Document:

Exhibit 10.8

 

LIPELLA
PHARMACEUTICALS INC.

AMENDED
AND RESTATED 2020 STOCK INCENTIVE PLAN 

 

		1.	PURPOSE

 

The
purpose of this Amended and Restated 2020 Stock Incentive Plan (the “Plan”) is to encourage key employees, directors,
and consultants of Lipella Pharmaceuticals Inc. (the “Company”) and its Subsidiaries (as defined below) to continue
their association with the Company by providing favorable opportunities for them to participate in the ownership of the Company
and its Subsidiaries and in its future growth through the granting of equity ownership opportunities and incentives based on the
Company’s Common Stock (as defined below) that are intended to align their interests with those of the Company’s stockholders
(“Awards”). Each person who is granted an Award under the Plan is deemed a “Participant.”

 

The
term “Subsidiary” as used in the Plan means a corporation, company, partnership or other form of business organization
of which the Company owns, directly or indirectly through an unbroken chain of ownership, fifty percent or more of the total combined
voting power of all classes of stock or other form of equity ownership or has a significant financial interest, as determined
by the Committee (as defined below).

 

		2.	ADMINISTRATION
                                         OF THE PLAN

 

The
Plan shall be administered by the Board of Directors of the Company (the “Board”) or, in the discretion of the Board,
a committee or subcommittee of the Board (the “Committee”), appointed by the Board and composed of at least two members
of the Board. In the event that a vacancy on the Committee occurs on account of the resignation of a member or the removal of
a member by vote of the Board, a successor member shall be appointed by vote of the Board. All references in the Plan to the “Committee”
shall be understood to refer to the Committee or the Board, whoever shall administer the Plan. 

 

For
so long as Section 16 of the Securities Exchange Act of 1934, as amended and in effect from time to time (the “Exchange
Act”), is applicable to the Company, each member of the Committee shall be a “non-employee director” or the
equivalent within the meaning of Rule 16b-3 under the Exchange Act. 

 

The
Committee shall select one of its members as Chairman and shall hold meetings at such times and places as it may determine. A
majority of the Committee shall constitute a quorum, and acts of the Committee at which a quorum is present, or acts reduced to
or approved in writing by all the members of the Committee, shall be the valid acts of the Committee. The Committee shall have
the authority to adopt, amend, and rescind such rules and regulations as, in its opinion, may be advisable in the administration
of the Plan. All questions of interpretation and application of such rules and regulations of the Plan and of Awards granted hereunder
shall be subject to the determination of the Committee, which shall be final and binding. 

 

The
Committee shall select Participants and determine the terms and conditions of all Awards. The terms of each Award need not be
identical, and the Committee need not treat Participants uniformly.

 

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With
respect to persons subject to Section 16 of the Exchange Act (“Insiders”), transactions under the Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successor under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed to be modified so as to be in compliance with such
Rule or, if such modification is not possible, it shall be deemed to be null and void, to the extent permitted by law and deemed
advisable by the Committee.

 

The
Plan shall be administered in such a manner as to permit those options to acquire Common Stock (“Options”) granted
hereunder and specially designated under Section 5 as incentive stock options as described in Section 422 (“ISOs”)
of the Internal Revenue Code of 1986, as amended (the “Code”), to qualify as such but the Company shall have no liability
to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an ISO is not an ISO or if the
Company converts an ISO to a nonstatutory (or nonqualified) stock option (an “NSO”).

 

		3.	STOCK
                                         SUBJECT TO THE PLAN

 

The
total number of shares of the Company’s Common Stock, $.0001 par value per share (“Common Stock”), that may
be subject to an Award under the Plan was, at the time of the initial adoption of the Plan, 2,500,000, from either authorized
but unissued shares or treasury shares. Effective as of the Board’s adoption of the amended and restated version of this
Plan, the number total number of shares was increased by 1,000,000, to 3,500,000. Shares of Common Stock underlying Awards that
fail to settle, vest or be fully exercised prior to expiration or other termination shall again become available for grant under
the terms of the Plan.

 

Each
reference to a number of shares of Common Stock in this Section 3 shall be subject to adjustment in accordance with the provisions
of Section 11.

 

		4.	ELIGIBILITY

 

The
persons who shall be eligible for Awards under the Plan shall be key employees, directors, and other persons who render services
of special importance to the management, operation or development of the Company or a Subsidiary, and who have contributed or
may be expected to contribute materially to the success of the Company or a Subsidiary. ISOs shall not be granted to any person
who is not an employee of the Company or a Subsidiary described in Section 424(e) or Section 424(f) of the Code (an “ISO
Subsidiary”).

 

		5.	TERMS
                                         AND CONDITIONS OF OPTIONS

 

(a)           
In General. The Committee may grant Awards in the form of Options. Every Option shall be evidenced by an Option agreement
in such form as the Committee shall approve from time to time, specifying the number of shares of Common Stock that may be purchased
pursuant to the Option, the time or times at which the Option shall become exercisable in whole or in part, whether the Option
is intended to be an ISO or an NSO, and such other terms and conditions as the Committee shall approve, and containing or incorporating
by reference the terms and conditions set forth in this Section 5.

 

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(b)           
Duration. The duration of each Option shall be as specified by the Committee in its discretion; provided, however,
that no ISO shall expire later than ten years from its date of grant, and no ISO granted to an employee who owns (directly or
under the attribution rules of Section 424(d) of the Code) stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or any ISO Subsidiary shall expire later than five years from its date of grant.

 

(c)            Exercise
Price. The exercise price of each Option shall be not less than the Fair Market Value (as defined below) of Common Stock on
the date the Option is granted; provided, however, that the exercise price with respect to an ISO granted to an
employee who at the time of grant owns (directly or under the attribution rules of Section 424(d) of the Code) stock representing
more than ten percent the voting power of all classes of stock of the Company or any ISO Subsidiary shall be at least 110 percent
of the Fair Market Value of the Common Stock on the date of grant of the ISO.

 

For
purposes of the Plan and except as may be otherwise explicitly provided in the Plan or in any Award agreement, the Fair Market
Value of a share of Common Stock at any particular date shall be determined according to the following rules:

 

(i)             If Common Stock is at the time listed or admitted to trading on any Trading Market, then Fair Market Value shall mean the Closing
Price for the Common Stock on such date. The “Closing Price” on any date shall mean the last sale price for the Common
Stock, regular way, or, in case no such sale takes place on that day, the average of the closing bid and asked prices, regular
way, for the Common Stock, in either case as reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading with a Trading Market; or

 

(ii)            If the Common Stock is not at the time listed or admitted to trading with a Trading Market, then Fair Market Value shall be determined
in good faith by the Board, which may take into consideration (1) the price paid for the Common Stock in the most recent trade
of a substantial number of shares known to the Board to have occurred at arm’s length between willing and knowledgeable
investors, (2) an appraisal by an independent party or (3) any other method of valuation undertaken in good faith by the Board,
or some or all of the above as the Board shall in its discretion elect.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; the
New York Stock Exchange; or the OTCQB or OTCQX markets maintained by The OTC Markets Group (or any successors to any of the foregoing).

 

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(d)           Method
of Exercise. Options may be exercised by delivery to the Company of a notice of exercise in a form, which may be electronic,
approved by the Committee, together with payment in full in the manner specified in Section 5(e) of the exercise price for the
number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company
as soon as practicable following exercise and payment of the exercise price. If the Participant fails to pay for or to accept
delivery of all or any part of the number of shares specified in the notice upon tender of delivery thereof, the right to exercise
the Option with respect to those shares shall be terminated, unless the Committee otherwise agrees.

 

(e)            Payment
Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

 

  (i)
           In cash or by check, payable to the
order of the Company;

 

  (ii)            By payment in cash or by check, payable to the order of the Company, of the par value of the Common Stock to be acquired and by
payment of the balance of the exercise price in whole or in part by delivery of the Participant’s recourse promissory note,
in a form specified by the Committee and to the extent consistent with applicable law, secured by the Common Stock acquired upon
exercise of the Option and such other security as the Committee may require;

 

  (iii)           Except as may otherwise be provided in the applicable Option agreement or approved by the Committee, in its sole discretion, by
(1) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient
funds to pay the exercise price and any required tax withholding or (2) delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient
to pay the exercise price and any required tax withholding;

 

  (iv)           By delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their Fair
Market Value, provided (1) the method of payment is then permitted under applicable law, (2) the Common Stock, if acquired directly
from the Company, was owned by the Participant for a minimum period of time, if any, as may be established by the Committee in
its sole discretion, and (3) the Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements;

 

   (v)            In the case of an NSO, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant
would receive (1) the number of shares underlying the portion of the Option being exercised less (2) such number of shares as
is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the value of the Common
Stock on the date of exercise and, at the election of the Participant, less (3) such number of shares as is equal in value to
the withholding obligation (if any) provided in Section 13(e);

 

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  (vi)            To the extent permitted by applicable law and provided for in the applicable Option agreement or approved by the Committee in
its sole discretion, by payment of such other lawful consideration as the Committee may determine; or

 

  (vii)          
By any combination of the above permitted forms of payment.

 

(f)             Vesting.
An Option may be exercised so long as it is vested and outstanding from time to time, in whole or in part, in the manner and subject
to the conditions, including any performance related conditions, that the Committee in its discretion may provide in the Option
agreement.

 

(g)           
Companion SAR. Options may be awarded in combination with stock appreciation rights (or “SARs”), and such an
Award may provide that the Options will not be exercisable unless the related SARs are forfeited.

 

(h)           
Notice of ISO Stock Disposition. The Participant must notify the Company promptly in the event that he sells, transfers,
exchanges or otherwise disposes of any shares of Common Stock issued upon exercise of an ISO before the later of (i) the second
anniversary of the date of grant of the ISO and (ii) the first anniversary of the date the shares were issued upon his exercise
of the ISO.

 

(i)            
Effect of Cessation of Employment or Service Relationship. The Committee shall determine in its discretion and specify
in each Option agreement the effect, if any, of the termination of the Participant’s employment or other service relationship
upon the exercisability of the Option.

 

(j)            
Transferability of Options. An Option shall not be assignable or transferable by the Participant except by will or by the
laws of descent and distribution. During the life of the Participant, an Option shall be exercisable only by him, by a conservator
or guardian duly appointed for him by reason of his incapacity or by the person appointed by the Participant in a durable power
of attorney acceptable to the Company’s counsel. Notwithstanding the preceding sentences of this Section 5(j), the Committee
may in its discretion permit the Participant of an NSO to transfer the NSO to a member of the Immediate Family (as defined below)
of the Participant, to a trust solely for the benefit of the Participant and the Participant’s Immediate Family or to a
partnership or limited liability company whose only partners or members are the Participant and members of the Participant’s
Immediate Family. “Immediate Family” shall mean, with respect to any Participant, the Participant’s child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
or sister-in-law, and shall include adoptive relationships.

 

(k)           
No Rights as Shareholder. A Participant shall have no rights as a shareholder with respect to any shares covered by an
Option until becoming the record holder of the shares. No adjustment shall be made for dividends or other rights for which the
record date is earlier than the date the certificate is issued, other than as required or permitted pursuant to Section 11.

 

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		6.	STOCK
                                         APPRECIATION RIGHTS

 

(a)           
In General. The Committee may grant Awards in the form of SARs, separately or in combination with Options. Every SAR shall
be evidenced by an SAR agreement in such form as the Committee shall approve from time to time, specifying the number of shares
of Common Stock to which the SAR relates, the time or times at which the SAR shall become exercisable in whole or in part, and
such other terms and conditions as the Committee shall approve, and containing or incorporating by reference the terms and conditions
set forth in this Section 6.

 

Upon
exercise of an SAR, the Participant shall be entitled to receive from the Company an amount equal to the excess of the Fair Market
Value, on the exercise date, of the number of shares of Common Stock as to which the SAR is exercised over the exercise price
for those shares under a related Option, or if there is no related Option, over the measurement price stated in the SAR agreement.
The amount payable by the Company upon exercise of an SAR shall be paid in the form of cash or other property (including Common
Stock of the Company), as provided in the SAR agreement.

 

(b)           Duration.
The duration of an SAR shall be as specified by the Committee in its discretion; provided, however, that no SAR
will be granted with a term in excess of ten years.

 

(c)           Measurement
Price. The measurement price of each SAR shall be not less than the Fair Market Value of Common Stock on the date the SAR
is granted. 

 

(d)           Method of Exercise. SARs may be exercised by delivery to the Company of a notice of exercise in a form, which may be electronic,
approved by the Committee, together with payment in full in the manner specified in Section 5(e) of the measurement price for
the number of shares for which the SAR is exercised. Settlement of the SAR shall be made as soon as practicable following exercise
and payment of the measurement price. If the Participant fails to pay for or to accept delivery of all or any part of the number
of shares specified in the notice upon tender of delivery thereof, the right to exercise the SAR with respect to those shares
shall be terminated, unless the Committee otherwise agrees. 

 

(e)           Companion Option. An SAR granted in connection with an Option may be exercised only to the extent of the surrender of the
related Option, and to the extent of the exercise of the related Option the SAR shall terminate. Shares of Common Stock covered
by an Option that terminates upon the exercise of a related SAR shall cease to be available under the Plan.

 

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		7.	STOCK
                                         AWARDS

 

(a)           
Types of Stock Awards.

 

  (i)             Restricted
Stock and Restricted Stock Units. The Committee may grant Awards in the form of shares of Common Stock, with or without restrictions
(with restrictions, “Restricted Stock”), and/or Restricted Stock Units (together, and including Performance Shares
and Performance Share Units, each as defined below, “Stock Awards”). Restricted Stock Units are a right to receive
shares of Common Stock (or their then Fair Market Value) at a specified future time. Restrictions on Restricted Stock may include
the right of the Company to repurchase all or part of the shares at their issue price or other stated or formula price (or to
require forfeiture of the shares if issued at no cost) from the Participant in the event that conditions specified by the Committee
in the applicable Award agreement are not satisfied prior to the end of the applicable restriction period or periods established
by the Committee for the Stock Award.

 

   (ii)            Performance Stock and Performance Share Units. The Committee may grant or award shares of Common Stock in the form of Performance
Shares and/or Performance Share Units. A Performance Share is an award of shares of Restricted Stock, the vesting of which is
based on the satisfaction of applicable Performance Goals (as defined below). A Performance Share Unit is a right to receive shares
of Common Stock (or their then Fair Market Value) at a specified future time and based on the satisfaction of applicable Performance
Goals.

 

   (iii)           Form of Payment. Restricted Stock Units and Performance Share Units shall be paid in cash, shares of Common Stock or a
combination of cash and shares of Common Stock as the Committee, in its sole discretion, shall determine at the grant date and
as shall be set forth in the applicable Award agreement.

 

(b)           
Procedures Relating to Stock Awards. A Restricted Stock agreement, Restricted Stock Unit agreement, Performance Share agreement
or Performance Share Unit agreement shall evidence the applicable Award and shall contain such terms and conditions as the Committee
shall provide.

 

A
holder of a Stock Award without restrictions, Restricted Stock or Performance Shares shall, subject to the terms of any applicable
agreement, have all of the rights of a stockholder of the Company, including the right to vote the shares and (except as provided
below) the right to receive any dividends. Certificates representing Restricted Stock or Performance Shares shall be imprinted
with a legend to the effect that the shares represented may not be sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of except in accordance with the terms of the applicable agreement. (If shares of Restricted Stock or Performance Shares
are held in book entry form, statements evidencing those shares shall include a similar legend.) The Participant shall be required
to deposit any stock certificates with an escrow agent designated by the Committee, together with a stock power or other instrument
of transfer appropriately endorsed in blank. With respect to such shares, the Committee shall provide that dividends will not
be paid with respect to unvested Restricted Stock or Performance Shares until the time (if at all) the Restricted Stock or Performance
Shares vest, and the Company will retain such dividends and pay them to the Participant upon vesting.

 

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Except
as otherwise provided in this Section 7, Restricted Stock and Performance Shares shall become freely transferable by the Participant
after all conditions and restrictions applicable to the shares have been satisfied or lapse (including satisfaction of any applicable
tax withholding obligations).

 

(c)            Additional
Matters Relating to Restricted Stock Units and Performance Share Units.

 

  (i)             Delivery. Provided the Participant’s employment or service relationship has not terminated as of the end of the applicable
Performance Period (as defined below) or at a later date determined by the Committee at the time of grant and set forth in the
applicable agreement, a delivery of shares of Common Stock or payment of cash as settlement of a Restricted Stock Unit or Performance
Share Unit Award shall occur as soon as administratively practicable following the written determination of the Committee of the
satisfaction of the applicable Performance Goals, but in no event later than the fifteenth day of the third month following the
close of the year in which the Performance Period ends or, if later, the close of the year specified by the Committee in the applicable
agreement. The Committee may, in its sole discretion and at the time of grant, provide for the further deferral of payment in
an applicable agreement.

 

   In
the case of an Award of Restricted Stock Units not subject to Performance Goals, a delivery of shares of Common Stock or payment
of cash as settlement of the Restricted Stock Unit shall occur as of the date specified in the applicable agreement, but in no
event later than the fifteenth day of the third month following the close of the year in which vesting under the applicable agreement
occurs.

 

  (ii)            Dividend Equivalents for Restricted Stock Units and Performance Share Units. With respect to each Restricted Stock Unit
and Performance Share Unit, the Committee may grant a Dividend Equivalent Unit to any Participant upon such terms and conditions
as it may establish. Each Dividend Equivalent Unit will entitle the Participant, at the time of the settlement of the Award, to
an additional payment equal to the dividends the Participant would have received if the Participant had been the actual record
owner of the underlying Common Stock on each dividend record date prior to settlement. The Dividend Equivalent Unit may be settled
in cash, additional shares of Common Stock or a combination thereof.

 

(d)           
Restrictions Relating to Stock Awards.

 

  (i)             In General. The Committee may, in its sole discretion, impose such conditions and/or restrictions on any Stock Award pursuant
to this Section 7 as it may deem advisable including, without limitation, a requirement that a Participant pay a stipulated purchase
price for each share of Common Stock awarded or underlying a Stock Award, restrictions based upon the achievement of specific
Performance Goals, time-based restrictions on vesting, either in lieu of or following the attainment of any Performance Goals,
or holding requirements or sale restrictions placed on the Common Stock upon vesting of any Stock Award.

 

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   (ii)            Satisfaction of Performance Goals. After the applicable period (the “Performance Period”) during which the
Performance Goals must be met in order to determine the payout and/or vesting of Performance Shares or Performance Share Units
has ended, restrictions on Performance Shares will lapse and delivery or payment with respect to Performance Share Units shall
be made, in each case based on the partial or full satisfaction of the Performance Goals and any other applicable requirements
of the Award. The Committee may, at the time the Performance Shares or Performance Share Units are granted, provide that additional
Performance Shares or Performance Share Units may be awarded in the event the applicable Performance Goals are exceeded. The minimum
duration of a Performance Period shall be one year, but may be longer, as determined by the Committee at the time the Stock Award
is granted.

 

  (iii)           Committee Determination. The extent to which Performance Goals are met will be determined solely by the Committee, which
determination will establish the amount of Performance Shares and/or Performance Share Units that will be paid out to the Participant
and the extent to which any restrictions will lapse.

 

(e)             Definition of Performance Goals. Before twenty-five percent of the Performance Period has elapsed (or within ninety days
of a grant date, if earlier), the Committee shall establish the criteria for Performance Goals. Such criteria may be based on
any one or more business criteria measured in the aggregate or on a per share basis, as specified by the Committee.

 

The
Committee shall make any adjustments necessary to eliminate the effect on the stated Performance Goals unusual or extraordinary
items that could not be reasonably anticipated.

 

If
the Performance Goals are not fully achieved, the Committee may provide in the applicable agreement that less than 100 percent
of an Award may be payable but in no event shall the amount of any such Award be increased after it has been established and after
twenty-five percent of the Performance Period has elapsed (or more than ninety days from the grant date, if earlier).

 

(f)             Effect of Cessation of Employment or Service Relationship. Each agreement underlying a Stock Award shall set forth the
extent to which the Participant shall have the right to retain the Award following termination of the Participant’s employment
or other service relationship with the Company. Whether any such right shall apply to a particular Award shall be determined in
the sole discretion of the Committee.

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		8.	OTHER
                                         STOCK-BASED AWARDS

 

(a)           
In General. The Committee may grant Awards of other types of equity-based or equity-related awards not otherwise described
by the terms of this Plan to Participants in such amounts and upon such terms as the Committee may determine (“Other Awards”).
Other Awards may involve the transfer of actual shares of Common Stock to Participants, a payment in cash or a combination of
shares and cash.

 

(b)          
Procedures Relating to Other Awards. Each Other Award pursuant to this Section 8 shall provide for the payment of a specific
amount or range of shares of Common Stock, as determined by the Committee. The Committee may, in its sole discretion, provide
that an Other Award pursuant to this Section 8 shall be contingent on the satisfaction of Performance Goals, as provided for in
Section 7(e). If the Committee exercises its sole discretion to establish Performance Goals, the number and/or value of Other
Awards issued pursuant to this Section 8 will be paid out to the Participant based on the extent to which the Performance Goals
are met, all in accordance with Section 7(e).

 

The
Committee shall determine whether an agreement is necessary to evidence an Other Award and any Other Award agreement shall contain
such terms and conditions as the Committee shall provide in its sole discretion including, without limitation, a requirement that
a Participant pay a stipulated purchase price for each share of Common Stock awarded or underlying an Other Award, restrictions
based upon the achievement of specific Performance Goals, time-based restrictions on vesting, either in lieu of or following the
attainment of any Performance Goals, or holding requirements or sale restrictions placed on the Common Stock upon vesting of an
Other Award.

 

(c)           Delivery of Awards. Provided the Participant’s employment or service relationship has not terminated as of the end
of the applicable Performance Period, or at a later date as determined by the Committee at the time of grant and set forth in
the applicable agreement, a delivery of shares of Common Stock or payment of cash as settlement of an Award pursuant to this Section
8 shall occur upon the written determination of the Committee of the satisfaction of the applicable Performance Goals, but in
no event later than the fifteenth day of the third month following the close of the year in which the Performance Period ends
or, if later, the close of the year specified by the Committee in the applicable agreement. The Committee may, in its sole discretion
and at the time of grant, provide for the further deferral of payment in an applicable agreement.

 

(d)          
Effect of Cessation of Employment or Service Relationship. Each Agreement underlying an Other Award pursuant to this Section
8 shall set forth the extent to which the Participant shall have the right to retain the Other Award following termination of
the Participant’s employment or other service relationship with the Company. Whether any such right shall apply to a particular
Other Award shall be determined in the sole discretion of the Committee.

 

 

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		9.	AWARDS
                                         VOIDABLE

 

If
a person to whom an Award under the Plan has been made fails to execute and deliver to the Committee a related Award agreement
within thirty days after it is submitted to him or her, the Award shall be voidable by the Committee at its election, without
further notice to the Participant.

 

		10.	REQUIREMENTS
                                         OF LAW

 

The
Company shall not be required to transfer any Common Stock or to sell or issue any shares upon the exercise or settlement of any
Award if the issuance of the shares will result in a violation by the Participant or the Company of any provisions of any law,
statute or regulation of any governmental authority. Specifically, in connection with the Securities Act of 1933, as amended (the
“Securities Act”), upon the transfer of Common Stock or the exercise of any Option or SAR the Company shall not be
required to issue shares unless the Board has received evidence satisfactory to it to the effect that the Participant will not
transfer the shares except pursuant to a registration statement in effect under the Securities Act or unless an opinion of counsel
satisfactory to the Company has been received by the Company to the effect that such registration is not required. Any determination
in this connection by the Board shall be conclusive. The Company shall not be obligated to take any other affirmative action in
order to cause the transfer of Common Stock or to sell or issue any shares upon the exercise or settlement of any Award to comply
with any law or regulations of any governmental authority, including, without limitation, the Securities Act or applicable state
securities laws.

 

		11.	CHANGES
                                         IN CAPITAL STRUCTURE AND CERTAIN OTHER EVENTS

 

(a)           
Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination
of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution
to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan,
(ii) the share counting rules set forth in Section 3, (iii) the number and class of securities and exercise price per share of
each outstanding Option, (iv) the share and per-share provisions and the measurement price of each outstanding SAR, (v) the number
of shares subject to and the repurchase price per share (if any) subject to each outstanding Stock Award, and (vi) the share and
per-share-related provisions and the purchase price, if any, of each outstanding Other Award, shall be equitably adjusted (or
substituted Awards may be made, if applicable) as the Committee, in its sole discretion, deems appropriate. Without limiting the
generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend or effects
another stock dividend for which an adjustment is made pursuant to this Section 11, and the exercise price of and the number of
shares subject to an outstanding Option or SAR are adjusted as of the date of the distribution of the dividend (rather than as
of the record date for such dividend), then a Participant who exercises an Option or SAR between the record date and the distribution
date for the stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares
of Common Stock acquired upon the Option or SAR exercise, notwithstanding the fact that such shares were not outstanding as of
the close of business on the record date for such stock dividend. Any such adjustment pursuant to this Section 11(a) made by the
Committee shall be conclusive and binding upon all affected persons, including the Company and all Participants.

 

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If
while Options, SARs or Stock Awards remain outstanding under the Plan the Company merges or consolidates with a wholly-owned subsidiary
for the purpose of reincorporating itself under the laws of another jurisdiction or for any other reason, the Participants will
be entitled to acquire shares of Common Stock of the surviving company upon the same terms and conditions as were in effect immediately
prior to such merger or consolidation (unless such merger or consolidation involves a change in the number of shares or the capitalization
of the Company, in which case proportional adjustments shall be made as provided above) and the Plan, unless otherwise rescinded
by the Board, will remain the Plan of the surviving company.

 

(b)           
Reorganization Events.

 

(i)            
Definition. A “Reorganization Event” shall mean: (1) any merger or consolidation of the Company with or into
another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive
cash, securities or other property or is cancelled; (2) any transfer or disposition of all of the Common Stock of the Company
for cash, securities or other property pursuant to a share exchange or other transaction; (3) any sale or disposition of all or
substantially all of the assets of the Company; or (4) any liquidation or dissolution of the Company.

 

(ii)           
Consequences of a Reorganization Event on Awards Other than Restricted Stock or Performance Shares.

 

(1)           
In connection with a Reorganization Event, the Committee may take any one or more of the following actions as to all or any (or
any portion of) outstanding Awards other than Restricted Stock or Performance Shares on such terms as the Committee determines
(except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company
and the Participant): (A) provide that the Awards shall be assumed, or substantially equivalent Awards shall be substituted, by
the acquiring or succeeding entity or an affiliate thereof; (B) upon notice to a Participant, provide that all of the Participant’s
unvested and/or unexercised Awards will terminate immediately prior to the consummation of the Reorganization Event unless exercised
by the Participant (to the extent then exercisable) within a specified period following the date of such notice; (C) provide that
outstanding Awards shall become exercisable, realizable or deliverable, or restrictions applicable to an Award shall lapse, in
whole or in part prior to or upon the Reorganization Event; (D) in the event of a Reorganization Event under the terms of which
holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization
Event (the “Acquisition Price”), make or provide for a cash payment to Participants with respect to each Award held
by a Participant equal to (I) the number of shares of Common Stock subject to the vested portion of the Award (after giving effect
to any acceleration of vesting that occurs upon or immediately prior to such Reorganization Event) multiplied by (II) the excess,
if any, of (Y) the Acquisition Price over (Z) the exercise, measurement or purchase price of the Award and any applicable tax
withholdings, in exchange for the termination of such Award; (E) provide that, in connection with a liquidation or dissolution
of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement
or purchase price thereof and any applicable tax withholdings); and (F) any combination of the foregoing. In taking any of the
actions permitted under this Section 11(b)(ii), the Committee shall not be obligated by the Plan to treat all Awards, all Awards
held by a Participant or all Awards of the same type identically and any adjustment pursuant to this Section 11(b) made by the
Committee shall be conclusive and binding upon all affected persons, including the Company and all Participants.

 

    - 12 -

     

    

(2)          
Notwithstanding the terms of Section 11(b)(ii)(1), in the case of outstanding Restricted Stock Units or Performance Share Units
that are subject to Section 409A of the Code: (A) if the applicable agreement provides that the Restricted Stock Units or Performance
Share Units shall be settled upon a change in control event within the meaning of Treasury Regulation Section 1.409A-3(i)(5),
and the Reorganization Event constitutes such a change in control event, then no assumption or substitution shall be permitted
pursuant to Section 11(b)(ii)(1)(A) and the Restricted Stock Units or Performance Share Units shall instead be settled in accordance
with the terms of the applicable agreement; and (B) the Committee may only undertake the actions set forth in clauses (C), (D)
or (E) of Section 11(b)(ii)(1) if the action is permitted or required by Section 409A of the Code and if the Reorganization Event
is not a change in control event as so defined or such action is not permitted or required by Section 409A of the Code, and the
acquiring or succeeding entity or an affiliate thereof does not assume or substitute the Restricted Stock Units or Performance
Share Units pursuant to clause (A) of Section 11(b)(ii)(1), then the unvested Restricted Stock Units or Performance Share Units
shall terminate immediately prior to the consummation of the Reorganization Event without any payment in exchange therefor.

 

(3)           For
purposes of Section 11(b)(ii)(1)(A), an Award (other than Restricted Stock or Performance Shares) shall be considered assumed
if, following consummation of the Reorganization Event, the Award confers the right to purchase or receive pursuant to the terms
of the Award, for each share of Common Stock subject to the Award immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders
of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization
Event is not solely common stock of the acquiring or succeeding entity or an affiliate thereof, the Company may, with the consent
of the acquiring or succeeding entity or an affiliate thereof, provide for the consideration to be received upon the exercise
or settlement of the Award to consist solely of the number of shares of common stock of the acquiring or succeeding entity or
an affiliate thereof that the Committee determined to be equivalent in value (as of the date of such determination or another
date specified by the Committee) to the per share consideration received by holders of outstanding shares of Common Stock as a
result of the Reorganization Event.

    - 13 -

     

    

(c)            Consequences
of a Reorganization Event on Restricted Stock or Performance Shares. Upon the occurrence of a Reorganization Event other than
a liquidation or dissolution of the Company, the repurchase and other rights of the Company with respect to outstanding Restricted
Stock or Performance Shares shall inure to the benefit of the Company’s successor and shall, unless the Committee determines
otherwise, apply to the cash, securities or other property that the Common Stock was converted into or exchanged for pursuant
to such Reorganization Event in the same manner and to the same extent as they applied to the Restricted Stock or Performance
Shares; provided, however, that the Committee may provide for termination or deemed satisfaction of repurchase or
other rights under the agreement evidencing any Restricted Stock, Performance Shares or any other agreement between a Participant
and the Company, either initially or by amendment. Upon the occurrence of a Reorganization Event involving the liquidation or
dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted
Stock, Performance Shares or any other agreement between a Participant and the Company, all restrictions and conditions on all
Restricted Stock then outstanding shall automatically be deemed terminated or satisfied.

 

		12.	FORFEITURE
                                         FOR DISHONESTY

 

Notwithstanding
anything to the contrary in the Plan, if the Board determines, either before or after the end of the employment or service relationship
and after full consideration of the facts presented on behalf of the Company, its Subsidiaries and a Participant, that the Participant
has (a) been engaged in fraud, embezzlement, theft, commission of a felony or proven dishonesty in the course of his or her employment
or other service relationship with the Company and its Subsidiaries that damaged the Company and its Subsidiaries, (b) has disclosed
trade secrets or other proprietary information of the Company and its Subsidiaries or (c) has breached the terms of any employment
or other agreements with the Company and its Subsidiaries:

 

(i)            
The Participant shall forfeit all unexercised Awards and all exercised Awards to the extent that stock certificates, cash or other
property, as applicable, have not yet been delivered; and

 

 

    - 14 -

     

    

(ii)            The
Company shall have the right to repurchase all or any part of the shares of Common Stock acquired by the Participant upon the
earlier exercise of any Award at a price equal to the amount paid to the Company upon exercise, increased by an amount equal to
the interest that would have accrued in the period between the date of exercise and the date of such repurchase upon a debt in
the amount of the exercise price, at the prime rate(s) announced from time to time during such period in the Federal Reserve Statistical
Release Selected Interest Rates and decreased by any cash dividends received.

 

The
decision of the Board as to the cause of a Participant’s discharge and the damage done to the Company shall be final, binding
and conclusive. No decision of the Board, however, shall affect in any manner the finality of the discharge of a Participant by
the Company.

 

		13.	MISCELLANEOUS

 

(a)           
Transferability of Awards. Except as otherwise provided herein, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the
laws of descent and distribution and, during the life of the Participant, shall be exercisable only by the Participant.

 

(b)           
Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Committee shall determine.
Each Award may contain terms and conditions in addition to those set forth in the Plan.

 

(c)           
No Guarantee of Employment or Continuation of Service Relationship. Neither the Plan nor any Award agreement shall give
an employee or other service provider the right to continue in the employment of or to continue to provide services to the Company
or a Subsidiary, or give the Company or a Subsidiary the right to require continued employment or services. 

 

(d)           
Rounding Conventions. The Committee may, in its sole discretion and taking into account any requirements of the Code, including
without limitations Sections 422 through 424 and 409A of the Code, determine the effect of vesting, stock dividend, and any other
adjustments on shares and any cash amount payable hereunder, and may provide that no fractional shares will be issued (rounding
up or down as determined by the Committee) and that cash amounts be rounded down to the nearest whole cent.

 

(e)           
Tax Withholding. To the extent required by law, the Company (or a Subsidiary) shall withhold or cause to be withheld income
and other taxes with respect to any income recognized by a Participant by reason of the exercise, vesting or settlement of an
Award, and as a condition to the receipt of any Award the Participant shall agree that if the amount payable to him or her by
the Company and any Subsidiary in the ordinary course is insufficient to pay such taxes, then he or she shall upon the request
of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations.

 

    - 15 -

     

    

Without
limiting the foregoing, the Committee may in its discretion permit any Participant’s withholding obligation to be paid in
whole or in part in the form of shares of Common Stock by withholding from the shares to be issued or by accepting delivery from
the Participant of shares already owned by him or her; provided, however, that payment of withholding obligation
in the form of shares shall not be made with respect to an amount in excess of the minimum required withholding. If payment of
withholding taxes is made in whole or in part in shares of Common Stock, the Participant shall deliver to the Company certificates
registered in his or her name representing shares of Common Stock legally and beneficially owned by him or her, fully vested and
free of all liens, claims, and encumbrances of every kind, duly endorsed or accompanied by stock powers duly endorsed by the record
holder of the shares represented by such certificates.

 

If
the Participant is subject to Section 16(a) of the Exchange Act, his or her ability to pay any withholding obligation in the form
of shares of Common Stock shall be subject to any additional restrictions as may be necessary to avoid any transaction that might
give rise to liability under Section 16(b) of the Exchange Act.

 

(f)           
Use of Proceeds. The proceeds from the sale of Common Stock pursuant to Awards shall constitute general funds of the Company.

 

(g)           
Awards to Non-United States Persons. Awards may be made to Participants who are foreign nationals or employed outside the
United States on such terms and conditions different from those specified in the Plan as the Committee considers necessary or
advisable to achieve the purposes of the Plan or to comply with applicable laws. The Board shall have the right to amend the Plan,
consistent with its authority to amend the Plan as set forth in Section 14, to obtain favorable tax treatment for Participants
or for any other reason the Board considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable
laws, and any such amendments shall be evidenced by an Addendum or Subplan to the Plan. The Board may delegate this authority
to the Committee.

 

(h)           
Governing Law. The granting of Awards and the issuance of Common Stock under the Plan shall be subject to all applicable
laws and regulations and to such approvals by any governmental agency or national securities exchanges as may be required. To
the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed in accordance with and governed
by the laws of the State of Delaware, without regard to the principles of conflicts of law.

 

(i)            
Compliance with Section 409A. It is the intention of the Company that no payment or entitlement pursuant to this Plan will
give rise to any adverse tax consequences to any person pursuant to Section 409A of the Code. The Committee shall interpret and
apply the Plan to that end, and shall not give effect to any provision therein in a manner that reasonably could be expected to
give rise to adverse tax consequences under Section 409A.

 

    - 16 -

     

    

		14.	EFFECTIVE
                                         DATE, DURATION, AMENDMENT AND TERMINATION OF PLAN

 

The
Plan was originally adopted effective July 6, 2020. This amended and restated Plan document shall be effective as of [___], 2022
if, and only if, the holders of a majority of the outstanding shares of capital stock present, or represented, and entitled to
vote thereon (voting as a single class) at a duly held meeting of the shareholders of the Company approve the Plan within twelve
months after such date. If so approved by the shareholders, the Committee may grant Awards under the Plan from time to time until
the close of business on [___], 2032. The Board may at any time amend the Plan; provided, however, that without approval
of the Company’s shareholders there shall be no: (a) increase in the total number of shares covered by the Plan, except
by operation of the provisions of Section 11, or the aggregate number of shares of Common Stock that may be issued to any single
person; (b) change in the class of persons eligible to receive Awards under the Plan; or (c) other change in the Plan that requires
shareholder approval under applicable law. Except as otherwise provided in the Plan or an Award agreement, no amendment shall
adversely affect outstanding Awards without the consent of the Participant. The Plan may be terminated at any time by action of
the Board, but any such termination will not terminate Awards then outstanding, without the consent of the Participant.

 

    - 17 -Exhibit 10.9 

 

LIPELLA
PHARMACEUTICALS INC.

Amended and Restated 2020 Stock Incentive Plan

Stock
Option Agreement

 

This
Stock Option Agreement and the associated grant award information (the “Customizing Information”), which Customizing
Information is provided in written form as the Stock Option Schedule or is available in electronic form from the recordkeeper
for the Lipella Pharmaceuticals Inc. Amended and Restated 2020 Stock Incentive Plan, as amended and in effect from time to time
(the “Plan”), made as of the date shown as the “Grant Date” in the Customizing Information (the “Grant
Date”) by and between Lipella Pharmaceuticals Inc., a Delaware corporation (the “Company”), and the individual
identified in the Customizing Information (the “Optionee”). This instrument and the Customizing Information are collectively
referred to as the “Option Agreement.”

 

WITNESSETH
THAT:

 

WHEREAS,
the Company has instituted the Plan; and

 

WHEREAS,
the Compensation Committee (the “Committee”) has authorized the grant of a stock option upon the terms and conditions
set forth below and pursuant to the Plan, a copy of which is incorporated herein; and

 

WHEREAS,
the Optionee acknowledges that he or she has carefully read this Option Agreement and agrees, as provided in Section 17(a) below,
that the terms and conditions of the Option Agreement reflect the entire understanding between himself or herself and the Company
regarding this stock option (and the Optionee has not relied upon any statement or promise other than the terms and conditions
of the Option Agreement with respect to this stock option);

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows.

 

1.             Grant.
Subject to the terms of the Plan and this Option Agreement, the Company hereby grants to the Optionee a stock option (the “Option”)
to purchase from the Company the amount of Common Stock (“Stock”) shown in the Customizing Information under “Shares
Granted.” If so provided in the “Grant Type” shown in the Customizing Information, this Option is intended to
constitute for United States income tax purposes an Incentive Stock Option and to qualify for special United States federal income
tax treatment under Section 422 of the Code and upon exercise, the maximum number of shares that can be treated as Incentive Stock
Options shall be so treated, and the remainder shall be treated as Nonstatutory Stock Options.

 

2.             Exercise
Price. This Option may be exercised at the “Exercise Price” per share shown in the Customizing Information, subject
to adjustment as provided herein and in the Plan.

 

    1 

     

    

 

3.             Term
and Exercisability of Option. This Option shall expire at 4:00 p.m. Eastern Time on the “Expiration Date” shown
in the Customizing Information, unless the Option expires earlier pursuant to this Section 3 or any provision of the Plan. At
any time before its expiration, this Option may be exercised to the extent vested, as shown in the Customizing Information, provided
that:

 

  (a)       at
the time of exercise the Optionee is not in violation of any confidentiality, inventions, non-solicitation and/or non-competition
agreement with the Company;

 

  (b)       the
Optionee’s employment, contractual or other service relationship with the Company (“Relationship”) must be in
effect on a given date in order for any scheduled increment in vesting, as set forth in the “Vesting Schedule” shown
in the Customizing Information, to become effective, except as provided in Section 3(c) below;

 

  (c)       this
Option may not be exercised after the ninetieth (90th) day following the date of termination of the Relationship between
the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee’s death or total and
permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the entire remaining Option
shall become fully vested and the unexercised portion of the Option shall remain exercisable thereafter for one (1) year; and

 

  (d)       in
the event the Relationship is terminated for any reason (whether voluntary or involuntary), (i) the Optionee’s right to
vest in the Option will, except as explicitly provided in the Plan or in Section 3(c), Section 3(d) or as provided by the Committee,
terminate as of the date of termination of the Relationship (and such right shall not be extended by any notice period mandated
under local law), (ii) the Optionee’s continuing right (if any) to exercise the Option after termination of the Relationship
will be measured from the date of termination of the Relationship (and such right will not be extended by any notice period mandated
under local law) and (iii) the Committee shall have the exclusive discretion to determine when the Relationship has terminated
for purposes of this Option (including determining when the Optionee is no longer considered to be providing active service while
on a leave of absence).

 

For
purposes of this Section 3, the term “Company” refers to the Company and its Subsidiaries.

 

It
is the Optionee’s responsibility to be aware of the date that the Option expires.

 

4.             Method
of Exercise. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, this
Option may be exercised in whole or in part from time to time by notice provided in a manner consistent with the requirements
of Section 5(d) of the Plan, accompanied by payment in full of the Exercise Price by means of payment acceptable to the Company
in accordance with Section 5(e) of the Plan.

 

As
soon as practicable after its receipt of notice, the Company shall, without transfer or issue tax to the Optionee (or other person
entitled to exercise this Option), (a) deliver to the Optionee (or other person entitled to exercise this Option), at the principal
executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for
such shares out of theretofore authorized but unissued shares or treasury shares of its Stock as the Company may elect or (b)
issue shares of its Stock in book entry form; provided, however, that the time of delivery or issuance may be postponed by the
Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law;
and provided, further, that any shares delivered or issued shall remain subject to any applicable securities law or trading restrictions
imposed pursuant to the terms of this Option Agreement and the Plan.

 

    2 

     

    

 

If
the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified
in the notice upon tender of delivery thereof, his or her right to exercise this Option with respect to such shares not paid for
may be terminated by the Company.

 

5.             Withholding
Taxes. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company (or a subsidiary
employing the Optionee, as applicable) an amount sufficient to satisfy the Company’s and/or subsidiary’s obligation
to withhold any and all federal, state, local or provincial income tax, social security, social insurance, payroll tax, fringe
benefits tax, payment on account or other tax-related items or statutory withholdings related to the Optionee’s participation
in the Plan (the “Withholding Amount”), if any, by (a) authorizing the Company and/or any subsidiary employing the
Optionee, as applicable, to withhold the Withholding Amount from the Optionee’s cash compensation or (b) remitting the Withholding
Amount to the Company (or a subsidiary employing the Optionee, as applicable) in cash; provided, however, that to the extent that
the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from
the Stock that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the
date of exercise sufficient to eliminate any deficiency in the Withholding Amount. Regardless of any action that the Company and/or
subsidiary takes with respect to any or all federal, state, local or provincial income tax, social security, social insurance,
payroll tax, fringe benefits tax, payment on account or other tax-related items or statutory withholdings related to the Optionee’s
participation in the Plan, the Optionee acknowledges that he or she, and not the Company and/or any subsidiary, has the ultimate
liability for any such items. Further, if the Optionee becomes subject to tax in more than one jurisdiction between the Grant
Date and the date of any relevant taxable or tax withholding event, the Optionee acknowledges that the Company and/or subsidiary
may be required to withhold or account for such tax-related items in more than one jurisdiction.

 

6.             Non-assignability
of Option. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and
distribution or as permitted by the Committee in its discretion pursuant to the terms of the Plan. During the life of the Optionee,
this Option shall be exercisable only by him or her, by a conservator or guardian duly appointed for him or her by reason of the
Optionee’s incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company’s
counsel.

 

7.             Compliance
with Securities Act; Lock-Up Agreement. The Company shall not be obligated to sell or issue any shares of Stock or other securities
pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being
exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state or
provincial securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee
hereby represents, warrants and agrees that he or she will receive such shares or other securities for investment and not with
a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its
counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of this Option, he or
she will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter’s
lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares
held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect.

    3 

     

    

 

8.             Legends.
The Optionee hereby acknowledges that the stock certificate or certificates (or entries in the case of book entry form) evidencing
shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend (or provide a restriction)
setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect.

 

9.             Rights
as Stockholder. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until
the date of issuance of a stock certificate (or appropriate entry is made in the case of book entry form) to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate
is issued (or appropriate entry is made in the case of book entry form).

 

10.           Effect
Upon Employment and Performance of Services. Nothing in this Option or the Plan shall be construed to impose any obligation
upon the Company or any subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or
to engage or retain the services of the Optionee.

 

11.           Time
for Acceptance. Unless the Optionee shall evidence his or her acceptance of this Option by electronic or other means prescribed
by the Committee within sixty (60) days after its delivery, the Option shall be null and void (unless waived by the Committee).

 

12.           Notice
of Disqualifying Disposition. If the “Grant Type” shown in the Customizing Information indicates that the Option
is an Incentive Stock Option, the Optionee agrees to notify the Company promptly in the event that he or she sells, transfers,
exchanges or otherwise disposes of any shares of Stock issued upon exercise of the Option before the later of (a) the second anniversary
of the date of grant of the Option and (b) the first anniversary of the date the shares were issued upon his or her exercise of
the Option.

 

13.           Right
of Repayment. In the event that the Optionee breaches any confidentiality, inventions, non-solicitation and/or non-competition
agreement with the Company, the Optionee shall pay to the Company an amount equal to the excess of the Fair Market Value of the
Stock as of the date of exercise over the price paid for such shares; provided, however, that the Committee in its discretion
may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee’s breach
of such agreement is not inimical to the best interests of the Company. In accordance with applicable law, the Company may deduct
the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee.
For purposes of this Section 13, the term “Company” refers to the Company and its Subsidiaries.

 

    4 

     

    

 

14.           Electronic
Delivery. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation
in the Plan by electronic means. The Optionee consents to receive such documents by electronic delivery and agrees to participate
in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the
Company.

 

15.           Company
Policies. This Option shall be subject to any applicable clawback or recoupment policies, share trading policies, and other
policies that may be implemented by the Board from time to time, in accordance with applicable law.

 

16.           Nature
of Award. By accepting this Option, the Optionee acknowledges, understands and agrees that:

 

  (a)       the
Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated
by the Company at any time, to the extent permitted by the Plan and this Option Agreement;

 

  (b)       the
grant of this Option is voluntary and occasional and does not create any contractual or other right to receive future awards under
the Plan or benefits in lieu of Plan awards, even if Options or other Plan awards have been granted in the past;

 

  (c)       all
decisions with respect to future Option grants or Plan awards will be at the sole discretion of the Committee;

 

  (d)       he
or she is voluntarily participating in the Plan;

 

  (e)       the
future value of shares of Stock underlying the Option is unknown and cannot be predicted with certainty;

 

  (f)        if
the underlying shares of Stock do not increase in value, the Option, as measured by the difference between the fair market value
of the Stock and the Exercise Price, will have no value;

 

  (g)       if
the Optionee exercises the Option and acquires shares of Stock, the value of such shares may increase or decrease in value;

 

  (h)       if
the Optionee resides and/or works outside the United States, the following additional provisions shall apply:

 

      (i)
          the Option and any shares of Stock acquired under the Plan do
not replace any pension or retirement rights or compensation;

 

      (ii)
         the Option and any shares of Stock acquired under the Plan (including
the value attributable to each) do not constitute compensation of any kind for services of any kind rendered to the Company and/or
any subsidiary thereof and are outside the scope of the Optionee’s employment contract, if any;

 

    5 

     

    

 

      (iii)
        the Option and any shares of Stock acquired under the Plan (including the
value attributable to each) are not part of normal or expected compensation or salary, including, but not limited to, for purposes
of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, service awards,
pension or retirement or welfare benefits or similar payments unless such other arrangement explicitly provides to the contrary;

 

      (iv)
         no claim or entitlement to compensation or damages shall arise from forfeiture
of the Option resulting from a termination of the Relationship for any reason and in consideration of the grant of the Option,
the Optionee irrevocably agrees never to institute a claim against the Company and/or any subsidiary, waives his or her ability
to bring such claim and releases the Company and/or its subsidiaries from any claim; if, notwithstanding the foregoing, such claim
is allowed by a court of competent jurisdiction, then by accepting this Option, the Optionee is deemed irrevocably to have agreed
not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims;
and

 

      (v)
          the Company shall not be liable for any foreign exchange rate
fluctuation between the Optionee’s local currency and the United States dollar that may affect the value of the Option
or any amounts due pursuant to the exercise of the Option or the subsequent sale of any shares of Stock acquired upon
settlement.

 

17.           General
Provisions.

 

  (a)       Amendment;
Waivers. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties
hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan, this Option Agreement
and applicable law, it may not be modified or amended nor may any provision hereof be waived without a further written agreement
duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the
rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall
be effective upon written notice of its provisions to the Optionee, to the extent permitted by applicable law. The waiver by either
of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in
any other instance. The Optionee shall have the right to receive, upon request, a written confirmation from the Company of the
Customizing Information.

 

  (b)       Binding
Effect. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, representatives, successors and assigns.

 

    6 

     

    

 

  (c)       Governing
Law. This Option Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of law.

 

  (d)       Construction.
This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and
this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement and of the Plan are included
for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include
both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized
terms not defined herein shall have the meanings given to them in the Plan.

 

  (e)       Language.
If the Optionee receives this Option Agreement, or any other document related to the Option and/or the Plan translated into a
language other than English and if the meaning of the translated version is different than the English version, the English version
will control.

 

  (f)       Data
Privacy.

 

      (i)           
The Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of
the Optionee’s personal data as described in this Option Agreement by and among, as applicable, his or her employer, the
Company and its subsidiaries for the exclusive purpose of implementing, administering and managing the Optionee’s participation
in the Plan.

 

      (ii)
          The Optionee understands that his or her employer, the Company and
its subsidiaries, as applicable, hold certain personal information about the Optionee regarding his or her employment, the nature
and amount of the Optionee’s compensation and the fact and conditions of the Optionee’s participation in the Plan,
including, but not limited to, the Optionee’s name, home address, telephone number and e-mail address, date of birth, social
insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in
the Company and its subsidiaries, details of all options, awards or any other entitlement to shares of stock awarded, canceled,
exercised, vested, unvested or outstanding in the Optionee’s favor, for the purpose of implementing, administering and managing
the Plan (the “Data”).

 

    7 

     

    

 

      (iii)
         The Optionee understands that the Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that these third parties may be located in the Optionee’s
country, or elsewhere, and that the third party’s country may have different data privacy laws and protections than the
Optionee’s country. The Optionee understands that the Optionee may request a list with the names and addresses of any potential
recipients of the Data by contacting his or her local human resources representative. The Optionee authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering
and managing the Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required
to a broker or other third party. The Optionee understands that the Data will be held only as long as is necessary to implement,
administer and manage Optionee’s participation in the Plan. The Optionee understands that he or she may, at any time, view
the Data, request additional information about the storage and processing of the Data, require any necessary amendments to the
Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Optionee’s local
human resources representative. The Optionee understands, however, that refusing or withdrawing his or her consent may affect
the Optionee’s ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal
of consent, the Optionee understands that the Optionee may contact his or her local human resources representative.

 

  (g)       Notices.
Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is delivered in the
form specified by the Committee as follows:

 

  To
the Optionee:              To his or her
last address provided to the Company

 

  To
the Company:              Lipella Pharmaceuticals
Inc.

7800
Susquehanna Street, Suite 505

Pittsburgh,
Pennsylvania 15208

Attn:
Chief Financial Officer

 

  (h)       Version
Number. This document is Version 1 of the Lipella Pharmaceuticals Inc. Amended and Restated 2020 Stock Incentive Plan Stock
Option Agreement.

 

    8 

     

    

 

LIPELLA
PHARMACEUTICALS INC.

AMENDED AND RESTATED 2020 STOCK INCENTIVE PLAN

Stock
Option Schedule

 

<<Name>>

<<Address>>

<<City>>,
<<State>> <Zip>>

 

In
accordance with the Stock Option Agreement, of which this Stock Option Schedule is a part (which together, constitute the “Option
Agreement”), the Company hereby grants to <<Name>> (the “Optionee”) the following Option to purchase
shares of Stock.

 

	Grant Date:	<<GrantDate>>
	Expiration Date:	<<ExpirationDate>>
	Shares Granted:	<<Shares>>
	Exercise Price:	<<ExercisePrice>>
	Grant Type:	<<ISO/NSO>>
	Stock Option Agreement Version:	<<Version>>

Vesting
Schedule:

 

	Date	 	Percentage
    of Total Option

    Shares Subject to Exercise	 
	 	 	Incremental

    Amount	 	Cumulative

    Amount	 
	<<Vest1>>	 	<<Vest1_I>>	 	<<Vest1_C>>	 
	<<Vest2>>	 	<<Vest2_I>>	 	<<Vest2_C>>	 
	<<Vest3>>	 	<<Vest3_I>>	 	<<Vest3_C>>	 

 

ACCEPTANCE
BY OPTIONEE

 

IN
WITNESS WHEREOF, the Company has caused this Option Document to be issued as of the date set forth above.

 

	Date:	 	 	 
	 	 	 	(Signature of Optionee)

 Notice
Address:

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