SEC Contract Filing

Filing Date: 2023-08-21

Document Content:
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exh_101.htm
<DESCRIPTION>EXHIBIT 10.1
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<P STYLE="text-align: right; margin: 0"><B>Exhibit 10.1</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NON QUALIFIED STOCK OPTION AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(TIME-BASED INDUCEMENT GRANT)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>NON QUALIFIED STOCK OPTION
AGREEMENT</B> (the &ldquo;Option Agreement&rdquo;) made this 17<SUP>th</SUP> day of August, 2023 between <B>PSYCHEMEDICS CORPORATION</B>,
a Delaware corporation (hereinafter called the &ldquo;Corporation&rdquo;), and Brian Hullinger, an employee or independent contractor
of the Corporation or one or more of its subsidiaries (hereinafter called the &ldquo;Optionee&rdquo;).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Corporation desires, by
affording the Optionee an opportunity to purchase shares of its Common Stock, $.005 par value (hereinafter called the &ldquo;Common Stock&rdquo;),
as hereinafter provided, and as an inducement material to the Optionee&rsquo;s entering into employment as Chief Executive Officer of
the Corporation, in accordance with the terms of the Offer of Employment between Optionee and the Corporation dated July 12, 2023 (hereinafter
called the &ldquo;Employment Agreement&rdquo;)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NOW, THEREFORE, in consideration
of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed, and do hereby
agree as follows:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1. <U>Grant of Option</U>.
The Corporation hereby irrevocably grants to the Optionee the right and option (hereinafter called the &ldquo;Option&rdquo;) to purchase
all or any part of an aggregate of 100,000 shares of the Common Stock (such number being subject to adjustment as provided in paragraph
7 hereof) on the terms and conditions herein set forth. The Option is not intended by the parties hereto to be, and shall not be treated
as, an incentive stock option (as such term is defined under Section 422 of the Internal Revenue Code of 1986 (hereinafter called the
&ldquo;Code&rdquo;)) and is granted as an inducement award under Nasdaq Listing Rule 5635(c)(4).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2. <U>Purchase Price</U>.
The purchase price of the shares of the Common Stock covered by the Option shall be $4.64 per share.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3. <U>Term of Option; Exercisability</U>.
The term of the Option shall be for a period of ten (10) years from the date hereof, subject to earlier termination as provided in paragraph
6 hereof. Except as otherwise provided in paragraph 6 hereof, the Option shall become exercisable as follows: the Option shall become
exercisable with respect to fifty percent (50%) of the shares (50,000 shares) on the first (1<SUP>st</SUP>) anniversary of the date hereof,
and the Option shall become exercisable with respect to the remaining fifty percent (50%) of the shares (50,000 shares) on the second
(2<SUP>nd</SUP>) anniversary of the date hereof; provided, in the event that Optionee remains employed for six (6) months following the
date hereof and there is a Corporate Event following such six-month period, and (i) the Corporation terminates Optionee&rsquo;s employment
without Cause or (ii) Optionee resigns Optionee&rsquo;s employment for Good Reason, in either event within the period commencing three
(3) months prior to the date of a Corporate Event and ending one (1) year after the date of a Corporate Event, then, subject to and in
accordance with the conditions set forth in this Option Agreement and Section 4(b)(ii) of the Employment Agreement, this Option shall
immediately accelerate and become fully exercisable) as of the later of (A) the termination date, or (B) the effective date of the separation
agreement described in Section 4(b)(ii) of the Employment Agreement. The purchase price of the shares as to which the Option shall be
exercised shall be paid at the time of exercise as provided in paragraph 8 hereof.</P>

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