Document:

ARCH
THERAPEUTICS, INC. 2013 STOCK INCENTIVE PLAN

 

NOTICE
OF STOCK OPTION AWARD

 

	Grantee’s Name and Address:	 	 
	 	 	 
	 	 	 

 

 

You (the “Grantee”) have been
granted an option to purchase shares of Common Stock, subject to the terms and conditions of this Notice of Stock Option Award
(the “Notice”), the Arch Therapeutics, Inc. 2013 Stock Incentive Plan, as amended from time to time (the “Plan”)
and the Stock Option Award Agreement (the “Option Agreement”) attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in this Notice.

 

	Award Number	 	 
	Date of Award	 	 
	Vesting Commencement Date	 	 
	Exercise Price per Share	$	 
	Total Number of Shares Subject to the Option
    (the “Shares”)	 	 
	Total Exercise Price	$	 
	Type of Option:  	 	____ Incentive Stock Option
	 	 	____ Non-Qualified Stock Option
	Expiration Date:	 	 
	Post-Termination Exercise Period:	 	 

 

Vesting Schedule:

 

Subject to the Grantee’s Continuous
Service and other limitations set forth in this Notice, the Plan and the Option Agreement, the Option may be exercised, in whole
or in part, in accordance with the following schedule:

 

 

    	1

    	 

    

 

 

IN WITNESS WHEREOF, the Company and the
Grantee have executed this Notice and agree that the Option is to be governed by the terms and conditions of this Notice, the Plan,
and the Option Agreement.

 

	 	Arch Therapeutics, Inc.

a Nevada corporation
	 	 
	 	By: 	 
	 	 	 
	 	Title:	 

 

 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE
SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS
OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR
THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE,
WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE
GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.

 

The Grantee acknowledges receipt of a copy
of the Plan and the Option Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby
accepts the Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan,
and the Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice,
and fully understands all provisions of this Notice, the Plan and the Option Agreement. The Grantee hereby agrees that all questions
of interpretation and administration relating to this Notice, the Plan and the Option Agreement shall be resolved by the Administrator
in accordance with Section 14 of the Option Agreement. The Grantee further agrees to the venue selection in accordance with
Section 15 of the Option Agreement. The Grantee further agrees to notify the Company upon any change in the residence address
indicated in this Notice.

 

 

 

	Dated:	 	 	Signed:	 
	 	 	 	 	Grantee

 

    	2

    	 

    

 

Award Number: ___________

 

ARCH
THERAPEUTICS, INC. 2013 STOCK INCENTIVE PLAN

 

STOCK
OPTION AWARD AGREEMENT

 

1.Grant of Option. Arch Therapeutics,
Inc., a Nevada corporation (the “Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice
of Stock Option Award (the “Notice”), an option (the “Option”) to purchase the Total Number of Shares of
Common Stock subject to the Option (the “Shares”) set forth in the Notice, at the Exercise Price per Share set forth
in the Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this Stock Option Award Agreement
(the “Option Agreement”) and the Arch Therapeutics, Inc. 2013 Stock Incentive Plan, as amended from time
to time (the “Plan”), which are incorporated herein by reference. Unless otherwise defined herein, the terms defined
in the Plan shall have the same defined meanings in this Option Agreement.

 

If designated in the Notice as an Incentive
Stock Option, the Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. However,
notwithstanding such designation, the Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000
dollar limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code
is calculated based on the aggregate Fair Market Value of the Shares subject to options designated as Incentive Stock Options which
become exercisable for the first time by the Grantee during any calendar year (under all plans of the Company or any Parent or
Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the shares subject to such options shall be determined as of the grant
date of the relevant option.

 

2.Exercise of Option.

 

(a)Right to Exercise. The Option
shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice and with the applicable provisions
of the Plan and this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan relating
to the exercisability or termination of the Option in the event of a Corporate Transaction or Change in Control. The Grantee shall
be subject to reasonable limitations on the number of requested exercises during any monthly or weekly period as determined by
the Administrator. In no event shall the Company issue fractional Shares.

 

(b)Method of Exercise. The Option
shall be exercisable by delivery of an exercise notice (a form of which is attached as Exhibit A) or by such other procedure as
specified from time to time by the Administrator which shall state the election to exercise the Option, the whole number of Shares
in respect of which the Option is being exercised, and such other provisions as may be required by the Administrator. The exercise
notice shall be delivered in person, by certified mail, or by such other method (including electronic transmission) as determined
from time to time by the Administrator to the Company accompanied by payment of the Exercise Price and all applicable income and
employment taxes required to be withheld. The Option shall be deemed to be exercised upon receipt by the Company of such notice
accompanied by the Exercise Price and all applicable withholding taxes, which, to the extent selected, shall be deemed to be satisfied
by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 4(d) below to the
extent such procedure is available to the Grantee at the time of exercise and such an exercise would not violate any Applicable
Law.

 

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(c)Taxes. No Shares will be delivered
to the Grantee or other person pursuant to the exercise of the Option until the Grantee or other person has made arrangements acceptable
to the Administrator for the satisfaction of applicable income tax and employment tax withholding obligations, including, without
limitation, such other tax obligations of the Grantee incident to the receipt of Shares. Upon exercise of the Option, the Company
or the Grantee’s employer may offset or withhold (from any amount owed by the Company or the Grantee’s employer to
the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding obligations. Furthermore,
in the event of any determination that the Company has failed to withhold a sum sufficient to pay all withholding taxes due in
connection with the Option, the Grantee agrees to pay the Company the amount of such deficiency in cash within five (5) days after
receiving a written demand from the Company to do so, whether or not the Grantee is an employee of the Company at that time.

 

(d)Section 16(b). Notwithstanding
any provision of this Option Agreement to the contrary, other than termination of the Grantee’s Continuous Service for Cause,
if a sale within the applicable time periods set forth in Sections 6, 7 or 8 herein of Shares acquired upon the exercise of the
Option would subject the Grantee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the
earliest to occur of (i) the tenth (10th) day following the date on which a sale of such Shares by the Grantee would no longer
be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Grantee’s termination of Continuous Service,
or (iii) the date on which the Option expires.

 

3.Grantee’s Representations.
Concurrently with the grant of this Option (and/or in connection with the exercise of this Option), Participant shall deliver to
the Company any such investment representation statements that the Company requests, in such form as the Company shall determine
in its discretion.

 

4.Method of Payment. Payment
of the Exercise Price shall be made by any of the following, or a combination thereof, at the election of the Grantee; provided,
however, that such exercise method does not then violate any Applicable Law:

 

(a)cash;

 

(b)check;

 

(c)surrender of Shares held for the requisite
period, if any, necessary to avoid a charge to the Company’s earnings for financial reporting purposes, or delivery of a
properly executed form of attestation of ownership of Shares as the Administrator may require which have a Fair Market Value on
the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised;

 

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(d)payment through a “net exercise”
such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to
(i) the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which
is the Fair Market Value per Share (on such date as is determined by the Administrator) less the Exercise Price per Share, and
the denominator of which is such Fair Market Value per Share (the number of net Shares to be received shall be rounded down to
the nearest whole number of Shares); or

 

(e)if the exercise occurs on or after
the Registration Date, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (i) shall provide
written instructions to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares
and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (ii) shall
provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm
in order to complete the sale transaction. 

 

5.Restrictions on Exercise. The
Option may not be exercised if the issuance of the Shares subject to the Option upon such exercise would constitute a violation
of any Applicable Laws. In addition, the Option may not be exercised until such time as the Plan has been approved by the stockholders
of the Company. If the exercise of the Option within the applicable time periods set forth in Section 6, 7 and 8 of this Option
Agreement is prevented by the provisions of this Section 5, the Option shall remain exercisable until one (1) month after
the date the Grantee is notified by the Company that the Option is exercisable, but in any event no later than the Expiration Date
set forth in the Notice.

 

6.Termination or Change of Continuous
Service. In the event the Grantee’s Continuous Service terminates, the Grantee may, but only during the Post-Termination
Exercise Period, exercise the portion of the Option that was vested at the date of such termination (the “Termination Date”).
The Post-Termination Exercise Period shall commence on the Termination Date. In no event, however, shall the Option be exercised
later than the Expiration Date set forth in the Notice. In the event of the Grantee’s change in status from Employee, Director
or Consultant to any other status of Employee, Director or Consultant, the Option shall remain in effect and the Option shall continue
to vest in accordance with the Vesting Schedule set forth in the Notice; provided, however, that with respect to any Incentive
Stock Option that shall remain in effect after a change in status from Employee to Director or Consultant, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3)
months and one (1) day following such change in status. Except as provided in Sections 7 and 8 below, to the extent that
the Option was unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the Option within the
Post-Termination Exercise Period, the Option shall terminate.

 

7.Disability of Grantee. In the
event the Grantee’s Continuous Service terminates as a result of his or her Disability, the Grantee may, but only within
twelve (12) months commencing on the Termination Date (but in no event later than the Expiration Date), exercise the portion of
the Option that was vested on the Termination Date; provided, however, that if such Disability is not a “disability”
as such term is defined in Section 22(e)(3) of the Code and the Option is an Incentive Stock Option, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3)
months and one (1) day following the Termination Date. To the extent that the Option was unvested on the Termination Date,
or if the Grantee does not exercise the vested portion of the Option within the time specified herein, the Option shall terminate.
Section 22(e)(3) of the Code provides that an individual is permanently and totally disabled if he or she is unable to engage
in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

 

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8.Death of Grantee. In the event
of the termination of the Grantee’s Continuous Service as a result of his or her death, or in the event of the Grantee’s
death during the Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s termination
of Continuous Service as a result of his or her Disability, the person who acquired the right to exercise the Option pursuant to
Section 9 may exercise the portion of the Option that was vested at the date of termination within twelve (12) months
commencing on the date of death (but in no event later than the Expiration Date). To the extent that the Option was unvested on
the date of death, or if the vested portion of the Option is not exercised within the time specified herein, the Option shall terminate.

 

9.Transferability of Option.
The Option, if an Incentive Stock Option, may not be transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of the Grantee only by the Grantee. The Option, if a Non-Qualified Stock
Option, may not be transferred in any manner other than by will or by the laws of descent and distribution, provided, however,
that a Non-Qualified Stock Option may be transferred during the lifetime of the Grantee to the extent and in the manner authorized
by the Administrator. Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s
Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s death on a beneficiary designation form
provided by the Administrator. Following the death of the Grantee, the Option, to the extent provided in Section 8, may be
exercised (a) by the person or persons designated under the deceased Grantee’s beneficiary designation or (b) in
the absence of an effectively designated beneficiary, by the Grantee’s legal representative or by any person empowered to
do so under the deceased Grantee’s will or under the then applicable laws of descent and distribution. The terms of the Option
shall be binding upon the executors, administrators, heirs, successors and transferees of the Grantee. 

 

10.Term of Option. The Option
must be exercised no later than the Expiration Date set forth in the Notice or such earlier date as otherwise provided herein.
After the Expiration Date or such earlier date, the Option shall be of no further force or effect and may not be exercised.

 

11.Tax Consequences. The Grantee
may incur tax liability as a result of the Grantee’s purchase or disposition of the Shares. THE GRANTEE SHOULD CONSULT A
TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

 

12.Entire Agreement: Governing Law.
The Notice, the Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter
hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the
subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by
the Company and the Grantee. Nothing in the Notice, the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this Option Agreement
are to be construed in accordance with and governed by the internal laws of the State of Nevada without giving effect to
any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State
of Nevada to the rights and duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be determined
to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

 

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13.Construction. The captions
used in the Notice and this Option Agreement are inserted for convenience and shall not be deemed a part of the Option for construction
or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

14.Administration and Interpretation.
Any question or dispute regarding the administration or interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

 

15.Venue. The Company, the Grantee,
and the Grantee’s assignees pursuant to Section 9 (the “parties”) agree that any suit, action, or proceeding
arising out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United States District Court
for the District of Massachusetts (or should such court lack jurisdiction to hear such action, suit or proceeding, in a
Massachusetts state court in the County of Middlesex) and that the parties shall submit to the jurisdiction of such court. The
parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for
any such suit, action or proceeding brought in such court. If any one or more provisions of this Section 15 shall for any
reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the
minimum extent necessary to make it or its application valid and enforceable.

 

16.Notices. Any notice required
or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for
delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown
in these instruments, or to such other address as such party may designate in writing from time to time to the other party.

 

END OF AGREEMENT

 

 

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EXHIBIT
A

 

ARCH THERAPEUTICS,
INC. 2013 STOCK INCENTIVE PLAN

 

EXERCISE
NOTICE

 

Arch Therapeutics, Inc.

Attention: Secretary

 

1.Exercise of Option. Effective
as of today, ______________, ___ the undersigned (the “Grantee”) hereby elects to exercise the Grantee’s option
to purchase ___________ shares of the Common Stock (the “Shares”) of Arch Therapeutics, Inc. (the “Company”)
under and pursuant to the Arch Therapeutics, Inc. 2013 Stock Incentive Plan, as amended from time to time (the “Plan”)
and the [  ] Incentive [  ] Non-Qualified Stock Option Award Agreement (the “Option Agreement”)
and Notice of Stock Option Award (the “Notice”) dated ______________, ________. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Exercise Notice.

 

2.Representations of the Grantee.
The Grantee acknowledges that the Grantee has received, read and understood the Notice, the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

 

3.Rights as Stockholder. Until
the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as provided in Section 11 of the Plan.

 

4.Delivery of Payment. The Grantee
herewith delivers to the Company the full Exercise Price for the Shares.

 

5.Tax Consultation. The Grantee
understands that the Grantee may suffer adverse tax consequences as a result of the Grantee’s purchase or disposition of
the Shares. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection
with the purchase or disposition of the Shares and that the Grantee is not relying on the Company for any tax advice.

 

6.Taxes. The Grantee agrees to
satisfy all applicable foreign, federal, state and local income and employment tax withholding obligations and herewith delivers
to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such obligations.
In the case of an Incentive Stock Option, the Grantee also agrees, as partial consideration for the designation of the Option as
an Incentive Stock Option, to notify the Company in writing within thirty (30) days of any disposition of any shares acquired
by exercise of the Option if such disposition occurs within two (2) years from the Date of Award or within one (1) year
from the date the Shares were transferred to the Grantee.

 

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7.Successors and Assigns. The
Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this agreement shall inure
to the benefit of the successors and assigns of the Company. This Exercise Notice shall be binding upon the Grantee and his or
her heirs, executors, administrators, successors and assigns.

 

8.Construction. The captions
used in this Exercise Notice are inserted for convenience and shall not be deemed a part of this agreement for construction or
interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

9.Administration and Interpretation.
The Grantee hereby agrees that any question or dispute regarding the administration or interpretation of this Exercise Notice shall
be submitted by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

 

10.Governing Law; Severability.
This Exercise Notice is to be construed in accordance with and governed by the internal laws of the State of Massachusetts without
giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal
laws of the State of Massachusetts to the rights and duties of the parties. Should any provision of this Exercise Notice be determined
by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain enforceable.

 

11.Notices. Any notice required
or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for
delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown
below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party.

 

12.Further Instruments. The parties
agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes
and intent of this agreement.

 

13.Entire Agreement. The Notice,
the Plan and the Option Agreement are incorporated herein by reference and together with this Exercise Notice constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements
of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Option Agreement
and this Exercise Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other
than the parties.

 

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	Submitted by:	 	Accepted by:
	 	 	 
	GRANTEE:	 	ARCH THERAPEUTICS, INC.
	 	 	 
	 	 	By: 	 
	 	 	 	 
	 	 	Title:	 
	(Signature)	 	 	 
	 	 	 	 
	Address:	 	Address:
	 	 	 

 

 

    	3ARCH THERAPEUTICS,
INC.

 

2013 STOCK
INCENTIVE PLAN

 

NOTICE
OF Restricted Stock Unit AWARD

 

 

	Grantee’s Name and Address:

	 	 
	 	 	 
	 	 	 

 

You (the “Grantee”) have been
granted an award of Restricted Stock Units (the “Award”), subject to the terms and conditions of this Notice of Restricted
Stock Unit Award (the “Notice”), the Arch Therapeutics, Inc. 2013 Stock Incentive Plan, as amended from time
to time (the “Plan”) and the Restricted Stock Unit Agreement (the “Agreement”) attached hereto, as follows.
Unless otherwise provided herein, the terms in this Notice shall have the same meaning as those defined in the Plan.

 

	Award Number

	 	 
	Date of Award	 	 
	Vesting Commencement Date

	 	 
	Total Number of Restricted Stock Units Awarded (the “Units”)

	 	 

 

Vesting Schedule:

 

Subject to the Grantee’s Continuous
Service and other limitations set forth in this Notice, the Agreement and the Plan, the Units will “vest” in accordance
with the following schedule (the “Vesting Schedule”):

  

In the event of the Grantee’s change
in status from Employee to Consultant or Director, the determination of whether such change in status results in a termination
of Continuous Service will be determined in accordance with Section 409A of the Code.

 

[During any authorized leave of absence,
the vesting of the Units as provided in this schedule shall be suspended (to the extent permitted under Section 409A of the
Code) after the leave of absence exceeds a period of three (3) months. The Vesting Schedule of the Units shall be extended by
the length of the suspension. Vesting of the Units shall resume upon the Grantee’s termination of the leave of absence and
return to service to the Company or a Related Entity; provided, however, that if the leave of absence exceeds six (6) months,
and a return to service upon expiration of such leave is not guaranteed by statute or contract, then (a) the Grantee’s
Continuous Service shall be deemed to terminate on the first date following such six-month period and (b) the Grantee will
forfeit the Units that are unvested on the date of the Grantee’s termination of Continuous Service. An authorized leave
of absence shall include sick leave, military leave, or other bona fide leave of absence (such as temporary employment by the
government). Notwithstanding the foregoing, with respect to a leave of absence due to any medically determinable physical or mental
impairment of the Grantee that can be expected to result in death or can be expected to last for a continuous period of not less
than six (6) months, where such impairment causes the Grantee to be unable to perform the duties of the Grantee’s position
of employment or substantially similar position of employment, a twenty-nine (29) month period of absence shall be substituted
for such six (6) month period above.]

 

    	 

    	 

    

 

For purposes of this Notice and the Agreement,
the term “vest” shall mean, with respect to any Units, that such Units are no longer subject to forfeiture to the Company.
If the Grantee would become vested in a fraction of a Unit, such Unit shall not vest until the Grantee becomes vested in the entire
Unit.

 

[Vesting shall cease upon the date the
Grantee terminates Continuous Service for any reason, including death or Disability. In the event the Grantee terminates Continuous
Service for any reason, including death or Disability, any unvested Units held by the Grantee immediately upon such termination
of the Grantee’s Continuous Service shall be forfeited and deemed reconveyed to the Company and the Company shall thereafter
be the legal and beneficial owner of such reconveyed Units and shall have all rights and interest in or related thereto without
further action by the Grantee.]

 

IN WITNESS WHEREOF, the Company and the
Grantee have executed this Notice and agree that the Award is to be governed by the terms and conditions of this Notice, the Plan,
and the Agreement.

 

	 	Arch Therapeutics, Inc.,

a Nevada corporation
	 	 
	 	By: 	 
	 	 	 
	 	Title:	 
	 	 	 
	 	Date:	 

 

 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE UNITS SHALL VEST,
IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE OR AS OTHERWISE SPECIFICALLY PROVIDED HEREIN (NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS NOTICE, THE AGREEMENT, NOR IN THE PLAN, SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE COMPANY’S
RIGHT TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE AT ANY TIME, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE
ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS
IS AT WILL.

 

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Grantee Acknowledges and Agrees:

 

The Grantee acknowledges receipt of a copy
of the Plan and the Agreement and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
the Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Agreement and
the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice and fully understands
all provisions of this Notice, the Agreement and the Plan. The Grantee further agrees and acknowledges that this Award is a non-elective
arrangement pursuant to Section 409A of the Code.

 

The Grantee further acknowledges that, from
time to time, the Company may be in a “blackout period” and/or subject to applicable federal securities laws that could
subject the Grantee to liability for engaging in any transaction involving the sale of the Company’s Shares. The Grantee
further acknowledges and agrees that, prior to the sale of any Shares acquired under this Award, it is the Grantee’s responsibility
to determine whether or not such sale of Shares will subject the Grantee to liability under insider trading rules or other applicable
federal securities laws.

 

The Grantee hereby agrees that all questions
of interpretation and administration relating to this Notice, the Plan and the Agreement shall be resolved by the Administrator
in accordance with Section 8 of the Agreement. The Grantee further agrees to the venue and jurisdiction selection in accordance
with Section 9 of the Agreement. The Grantee further agrees to notify the Company upon any change in his or her residence
address indicated in this Notice.

 

	Dated:	 	 	 
	 	 	 	Grantee’s Signature
	 	 	 	 
	 	 	 	Grantee’s Printed Name
	 	 	 	 
	 	 	 	 
	 	 	 	Address
	 	 	 	 
	 	 	 	City, State & Zip

 

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Award Number: __________________

 

ARCH THERAPEUTICS, INC.

2013 STOCK INCENTIVE PLAN

 

RESTRICTED STOCK UNIT AGREEMENT

 

1.Issuance of Units. Arch Therapeutics,
Inc., a Nevada corporation (the “Company”), hereby issues to the Grantee (the “Grantee”) named in the Notice
of Restricted Stock Unit Award (the “Notice”) an award (the “Award”) of the Total Number of Restricted
Stock Units Awarded set forth in the Notice (the “Units”), subject to the Notice, this Restricted Stock Unit Agreement
(the “Agreement”) and the terms and provisions of the Arch Therapeutics, Inc. 2013 Stock Incentive Plan, as amended
from time to time (the “Plan”), which is incorporated herein by reference. Unless otherwise provided herein, the terms
in this Agreement shall have the same meaning as those defined in the Plan.

 

2.Transfer Restrictions. The
Units may not be transferred in any manner other than by will or by the laws of descent and distribution.

 

3.Conversion of Units and Issuance
of Shares.

 

(a)General. Subject to Sections 3(b)
and 3(c), one share of Common Stock shall be issuable for each Unit subject to the Award (the “Shares”) upon vesting.
Immediately thereafter, or as soon as administratively feasible, the Company will transfer the appropriate number of Shares to
the Grantee after satisfaction of any required tax or other withholding obligations. Any fractional Unit remaining after the Award
is fully vested shall be discarded and shall not be converted into a fractional Share. Notwithstanding the foregoing, the relevant
number of Shares shall be issued no later than March 15th of the year following the calendar year in which the Award vests.

 

(b)Delay of Conversion. The conversion
of the Units into the Shares under Section 3(a) above, shall be delayed in the event the Company reasonably anticipates that
the issuance of the Shares would constitute a violation of federal securities laws or other Applicable Law. If the conversion of
the Units into the Shares is delayed by the provisions of this Section 3(b), the conversion of the Units into the Shares shall
occur at the earliest date at which the Company reasonably anticipates issuing the Shares will not cause a violation of federal
securities laws or other Applicable Law. For purposes of this Section 3(b), the issuance of Shares that would cause inclusion
in gross income or the application of any penalty provision or other provision of the Code is not considered a violation of Applicable
Law.

 

(c)Delay of Issuance of Shares.
The Company shall delay the issuance of any Shares under this Section 3 to the extent necessary to comply with Section 409A(a)(2)(B)(i)
of the Code (relating to payments made to certain “specified employees” of certain publicly-traded companies); in such
event, any Shares to which the Grantee would otherwise be entitled during the six (6) month period following the date of the Grantee’s
termination of Continuous Service will be issuable on the first business day following the expiration of such six (6) month period.

 

    	 

    	 

    

 

 

4.Right to Shares. The Grantee
shall not have any right in, to or with respect to any of the Shares (including any voting rights or rights with respect to dividends
paid on the Common Stock) issuable under the Award until the Award is settled by the issuance of such Shares to the Grantee.

 

5.Taxes.

 

(a)Tax Liability. The Grantee is
ultimately liable and responsible for all taxes owed by the Grantee in connection with the Award, regardless of any action the
Company or any Related Entity takes with respect to any tax withholding obligations that arise
in connection with the Award. Neither the Company nor any Related Entity makes any representation
or undertaking regarding the treatment of any tax withholding in connection with any aspect of the Award, including the grant,
vesting, assignment, release or cancellation of the Units, the delivery of Shares, the subsequent sale of any Shares acquired upon
vesting and the receipt of any dividends or dividend equivalents. The Company does not commit and is under no obligation to structure
the Award to reduce or eliminate the Grantee’s tax liability.

 

(b)Payment of Withholding Taxes.
Prior to any event in connection with the Award (e.g., vesting) that the Company determines may result in any tax withholding obligation,
whether United States federal, state, local or non-U.S., including any social insurance, employment tax, payment on account or
other tax-related obligation (the “Tax Withholding Obligation”), the Grantee must arrange for the satisfaction of the
minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company.

 

(i)By Share Withholding. If permissible
under Applicable Law, the Grantee authorizes the Company to, upon the exercise of its sole discretion, withhold from those Shares
otherwise issuable to the Grantee the whole number of Shares sufficient to satisfy the minimum applicable Tax Withholding Obligation.
The Grantee acknowledges that the withheld Shares may not be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation. Accordingly, the Grantee agrees to pay to the Company or any Related Entity as soon as practicable, including through
additional payroll withholding, any amount of the Tax Withholding Obligation that is not satisfied by the withholding of Shares
described above.

 

(ii)By Sale of Shares. Unless
the Grantee determines to satisfy the Tax Withholding Obligation by some other means in accordance with clause (iii) below, the
Grantee’s acceptance of this Award constitutes the Grantee’s instruction and authorization to the Company and any brokerage
firm determined acceptable to the Company for such purpose to, upon the exercise of Company’s sole discretion, sell on the
Grantee’s behalf a whole number of Shares from those Shares issuable to the Grantee as the Company determines to be appropriate
to generate cash proceeds sufficient to satisfy the minimum applicable Tax Withholding Obligation. Such Shares will be sold on
the day such Tax Withholding Obligation arises (e.g., a vesting date) or as soon thereafter as practicable. The Grantee will be
responsible for all broker’s fees and other costs of sale, and the Grantee agrees to indemnify and hold the Company harmless
from any losses, costs, damages, or expenses relating to any such sale. To the extent the proceeds of such sale exceed the Grantee’s
minimum Tax Withholding Obligation, the Company agrees to pay such excess in cash to the Grantee. The Grantee acknowledges that
the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any
such sale may not be sufficient to satisfy the Grantee’s minimum Tax Withholding Obligation. Accordingly, the Grantee agrees
to pay to the Company or any Related Entity as soon as practicable, including through additional payroll withholding, any amount
of the Tax Withholding Obligation that is not satisfied by the sale of Shares described above.

 

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(iii)By Check, Wire Transfer or Other
Means. At any time not less than five (5) business days (or such fewer number of business days as determined by the Administrator)
before any Tax Withholding Obligation arises (e.g., a vesting date), the Grantee may elect to satisfy the Grantee’s Tax Withholding
Obligation by delivering to the Company an amount that the Company determines is sufficient to satisfy the Tax Withholding Obligation
by (x) wire transfer to such account as the Company may direct, (y) delivery of a certified check payable to the Company,
or (z) such other means as specified from time to time by the Administrator.

 

Notwithstanding the foregoing, the Company
or a Related Entity also may satisfy any Tax Withholding Obligation by offsetting any amounts (including, but not limited to, salary,
bonus and severance payments) payable to the Grantee by the Company and/or a Related Entity. Furthermore, in the event of any determination
that the Company has failed to withhold a sum sufficient to pay all withholding taxes due in connection with the Award, the Grantee
agrees to pay the Company the amount of such deficiency in cash within five (5) days after receiving a written demand from the
Company to do so, whether or not the Grantee is an employee of the Company at that time.

 

6.Entire Agreement; Governing Law.
The Notice, the Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof
and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject
matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company
and the Grantee. These agreements are to be construed in accordance with and governed by the internal laws of the State of Nevada
without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of Nevada to the rights and duties of the parties. Should any provision of the Notice or this Agreement
be determined to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

 

7.Construction. The captions
used in the Notice and this Agreement are inserted for convenience and shall not be deemed a part of the Award for construction
or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include
the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

8.Administration and Interpretation.
Any question or dispute regarding the administration or interpretation of the Notice, the Plan or this Agreement shall be submitted
by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator shall be
final and binding on all persons.

 

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9.Venue and Jurisdiction. The
parties agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or this Agreement shall be
brought exclusively in the United States District Court for the District of Massachusetts (or should such court lack jurisdiction
to hear such action, suit or proceeding, in a Massachusetts state court in the County of Middlesex) and that the parties shall
submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted by law, any objection
the party may have to the laying of venue for any such suit, action or proceeding brought in such court. If any one or more provisions
of this Section 9 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.

 

10.Notices. Any notice required
or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for
delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail
(if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown
in these instruments, or to such other address as such party may designate in writing from time to time to the other party.

 

11.Language. If the Grantee has
received this Agreement or any other document related to the Plan translated into a language other than English and if the translated
version is different than the English version, the English version will control, unless otherwise prescribed by Applicable Law.

 

12.Amendment and Delay to Meet the
Requirements of Section 409A. The Grantee acknowledges that the Company, in the exercise of its sole discretion and without
the consent of the Grantee, may amend or modify this Agreement in any manner and delay the issuance of any Shares issuable pursuant
to this Agreement to the minimum extent necessary to meet the requirements of Section 409A of the Code as amplified by any
Treasury regulations or guidance from the Internal Revenue Service as the Company deems appropriate or advisable. In addition,
the Company makes no representation that the Award will comply with Section 409A of the Code and makes no undertaking to prevent
Section 409A of the Code from applying to the Award or to mitigate its effects on any deferrals or payments made in respect of
the Units. The Grantee is encouraged to consult a tax adviser regarding the potential impact of Section 409A of the Code.

 

END OF AGREEMENT

 

 

    	4

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