**Exhibit 10.3****INCENTIVE STOCK OPTION AGREEMENT****MAKEMUSIC, INC.****2003 EQUITY INCENTIVE PLAN**     THIS AGREEMENT, made effective as of this ___ day of ___, 20___, by and between MakeMusic, Inc.,a Minnesota corporation (the “Company”), and                      (“Participant”).W I T N E S S E T H:     WHEREAS, Participant on the date hereof is a key employee or officer of the Company or one ofits Subsidiaries; and     WHEREAS, the Company wishes to grant an incentive stock option to Participant to purchaseshares of the Company’s Common Stock pursuant to the Company’s 2003 Equity Incentive Plan (the“Plan”); and     WHEREAS, the Administrator of the Plan has authorized the grant of an incentive stock optionto Participant and has determined that, as of the effective date of this Agreement, the fair marketvalue of the Company’s Common Stock is $                     per share;     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,the parties hereto agree as follows:     1. **Grant of Option**. The Company hereby grants to Participant on the date set forthabove (the “Date of Grant”), the right and option (the “Option”) to purchase all or portions of anaggregate of                                         (                    ) sharesof Common Stock at a per share price of $                     on the terms and conditionsset forth herein, and subject to adjustment pursuant to Section 14 of the Plan. This Option isintended to be an incentive stock option within the meaning of Section 422, or any successorprovision, of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulationsthereunder, to the extent permitted under Code Section 422(d).     2. **Duration and Exercisability**.          a. **General**. The term during which this Option may be exercised shall terminate on                                        ,                     , except as otherwiseprovided in Paragraphs 2(b) through 2(d) below. This Option shall become exercisable according tothe following schedule:   Vesting Date Cumulative Percentage of Shares         Once the Option becomes exercisable to the extent of one hundred percent (100%) of the aggregatenumber of shares specified in Paragraph 1, Participant may continue to exercise this Option underthe terms and conditions of this Agreement until the termination of the Option as provided herein.If Participant does not purchase upon an exercise of this Option the full number of shares whichParticipant is then entitled to purchase, Participant may purchase upon any subsequent exerciseprior to this Option’s termination such previously unpurchased shares in addition to thoseParticipant is otherwise entitled to purchase.          b. **Termination of Employment (other than Disability or Death)**. Except as otherwiseprovided in Paragraph 4 hereof, if Participant’s employment with the Company or any Subsidiary isterminated for any reason other than disability or death, this Option shall completely terminate onthe earlier of (i) the close of business on the three-month anniversary date of such termination ofemployment, and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In suchperiod following the termination of Participant’s employment, this Option shall be exercisable onlyto the extent the Option was exercisable on the vesting date immediately preceding such terminationof employment, but had not previously been exercised. To the extent this Option was not exercisableupon such termination of employment, or if Participant does not exercise the Option within the timespecified in this Paragraph 2(b), all rights of Participant under this Option shall be forfeited.
 

 
          c. **Disability**. If Participant’s employment terminates because of disability (asdefined in Code Section 22(e), or any successor provision), this Option shall terminate on theearlier of (i) the close of business on the twelve-month anniversary date of such termination ofemployment, and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In suchperiod following the termination of Participant’s employment, this Option shall be exercisable onlyto the extent the Option was exercisable on the vesting date immediately preceding such terminationof employment, but had not previously been exercised. To the extent this Option was not exercisableupon such termination of employment, or if Participant does not exercise the Option within the timespecified in this Paragraph 2(c), all rights of Participant under this Option shall be forfeited.          d. **Death**. In the event of Participant’s death, this Option shall terminate on theearlier of (i) the close of business on the twelve-month anniversary date of the date ofParticipant’s death, and (ii) the expiration date of this Option stated in Paragraph 2(a) above. Insuch period following Participant’s death, this Option shall be exercisable by the person orpersons to whom Participant’s rights under this Option shall have passed by Participant’s will orby the laws of descent and distribution only to the extent the Option was exercisable on thevesting date immediately preceding the date of Participant’s death, but had not previously beenexercised. To the extent this Option was not exercisable upon the date of Participant’s death, orif such person or persons do not exercise this Option within the time specified in this Paragraph2(d), all rights under this Option shall be forfeited.     3. **Manner of Exercise**.          a. **General**. The Option may be exercised only by Participant (or other proper party inthe event of death or incapacity), subject to the conditions of the Plan and subject to such otheradministrative rules as the Administrator may deem advisable, by delivering within the OptionPeriod written notice of exercise to the Company at its principal office. The notice shall statethe number of shares as to which the Option is being exercised and shall be accompanied by paymentin full of the Option price for all shares designated in the notice. The exercise of the Optionshall be deemed effective upon receipt of such notice by the Company and upon payment that complieswith the terms of the Plan and this Agreement. The Option may be exercised with respect to anynumber or all of the shares as to which it can then be exercised and, if partially exercised, maybe so exercised as to the unexercised shares any number of times during the Option period asprovided herein.          b. **Form of Payment**. Subject to approval by the Administrator, payment of the optionprice by Participant shall be in the form of cash, personal check, certified check or previouslyacquired shares of Common Stock of the Company, or any combination thereof. Any stock so tenderedas part of such payment shall be valued at its Fair Market Value as provided in the Plan. Forpurposes of this Agreement, “previously acquired shares of Common Stock” shall include shares ofCommon Stock that are already owned by Participant at the time of exercise.          c. **Stock Transfer Records**. As soon as practicable after the effective exercise of allor any part of the Option, Participant shall be recorded on the stock transfer books of the Companyas the owner of the shares purchased, and the Company shall deliver to Participant one or more dulyissued stock certificates evidencing such ownership. All requisite original issue or transferdocumentary stamp taxes shall be paid by the Company.     4. **Change of Control**.          a. **Acceleration**. Notwithstanding anything in the Plan or this Agreement to thecontrary, in the event of the termination of the Participant’s relationship with the Company inconnection with a Change of Control, this Option shall become immediately exercisable upon suchChange of Control to the extent of 100% of the aggregate number of shares specified in Paragraph 1,minus any shares or securities previously purchased by Participant, and shall remain exercisableuntil the earlier of the Expiration Date stated in Paragraph 2(a) above, and (ii) the datedetermined by the Board in connection with the terms of the Plan (including, without limitation,upon consummation of the Change of Control, if so determined by the Board). If Participant doesnot exercise this Option, as the case may be, within the time specified in this Paragraph 4(a), allrights of Participant under this Option shall be forfeited. If the Participant exercises thisOption on a date that is after the three-month anniversary of the date of his termination ofemployment, this Option shall be treated as a nonqualified stock option and shall no longer qualifyas an incentive stock option under Code Section 422.          b. **Change of Control Defined**. For purposes of this Paragraph 4, a “Change ofControl” means:               i. The consummation of any merger, consolidation, exchange, or reorganization to which theCompany is a party if the individuals and entities who were shareholders of the Company immediatelyprior to the effective date of such transaction have, immediately following the effective date ofsuch transaction, beneficial ownership (as
 

 
defined in Rule 13d-3 under the Securities Exchange Actof 1934) of less than fifty percent (50%) of the total combined voting power of all classes ofsecurities issued by the surviving corporation for the election of directors of the survivingcorporation;               ii. The shareholders of the Company approve any plan or proposal for the liquidation of theCompany;               iii. A sale, lease or other transfer of all or substantially all of the assets of the Companyto any person or entity which is not an Affiliate of the Company; or               iv. The acquisition, without prior approval by resolution adopted by the Board, of direct orindirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)of securities of the Corporation representing, in the aggregate, more than fifty percent (50%) ormore of the total combined voting power of all classes of the Company’s then-issued and outstandingsecurities by any person or entity or by a group of associated persons or entities acting inconcert; provided, however, that a change of control will not be deemed to occur if suchacquisition is initiated by Participant or an entity in which Participant owns fifty percent (50%)or more of the total combined voting power of all classes of such entity’s securities, or ifParticipant or such entity is a member of the group of associated persons or entities acting inconcert.          c. **Limitation on Change of Control Payments**. Participant shall not be entitled toreceive any Change of Control Payment, as defined below, which would constitute a “parachutepayment” for purposes of Code Section 280G, or any successor provision, and the regulationsthereunder. In the event any Change of Control Payment payable to Participant would constitute a“parachute payment,” Participant shall have the right to designate those Change of Control Paymentswhich would be reduced or eliminated so that Participant will not receive a “parachute payment.”For purposes of this Paragraph 4(c), a “Change of Control Payment” shall mean any payment, benefitor transfer of property in the nature of compensation paid to or for the benefit of Participantunder any arrangement which is considered contingent on a Change of Control for purposes of CodeSection 280G, including, without limitation, any and all of the Company’s salary, bonus, incentive,restricted stock, stock option, equity-based compensation or benefit plans, programs or otherarrangements, and shall include the acceleration of this Option.     5. **Miscellaneous**.          a. **Employment; Rights as Shareholder**. This Agreement shall not confer on Participantany right with respect to continuance of employment by the Company or any of its Subsidiaries, norwill it interfere in any way with the right of the Company to terminate such employment.Participant shall have no rights as a shareholder with respect to shares subject to this Optionuntil such shares have been issued to Participant upon exercise of this Option. No adjustment shallbe made for dividends (ordinary or extraordinary, whether in cash, securities or other property),distributions or other rights for which the record date is prior to the date such shares areissued, except as provided in Section 14 of the Plan.          b. **Securities Law Compliance**. The exercise of all or any parts of this Option shallonly be effective at such time as counsel to the Company shall have determined that the issuanceand delivery of Common Stock pursuant to such exercise will not violate any state or federalsecurities or other laws. Participant may be required by the Company, as a condition of theeffectiveness of any exercise of this Option, to agree in writing that all Common Stock to beacquired pursuant to such exercise shall be held, until such time that such Common Stock isregistered and freely tradable under applicable state and federal securities laws, forParticipant’s own account without a view to any further distribution thereof, that the certificatesfor such shares shall bear an appropriate legend to that effect and that such shares will be nottransferred or disposed of except in compliance with applicable state and federal securities laws.          c. **Mergers, Recapitalizations, Stock Splits, Etc.** Pursuant and subject to Section 14of the Plan, and subject to Paragraph 4 hereof, certain changes in the number or character of theCommon Stock of the Company(through sale, merger, consolidation, exchange, reorganization, divestiture (including a spin-off),liquidation, recapitalization, stock split, stock dividend or otherwise) shall result in anadjustment, reduction or enlargement, as appropriate, in Participant’s rights with respect to anyunexercised portion of the Option (i.e., Participant shall have such “anti-dilution” rightsunder the Option with respect to such events, but shall not have “preemptive” rights).          d. **Shares Reserved**. The Company shall at all times during the option period reserveand keep available such number of shares as will be sufficient to satisfy the requirements of thisAgreement.
 

 
     e. **Withholding Taxes on Disqualifying Disposition**. In the event of a disqualifyingdisposition of the shares acquired through the exercise of this Option, Participant hereby agreesto inform the Company of such disposition. Upon notice of a disqualifying disposition, the Companymay take such action as it deems appropriate to insure that, if necessary to comply with allapplicable federal or state income tax laws or regulations, all applicable federal and statepayroll, income or other taxes are withheld from any amounts payable by the Company to Participant.If the Company is unable to withhold such federal and state taxes, for whatever reason, Participanthereby agrees to pay to the Company an amount equal to the amount the Company would otherwise berequired to withhold under federal or state law. Participant may, subject to the approval anddiscretion of the Administrator or such administrative rules it may deem advisable, elect to haveall or a portion of such tax withholding obligations satisfied by delivering shares of theCompany’s Common Stock having a fair market value equal to such obligations. Such election shall beapproved by the Administrator and otherwise comply with such rules as the Administrator may adoptto assure compliance with Rule 16b-3, or any successor provision, as then in effect, of the GeneralRules and Regulations under the Securities Exchange Act of 1934, if applicable.     f. **Nontransferability**. During the lifetime of Participant, the accrued Option shall beexercisable only by Participant or by the Participant’s guardian or other legal representative, andshall not be assignable or transferable by Participant, in whole or in part, other than by will orby the laws of descent and distribution.     g. **2003 Equity Incentive Plan**. The Option evidenced by this Agreement is grantedpursuant to the Plan, a copy of which Plan has been made available to Participant and is herebyincorporated into this Agreement. This Agreement is subject to and in all respects limited andconditioned as provided in the Plan. All defined terms of the Plan shall have the same meaning whenused in this Agreement. The Plan governs this Option and, in the event of any questions as to theconstruction of this Agreement or in the event of a conflict between the Plan and this Agreement,the Plan shall govern, except as the Plan otherwise provides.     h. **Lockup Period Limitation**. Participant agrees that in the event the Company advisesParticipant that it plans an underwritten public offering of its Common Stock in compliance withthe Securities Act of 1933, as amended, and that the underwriter(s) seek(s) to impose restrictionsunder which certain shareholders may not sell or contract to sell or grant any option to buy orotherwise dispose of part or all of their stock purchase rights of the underlying Common Stock,Participant hereby agrees that for a period not to exceed 180 days from the prospectus, Participantwill not sell or contract to sell or grant an option to buy or otherwise dispose of this option orany of the underlying shares of Common Stock without the prior written consent of theunderwriter(s) or its representative(s).     i. **Blue Sky Limitation**. Notwithstanding anything in this Agreement to the contrary, inthe event the Company makes any public offering of its securities and determines in its solediscretion that it is necessary to reduce the number of issued but unexercised stock purchaserights so as to comply with any state securities or Blue Sky law limitations with respect thereto,the Board of Directors of the Company shall have the right (i) to accelerate the exercisability ofthis Option and the date on which this Option must be exercised, provided that the Company givesParticipant 15 days’ prior written notice of such acceleration, and (ii) to cancel any portion ofthis Option or any other option granted to Participant pursuant to the Plan which is not exercisedprior to or contemporaneously with such public offering. Notice shall be deemed given whendelivered personally or when deposited in the United States mail, first class postage prepaid andaddressed to Participant at the address of Participant on file with the Company.     j. **Stock Legend**. The Administrator may require that the certificates for any shares ofCommon Stock purchased by Participant (or, in the case of death, Participant’s successors) shallbear an appropriate legend to reflect the restrictions of Paragraph 5(b) and Paragraphs 5(h)through 5(k) of this Agreement.     k. **Scope of Agreement**. This Agreement shall bind and inure to the benefit of theCompany and its successors and assigns and Participant and any successor or successors ofParticipant permitted by Paragraph 2 or Paragraph 5(f) above.     l. **Arbitration**. Any dispute arising out of or relating to this Agreement or thealleged breach of it, or the making of this Agreement, including claims of fraud in the inducement,shall be discussed between the disputing parties in a good faith effort to arrive at a mutualsettlement of any such controversy. If, notwithstanding, such dispute cannot be resolved, suchdispute shall be settled by binding arbitration. Judgment upon the award rendered by the arbitratormay be entered in any court having jurisdiction thereof. The arbitrator shall be a retired state orfederal judge or an attorney who has practiced securities or business litigation for at least 10years. If the parties cannot agree on an arbitrator within 20 days, any party may request that thechief judge of the District Court for
 

 
Hennepin County, Minnesota, select an arbitrator. Arbitrationwill be conducted pursuant to the provisions of this Agreement, and the commercial arbitrationrules of the American Arbitration Association, unless such rules are inconsistent with theprovisions of this Agreement. Limited civil discovery shall be permitted for the production ofdocuments and taking of depositions. Unresolved discovery disputes may be brought to the attentionof the arbitrator who may dispose of such dispute. The arbitrator shall have the authority to awardany remedy or relief that a court of this state could order or grant; provided, however, thatpunitive or exemplary damages shall not be awarded. The arbitrator may award to the prevailingparty, if any, as determined by the arbitrator, all of its costs and fees, including thearbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and reasonableattorneys’ fees. Unless otherwise agreed by the parties, the place of any arbitration proceedingsshall be Hennepin County, Minnesota.     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the dayand year first above written.           **MAKEMUSIC, INC.**             By:                          Its:                                               Participant