Exhibit 10.3

INTROGEN THERAPEUTICS, INC.

NOTICE OF STOCK OPTION GRANT AND STOCK OPTION AGREEMENT

I. NOTICE OF STOCK OPTION GRANT

     Introgen Therapeutics, Inc. grants to XXX (“Optionee”) an option to
purchase Common Stock of the Company, subject to the terms and conditions of the
Plan and this Option Agreement. Please see the Introgen Therapeutics, Inc. 2000
Stock Option Plan (the “Plan”) for the definition of capitalized terms in this
grant and Option Agreement.

     A. Terms of this Option Grant

         

  Option Control Number   XXX
 
       

  Date of Grant   XXX
 
       

  Vesting Commencement Date   XXX
 
       

  Term/Expiration Date   XXX
 
       

  Total Number of Shares You May Purchase   XXX
 
       

  Exercise Price per Share   XXX
 
       

  Type of Option   [Non-Statutory Stock Option] [Incentive Stock Option, subject
to the paragraph below

At least part of this Option may be classified as a Non-Statutory Stock Option
if this option grant causes the aggregate fair market value of all Optionee’s
stock options vesting in one or more of the years in which this Option vests to
exceed $100,000. The portion of this Option that is not a Non-Statutory Stock
Option may qualify for classification as an Incentive Stock Option. The ultimate
classification of stock options under the Internal Revenue Code is dependent
upon the fair market value of the stock underlying the options at the time the
options are granted, circumstances that exist at the time Optionee exercises the
stock options, and the application of relevant provisions of the Internal
Revenue Code. Optionee should consult with a tax advisor regarding taxation of
Optionee’s stock options.]

     B. Vesting Schedule

     XXX

 

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     C. Accelerated Vesting

     Accelerated vesting occurs in the event of:

1.   The merger or reorganization of the Company with or into another
corporation, entity, or person;   2.   The sale of all or substantially all of
the Company’s assets to another corporation, entity, or person; or   3.   Any
change in ownership of the Company’s voting stock resulting in ownership of more
than 50% of the Company’s voting stock by one or more persons acting in concert
who did not prior to such change in ownership own more than 50% of the Company’s
voting stock.

     When one of the foregoing events occurs, this Option shall immediately vest
100% and be fully exercisable.

     D. Termination Period

     This Option may be exercised for three months after Optionee ceases to be a
Service Provider. Upon the death or Disability of the Optionee, this Option may
be exercised for twelve months after Optionee ceases to be a Service Provider.
In no event shall this Option be exercised later than the Term/Expiration Date
as provided above.

(The Stock Option Agreement begins on the next page.)

 

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II. STOCK OPTION AGREEMENT

     A. Grant of Option.

          The Plan Administrator of the Company hereby grants to the Optionee
named in the Notice of Stock Option Grant in Part I of this Agreement an Option
to purchase the number of Shares, as set forth in the Notice of Stock Option
Grant, at the exercise price per share set forth in the Notice of Stock Option
Grant (the “Exercise Price”), subject to the terms and conditions of the Plan,
which is incorporated herein by reference. Subject to Section 15(c) of the Plan,
in the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Option Agreement, the terms and conditions of the
Plan shall prevail.

          If designated in the Notice of Stock Option Grant as an Incentive
Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock
Option under Section 422 of the Code. However, if this Option is intended to be
an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of
Code Section 422(d), it shall be treated as a Nonstatutory Stock Option (“NSO”).

     B. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Stock Option Grant
and the applicable provisions of the Plan and this Option Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of the
Company’s stock option exercise notice in effect at the time of exercise (the
“Exercise Notice”), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
“Exercised Shares”), and such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be completed by the Optionee and delivered to the Chief Financial
Officer of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.

               No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

 

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     C. Method of Payment.

          Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

1.   Cash;   2.   Check;   3.   Consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan; or   4.   Surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

     D. Non-Transferability of Option.

          Unless otherwise specifically authorized by the Plan Administrator,
this Option may not be transferred in any manner other than by will or by the
laws of descent or distribution and may be exercised during the lifetime of
Optionee only by the Optionee. The terms of the Plan and this Option Agreement
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.

     E. Term of Option.

          This Option may be exercised only within the term set out in the
Notice of Stock Option Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

     F. Tax Consequences.

          Some of the federal tax consequences relating to this Option, as of
the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

     G. Exercising the Option.

          1. Nonstatutory Stock Option. The Optionee may incur regular federal
income tax liability upon exercise of a NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Exercised Shares on the
date of exercise over their aggregate Exercise Price. If the Optionee is an
Employee or a former Employee, the Company will be required to withhold from his
or her

 

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compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

          2. Incentive Stock Option. If this Option qualifies as an ISO, the
Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price will be treated as an
adjustment to alternative minimum taxable income for federal tax purposes and
may subject the Optionee to alternative minimum tax in the year of exercise. In
the event that the Optionee ceases to be an Employee but remains a Service
Provider, any Incentive Stock Option of the Optionee that remains unexercised
shall cease to qualify as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option on the date three (3) months and one
(1) day following such change of status.

          3. Disposition of Shares.

               (a) NSO. If the Optionee holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes.

               (b) ISO. If the Optionee holds ISO Shares for at least one year
after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.

               (c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

     H. Entire Agreement; Governing Law.

          The Plan is incorporated herein by reference. 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 Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by

 

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means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Texas.

     I. NO GUARANTEE OF CONTINUED SERVICE.

          OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT
OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE
PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     J. FLUCTUATIONS IN STOCK PRICE

          OPTIONEE ACKNOWLEDGES AND AGREES THAT THE EXERCISE PRICE OF THE OPTION
GRANTED BY THE COMPANY AND REFERRED TO HEREIN IS THE FAIR MARKET VALUE OF THE
COMPANY’S COMMON STOCK ON THE DATE THE OPTION WAS GRANTED. THE FAIR MARKET VALUE
OF THE COMPANY’S COMMON STOCK IS SUBJECT TO MANY FACTORS, INCLUDING THE
ANNOUNCEMENT OF NEW PRODUCTS OR SERVICES BY THE COMPANY OR ITS COMPETITORS,
QUARTERLY VARIATIONS IN THE COMPANY’S OR ITS COMPETITORS’ RESULTS OF OPERATIONS,
FAILURE TO ACHIEVE OPERATING RESULTS PROJECTED BY SECURITIES ANALYSTS, CHANGES
IN EARNINGS ESTIMATES OR RECOMMENDATIONS BY SECURITIES ANALYSTS, DEVELOPMENTS IN
THE COMPANY’S INDUSTRY, AND GENERAL MARKET CONDITIONS AND OTHER FACTORS,
INCLUDING FACTORS UNRELATED TO OUR OPERATING PERFORMANCE OR THE OPERATING
PERFORMANCE OF OUR COMPETITORS. THEREFORE, THE COMPANY CANNOT GUARANTEE THAT THE
OPTION WILL HAVE ANY VALUE IN THE FUTURE.

     J. INSIDER TRADING POLICY

          THE TRADING OF SHARES OF THE COMPANY’S COMMON STOCK PURCHASED UNDER
THIS OPTION MAY BE SUBJECT TO THE COMPANY’S INSIDER TRADING POLICY. IN
PARTICULAR, YOUR FUTURE TRADING IN SUCH SHARES MAY BE ALLOWED ONLY DURING
SPECIFIED OPEN TRADING WINDOWS AND RESTRICTED DURING SPECIFIED BLACK-OUT PERIODS
IMPOSED IN ACCORDANCE WITH THE INTROGEN THERAPEUTICS, INC. INSIDER TRADING
POLICY. ALL INTROGEN SERVICE PROVIDERS ARE CONSIDERED INSIDERS UNDER THIS
INSIDER TRADING POLICY. YOU SHOULD CONTACT THE

 

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COMPANY’S INSIDER TRADING COMPLIANCE OFFICER PRIOR TO TRADING SHARES IF YOU
BELIEVE YOU ARE AN INSIDER SUBJECT TO TRADING WINDOWS AND BLACK-OUT PERIODS.

     By your signature and the signature of the Company’s representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. You and the Company
agree that this Option is not valid and enforceable until both parties hereto
have executed this Option Agreement. Optionee has reviewed the Plan and this
Option Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Option Agreement and fully understands all
provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Option Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

          OPTIONEE:   INTROGEN THERAPEUTICS, INC.
 
       

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  By:    
Signature
     

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Print Name

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Social Security Number

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Residence Street Address

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Residence City, State and Zip

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E-Mail address (required)

Option Control Number XXX

THE CONSENT OF SPOUSE ON THE NEXT PAGE IS AN INTEGRAL PART OF THIS DOCUMENT.

 

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CONSENT OF SPOUSE

(Option Control Number XXX)

     The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company’s granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned’s spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

     
 
 

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  Signature of Spouse of Optionee
 
   
 
 

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  Printed Name of Spouse of Optionee
 
   
 
 

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  Social Security Number of Spouse of Optionee

CONFIRMATION OF NO SPOUSE

If there is no consent of spouse signature above, I confirm that as of the grant
date of this option, I have no spouse.

     
 
 

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  Signature of Optionee
 
   
 
 

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  Date