Exhibit 10.3




 





ZIOPHARM
Oncology, Inc.

2012 Equity Incentive Plan



Form of Option Agreement

(Incentive Stock Option or Nonstatutory Stock Option)


 


Pursuant to your Stock
Option Grant Notice (“Grant Notice”) and this Option Agreement, Ziopharm
Oncology, Inc. (the “Company”) has granted you an option under its 2012 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set
forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the terms in this Option
Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or
in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.


 


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


 


1.Vesting.
Your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service.


 


2.Number
of Shares and Exercise Price. The number of shares of Common Stock subject to your option and your exercise price per
share in your Grant Notice will be adjusted for Capitalization Adjustments.


 


3.Exercise
Restriction for Non-Exempt Employees. If you are an Employee eligible for overtime compensation under the Fair Labor
Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided
in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from
the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the
Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary
in the case of (i) your death or disability; (ii) a Corporate Transaction in which your option is not assumed, continued or substituted;
(iii) a Change in Control; or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s
benefit plans).


 


4.Exercise
prior to Vesting (“Early Exercise”). This option may not be exercised prior to vesting.


 


5.Method
of Payment. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the
exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by
your Grant Notice, which may include one or more of the following:


 



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(a)Provided
that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the
Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.
This manner of payment is also known as a “broker-assisted exercise,” “same day sale,” or “sell to
cover.”


 


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


 


(c)If this
option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option
by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay
any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted
form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter
if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as
a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.


 


6.Whole
Shares. You may exercise your option only for whole shares of Common Stock.


 


7.Securities
Law Compliance. In no event may you exercise your option unless the shares of Common Stock issuable upon exercise are
then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance
of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply
with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines
that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required
for compliance with Treasury Regulations Section 1.401(k)-1(d)(3), if applicable).


 


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


 


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


 



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(b)three (3)
months after the termination of your Continuous Service for any reason other than Cause, your
Disability or your death (except as otherwise provided in Section 8(d)); provided, however, that if during any part
of such three (3) month period your option is not exercisable solely because of the condition set forth in the section above relating
to “Securities Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has
been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; provided further,
that if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six (6) months after the Date of Grant,
and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not
expire until the earlier of (x) the later of (A) the date that is seven (7) months after the Date of Grant, and (B) the date that
is three (3) months after the termination of your Continuous Service, and (y) the Expiration Date;


 


(c)twelve
(12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(d));


 


(d)eighteen
(18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous
Service terminates for any reason other than Cause;


 


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


 


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


 


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


 


9.Exercise.


 


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


 


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


 



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(c)If your
option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen
(15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs
within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise
of your option.


 


10.Transferability.
Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent
and distribution, and is exercisable during your life only by you.


 


(a)Certain Trusts.
Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if
you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the
option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.


 


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


 


(c)Beneficiary
Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written
notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate
a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration
resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled
to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.


 


11.Option
not a Service Contract. Your option is not an employment or service contract, and nothing in your option will be deemed
to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the
Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate,
their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a
Director or Consultant for the Company or an Affiliate.


 



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12.Withholding
Obligations.


 


(a)At the
time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by
means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.


 


(b)If this
option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable
legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon
the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be
necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination
of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant
to the preceding sentence will not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise
deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding
the filing of such election, shares of Common Stock will be withheld solely from fully vested shares of Common Stock determined
as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you
arising in connection with such share withholding procedure will be your sole responsibility.


 


(c)You may
not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly,
you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation
to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein,
if applicable, unless such obligations are satisfied.


 


13.Tax
Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation
programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers,
Directors, Employees, or Affiliates related to tax liabilities arising from your option or your other compensation. In particular,
you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the
Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there
is no other impermissible deferral of compensation associated with the option.


 



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14.Notices.
Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be
deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit
in the U.S. mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole
discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request
your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by
electronic delivery and to participate in the Plan through an online or electronic system established and maintained by the Company
or another third party designated by the Company.


 


15.Governing
Plan Document. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part
of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be
promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan,
the provisions of the Plan will control.


 



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