EX-10.5



 Exhibit 10.5 

VERRICA PHARMACEUTICALS INC. 

STOCK OPTION GRANT NOTICE 

(2018 EQUITY INCENTIVE PLAN) 

Verrica Pharmaceuticals Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”),
hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this Stock Option Grant Notice, in the Option
Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same
definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this Stock Option Grant Notice and the Plan, the terms of the Plan will control. 

 

			
	Optionholder:	  	
                     
                                        


	Date of Grant:	  	  

	Vesting Commencement Date:	  	  

	Number of Shares Subject to Option:	  	  

	Exercise Price (Per Share):	  	  

	Total Exercise Price:	  	  

	Expiration Date:	  	  


  

					
	Type of Grant:	  	☐ Incentive Stock Option1	  	☐ Nonstatutory Stock Option
		
	Exercise Schedule:	  	Same as Vesting Schedule
		
	Vesting Schedule:	  	[                            , subject to Optionholder’s Continuous
Service as of each such date]
		
	Payment:	  	By one or a combination of the following items (described in the Option Agreement):
		
		  	☐ By cash, check, bank draft or money order payable to the Company
		
		  	☐ Pursuant to a Regulation T Program if the shares are publicly traded
		
		  	☐ By delivery of already-owned shares if the shares are publicly traded
		
		  	☐ If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement

  

	1 	If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess
over $100,000 is a Nonstatutory Stock Option. 


  
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 Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and understands and agrees to,
this Stock Option Grant Notice, the Option Agreement and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder
further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral
and written agreements, promises and/or representations on that subject with the exception of, if applicable, (i) equity awards previously granted and delivered to Optionholder, (ii) any compensation recovery policy that is adopted by the
Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement or other written agreement entered into between the Company and Optionholder specifying the terms that should govern this option upon
the terms and conditions set forth therein. 
 By accepting this option, Optionholder acknowledges having received and read the Stock Option Grant Notice,
the Option Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. Optionholder consents to receive Plan and related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. 
  

									
	VERRICA PHARMACEUTICALS INC.	 		    	OPTIONHOLDER:
				
	By:	 	  
	 		    	  

		 	Signature	 		    	Signature


									
					
	Title:	 	  
	 		 	Date:	 	 
					
	Date:	 	  
	 		 		 	

 ATTACHMENTS: Option Agreement, 2018 Equity Incentive Plan and Notice of Exercise


  
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 ATTACHMENT I 

VERRICA PHARMACEUTICALS INC. 

OPTION AGREEMENT 

(2018 EQUITY INCENTIVE PLAN) 

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK
OPTION) 
 Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement,
Verrica Pharmaceuticals Inc. (the “Company”) has granted you an option under its 2018 Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in
your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the
terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan. 

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows: 

1. VESTING. Subject to the provisions contained herein, your option will vest as provided in your Grant Notice.
Vesting will cease upon the termination of your Continuous Service. 
 2. NUMBER OF
SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization
Adjustments. 
 3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date
of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month
anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your
“retirement” (as defined in the Company’s benefit plans). 
 4. METHOD OF
PAYMENT. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner
permitted by your Grant Notice, which may include one or more of the following: 
 (a) Provided that at the time of
exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company
or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to
cover”. 

  
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 (b) Provided that at the time of exercise the Common Stock is publicly traded, by delivery
to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by
the Company. You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. 

(c) If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net
exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise
price. You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment. Shares of Common Stock will no longer be outstanding under your option and will not
be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding
obligations. 
 5. WHOLE SHARES. You may exercise your option only for whole shares of Common
Stock. 
 6. SECURITIES LAW COMPLIANCE. In no event may you exercise your option
unless the shares of Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in
material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable). 

7. TERM. You may not exercise your option before the Date of Grant or after the expiration of the option’s
term. The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following: 

(a) immediately upon the termination of your Continuous Service for Cause; 

(b) three (3) months after the termination of your Continuous Service for any reason other than Cause, your Disability or
your death (except as otherwise provided in Section 7(d) below); provided, however, that if during any part of such three (3) month period your option is not exercisable solely because of the condition set forth in the section above
regarding “Securities Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service;
provided further, if during any part of such three (3) month period, the sale of any Common Stock received upon exercise of your option would violate the Company’s insider trading policy, then your option will not expire until the
earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service during which the sale of the Common Stock received upon exercise of your option would
not be in violation of the Company’s insider trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six
(6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that
is seven (7) months after the Date of Grant, and (B) the date that is three (3) months after the termination of your Continuous Service, and (y) the Expiration Date; 

  
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 (c) twelve (12) months after the termination of your Continuous Service due to your
Disability (except as otherwise provided in Section 7(d) below); 
 (d) eighteen (18) months after your death if you die
either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause; 

(e) the Expiration Date indicated in your Grant Notice; or 

(f) the day before the tenth (10th) anniversary of the Date of Grant. 

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option,
the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death
or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide
services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

 8. EXERCISE. 

(a) You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during
its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable
withholding taxes to the Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require. 

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into
an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares
of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise. 

(c) If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within
fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of
Common Stock are transferred upon exercise of your option. 
 9. TRANSFERABILITY. Except as otherwise provided
in this Section 9, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. 

  
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 (a) Certain Trusts. Upon receiving written permission from the Board or its duly
authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee
must enter into transfer and other agreements required by the Company. 
 (b) Domestic Relations Orders. Upon receiving
written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic
relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to
effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is
contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer. 

(c) Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by
delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and
receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the
Common Stock or other consideration resulting from such exercise. 
 10. OPTION NOT A
SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any
relationship that you might have as a Director or Consultant for the Company or an Affiliate. 
 11. WITHHOLDING
OBLIGATIONS. 
 (a) At the time you exercise your option, in whole or in part, and at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in
connection with the exercise of your option. 
 (b) If this option is a Nonstatutory Stock Option, then upon your request and subject
to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of
Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option
as a liability for financial accounting purposes). Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are
otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility. 

  
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 (c) You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release
such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied. 
 12.
TAX CONSEQUENCES. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You
will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from
Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral
of compensation associated with the option. 
 13. NOTICES. Any notices provided for in your option or the Plan
will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to
participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system
established and maintained by the Company or another third party designated by the Company. 
 14. GOVERNING
PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and
regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control. In addition, your option (and
any compensation paid or shares issued under your option) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the
Company and any compensation recovery policy otherwise required by applicable law. 
 15. OTHER
DOCUMENTS. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you
acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time. 

16. EFFECT ON OTHER EMPLOYEE BENEFIT
PLANS. The value of this option will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except
as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans. 

17. VOTING RIGHTS. You will not have voting or any other rights as a stockholder of the Company
with respect to the shares to be issued pursuant to this option until such shares are issued to 

  
 5 








 
you. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this option, and no action taken pursuant to its provisions, will
create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person. 

18. SEVERABILITY. If all or any part of this Option Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a
Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid. 

19. MISCELLANEOUS. 

(a) The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all
covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns. 
 (b)
You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option. 

(c) You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of
counsel prior to executing and accepting your option, and fully understand all provisions of your option. 
 (d) This Option
Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 

(e) All obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. 

*        *        * 

This Option Agreement will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached.


  
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 ATTACHMENT II 

2018 EQUITY INCENTIVE PLAN 

  
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 ATTACHMENT III 

NOTICE OF EXERCISE 

 

							
	VERRICA PHARMACEUTICALS INC.	 		  		  	
	10 North High Street, Suite 200	 		  	Date of Exercise:	  	
	West Chester, PA 19380	 		  		  	

 This constitutes notice to Verrica Pharmaceuticals Inc. (the “Company”) under my stock
option that I elect to purchase the below number of shares of Common Stock of the Company (the “Shares”) for the price set forth below. 
  

									
	Type of option (check one):	  	 	Incentive ☐	 	  	 	Nonstatutory ☐	 
			
	 Stock option dated:
	  				  			
			
	 Number of Shares as to which option is exercised:
	  				  			
			
	 Certificates to be issued in name of:
	  				  			
			
	 Total exercise price:
	  	$	            	 	  	$	            	 
			
	 Cash payment delivered herewith:
	  	$	            	 	  	$	            	 
			
	 [Value of              Shares
delivered herewith1:
	  	$	            	 	  	$	            	] 
			
	 [Value of              Shares pursuant
to net exercise2:
	  	$	            	 	  	$	            	] 
			
	 [Regulation T Program (cashless
exercise3):
	  	$	            	 	  	$	            	] 

  

	1 	Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims,
encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate. 


	2 	The option must be a Nonstatutory Stock Option, and the Company must have established net exercise procedures at the time of exercise, in order to utilize this payment method. 


	3 	Shares must meet the public trading requirements set forth in the option. 


  
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 By this exercise, I agree (i) to provide such additional documents as you may require
pursuant to the terms of the Verrica Pharmaceuticals Inc. 2018 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two
(2) years after the date of grant of this option or within one (1) year after such Shares are issued upon exercise of this option. 
  

	
	Very truly yours,
	
	  




  
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 VERRICA PHARMACEUTICALS INC. 

RESTRICTED STOCK UNIT GRANT NOTICE 

(2018 EQUITY INCENTIVE PLAN) 

Verrica Pharmaceuticals Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby
awards to Participant a Restricted Stock Unit Award for the number of shares of the Company’s Common Stock (“Restricted Stock Units”) set forth below (the “Award”). The Award is subject to all of
the terms and conditions as set forth in this notice of grant (this “Restricted Stock Unit Grant Notice”), and in the Plan and the Restricted Stock Unit Award Agreement (the “Award Agreement”), both of
which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein shall have the meanings set forth in the Plan or the Award Agreement. In the event of any conflict between the terms in this
Restricted Stock Unit Grant Notice or the Award Agreement and the Plan, the terms of the Plan shall control. 
  

			
	Participant:	 	  

	Date of Grant:	 	  

	Vesting Commencement Date:	 	  

	Number of Restricted Stock Units:	 	  


  

			
	Vesting Schedule:	  	[                            , subject to Participant’s Continuous Service
through each such vesting date.]
		
	Issuance Schedule:	  	Subject to any Capitalization Adjustment, one share of Common Stock (or its cash equivalent, at the discretion of the Company) will be issued for each Restricted Stock Unit that vests at the time set forth in Section 6 of the
Award Agreement.

 Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Restricted
Stock Unit Grant Notice, the Award Agreement and the Plan. Participant acknowledges and agrees that this Restricted Stock Unit Grant Notice and the Award Agreement may not be modified, amended, or revised except as provided in the Plan. Participant
further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of the Common Stock
pursuant to the Award specified above and supersede all prior oral and written agreements on the terms of this Award, with the exception, if applicable, of (i) equity awards previously granted and delivered to Participant, (ii) any
compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement or other written agreement entered into between the Company and Participant
specifying the terms that should govern this Award upon the terms and conditions set forth therein. 







 By accepting this Award, Participant acknowledges having received and read the Restricted Stock Unit Grant
Notice, the Award Agreement and the Plan and agrees to all of the terms and conditions set forth in these documents. Participant consents to receive Plan and related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. 
  

									
	VERRICA PHARMACEUTICALS INC.	 		    	PARTICIPANT
				
	By:	 	  
	 		    	  

		 	Signature	 		    	Signature


									
					
	Title:	 	  
	 		 	Date:	 	 
					
	Date:	 	  
	 		 		 	

 ATTACHMENTS: Award Agreement and 2018 Equity Incentive Plan 







 ATTACHMENT I 

VERRICA PHARMACEUTICALS INC. 

2018 EQUITY INCENTIVE PLAN 

RESTRICTED STOCK UNIT AWARD AGREEMENT 

Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Award Agreement
(the “Agreement”), Verrica Pharmaceuticals Inc. (the “Company”) has awarded you (“Participant”) a Restricted Stock Unit Award (the “Award”) pursuant to
the Company’s 2018 Equity Incentive Plan (the “Plan”) for the number of Restricted Stock Units/shares indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement or the Grant Notice shall
have the same meanings given to them in the Plan. The terms of your Award, in addition to those set forth in the Grant Notice, are as follows. 

1. GRANT OF THE AWARD. This Award represents the right to be issued
on a future date one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 3 below) as indicated in the Grant Notice. As of the Date of Grant, the
Company will credit to a bookkeeping account maintained by the Company for your benefit (the “Account”) the number of Restricted Stock Units/shares of Common Stock subject to the Award. Notwithstanding the foregoing, the
Company reserves the right to issue you the cash equivalent of Common Stock, in part or in full satisfaction of the delivery of Common Stock in connection with the vesting of the Restricted Stock Units, and, to the extent applicable, references in
this Agreement and the Grant Notice to Common Stock issuable in connection with your Restricted Stock Units will include the potential issuance of its cash equivalent pursuant to such right. This Award was granted in consideration of your services
to the Company. 
 2. VESTING. Subject to the limitations contained herein, your Award will vest, if at all, in
accordance with the vesting schedule provided in the Grant Notice. Vesting will cease upon the termination of your Continuous Service and the Restricted Stock Units credited to the Account that were not vested on the date of such termination will be
forfeited at no cost to the Company and you will have no further right, title or interest in or to such Award or the shares of Common Stock to be issued in respect of such portion of the Award. 

3. NUMBER OF SHARES. The number of Restricted Stock Units subject to your Award may
be adjusted from time to time for Capitalization Adjustments, as provided in the Plan. Any additional Restricted Stock Units, shares, cash or other property that becomes subject to the Award pursuant to this Section 3, if any, shall be subject,
in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units and shares covered by your Award. Notwithstanding the
provisions of this Section 3, no fractional shares or rights for fractional shares of Common Stock shall be created pursuant to this Section 3. Any fraction of a share will be rounded down to the nearest whole share. 

4. SECURITIES LAW COMPLIANCE. You may not be issued any Common Stock
under your Award unless the shares of Common Stock underlying the Restricted Stock Units are either (i) then registered under the Securities Act, or (ii) the Company has determined that such issuance would be exempt from the registration
requirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and you shall not receive such Common Stock if the Company determines that such receipt would not be in material
compliance with such laws and regulations. 







 5. TRANSFER RESTRICTIONS. Prior to the
time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of this Award or the shares issuable in respect of your Award, except as expressly provided in this Section 5. For example, you
may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan. The restrictions on transfer set forth herein will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units. 

(a) Death. Your Award is transferable by will and by the laws of descent and distribution. At your death, vesting of your Award will
cease and your executor or administrator of your estate shall be entitled to receive, on behalf of your estate, any Common Stock or other consideration that vested but was not issued before your death. 

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you
and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive the distribution of Common Stock or other consideration hereunder, pursuant to a domestic relations order, marital
settlement agreement or other divorce or separation instrument as permitted by applicable law that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this
Award with the Company General Counsel prior to finalizing the domestic relations order or marital settlement agreement to verify that you may make such transfer, and if so, to help ensure the required information is contained within the domestic
relations order or marital settlement agreement. 
 6. DATE OF ISSUANCE. 

(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the Withholding Obligation set forth in Section 11 of this Agreement, in the event one or more
Restricted Stock Units vests, the Company shall issue to you one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 3 above, and subject to any
different provisions in the Grant Notice). Each issuance date determined by this paragraph is referred to as an “Original Issuance Date”. 

(b) If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following
business day. In addition, if: 
 (i) the Original Issuance Date does not occur (1) during an “open window period”
applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established
stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in
compliance with the Company’s policies (a “10b5-1 Arrangement”)), and 

(ii) either (1) a Withholding Obligation does not apply, or (2) the Company decides, prior to the Original Issuance Date,
(A) not to satisfy the Withholding Obligation by withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to permit you to enter into a “same day sale”
commitment with a broker-dealer pursuant to Section 11 of this Agreement (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit you to pay your Withholding
Obligation in cash, 







 then the shares that would otherwise be issued to you on the Original Issuance Date will
not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than
December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury
Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award
are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d). 

(c) The form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the
Company. 
 7. DIVIDENDS. You shall receive no benefit or adjustment to your Award with respect to any cash
dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment; provided, however, that this sentence will not apply with respect to any shares of Common Stock that are delivered to you in connection with your
Award after such shares have been delivered to you. 
 8. RESTRICTIVE LEGENDS. The shares of
Common Stock issued in respect of your Award shall be endorsed with appropriate legends as determined by the Company. 
 9.
EXECUTION OF DOCUMENTS. You hereby acknowledge and agree that the manner selected by the Company by which you indicate your consent to your Grant Notice is also deemed to be your execution of your
Grant Notice and of this Agreement. You further agree that such manner of indicating consent may be relied upon as your signature for establishing your execution of any documents to be executed in the future in connection with your Award. 

10. AWARD NOT A SERVICE CONTRACT. 

(a) Nothing in this Agreement (including, but not limited to, the vesting of your Award or the issuance of the shares in respect of
your Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ or service of, or affiliation with, the Company or an
Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation;
(iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and
without regard to any future vesting opportunity that you may have. 
 (b) By accepting this Award, you acknowledge and agree that
the right to continue vesting in the Award pursuant to the vesting schedule provided in the Grant Notice may not be earned unless (in addition to any other conditions described in the Grant Notice and this Agreement) you continue as an employee,
director or consultant at the will of the Company and affiliate, as applicable (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You acknowledge and agree that
such a reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination
of the right to continue vesting in the Award. You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated 







 
hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of
continued engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with the Company’s right to terminate your Continuous Service at any time, with or without your
cause or notice, or to conduct a reorganization. 
 11. WITHHOLDING OBLIGATION. 

(a) On each vesting date, and on or before the time you receive a distribution of the shares of Common Stock in respect of your Restricted
Stock Units, and at any other time as reasonably requested by the Company in accordance with applicable tax laws, you hereby authorize any required withholding from the Common Stock issuable to you and/or otherwise agree to make adequate provision,
including in cash, for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate that arise in connection with your Award (the “Withholding Obligation”).

 (b) By accepting this Award, you acknowledge and agree that the Company or any Affiliate may, in its sole discretion, satisfy all or any
portion of the Withholding Obligation relating to your Restricted Stock Units by any of the following means or by a combination of such means: (i) causing you to pay any portion of the Withholding Obligation in cash; (ii) withholding from
any compensation otherwise payable to you by the Company; (iii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the
date shares of Common Stock are issued pursuant to Section 6) equal to the amount of such Withholding Obligation; provided, however, that the number of such shares of Common Stock so withheld will not exceed the amount necessary to satisfy the
Withholding Obligation using the maximum statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income; and provided, further, that to the extent
necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Company’s Compensation
Committee; and/or (iv) permitting or requiring you to enter into a “same day sale” commitment, if applicable, with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA
Dealer”), pursuant to this authorization and without further consent, whereby you irrevocably elect to sell a portion of the shares to be delivered in connection with your Restricted Stock Units to satisfy the Withholding Obligation and
whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Withholding Obligation directly to the Company and/or its Affiliates. Unless the Withholding Obligation is satisfied, the Company shall have no obligation
to deliver to you any Common Stock or any other consideration pursuant to this Award. 
 (c) In the event the Withholding Obligation arises
prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Withholding Obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company
harmless from any failure by the Company to withhold the proper amount. 
 12. TAX CONSEQUENCES.
The Company has no duty or obligation to minimize the tax consequences to you of this Award and shall not be liable to you for any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own
personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so. You understand that you (and not the
Company) shall be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 







 13. UNSECURED OBLIGATION. Your Award is unfunded, and
as a holder of a vested Award, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property pursuant to this Agreement. You shall not have voting or any other
rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain full voting and other
rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any
other person. 
 14. NOTICES. Any notice or request required or permitted hereunder shall be
given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed
to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the
Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained
by the Company or another third party designated by the Company. 
 15. HEADINGS. The headings
of the Sections in this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement or to affect the meaning of this Agreement. 

16. MISCELLANEOUS. 

(a) The rights and obligations of the Company under your Award shall be transferable by the Company to any one or more persons or
entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns. 

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the
Company to carry out the purposes or intent of your Award. 
 (c) You acknowledge and agree that you have reviewed your Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award. 

(d) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required. 
 (e) All obligations of the Company under the Plan and this Agreement shall be
binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. 

17. GOVERNING PLAN DOCUMENT. Your Award is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Your
Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy
adopted by the Company and any 







 
compensation recovery policy otherwise required by applicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to voluntarily terminate
employment upon a resignation for “good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company. 

18. EFFECT ON OTHER EMPLOYEE BENEFIT
PLANS. The value of the Award subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any employee benefit plan (other than the Plan)
sponsored by the Company or any Affiliate except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any or all of the employee benefit plans of the Company or any Affiliate. 

19. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so
declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid. 

20. OTHER DOCUMENTS. You hereby acknowledge receipt or the right to receive a
document providing the information required by Rule 428(b)(1) promulgated under the Securities Act. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain
“window” periods and the Company’s insider trading policy, in effect from time to time. 
 21.
AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be
amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment
materially adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem
necessary or advisable to carry out the purpose of the Award as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights
relating to that portion of the Award which is then subject to restrictions as provided herein. 
 22. COMPLIANCE
WITH SECTION 409A OF THE CODE. This Award is intended to be exempt from the application of
Section 409A of the Code, including but not limited to by reason of complying with the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) and any ambiguities
herein shall be interpreted accordingly. Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and determined to be deferred compensation
subject to Section 409A of the Code, this Award shall comply with Section 409A to the extent necessary to avoid adverse personal tax consequences and any ambiguities herein shall be interpreted accordingly. If it is determined that the
Award is deferred compensation subject to Section 409A and you are a “Specified Employee” (within the meaning set forth in Section 409A(a)(2)(B)(i) of the Code) as of the date of your “Separation from Service” (as
defined in Section 409A), then the issuance of any shares that would otherwise be made upon the date of your Separation from Service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and
will instead be issued in a lump sum on the date that is six (6) months and one day after the date of the Separation from Service, with the balance of the shares issued thereafter 







 
in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of adverse taxation
on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended to constitute a “separate payment” for purposes of Treasury Regulation
Section 1.409A-2(b)(2).  
 * * * * * 

This Restricted Stock Unit Award Agreement shall be deemed to be signed by the Company and the Participant upon the signing by the Participant
of the Restricted Stock Unit Grant Notice to which it is attached. 







 ATTACHMENT II 

2018 EQUITY INCENTIVE PLAN