EX-10.3



 Exhibit 10.3 

TOKAI PHARMACEUTICALS, INC. 

Incentive Stock Option Agreement 

Granted Under 2007 Stock Incentive Plan 

1. Grant of Option. 
 This agreement
evidences the grant by Tokai Pharmaceuticals, Inc., a Delaware corporation (the “Company”), on [            ] (the “Grant Date”) to
[            ], an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2007
Stock Incentive Plan, as amended (the “Plan”), a total of [            ] shares (the “Shares”) of common stock, $0.001 par value per share, of the Company
(“Common Stock”) at an exercise price of $[            ] per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on
[            ] (the “Final Exercise Date”). 
 It is intended
that the option evidenced by this agreement shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise
indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms. 

2. Vesting Schedule. 
 (a) This option
shall become exercisable (“vest”) as to [            ] of the shares underlying the option on
[            ] and as to an additional [            ] of the original number of shares on the first day of each
successive month thereafter until [            ]. 
 (b) The right of
exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the
earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan. 
 (c) Notwithstanding
anything herein to the contrary, if, on or prior to the first anniversary of the date of the consummation of a Change of Control Event (as defined below), the Participant’s employment with the Company is terminated by the Company without Cause
(as defined below) or the Participant resigns as an employee of the Company for Good Reason (as defined below), all of the Shares not already vested shall automatically vest and the option shall be exercisable in full upon the effective date of such
termination or resignation. 
 (d) For the purposes of this option, a “Change of Control Event” shall mean (i) the
consolidation or merger of the Company with or into any other corporation or other entity (other than a merger or consolidation in which all or substantially all of the individuals and entities who were beneficial owners of outstanding securities
entitled to vote generally in the election of directors of the Company (“Company Voting Securities”) immediately prior to such transaction beneficially own, directly or indirectly, a majority of the combined voting power of the then
outstanding securities entitled to vote generally in the election of directors of the resulting, surviving or acquiring corporation in such transaction in substantially the same proportions as their ownership of Company Voting Securities immediately
prior to such merger or consolidation ), or (ii) the sale of all or substantially all of the assets of the Company to any other corporation or other entity. 

  








 (e) For the purposes of this option, “Good Reason” shall mean any action on the part of
the Company or a successor in interest not consented to by the Participant in writing (which action shall not have been cured within thirty (30) days following written notice from the Participant to the Company’s Board of Directors and the
Company’s Chief Executive Officer (or the Board of Directors and Chief Executive Officer of the Company’s successor in interest, if applicable) specifying that such action will give rise to a termination of employment for Good Reason)
having the following effect or effects: (i) a material diminution in the Participant’s responsibilities from and after the Change of Control Event; (ii) a material reduction in the Participant’s base salary from and after the
Change of Control Event, other than a reduction comparable to reductions generally applicable to similarly situated employees of the Company; or (iii) the Company’s requiring the Participant’s ongoing and regular services to be
performed at a location more than fifty (50) miles from the geographic location at which the Participant was providing services before such requirement; provided, however, that the Participant must give written notice with respect
to the proposed Good Reason within thirty (30) days after the action first occurs and that the Participant actually leaves employment within forty-five (45) days after the Company fails to cure the proposed Good Reason. 

3. Exercise of Option. 
 (a) Form of
Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share. 

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be
exercised unless the Participant, at the time he/she exercises this option, is, and has been at all times since the Grant Date, an employee or officer of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”). 
 (c) Termination of Relationship with the
Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right
to exercise this option shall terminate immediately upon such violation. 
 (d) Exercise Period Upon Death or Disability. If the
Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he/she is an Eligible Participant and the Company has not terminated such relationship for “Cause” as
specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee),
provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his/her death or disability, and further provided that this option shall not be exercisable after the
Final Exercise Date. 
 (e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s employment with the
Company is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment. If, prior 

  
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to the Final Exercise Date, the Participant is given notice by the Company of the termination of his/her employment by the Company for Cause, and the effective date of such employment termination
is subsequent to the date of the delivery of such notice, the right to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the
Participant’s employment shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment (in which case the right to exercise this option shall, pursuant to the preceding sentence,
terminate upon the effective date of such termination of employment). If the Participant is party to an employment or severance agreement with the Company that contains a definition of “Cause” for termination of employment,
“Cause” shall have the meaning ascribed to such term in such agreement. Otherwise, “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his/her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company,
which determination shall be conclusive. The Participant’s employment shall be considered to have been terminated for Cause if the Company determines, within 30 days after the Participant’s resignation, that termination for Cause was
warranted. 
 (f) Stockholders Agreement. As a condition to the exercise of this option, in whole or in part, the Participant, prior
to such exercise of this option, shall execute and deliver or shall have executed and delivered to the Company a counterpart signature page to the Fifth Amended and Restated Stockholders Agreement dated as of May 13, 2013, as amended from time
to time (the “Stockholders Agreement”), among the Company and the Stockholders (as defined therein) agreeing to become a party to the Stockholders Agreement and be bound by the terms thereof; provided that if the Participant has previously
executed and delivered the Stockholders Agreement, the Participant need only reaffirm his/her obligations thereunder; and provided further that the Participant shall not be obligated to execute and deliver the Stockholders Agreement in the event
that it has expired or been terminated. 
 4. Company Right of First Refusal. 

(a) Notice of Proposed Transfer. If the Participant proposes to sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by
operation of law or otherwise (collectively, “transfer”) any Shares acquired upon exercise of this option, then the Participant shall first give written notice of the proposed transfer (the “Transfer Notice”) to the Company. The
Transfer Notice shall name the proposed transferee and state the number of such Shares the Participant proposes to transfer (the “Offered Shares”), the price per share and all other material terms and conditions of the transfer. 

(b) Company Right to Purchase. For 90 days following its receipt of such Transfer Notice, the Company shall have the option to purchase
the Offered Shares at the price and upon the terms set forth in the Transfer Notice. In the event the Company elects to purchase the Offered Shares, it shall give written notice of such election to the Participant within such 30-day period. Within
10 days after his/her receipt of such notice, the Participant shall tender to the Company at its principal offices the certificate or certificates representing the Offered Shares to be purchased by the Company, duly endorsed in blank by the
Participant or with duly endorsed stock powers attached thereto, all in a form suitable for transfer of the Offered Shares to the Company. Promptly following receipt of such certificate or certificates, the Company shall deliver or mail to the
Participant a check in payment of the purchase price for the Offered Shares; provided that if the terms of payment set forth in the Transfer Notice were other than cash against delivery, the Company may pay for the Offered Shares on
the same terms and conditions as were set forth in the Transfer Notice; and provided further that any delay in making such payment shall not invalidate the Company’s exercise of its option to purchase the Offered Shares. 

  
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 (c) Shares Not Purchased By Company. If the Company does not elect to acquire the Offered
Shares, the Participant may, within the 90-day period following the expiration of the option granted to the Company under subsection (b) above, transfer the Offered Shares to the proposed transferee, provided that such transfer
shall not be on terms and conditions more favorable to the transferee than those contained in the Transfer Notice. Notwithstanding any of the above, all Offered Shares transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this
Section 4. 
 (d) Consequences of Non-Delivery. After the time at which the Offered Shares are required to be delivered to the
Company for transfer to the Company pursuant to subsection (b) above, the Company shall not pay any dividend to the Participant on account of such Offered Shares or permit the Participant to exercise any of the privileges or rights of a
stockholder with respect to such Offered Shares, but shall, insofar as permitted by law, treat the Company as the owner of such Offered Shares. 

(e) Exempt Transactions. The following transactions shall be exempt from the provisions of this Section 4: 

(1) any transfer of Shares to or for the benefit of any spouse, child or grandchild of the Participant, or to a trust for their
benefit; 
 (2) any transfer pursuant to an effective registration statement filed by the Company under the Securities Act of
1933, as amended (the “Securities Act”); and 
 (3) the sale of all or substantially all of the outstanding shares
of capital stock of the Company (including pursuant to a merger or consolidation); 
 provided, however, that in the case of a transfer
pursuant to clause (1) above, such Shares shall remain subject to the right of first refusal set forth in this Section 4 and such transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming
that such transferee shall be bound by all of the terms and conditions of this Section 4. 
 (f) Assignment of Company Right.
The Company may assign its rights to purchase Offered Shares in any particular transaction under this Section 4 to one or more persons or entities. 

(g) Termination. The provisions of this Section 4 shall terminate upon the earlier of the following events: 

(1) the closing of the sale of shares of Common Stock in an underwritten public offering pursuant to an effective registration
statement filed by the Company under the Securities Act; or 
 (2) the sale of all or substantially all of the outstanding
shares of capital stock, assets or business of the Company, by merger, consolidation, sale of assets or otherwise (other than a merger or consolidation in which all or substantially all of the individuals and entities who were beneficial owners of
the outstanding securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the outstanding securities entitled to vote generally
in the election of directors of the resulting, surviving or acquiring corporation in such transaction). 

  
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 (h) No Obligation to Recognize Invalid Transfer. The Company shall not be required
(1) to transfer on its books any of the Shares which shall have been sold or transferred in violation of any of the provisions set forth in this Section 4, or (2) to treat as owner of such Shares or to pay dividends to any transferee
to whom any such Shares shall have been so sold or transferred. 
 (i) Legends. The certificate representing Shares shall bear a
legend substantially in the following form (in addition to, or in combination with, any legend required by applicable federal and state securities laws and agreements relating to the transfer of the Company securities): 

“The shares represented by this certificate are subject to a right of first refusal in favor of the Company, as provided in a certain
stock option agreement with the Company.” 
 (j) Stockholders Agreement. Notwithstanding the foregoing, in the event that and
for so long as the Shares are subject to a right of first refusal in favor of the Company under the terms of the Stockholders Agreement, paragraphs (a) through (f) of this Section 4 shall be of no force or effect. 

5. Agreement in Connection with Public Offering. 

The Participant agrees, in connection with the initial underwritten public offering of the Company’s securities pursuant to a
registration statement under the Securities Act, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Common Stock held by the Participant (other than those shares included in
the offering) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering of the Company’s securities for a period of 180 days from the effective date of such registration statement,
and (ii) to execute any agreement necessary to effect clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering. 

6. Tax Matters. 
 (a) Withholding.
No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option. 
 (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of
this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition. 

7. Nontransferability of Option. 
 This
option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this
option shall be exercisable only by the Participant. 
 8. Delivery of Shares; Compliance with Securities Laws, Etc.  

(a) General. The Company shall, upon payment of the option price for the number of Shares purchased and paid for, make prompt delivery
of such Shares to the Participant, provided that if any law or regulation requires the Company to take any action with respect to such Shares before the issuance thereof, then the date of delivery of such Shares shall be extended for the period
necessary to complete such action. 

  
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 (b) Listing, Qualification, Etc. This option shall be subject to the requirement that if,
at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject hereto upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or
regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of shares hereunder, this option may not be exercised, in
whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board of Directors. Nothing herein shall be
deemed to require the Company to apply for, effect or obtain such listing, registration, qualification, or disclosure, or to satisfy such other condition. 

(c) Legends on Stock Certificates. All stock certificates representing Shares issued to the Participant upon exercise of this option
shall have affixed thereto legends substantially in the following forms, in addition to any other legends required by applicable state law: 

“The shares of stock represented by this certificate have not been registered under the Securities Act of 1933 and may not be transferred,
sold or otherwise disposed of in the absence of an effective registration statement with respect to the shares evidenced by this certificate, filed and made effective under the Securities Act of 1933, or an opinion of counsel satisfactory to the
Company to the effect that registration under such Act is not required.” 
 “The shares of stock represented by this certificate
are subject to certain restrictions on transfer contained in an Option Agreement, a copy of which will be furnished upon request by the issuer.” 
 9.
Investment Representations. 
 The Participant represents, warrants and covenants as follows: 

(a) Any Shares purchased upon exercise of this option shall be acquired by Participant’s account for investment only, and not with a view
to, or for sale in connection with, any distribution of such Shares in violation of the Securities Act, or any rule or regulation under the Securities Act. 

(b) The Participant has had such opportunity as he/she has deemed adequate to obtain from representatives of the Company such information as
is necessary to permit his/her to evaluate the merits and risks of his/her investment in the Company. 
 (c) The Participant has sufficient
experience in business, financial and investment matters to be able to evaluate the risks involved in his/her investment in the Company and to make an informed investment decision with respect to such purchase. 

(d) The Participant is able to bear the economic risk of holding Common Stock acquired pursuant to the exercise of this option for an
indefinite period. 
 (e) The Participant understands that (i) the Common Stock acquired pursuant to the exercise of this option have
not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) such Common Stock cannot be sold, transferred or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be
available unless a public market then exists 

  
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for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no
registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register any Common Stock acquired pursuant to the exercise of this option
under the Securities Act. 
 By making payment upon exercise of this option, the Participant shall be deemed to have reaffirmed, as of the
date of such payment, the representations made in this Section 9. 
 10. Provisions of the Plan. 

This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is
furnished to the Participant with this option. 
 IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate
seal by its duly authorized officer. This option shall take effect as a sealed instrument. 
  

					
	 TOKAI PHARMACEUTICALS, INC.

 

	 By:
	 	  

		 	Name:	 	  

		 	Title:	 	  




  
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 PARTICIPANT’S ACCEPTANCE 

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges
receipt of a copy of the Company’s 2007 Stock Incentive Plan. 
  

			
	 PARTICIPANT:

 

	 [              ]
	 	
	  
 Address:
	 	  

		 	  




  
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