that State’s conflict-of-laws provisions.

 

8. No Employment/Service Contracts. Nothing in this Agreement or in the Plan
shall confer upon Optionee any right to continue in the service of the Company
(or any Subsidiary employing or retaining Optionee) for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any such Subsidiary) or Optionee, which rights are hereby expressly
reserved by each party, to terminate Optionee’s service at any time for any
reason whatsoever, with or without cause.

 

9. Notices. Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Company in
care of the Company Chief Financial Officer at the Company’s principal offices
at 1960 S. 4250 West, Salt Lake City, UT 84104. Any notice required to be given
or delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated on the Grant Notice. All notices shall be deemed to have been
given or delivered upon personal delivery or upon deposit in the U. S. Mail, by
registered or certified mail, postage prepaid and properly addressed to the
party to be notified.

 

10. Construction. This Agreement and the option evidenced hereby are made and
granted pursuant to the Plan and are in all respects limited by and subject to
the express terms and provisions of the Plan, unless, in the specific instance,
a provision in this Agreement states that it supersedes a provision in the Plan.
All terms used herein that are defined in the Plan shall have the same meaning
ascribed to such terms in the Plan. All decisions of the Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.

 

11. Additional Terms Applicable to an Incentive Stock Option. In the event this
option is designated an Incentive Stock Option in the Grant Notice, the
following terms and conditions shall also apply to the grant:

 

(a) This option shall cease to qualify for favorable tax treatment as an
Incentive Stock Option under the Federal tax laws if (and to the extent) this
option is exercised for one or more Option Shares: (i) more than three months
after the date Optionee ceases to be an Employee for any reason other than death
or disability or (ii) more than one year after the date Optionee ceases to be an
Employee because of death or disability. The term “disability” shall mean
Grantee’s inability to engage in any substantial gainful activity because of any
medically determinable physical or mental impairment that can be expected to
result in death or lasted, or can be expected to last, for a continuous period
of not less than 12 months.

 

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(b) If this option is to become exercisable in a series of installments as
indicated in the Grant Notice, no such installment shall qualify for favorable
tax treatment as an Incentive Stock Option under the Federal tax laws if (and to
the extent) the aggregate Fair Market Value (determined at the Grant Date) of
the shares of the Company’s Common Stock for which such installment first
becomes exercisable hereunder will, when added to the aggregate value
(determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or one or more other Incentive Stock
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Company or any Subsidiary) first become exercisable
during the same calendar year, exceed $100,000 in the aggregate. Should the
number of shares of Common Stock for which this option first becomes exercisable
in any calendar year exceeds the applicable $100,000 limitation, the option may
nevertheless be exercised for those excess shares in such calendar year as a
non-statutory option.

 

(c) Should the exercisability of this option be accelerated upon a Change in
Control, then this option shall qualify for favorable tax treatment as an
Incentive Stock Option under the Federal tax laws only to the extent the
aggregate Fair Market Value (determined at the Grant Date) of the number of
shares of the Company’s Common Stock for which this option first becomes
exercisable in the calendar year in which the Change in Control occurs does not,
when added to the aggregate value (determined as of the respective date or dates
of grant) of the shares of Common Stock or other securities for which this
option or one or more other Incentive Stock Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the Company
or any Subsidiary) first become exercisable during the same calendar year,
exceed $100,000 in the aggregate. Should the number of shares of Common Stock
for which this option first becomes exercisable in the calendar year of such
Change in Control exceed the applicable $100,000 limitation, the option may
nevertheless be exercised for the excess shares in such calendar year as a
non-statutory option.

 

(d) Should Optionee hold, in addition to this option, one or more other options
to purchase shares of the Company’s Common Stock that become exercisable for the
first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Stock Options
under the Federal tax laws shall be applied on the basis of the order in which
such options are granted.

 

(e) To the extent this option should fail to qualify for Incentive Stock Option
treatment under the Federal tax laws, Optionee shall recognize compensation
income at the time the option is exercised in an amount equal to the Fair Market
Value of the purchased Option Shares less the aggregate Exercise Price paid for
those shares, and Optionee must make appropriate arrangements with the Company
or any Subsidiary employing Optionee for the satisfaction of all Federal, state
or local income and employment tax withholding requirements applicable to such
compensation income.

 

12. Additional Terms Applicable to a Non-Statutory Stock Option. In the event
this option is designated a non-statutory stock option in the Grant Notice,
Optionee shall make appropriate arrangements with the Company or any Subsidiary
employing Optionee for the satisfaction of all Federal, state or local income
and employment tax withholding requirements applicable to the exercise of this
option. Such arrangements will be made prior to or at the time of exercise.

 

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Exhibit I

 

FORM OF PURCHASE

(to be signed only upon exercise of Option)

 

TO: PolarityTE, Inc.

 

The Optionee, holder of the attached option, hereby irrevocable elects to
exercise the purchase rights represented by the option for, and to purchase
thereunder, _________________________shares of Common Stock of PolarityTE, Inc.,
and herewith makes payment therefor, and requests that the certificate(s) for
such shares be delivered to the Optionee at:

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

The Optionee agrees and acknowledges that this purported exercise of the option
is conditioned on, and subject to, any compliance with requirements of
applicable federal and state securities laws deemed necessary by the Company,
and to Optionee’s satisfaction of all Federal, state or local income and
employment tax withholding requirements applicable to this exercise on terms
acceptable to the Company.

 

DATED this ____________________day of________________________,
___________________.

 

Signature

 

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