Exhibit 10.3


 


ENTRADA
THERAPEUTICS, INC.


 


2021
EMPLOYEE STOCK PURCHASE PLAN


 


The purpose of the Entrada
Therapeutics, Inc. 2021 Employee Stock Purchase Plan (the “Plan”) is to provide eligible employees of Entrada Therapeutics, Inc.
(the “Company”) and each Designated Subsidiary (as defined in Section 11) with opportunities to purchase shares of the
Company’s common stock, par value $0.0001 per share (the “Common Stock”). An aggregate of 278,762 shares of Common Stock
have been approved and reserved for this purpose, plus on January 1, 2022, and each January 1 thereafter through January 1,
2031, the number of shares of Common Stock reserved and available for issuance under the Plan shall be cumulatively increased by the least
of (i) 557,524 shares of Common Stock, (ii) one percent (1%) of the number of shares of Common Stock issued and outstanding
on the immediately preceding December 31st, or (iii) such number of shares of Common Stock as determined by the Administrator.


 


The Plan includes two components:
a Code Section 423 Component (the “423 Component”) and a non-Code Section 423 Component (the “Non-423 Component”).
It is intended for the 423 Component to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of
the Internal Revenue Code of 1986, as amended (the “Code”), and the 423 Component shall be interpreted in accordance with
that intent. Under the Non-423 Component, which does not qualify as an “employee stock purchase plan” within the meaning of
Section 423(b) of the Code, options will be granted pursuant to rules, procedures or sub-plans adopted by the Administrator
designed to achieve tax, securities laws or other objectives for eligible employees. Except as otherwise provided herein, the Non-423
Component will operate and be administered in the same manner as the 423 Component.


 






     


     


    

 


1.            Administration.
The Plan will be administered by the person or persons (the “Administrator”) appointed by the Company’s Board of Directors
(the “Board”) for such purpose. The Administrator has authority at any time to: (i) adopt, alter and repeal such rules,
guidelines and practices for the administration of the Plan and for its own acts and proceedings as it shall deem advisable; (ii) interpret
the terms and provisions of the Plan; (iii) make all determinations it deems advisable for the administration of the Plan; (iv) decide
all disputes arising in connection with the Plan; and (v) otherwise supervise the administration of the Plan. All interpretations
and decisions of the Administrator shall be binding on all persons, including the Company and the Participants. No member of the Board
or individual exercising administrative authority with respect to the Plan shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted hereunder.


 


2.            Offerings.
The Company may make one or more offerings to eligible employees to purchase Common Stock under the Plan (“Offerings”) consisting
of one or more Purchase Periods. The Administrator shall determine, in its discretion, when the initial Offering and any subsequent Offering
shall occur and the duration of each such Offering, provided that no Offering shall exceed 27 months in duration.


 






    2 


     


    

 


3.              Eligibility.
All individuals classified as employees on the payroll records of the Company and each Designated Subsidiary are eligible to participate
in any one or more of the Offerings under the Plan, provided that as of the first day of the applicable Offering (the “Offering
Date”) they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week (or such lesser number
of hours per week as the Administrator shall determine in advance of an Offering) and have completed such period of service prior to the
Offering Date as by the Administrator in advance of an offering (but in no event will the required
period of continuous employment be equal to or greater than two (2) years); provided,
however, that employees who are employed for 20 hours or less a week may be eligible to participate in the Plan if required by applicable
law or regulations. The Administrator may exclude from participation in the Plan or any Offering employees who are “highly
compensated employees” of the Company or a Designated Subsidiary (within the meaning of Section 414(q) of the Code) or
a sub-set of such highly compensated employees. In the event any such individuals are reclassified as employees of the Company or a Designated
Subsidiary for any purpose, including, without limitation, common law or statutory employees, by any action of any third party, including,
without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such individuals
shall, notwithstanding such reclassification, remain ineligible for participation. Notwithstanding the foregoing, the exclusive means
for individuals who are not contemporaneously classified as employees of the Company or a Designated Subsidiary on the Company’s
or Designated Subsidiary’s payroll system to become eligible to participate in this Plan is through an amendment to this Plan, duly
executed by the Company, which specifically renders such individuals eligible to participate herein.


 


4.              Participation.


 


(a)            An
eligible employee who is not a Participant in any prior Offering may participate in a subsequent Offering by submitting an enrollment
form to his or her appropriate payroll location at least 15 business days before the Offering Date (or by such other deadline as shall
be established by the Administrator for the Offering).


 






    3 


     


    

 


(b)            Enrollment.
The enrollment form will (a) state a whole percentage or amount to be deducted from an eligible employee’s Compensation (as
defined in Section 11) per pay period, (b) authorize the purchase of Common Stock in each Offering in accordance with the terms
of the Plan and (c) specify the exact name or names in which shares of Common Stock purchased for such individual are to be issued
pursuant to Section 10. An employee who does not enroll in accordance with these procedures will be deemed to have waived the right
to participate. Unless a Participant files a new enrollment form or withdraws from the Plan, such Participant’s deductions and purchases
will continue at the same percentage or amount of Compensation for future Offerings, provided he or she remains eligible.


 


(c)            Notwithstanding
the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code.


 


5.              Employee
Contributions. Each eligible employee may authorize payroll deductions at a minimum of one percent (1%) up to a maximum of fifteen
percent (15%) of such employee’s Compensation for each pay period (or such other percentage as the Administrator may establish from
time to time before an Offering begins). The Company will maintain book accounts showing the amount of payroll deductions made by each
Participant for each Purchase Period. No interest will accrue or be paid on payroll deductions.


 


6.              Deduction
Changes. Except as may be determined by the Administrator in advance of an Offering, a Participant may not increase or decrease his
or her payroll deduction during any Offering, but may increase or decrease his or her payroll deduction with respect to the next Offering
(subject to the limitations of Section 5) by filing a new enrollment form at least fifteen (15) business days before the next Offering
Date (or by such other deadline as shall be established by the Administrator for the Offering). The Administrator may, in advance of any
Offering, establish rules permitting a Participant to increase, decrease or terminate his or her payroll deduction during an Offering.


 






    4 


     


    

 


7.              Withdrawal.
A Participant may withdraw from participation in the Plan by delivering a written notice of withdrawal to his or her appropriate payroll
location. The Participant’s withdrawal will be effective as of the next business day. Following a Participant’s withdrawal,
the Company will promptly refund such individual’s entire account balance under the Plan to him or her (after payment for any Common
Stock purchased before the effective date of withdrawal). Partial withdrawals are not permitted. Such an employee may not begin participation
again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4.


 


8.              Grant
of Options. On each Offering Date, the Company will grant to each eligible employee who is then a Participant in the Plan an option
(“Option”) to purchase on the last day of a Purchase Period (the “Exercise Date”), at the Option Price hereinafter
provided for, the lower of (a) a number of shares of Common Stock determined by dividing such Participant’s accumulated payroll
deductions on such Exercise Date by the Option Price (as defined herein), or (b) the number of shares determined by dividing $25,000
by the Fair Market Value of the Common Stock on the Offering Date for such Offering (or such other maximum number of shares as shall have
been established by the Administrator in advance of the Offering); provided, however, that such Option shall be subject to the limitations
set forth below. Each Participant’s Option shall be exercisable only to the extent of such Participant’s accumulated payroll
deductions on the Exercise Date. The purchase price for each share purchased under each Option (the “Option Price”) will be
eighty-five percent (85%) of the Fair Market Value of the Common Stock on the Offering Date or the Exercise Date, whichever is less.


 






    5 


     


    

 


Notwithstanding the foregoing,
no Participant may be granted an option hereunder if such Participant, immediately after the option was granted, would be treated as owning
stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or
any Parent or Subsidiary (as defined in Section 11). For purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of a Participant, and all stock which the Participant has a contractual right
to purchase shall be treated as stock owned by the Participant. In addition, no Participant may be granted an Option which permits such
Participant rights to purchase stock under the Plan, and any other employee stock purchase plan of the Company and its Parents and Subsidiaries,
to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined on the option grant date or dates) for each
calendar year in which the Option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with
Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.


 


9.              Exercise
of Option and Purchase of Shares. Each employee who continues to be a Participant in the Plan on the Exercise Date shall be deemed
to have exercised his or her Option on such date and shall acquire from the Company such number of whole shares of Common Stock reserved
for the purpose of the Plan as his or her accumulated payroll deductions on such date will purchase at the Option Price, subject to any
other limitations contained in the Plan. Unless otherwise determined by the Administrator in advance of an Offering, any amount remaining
in a Participant’s account after the purchase of shares on an Exercise Date of an Offering solely by reason of the inability to
purchase a fractional share will be carried forward to the next Purchase Period and, if such Exercise Date is the final Exercise Date
of an Offering, will be carried forward to the next Offering; any other balance remaining in a Participant’s account at the end
of an Offering will be refunded to the Participant promptly.


 






    6 


     


    

 


10.            Issuance
of Certificates. Certificates or book-entries at the Company’s transfer agent representing shares of Common Stock purchased
under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants
with rights of survivorship, or in the name of a broker authorized by the employee to be his, her or their nominee for such purpose.


 


11.            Definitions.


 


The term “Compensation”
means the regular or basic rate of compensation. The Administrator, in its discretion, may establish
a different definition of Compensation for an Offering, which for the Section 423 Component shall apply on a uniform and nondiscriminatory
basis. Further, the Administrator will have discretion to determine the application of this definition to eligible employees outside the
United States.


 


The term “Designated
Subsidiary” means any present or future Subsidiary (as defined below) that has been designated by the Board to participate in the
Plan. The Board may so designate any Subsidiary, or revoke any such designation, at any time and from time to time, either before or after
the Plan is approved by the stockholders.


 


The term “Fair Market
Value of the Common Stock” on any given date means the fair market value of the Common Stock determined in good faith by the Administrator;
provided, however, that if the Common Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation
System (“NASDAQ”), the NASDAQ Global Market, The New York Stock Exchange or another national securities exchange, the determination
shall be made by reference to the closing price on such date. If there is no closing price for such date, the determination shall be made
by reference to the last date preceding such date for which there is a closing price.


 






    7 


     


    

 


The term “Initial Public
Offering” means the first underwritten, firm commitment public offering pursuant to an effective registration statement under the
U.S. Securities Act of 1933, as amended, covering the offer and sale by the Company of its Common Stock


 


The term “Parent”
means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the Code.


 


The term “Participant”
means an individual who is eligible as determined in Section 3 and who has complied with the provisions of Section 4.


 


The term “Purchase Period”
means a period of time specified within an Offering beginning on an Offering Date or on the next day following an Exercise Date within
an Offering and ending on an Exercise Date. An Offering may consist of one or more Purchase Periods.


 


The term “Registration
Date” means the date on which the registration statement on Form S-1 that is filed by the Company with respect to its Initial
Public Offering is declared effective by the U.S. Securities and Exchange Commission (the “SEC”).


 


The term “Subsidiary”
means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f) of the Code.


 






    8 


     


    

 


12.          Rights
on Termination of Employment. If a Participant’s employment terminates for any reason before the Exercise Date for any Offering,
no payroll deduction will be taken from any pay due and owing to the Participant and the balance in the Participant’s account will
be paid to such Participant or, in the case of such Participant’s death, to his or her designated beneficiary as if such Participant
had withdrawn from the Plan under Section 7. An employee will be deemed to have terminated employment, for this purpose, if the corporation
that employs him or her, having been a Designated Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any corporation
other than the Company or a Designated Subsidiary; provided, however, that if a Participant transfers from an Offering under the 423 Component
to an Offering under the Non-423 Component, the exercise of the Participant’s Option will be qualified under the 423 Component only
to the extent that such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423
Component to an Offering under the 423 Component, the exercise of the Participant’s Option will remain non-qualified under the Non-423
Component. An employee will not be deemed to have terminated employment for this purpose if the employee is on an approved leave of absence
for military service or sickness or for any other purpose approved by the Company, if the employee’s right to reemployment is guaranteed
either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise
provides in writing.


 


13.          Special
Rules and Sub-Plans. Notwithstanding anything herein to the contrary, the Administrator may adopt special rules applicable
to the employees of a particular Designated Subsidiary whenever the Administrator determines that such rules are necessary or appropriate
for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees; provided that if such special rules or
sub-plans are inconsistent with the requirements of Section 423(b) of the Code, the employees subject to such special rules or
sub-plans will participate in the Non-423 Component. Any special rules or sub-plans established pursuant to this Section 13
shall, to the extent possible, result in the employees subject to such rules having substantially the same rights as other Participants
in the Plan.


 


14.          Optionees
Not Stockholders. Neither the granting of an Option to a Participant nor the deductions from his or her pay shall constitute such
Participant a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued
to the Participant.


 






    9 


     


    

 


15.          Rights
Not Transferable. Rights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution,
and are exercisable during the Participant’s lifetime only by the Participant.


 


16.          Application
of Funds. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for
any corporate purpose.


 


17.          Adjustment
in Case of Changes Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, the payment of a dividend
in Common Stock or any other change affecting the Common Stock, the number of shares approved for the Plan and any other share limitations
in the Plan shall be equitably or proportionately adjusted to give proper effect to such event.


 


18.          Amendment
of the Plan. The Board may at any time and from time to time amend the Plan in any respect, except that without the approval within
twelve (12) months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for the
Plan or making any other change that would require stockholder approval in order for the 423 Component of the Plan, as amended, to qualify
as an “employee stock purchase plan” under Section 423(b) of the Code.


 


19.          Insufficient
Shares. If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares
purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available
shall be apportioned among Participants in proportion to the amount of payroll deductions accumulated on behalf of each Participant that
would otherwise be used to purchase Common Stock on such Exercise Date.


 






    10 


     


    

 


20.          Termination
of the Plan. The Plan may be terminated at any time by the Board. Upon termination of the Plan, all amounts in the accounts of Participants
shall be promptly refunded. Unless terminated earlier, the Plan shall automatically terminate on the tenth anniversary of the Registration
Date.


 


21.          Governmental
Regulations. The Company’s obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental
approvals required in connection with the authorization, issuance, or sale of such stock.


 


22.          Governing
Law. This Plan and all Options and actions taken thereunder shall be governed by, and construed in accordance with the General Corporation
Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in
accordance with the internal laws of the State of Delaware, applied without regard to conflict of law principles.


 


23.          Issuance
of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury
of the Company, or from any other proper source.


 


24.          Tax
Withholding. Participation in the Plan is subject to any minimum required tax withholding on income of the Participant in connection
with the Plan. Each Participant agrees, by entering the Plan, that the Company and its Subsidiaries shall have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant, including shares issuable under the Plan.


 


25.          Notification
Upon Sale of Shares Under the 423 Component. Each Participant agrees, by entering the 423 Component of the Plan, to give the Company
prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two (2) years after the
date of grant of the Option pursuant to which such shares were purchased or within one (1) year after the date such shares were purchased.


 


26.          Effective
Date. This Plan shall become effective upon the date immediately preceding the Registration Date following stockholder approval in
accordance with applicable state law, the Company’s bylaws and articles of incorporation, each as amended, and applicable stock
exchange rules.


 






    11