Form of Option Agreement under 2007 Equity Incentive Plan



 Exhibit 10.3 
 ZYNGA INC. 
 2007 EQUITY INCENTIVE PLAN 

STOCK OPTION AGREEMENT 
 This Stock Option Agreement (the “Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”) by and between Zynga
Inc., a Delaware corporation (the “Company”), and the participant named below (the “Participant”). Capitalized terms not defined herein shall have the meaning ascribed to them in the Company’s
2007 Equity Incentive Plan (the “Plan”). 
  

			
		
	 Participant:
	  	 
		
	Social Security Number:	  	 
		
	Address:	  	 
		
	Total Option Shares:	  	 
		
	Exercise Price Per Share: 	  	$
		
	Date of Grant:	  	 
		
	Vesting Start Date:	  	 
		
	Expiration Date:	  	 
		  	(unless earlier terminated under Section 5.6 of the Plan)
		
	Classification of Optionee	  	[ ] Employee
		
		  	[ ] Non-Employee
		
	Type of Stock Option:	  	
	Grant Number:	  	

 1. Grant of Option. The Company hereby grants to Participant an option (this
“Option”) to purchase the total number of shares of Class A Common Stock, $0.00005 par value, of the Company set forth above as Total Option Shares (the “Shares”) at the Exercise Price Per Share
set forth above (the “Exercise Price”), subject to all of the terms and conditions of this Agreement and the Plan. If designated as an Incentive Stock Option above, the Option is intended to qualify as an “incentive
stock option” (the “ISO”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). 

2. Exercise Period. 

2.1 Exercise Period of Option. Provided Participant continues to provide services to the
Company or to any Parent or Subsidiary of the Company, the Shares issuable upon exercise of this Option will become vested and exercisable with respect to 25% of the Shares on the first anniversary of the Vesting Start Date set forth on the first
page of this Agreement and 1/48th monthly thereafter until
the Shares are vested with respect to 100% of the 







 
Shares. If application of the vesting percentage causes a fractional share, such share shall be rounded down to the nearest whole share for each month except for the last month in such vesting
period, at the end of which last month this Option shall become vested for the full remainder of the Shares. Notwithstanding any provision in the Plan or this Agreement to the contrary, Options for Unvested Shares (as defined in Section 2.2 of
this Agreement) will not be exercisable on or after Participant’s Termination Date. 
 2.2 Vesting of
Options. Shares that are vested pursuant to the schedule set forth in Section 2.1 are “Vested Shares”. Shares that are not vested pursuant to the schedule set forth in Section 2.1 are “Unvested
Shares”. 
 2.3 Definitions. 

(a) “Cause” means Termination because of: 

(i) any willful, material violation by Participant of any law or regulation applicable to the business of the Company,
Participant’s conviction for, or guilty plea to, a felony or a crime involving moral turpitude, or any willful perpetration by Participant of a common law fraud; 

(ii) Participant’s commission of an act of personal dishonesty that involves personal profit in connection with the
Company or any other entity having a business relationship with the Company; 
 (iii) any material breach by
Participant of any provision of any agreement or understanding between the Company and Participant regarding the terms of Participant’s service as an employee, officer, director or consultant to the Company, including without limitation, the
willful and continued failure or refusal of Participant to perform the material duties required of Participant as an employee, officer, director or consultant of the Company, other than as a result of having a Disability, or a breach of any
applicable invention assignment and confidentiality agreement or similar agreement between the Company and Participant; 
 (iv) Participant’s disregard of the policies of the Company so as to cause loss, damage or injury to the property, reputation or employees of the Company; or 

(v) any other misconduct by Participant that is materially injurious to the financial condition or business reputation
of, or is otherwise materially injurious to, the Company. 
 No act or failure to act by the Participant shall be considered “willful”
if done or omitted by the Participant in good faith with reasonable belief that such action or omission was in the best interests of the Company. All references to the Company in this definition of “Cause” shall include parent, subsidiary,
affiliate and successor entities of the Company. 
 2.4 Expiration. The Option shall expire on the
Expiration Date set forth above or earlier as provided in Section 3 below or pursuant to Section 5.6 of the Plan. 







 3. Termination. 

3.1 Termination for Any Reason Except Death, Disability or Cause. If Participant is Terminated for any reason,
except death, Disability or for Cause, the Option, to the extent (and only to the extent) that it would have been exercisable by Participant on the Termination Date, may be exercised by Participant no later than three months after the Termination
Date, but in any event no later than the Expiration Date. 
 3.2 Termination Because of Death or
Disability. If Participant is Terminated because of death or Disability of Participant (or Participant dies within three months of Termination when Termination is for any reason other than Participant’s Disability or for Cause), the Option,
to the extent that it is exercisable by Participant on the Termination Date, may be exercised by Participant (or Participant’s legal representative) no later than 12 months after the Termination Date, but in any event no later than the
Expiration Date. Any exercise beyond (i) three months after the Termination Date when the Termination is for any reason other than the Participant’s death or disability, within the meaning of Section 22(e)(3) of the Code; or
(ii) 12 months after the Termination Date when the termination is for Participant’s disability, within the meaning of Section 22(e)(3) of the Code, is deemed to be an NQSO. 

3.3 Termination for Cause. If the Participant is terminated for Cause, Participant’s Options expire
immediately upon such Termination. 
 3.4 No Obligation to Employ. Nothing in the Plan or this Agreement
shall confer on Participant any right to continue in the employ of, or other relationship with, the Company or any Parent or Subsidiary of the Company, or limit in any way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or without Cause. 
 4. Manner of
Exercise. 
 4.1 Stock Option Exercise Agreement. To exercise this Option, Participant (or in the
case of exercise after Participant’s death or incapacity, Participant’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company an executed stock option exercise agreement in the form attached hereto as
Exhibit A, or in such other form as may be approved by the Committee from time to time (the “Exercise Agreement”), which shall set forth, inter alia, (i) Participant’s election to exercise the
Option, (ii) the number of Shares being purchased, (iii) any restrictions imposed on the Shares and (iv) any representations, warranties and agreements regarding Participant’s investment intent and access to information as may be
required by the Company to comply with applicable securities laws. If someone other than Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right
to exercise the Option and such person shall be subject to all of the restrictions contained herein as if such person were the Participant. 
 4.2 Limitations on Exercise. The Option may not be exercised unless such exercise is in compliance with all applicable federal and state securities laws, as they are in effect on the date of
exercise. The Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all Shares as to which the Option is then exercisable. 







 4.3 Payment. The Exercise Agreement shall be accompanied by full
payment of the Exercise Price for the shares being purchased in cash (by check), or where permitted by law: 

(a) by cancellation of indebtedness of the Company to the Participant; 

(b) by surrender of shares of the Company’s Class A Common Stock that (i) either (A) have been paid
for within the meaning of SEC Rule 144 (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares); or (B) were obtained by Participant in the open public market;
and (ii) are clear of all liens, claims, encumbrances or security interests; 
 (c) by waiver of
compensation due or accrued to Participant for services rendered; 
 (d) provided that a public market for the
Company’s stock exists: (i) through a “same day sale” commitment from Participant and a Company-designated broker-dealer that is a member of the Financial Industry Regulatory Authority (a “Dealer”) whereby
Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased sufficient to pay for the total Exercise Price and whereby the Dealer irrevocably commits upon receipt of such Shares to forward the total
Exercise Price directly to the Company, or (ii) through a “margin” commitment from Participant and a Dealer whereby Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the Dealer in a margin
account as security for a loan from the Dealer in the amount of the total Exercise Price, and whereby the Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company; 

(e) any other form of consideration approved by the Committee; or 

(f) by any combination of the foregoing. 

4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise of the Option, Participant must pay or
provide for any applicable federal, state and local withholding obligations of the Company. If the Committee permits, Participant may provide for payment of withholding taxes upon exercise of the Option by requesting that the Company retain the
minimum number of Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld; but in no event will the Company withhold Shares if such withholding would result in adverse accounting consequences to the Company. In
such case, the Company shall issue the net number of Shares to the Participant by deducting the Shares retained from the Shares issuable upon exercise. 
 4.5 Issuance of Shares. Provided that the Exercise Agreement and payment are in form and substance satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name
of Participant, Participant’s authorized assignee, or Participant’s legal representative, and shall deliver certificates representing the Shares with the appropriate legends affixed thereto. 

5. Notice of Disqualifying Disposition of ISO Shares. If the Option is an ISO, and if Participant sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two years after the Date of Grant, and (ii) the date one year after 







 
transfer of such Shares to Participant upon exercise of the Option, Participant shall immediately notify the Company in writing of such disposition. Participant agrees that Participant may be
subject to income tax withholding by the Company on the compensation income recognized by Participant from the early disposition by payment in cash or out of the current wages or other compensation payable to Participant. 

6. Compliance with Laws and Regulations. The Plan and this Agreement are intended to comply with Section 25102(o) of
the California Corporations Code and any regulations relating thereto. Any provision of this Agreement which is inconsistent with Section 25102(o) or any regulations relating thereto shall, without further act or amendment by the Company or the
Board, be reformed to comply with the requirements of Section 25102(o) and any regulations relating thereto. The exercise of the Option and the issuance and transfer of Shares shall be subject to compliance by the Company and Participant
with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Class A Common Stock may be listed at the time of such issuance or transfer.
Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC, any state securities commission or any stock exchange to effect such compliance. 

7. Nontransferability of Option. The Option may not be transferred in any manner other than by will or by the laws of
descent and distribution, and, with respect to NQSOs, by instrument to an inter vivos or testamentary trust in which the options are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift to “immediate family” as
that term is defined in 17 C.F.R. 240.16a-1(e), and may be exercised during the lifetime of Participant only by Participant or in the event of Participant’s incapacity, by Participant’s legal representative. The terms of the Option shall
be binding upon the executors, administrators, successors and assigns of Participant. 
 8. Company’s Right of First
Refusal. Before any Vested Shares held by Participant or any transferee of such Vested Shares may be sold or otherwise transferred (including without limitation a transfer by gift or operation of law), the Company and/or its assignee(s)
shall have an assignable right of first refusal to purchase the Vested Shares to be sold or transferred on the terms and conditions set forth in the Exercise Agreement (the “Right of First Refusal”). The Company’s Right
of First Refusal will terminate when the Company’s securities become publicly traded. 
 9. Tax Consequences.
Set forth below is a brief summary as of the Effective Date of the Plan of some of the federal and California tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 
 9.1 Exercise of ISO. If the Option qualifies as an ISO, there will be no regular federal or California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price will be treated as a tax preference item for federal alternative minimum tax purposes and may subject the Participant to the alternative minimum tax in the year of exercise.








 9.2 Exercise of Nonqualified Stock Option. If the Option does not
qualify as an ISO, there may be a regular federal and California income tax liability upon the exercise of the Option. Participant 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 Shares on the date of exercise over the Exercise Price. If Participant is a current or former employee of the Company, the Company may be required to withhold from Participant’s compensation or collect from
Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. 
 9.3 Disposition of Shares. The following tax consequences may apply upon disposition of the Shares. 
 (a) Incentive Stock Options. If the Shares are held for more than 12 months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two years after
the Date of Grant, any gain realized on disposition of the Shares will be treated as long term capital gain for federal and California income tax purposes. If Vested Shares purchased under an ISO are disposed of within the applicable one year or two
year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates in the year of the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price. 
 (b) Nonqualified Stock Options. If the Shares are held for more
than 12 months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long term capital gain. 

(c) Withholding. The Company may be required to withhold from the Participant’s compensation or collect from
the Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. 

10. Privileges of Stock Ownership. Participant shall not have any of the rights of a shareholder with respect to any Shares
until the Shares are issued to Participant. 
 11. Interpretation. Any dispute regarding the interpretation of
this Agreement shall be submitted by Participant or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and Participant. 

12. Entire Agreement. The Plan is incorporated herein by reference. This Agreement and the Plan constitute the entire
agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject
matter hereof. 
 13. Notices. Any and all notices required or permitted to be given to a party pursuant to the
provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following: (i) at the time of personal delivery, if delivery is in person or by
email; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone
and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one business day after deposit with an express overnight courier for United States deliveries, or 








 
two business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three business days after deposit in the United
States mail by certified mail (return receipt requested) for United States deliveries. 
 All notices for delivery outside the
United States will be sent by facsimile or e-mail with confirmation of receipt, or by express courier. All notices not delivered personally or by facsimile or e-mail will be sent with postage and/or other charges prepaid and properly addressed to
the Company at: 444 De Haro Street, Suite 132, San Francisco, CA 94107, 415-503-0222, or stockadmin@zynga.com and to the Participant at the address, facsimile number or email address set forth below the Participant’s signature line of this
Agreement, or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto. Notices to the Company will be marked “Attention: Stock Plan
Administrator”. 
 14. Successors and Assigns. The Company may assign any of its rights under this Agreement
including its rights to purchase Shares under the Right of First Refusal. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written
consent of the Company. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon Participant and
Participant’s heirs, executors, administrators, legal representatives, successors and assigns. 
 15. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to that body of laws pertaining to conflict of laws. 

16. Acceptance. Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. Participant has read and
understands the terms and provisions thereof, and accepts the Option subject to all the terms and conditions of the Plan and this Agreement. Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or
disposition of the Shares and that Participant should consult a tax adviser prior to such exercise or disposition. 
 17.
Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement. 

18. Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and
will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed
and delivered will be deemed an original, and all of which together shall constitute one and the same agreement. 
 20.
Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible
given the intent of the parties hereto. 







 If such clause or provision cannot be so enforced, such provision shall be stricken from
this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement. Notwithstanding the forgoing, if the
value of this Agreement based upon the substantial benefit of the bargain for any party is materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree to
substitute such provision(s) through good faith negotiations. 
 21. Facsimile Signatures. This Agreement may be
executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party. 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and Participant has
executed this Agreement, effective as of the Date of Grant. 
  

											
	ZYNGA INC.	 		 	PARTICIPANT	 	
				
	By:	 	 	 		 	 
		 		 		 	Signature
	Reginald D. Davis	 		 	 
		 		 	(Please print name)
	Secretary, General Counsel	 		 		 		 	
	444 De Haro Street, Suite 132	 		 		 	Address:	 	 
	San Francisco, CA 94107	 		 		 	 	 	 
		 		 		 	Fax:	 	 
		 		 		 	Email: