Document:

Exhibit
        10.1

      

      

      ZIOPHARM
        Oncology, INC.

        

      2003
        STOCK OPTION PLAN

      

      1. Purpose.
        The
        purpose of the 2003 Stock Option Plan (the “Plan”) of ZIOPHARM Oncology, Inc.
        (the “Company”) is to increase stockholder value and to advance the interests of
        the Company by furnishing a variety of economic incentives (“Incentives”)
        designed to attract, retain and motivate employees, certain key consultants
        and
        directors of the Company. Incentives may consist of opportunities to purchase
        or
        receive shares of Common Stock, $0.001 par value per share, of the Company
        (“Common Stock”) on terms determined under this Plan.

      

      2. Administration.
        The
        Plan shall be administered by the board of directors of the Company (the
“Board
        of Directors”) or by a stock option or compensation committee (the “Committee”)
        of the Board of Directors. The Committee shall consist of not less than two
        directors of the Company and shall be appointed from time to time by the
        Board
        of Directors. During any time period during which the Company has a class
        of
        equity securities registered under Section 12 of the Securities Exchange
        Act of
        1934 (including the regulations promulgated thereunder, the “1934 Act”), each
        member of the Committee shall be (i) a “non-employee
        director” within the meaning of Rule 16b-3 of the Securities
        Exchange Act of 1934 (including the regulations promulgated thereunder, the
        “1934 Act”)
        (a
“Non-Employee Director”), and
        (ii)
        shall be an “outside director” within the meaning of Section 162(m) under the
        Internal Revenue Code of 1986, as amended (the “Code”) and the regulations
        promulgated thereunder. The Committee shall have complete authority to award
        Incentives under the Plan, to interpret the Plan, and to make any other
        determination which it believes necessary and advisable for the proper
        administration of the Plan. The Committee’s decisions and matters relating to
        the Plan shall be final and conclusive on the Company and its participants.
        If
        at any time there is no stock option or compensation committee, the term
        “Committee”, as used in the Plan, shall refer to the Board of
        Directors.

      

      3. Eligible
        Participants.
        Officers of the Company, employees of the Company or its subsidiaries, members
        of the Board of Directors, and consultants or other independent contractors
        who
        provide services to the Company or its subsidiaries shall be eligible to
        receive
        Incentives under the Plan when designated by the Committee. Participants
        may be
        designated individually or by groups or categories (for example, by pay grade)
        as the Committee deems appropriate. Participation by officers of the Company
        or
        its subsidiaries and any performance objectives relating to such officers
        must
        be approved by the Committee. Participation by others and any performance
        objectives relating to others may be approved by groups or categories (for
        example, by pay grade) and authority to designate participants who are not
        officers and to set or modify such targets may be delegated.

      

      4. Types
        of Incentives.
        Incentives under the Plan may be granted in any one or a combination of the
        following forms: (a) incentive stock options and non-statutory stock options
        (section 6); (b) stock appreciation rights (“SARs”) (section 7); (c) stock
        awards (section 8); (d) restricted stock (section 8); and (e) performance
        shares
        (section 9).

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      5. Shares
        Subject to the Plan.

      

      5.1. Number
        of Shares.
        Subject
        to adjustment as provided in Section 10.6, the number of shares of Common
        Stock
        which may be issued under the Plan shall not exceed 2,500,000 shares of Common
        Stock. Shares of Common Stock that are issued under the Plan or are subject
        to
        outstanding Incentives will be applied to reduce the maximum number of shares
        of
        Common Stock remaining available for issuance under the Plan.

      

      5.2. Cancellation.
        To the
        extent that cash in lieu of shares of Common Stock is delivered upon the
        exercise of an SAR pursuant to Section 7.4, the Company shall be deemed,
        for
        purposes of applying the limitation on the number of shares, to have issued
        the
        greater of the number of shares of Common Stock which it was entitled to
        issue
        upon such exercise or on the exercise of any related option. In the event
        that a
        stock option or SAR granted hereunder expires or is terminated or canceled
        unexercised as to any shares of Common Stock, such shares may again be issued
        under the Plan either pursuant to stock options, SARs or otherwise. In the
        event
        that shares of Common Stock are issued as restricted stock or pursuant to
        a
        stock award and thereafter are forfeited or reacquired by the Company pursuant
        to rights reserved upon issuance thereof, such forfeited and reacquired shares
        may again be issued under the Plan, either as restricted stock, pursuant
        to
        stock awards or otherwise. The Committee may also determine to cancel, and
        agree
        to the cancellation of, stock options in order to make a participant eligible
        for the grant of a stock option at a lower price than the option to be
        canceled.

      

      5.3. Type
        of Common Stock.
        Common
        Stock issued under the Plan in connection with stock options, SARs, performance
        shares, restricted stock or stock awards, may be authorized and unissued
        shares
        or treasury stock, as designated by the Committee.

      

      6. Stock
        Options.
        A stock
        option is a right to purchase shares of Common Stock from the Company. Each
        stock option granted by the Committee under this Plan shall be subject to
        the
        following terms and conditions:

      

      6.1. Price.
        The
        option price per share shall be determined by the Committee, subject to
        adjustment under Section 10.6.

      

      6.2. Number.
        The
        number of shares of Common Stock subject to the option shall be determined
        by
        the Committee, subject to adjustment as provided in Section 10.6. The number
        of
        shares of Common Stock subject to a stock option shall be reduced in the
        same
        proportion that the holder thereof exercises a SAR if any SAR is granted
        in
        conjunction with or related to the stock option. 

      

      6.3. Duration
        and Time for Exercise.
        Subject
        to earlier termination as provided in Section 10.4, the term of each stock
        option shall be determined by the Committee but shall not exceed ten years
        and
        one day from the date of grant. Each stock option shall become exercisable
        at
        such time or times during its term as shall be determined by the Committee
        at
        the time of grant. The Committee may accelerate the exercisability of any
        stock
        option. Subject to the foregoing and with the approval of the Committee,
        all or
        any part of the shares of Common Stock with respect to which the right to
        purchase has accrued may be purchased by the Company at the time of such
        accrual
        or at any time or times thereafter during the term of the
        option.

      
        
           

        

        
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      6.4. Manner
        of Exercise.
        A stock
        option may be exercised, in whole or in part, by giving written notice to
        the
        Company, specifying the number of shares of Common Stock to be purchased
        and
        accompanied by the full purchase price for such shares. The option price
        shall
        be payable (a) in United States dollars upon exercise of the option and may
        be
        paid by cash, uncertified or certified check or bank draft; (b) at the
        discretion of the Committee, by delivery of shares of Common Stock in payment
        of
        all or any part of the option price, which shares shall be valued for this
        purpose at the Fair Market Value on the date such option is exercised; or
        (c) at
        the discretion of the Committee, by instructing the Company to withhold from
        the
        shares of Common Stock issuable upon exercise of the stock option shares
        of
        Common Stock in payment of all or any part of the exercise price and/or any
        related withholding tax obligations, which shares shall be valued for this
        purpose at the Fair Market Value or in such other manner as may be authorized
        from time to time by the Committee. The shares of Common Stock delivered
        by the
        participant pursuant to Section 6.4(b) must have been held by the participant
        for a period of not less than six months prior to the exercise of the option,
        unless otherwise determined by the Committee. Prior to the issuance of shares
        of
        Common Stock upon the exercise of a stock option, a participant shall have
        no
        rights as a stockholder.

      

      6.5. Incentive
        Stock Options.
        Notwithstanding anything in the Plan to the contrary, the following additional
        provisions shall apply to the grant of stock options which are intended to
        qualify as Incentive Stock Options (as such term is defined in Section 422
        of
        the Code):

      

      (a) The
        aggregate Fair Market Value (determined as of the time the option is granted)
        of
        the shares of Common Stock with respect to which Incentive Stock Options
        are
        exercisable for the first time by any participant during any calendar year
        (under all of the Company’s plans) shall not exceed $100,000. The determination
        will be made by taking incentive stock options into account in the order
        in
        which they were granted. If such excess only applies to a portion of an
        Incentive Stock Option, the Committee, in its discretion, will designate
        which
        shares will be treated as shares to be acquired upon exercise of an Incentive
        Stock Option.

      

      (b) Any
        Incentive Stock Option certificate authorized under the Plan shall contain
        such
        other provisions as the Committee shall deem advisable, but shall in all
        events
        be consistent with and contain all provisions required in order to qualify
        the
        options as Incentive Stock Options.

      

      (c) All
        Incentive Stock Options must be granted within ten years from the earlier
        of the
        date on which this Plan was adopted by Board of Directors or the date this
        Plan
        was approved by the stockholders.

      

      (d) Unless
        sooner exercised, all Incentive Stock Options shall expire no later than
        10
        years after the date of grant.

      
        
           

        

        
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      (e) The
        option price for Incentive Stock Options shall be not less than the Fair
        Market
        Value of the Common Stock subject to the option on the date of
        grant.

      

      (f) If
        Incentive Stock Options are granted to any participant who, at the time such
        option is granted, would own (within the meaning of Section 422 of the Code)
        stock possessing more than 10% of the total combined voting power of all
        classes
        of stock of the employer corporation or of its parent or subsidiary corporation,
        (i) the option price for such Incentive Stock Options shall be not less than
        110% of the Fair Market Value of the Common Stock subject to the option on
        the
        date of grant and (ii) such Incentive Stock Options shall expire no later
        than
        five years after the date of grant.

      

      6.6 Right
        of Redemption.
        The
        agreement with the recipient evidencing a stock option grant may include
        a
        provision whereby the Company may elect, prior to the date of the first
        registration of an equity security of the Company pursuant to the Exchange
        Act
        of 1934, as amended, to repurchase from a former Company employee, director,
        consultant, advisor or other independent contractor, and their respective
        successors and assigns, all or any part of the shares of Common Stock received
        by a participant pursuant to the exercise of a stock option. Any such repurchase
        must be made no earlier than six months following the termination of the
        holder’s relationship with the Company giving rise to the stock option grant and
        at fair market value, as determined by the Committee, on such date of
        redemption.

      

      7. Stock
        Appreciation Rights.
        An SAR
        is a right to receive, without payment to the Company, a number of shares
        of
        Common Stock, cash or any combination thereof, the amount of which is determined
        pursuant to the formula set forth in Section 7.4. An SAR may be granted (a)
        with
        respect to any stock option granted under this Plan, either concurrently
        with
        the grant of such stock option or at such later time as determined by the
        Committee (as to all or any portion of the shares of Common Stock subject
        to the
        stock option), or (b) alone, without reference to any related stock option.
        Each
        SAR granted by the Committee under this Plan shall be subject to the following
        terms and conditions:

      

      7.1. Number.
        Each
        SAR granted to any participant shall relate to such number of shares of Common
        Stock as shall be determined by the Committee, subject to adjustment as provided
        in Section 10.6. In the case of an SAR granted with respect to a stock option,
        the number of shares of Common Stock to which the SAR pertains shall be reduced
        in the same proportion that the holder of the option exercises the related
        stock
        option.

      

      7.2. Duration.
        Subject
        to earlier termination as provided in Section 10.4, the term of each SAR
        shall
        be determined by the Committee but shall not exceed ten years and one day
        from
        the date of grant. Unless otherwise provided by the Committee, each SAR shall
        become exercisable at such time or times, to such extent and upon such
        conditions as the stock option, if any, to which it relates is exercisable.
        The
        Committee may in its discretion accelerate the exercisability of any
        SAR.

      

      7.3. Exercise.
        An SAR
        may be exercised, in whole or in part, by giving written notice to the Company,
        specifying the number of SARs which the holder wishes to exercise. Upon receipt
        of such written notice, the Company shall, within 90 days thereafter, deliver
        to
        the exercising holder certificates for the shares of Common Stock or cash
        or
        both, as determined by the Committee, to which the holder is entitled pursuant
        to Section 7.4.

      
        
           

        

        
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      7.4. Payment.
        Subject
        to the right of the Committee to deliver cash in lieu of shares of Common
        Stock
        (which, as it pertains to officers and directors of the Company, shall comply
        with all requirements of the 1934 Act), the number of shares of Common Stock
        which shall be issuable upon the exercise of an SAR shall be determined by
        dividing:

      

      (a) the
        number of shares of Common Stock as to which the SAR is exercised multiplied
        by
        the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares
        of Common Stock subject to the SAR on the exercise date exceeds (1) in the
        case
        of an SAR related to a stock option, the purchase price of the shares of
        Common
        Stock under the stock option or (2) in the case of an SAR granted alone,
        without
        reference to a related stock option, an amount which shall be determined
        by the
        Committee at the time of grant, subject to adjustment under Section 10.6);
        by

      

      (b) the
        Fair
        Market Value of a share of Common Stock on the exercise date.

      

      In
        lieu
        of issuing shares of Common Stock upon the exercise of a SAR, the Committee
        may
        elect to pay the holder of the SAR cash equal to the Fair Market Value on
        the
        exercise date of any or all of the shares which would otherwise be issuable.
        No
        fractional shares of Common Stock shall be issued upon the exercise of an
        SAR;
        instead, the holder of the SAR shall be entitled to receive a cash adjustment
        equal to the same fraction of the Fair Market Value of a share of Common
        Stock
        on the exercise date or to purchase the portion necessary to make a whole
        share
        at its Fair Market Value on the date of exercise.

      

      8. Stock
        Awards and Restricted Stock.
        A stock
        award consists of the transfer by the Company to a participant of shares
        of
        Common Stock, without other payment therefor, as additional compensation
        for
        services to the Company. A share of restricted stock consists of shares of
        Common Stock which are sold or transferred by the Company to a participant
        at a
        price determined by the Committee (which price shall be at least equal to
        the
        minimum price required by applicable law for the issuance of a share of Common
        Stock) and subject to restrictions on their sale or other transfer by the
        participant. The transfer of Common Stock pursuant to stock awards and the
        transfer and sale of restricted stock shall be subject to the following terms
        and conditions:

      

      8.1. Number
        of Shares.
        The
        number of shares to be transferred or sold by the Company to a participant
        pursuant to a stock award or as restricted stock shall be determined by the
        Committee.

      

      8.2. Sale
        Price.
        The
        Committee shall determine the price, if any, at which shares of restricted
        stock
        shall be sold to a participant, which may vary from time to time and among
        participants and which may be below the Fair Market Value of such shares
        of
        Common Stock at the date of sale.

      
        
           

        

        
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      8.3. Restrictions.
        All
        shares of restricted stock transferred or sold hereunder shall be subject
        to
        such restrictions as the Committee may determine, including, without limitation
        any or all of the following:

      

      (a) a
        prohibition against the sale, transfer, pledge or other encumbrance of the
        shares of restricted stock, such prohibition to lapse at such time or times
        as
        the Committee shall determine (whether in annual or more frequent installments,
        at the time of the death, disability or retirement of the holder of such
        shares,
        or otherwise);

      

      (b) a
        requirement that the holder of shares of restricted stock forfeit, or (in
        the
        case of shares sold to a participant) resell back to the Company at his or
        her
        cost, all or a part of such shares in the event of termination of his or
        her
        employment or consulting engagement during any period in which such shares
        are
        subject to restrictions;

      

      (c) such
        other conditions or restrictions as the Committee may deem
        advisable.

      

      8.4. Escrow.
        In
        order to enforce the restrictions imposed by the Committee pursuant to Section
        8.3, the participant receiving restricted stock shall enter into an agreement
        with the Company setting forth the conditions of the grant. Shares of restricted
        stock shall be registered in the name of the participant and deposited, together
        with a stock power endorsed in blank, with the Company. Each such certificate
        shall bear a legend in substantially the following form:

      

      The
        transferability of this certificate and the shares of Common Stock represented
        by it are subject to the terms and conditions (including conditions of
        forfeiture) contained in the 2003 Stock Option Plan of Ziopharm,
        Inc. (the
        “Company”), and an agreement entered into between the registered owner and the
        Company. A copy of the Plan and the agreement is on file in the office of
        the
        secretary of the Company.

      

      8.5. End
        of
        Restrictions.
        Subject
        to Section 10.5, at the end of any time period during which the shares of
        restricted stock are subject to forfeiture and restrictions on transfer,
        such
        shares will be delivered free of all restrictions to the participant or to
        the
        participant's legal representative, beneficiary or heir.

      

      8.6. Stockholder.
        Subject
        to the terms and conditions of the Plan, each participant receiving restricted
        stock shall have all the rights of a stockholder with respect to shares of
        stock
        during any period in which such shares are subject to forfeiture and
        restrictions on transfer, including without limitation, the right to vote
        such
        shares. Dividends paid in cash or property other than Common Stock with respect
        to shares of restricted stock shall be paid to the participant
        currently.

      

      9. Performance
        Shares.
        A
        performance share consists of an award which shall be paid in shares of Common
        Stock, as described below. The grant of performance share shall be subject
        to
        such terms and conditions as the Committee deems appropriate, including the
        following:

      
        
           

        

        
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      9.1. Performance
        Objectives.
        Each
        performance share will be subject to performance objectives for the Company
        or
        one of its operating units to be achieved by the end of a specified period.
        The
        number of performance shares granted shall be determined by the Committee
        and
        may be subject to such terms and conditions, as the Committee shall determine.
        If the performance objectives are achieved, each participant will be paid
        in
        shares of Common Stock or cash. If such objectives are not met, each grant
        of
        performance shares may provide for lesser payments in accordance with formulas
        established in the award.

      

      9.2. Not
        Stockholder.
        The
        grant of performance shares to a participant shall not create any rights
        in such
        participant as a stockholder of the Company, until the payment of shares
        of
        Common Stock with respect to an award.

      

      9.3. No
        Adjustments.
        No
        adjustment shall be made in performance shares granted on account of cash
        dividends which may be paid or other rights which may be issued to the holders
        of Common Stock prior to the end of any period for which performance objectives
        were established.

      

      9.4. Expiration
        of Performance Share.
        If any
        participant's employment or consulting engagement with the Company is terminated
        for any reason other than normal retirement, death or disability prior to
        the
        achievement of the participant's stated performance objectives, all the
        participant's rights on the performance shares shall expire and terminate
        unless
        otherwise determined by the Committee. In the event of termination of employment
        or consulting by reason of death, disability, or normal retirement, the
        Committee, in its own discretion may determine what portions, if any, of
        the
        performance shares should be paid to the participant.

      

      10. General.

      

      10.1. Effective
        Date.
        The
        Plan will become effective upon its approval by the Company's stockholders.
        Unless approved by the stockholders within one year after the date of the
        Plan's
        adoption by the Board of Directors, the Plan shall not be effective for any
        purpose.

      

      10.2. Duration.
        The
        Plan shall remain in effect until all Incentives granted under the Plan have
        either been satisfied by the issuance of shares of Common Stock or the payment
        of cash or been terminated under the terms of the Plan and all restrictions
        imposed on shares of Common Stock in connection with their issuance under
        the
        Plan have lapsed. No Incentives may be granted under the Plan after the tenth
        anniversary of the date the Plan is approved by the stockholders of the
        Company.

      

      10.3. Non-transferability
        of Incentives.
        No
        stock option, SAR, restricted stock or performance award may be transferred,
        pledged or assigned by the holder thereof (except, in the event of the holder's
        death, by will or the laws of descent and distribution to the limited extent
        provided in the Plan or the Incentive), or pursuant to a qualified domestic
        relations order as defined by the Code or Title I of the Employee Retirement
        Income Security Act, or the rules thereunder, and the Company shall not be
        required to recognize any attempted assignment of such rights by any
        participant. Notwithstanding the preceding sentence, stock options may be
        transferred by the holder thereof to Employee’s spouse, children, grandchildren
        or parents (collectively, the “Family Members”), to trusts for the benefit of
        Family Members, to partnerships or limited liability companies in which Family
        Members are the only partners or shareholders, or to entities exempt from
        federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue
        Code of 1986, as amended. During a participant’s lifetime, a stock option may be
        exercised only by him or her, by his or her guardian or legal representative
        or
        by the transferees permitted by the preceding sentence.

      
        
           

        

        
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      10.4. Effect
        of Termination or Death.
        In the
        event that a participant ceases to be an employee of or consultant to the
        Company for any reason, including death or disability, any Incentives may
        be
        exercised or shall expire at such times as may be determined by the
        Committee.

      

      10.5. Additional
        Condition.
        Notwithstanding anything in this Plan to the contrary: (a) the Company may,
        if
        it shall determine it necessary or desirable for any reason, at the time
        of
        award of any Incentive or the issuance of any shares of Common Stock pursuant
        to
        any Incentive, require the recipient of the Incentive, as a condition to
        the
        receipt thereof or to the receipt of shares of Common Stock issued pursuant
        thereto, to deliver to the Company a written representation of present intention
        to acquire the Incentive or the shares of Common Stock issued pursuant thereto
        for his or her own account for investment and not for distribution; and (b)
        if
        at any time the Company further determines, in its sole discretion, that
        the
        listing, registration or qualification (or any updating of any such document)
        of
        any Incentive or the shares of Common Stock issuable pursuant thereto is
        necessary on any securities exchange or under any federal or state securities
        or
        blue sky law, or that the consent or approval of any governmental regulatory
        body is necessary or desirable as a condition of, or in connection with the
        award of any Incentive, the issuance of shares of Common Stock pursuant thereto,
        or the removal of any restrictions imposed on such shares, such Incentive
        shall
        not be awarded or such shares of Common Stock shall not be issued or such
        restrictions shall not be removed, as the case may be, in whole or in part,
        unless such listing, registration, qualification, consent or approval shall
        have
        been effected or obtained free of any conditions not acceptable to the
        Company.

      

      10.6. Adjustment.
        In the
        event of any recapitalization, stock dividend, stock split, combination of
        shares or other change in the Common Stock, the number of shares of Common
        Stock
        then subject to the Plan, including shares subject to restrictions, options
        or
        achievements of performance shares, shall be adjusted in proportion to the
        change in outstanding shares of Common Stock. In the event of any such
        adjustments, the purchase price of any option, the performance objectives
        of any
        Incentive, and the shares of Common Stock issuable pursuant to any Incentive
        shall be adjusted as and to the extent appropriate, in the discretion of
        the
        Committee, to provide participants with the same relative rights before and
        after such adjustment.

      

      10.7. Incentive
        Plans and Agreements.
        Except
        in the case of stock awards, the terms of each Incentive shall be stated
        in a
        plan or agreement approved by the Committee. The Committee may also determine
        to
        enter into agreements with holders of options to reclassify or convert certain
        outstanding options, within the terms of the Plan, as Incentive Stock Options
        or
        as non-statutory stock options and in order to eliminate SARs with respect
        to
        all or part of such options and any other previously issued
        options.

      
        
           

        

        
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      10.8. Withholding.

      

      (a) The
        Company shall have the right to withhold from any payments made under the
        Plan
        or to collect as a condition of payment, any taxes required by law to be
        withheld. At any time when a participant is required to pay to the Company
        an
        amount required to be withheld under applicable income tax laws in connection
        with a distribution of Common Stock or upon exercise of an option or SAR,
        the
        participant may satisfy this obligation in whole or in part by electing (the
        “Election”) to have the Company withhold from the distribution shares of Common
        Stock having a value up to the minimum amount of withholding taxes required
        to
        be collected on the transaction. The value of the shares to be withheld shall
        be
        based on the Fair Market Value of the Common Stock on the date that the amount
        of tax to be withheld shall be determined (“Tax Date”).

      

      (b) Each
        Election must be made prior to the Tax Date. The Committee may disapprove
        of any
        Election, may suspend or terminate the right to make Elections, or may provide
        with respect to any Incentive that the right to make Elections shall not
        apply
        to such Incentive. An Election is irrevocable.

      

      10.9. No
        Continued Employment, Engagement or Right to Corporate Assets.
        No
        participant under the Plan shall have any right, because of his or her
        participation, to continue in the employ of the Company for any period of
        time
        or to any right to continue his or her present or any other rate of
        compensation. Nothing contained in the Plan shall be construed as giving
        an
        employee, a consultant, such persons' beneficiaries or any other person any
        equity or interests of any kind in the assets of the Company or creating
        a trust
        of any kind or a fiduciary relationship of any kind between the Company and
        any
        such person.

      

      10.10. Deferral
        Permitted.
        Payment
        of cash or distribution of any shares of Common Stock to which a participant
        is
        entitled under any Incentive shall be made as provided in the Incentive.
        Payment
        may be deferred at the option of the participant if provided in the
        Incentive.

      

      10.11. Amendment
        of the Plan.
        The
        Board may amend or discontinue the Plan at any time. However, no such amendment
        or discontinuance shall adversely change or impair, without the consent of
        the
        recipient, an Incentive previously granted. Further, no such amendment shall,
        without approval of the shareholders of the Company, (a) increase the maximum
        number of shares of Common Stock which may be issued to all participants
        under
        the Plan, (b) change or expand the types of Incentives that may be granted
        under
        the Plan, (c) change the class of persons eligible to receive Incentives
        under
        the Plan, or (d) materially increase the benefits accruing to participants
        under
        the Plan.

      

      10.12
        Sale,
        Merger, Exchange or Liquidation.
        Unless
        otherwise provided in the agreement for an Incentive, in the event of an
        acquisition of the Company through the sale of substantially all of the
        Company's assets or through a merger, exchange, reorganization or liquidation
        of
        the Company or a similar event as determined by the Committee (collectively
        a
“transaction”), the Committee shall be authorized, in its sole discretion, to
        take any and all action it deems equitable under the circumstances, including
        but not limited to any one or more of the following:

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      

      

      (1)
         providing
        that the Plan and all Incentives shall terminate and the holders of (i) all
        outstanding vested options shall receive, in lieu of any shares of Common
        Stock
        they would be entitled to receive under such options, such stock, securities
        or
        assets, including cash, as would have been paid to such participants if their
        options had been exercised and such participant had received Common Stock
        immediately prior to such transaction (with appropriate adjustment for the
        exercise price, if any), (ii) performance shares and/or SARs that
        entitle
        the participant to receive Common Stock shall receive, in lieu of any shares
        of
        Common Stock each participant was entitled to receive as of the date of the
        transaction pursuant to the terms of such Incentive, if any, such stock,
        securities or assets, including cash, as would have been paid to such
        participant if such Common Stock had been issued to and held by the participant
        immediately prior to such transaction, and (iii) any Incentive under this
        Agreement which does not entitle the participant to receive Common Stock
        shall
        be equitably treated as determined by the Committee. 

      

      (2)
        providing that participants holding outstanding vested Common Stock based
        Incentives shall receive, with respect to each share of Common Stock issuable
        pursuant to such Incentives as of the effective date of any such transaction,
        at
        the determination of the Committee, cash, securities or other property, or
        any
        combination thereof, in an amount equal to the excess, if any, of the Fair
        Market Value of such Common Stock on a date within ten days prior to the
        effective date of such transaction over the option price or other amount
        owed by
        a participant, if any, and that such Incentives shall be cancelled, including
        the cancellation without consideration of all options that have an exercise
        price below the per share value of the consideration received by the Company
        in
        the transaction. 

      

      (3)
        providing that the Plan (or replacement plan) shall continue with respect
        to
        Incentives not cancelled or terminated as of the effective date of such
        transaction and provide to participants holding such Incentives the right
        to
        earn their respective Incentives on a substantially equivalent basis (taking
        into account the transaction and the number of shares or other equity issued
        by
        such successor entity) with respect to the equity of the entity succeeding
        the
        Company by reason of such transaction.

      

      (4)
        providing that all unvested, unearned or restricted Incentives, including
        but
        not limited to restricted stock for which restrictions have not lapsed as
        of the
        effective date of such transaction, shall be void and deemed terminated,
        or, in
        the alternative, for the acceleration or waiver of any vesting, earning or
        restrictions on any Incentive.

      

      The
        Board
        may restrict the rights of participants or the applicability of this
        Section 10.12 to the extent necessary to comply with Section 16(b)
        of the
        Securities Exchange Act of 1934, the Internal Revenue Code or any other
        applicable law or regulation. The grant of an Incentive award pursuant to
        the
        Plan shall not limit in any way the right or power of the Company to make
        adjustments, reclassifications, reorganizations or changes of its capital
        or
        business structure or to merge, exchange or consolidate or to dissolve,
        liquidate, sell or transfer all or any part of its business or assets.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

      

      10.13. Definition
        of Fair Market Value.
        For
        purposes of this Plan, the “Fair Market Value” of a share of Common Stock at a
        specified date shall, unless otherwise expressly provided in this Plan, be
        the
        amount which the Committee or the Board of Directors determines in good faith
        to
        be 100% of the fair market value of such a share as of the date in question;
        provided, however, that notwithstanding the foregoing, if such shares are
        listed
        on a U.S. securities exchange or are quoted on the Nasdaq National Market
        or
        Nasdaq Small-Cap Market (“Nasdaq”), then Fair Market Value shall be determined
        by reference to the last sale price of a share of Common Stock on such U.S.
        securities exchange or Nasdaq on the applicable date. If such U.S. securities
        exchange or Nasdaq is closed for trading on such date, or if the Common Stock
        does not trade on such date, then the last sale price used shall be the one
        on
        the date the Common Stock last traded on such U.S. securities exchange or
        Nasdaq.

      

      

      Approved
        by the Board of Directors of ZIOPHARM, Inc. on December 30, 2003.

      Approved
        by the stockholders of ZIOPHARM, Inc. on December 21, 2004.

      Assumed
        by ZIOPHARM Oncology, Inc. pursuant to merger effective September 13,
        2005.

      

      
        
           

        

        
          11Exhibit
        10.2

       

      EMPLOYMENT
        AGREEMENT

       

      AGREEMENT
        (the “Agreement”),
        dated
        as of January
        8, 2004, by and between ZYLOGEN, INC., a Delaware corporation with principal
        executive offices at 787 Seventh Avenue, 48th
        Floor,
        New York, NY 10019 (the “Company”),
        and
        DR. JONATHAN
        LEWIS, residing at 1522 Fairfield Beach Road, Fairfield, CT 06824
        (the
“Executive”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Company desires to employ the Executive as President and Chief Executive
        Officer of the Company, and the Executive desires to serve the Company in
        those
        capacities, upon the terms and subject to the conditions contained in this
        Agreement;

       

      NOW,
        THEREFORE, in consideration of the mutual covenants and agreements herein
        contained, the parties hereto hereby agree as follows:

       

      1. Employment.

       

      (a) Services.
        The
        Executive will be employed by the Company as its President and Chief Executive
        Officer. The Executive will report directly to the Board of Directors of
        the
        Company (the "Board") and shall perform such duties assigned by the Board
        as are
        consistent with his position as President and Chief Executive Officer
(the
        “Services”).
        The
        Executive agrees to perform such duties faithfully, to devote substantially
        all
        of his business time, attention and energies to the business of the Company,
        and
        while he remains employed, not to engage in any other business activity that
        is
        in conflict with your duties and obligations to the Company; provided,
        however,
        that
        the Executive may engage in the following activities to the extent that such
        activities, individually or collectively, do not interfere with the performance
        of the Executive’s duties and responsibilities hereunder, devoting such
        reasonable time as may be necessary, but in no event more than five (5) business
        days per annum (A) to fulfill civic responsibilities, (B) for personal financial
        matters, (C) to respond to inquiries from former patients and their current
        physicians, (D) to serve as an expert witness in cases involving Sarcoma,
        (E) to
        give and attend academic lectures in connection with the Executive’s affiliation
        with the Yale Medical School and the National Academy of Sciences, (F) to
        write
        and edit medical, scientific and business textbooks and (G) to perform certain
        other activities with the prior consent of the Company’s Board of Directors.

       

      (b) Acceptance.
        Executive hereby accepts such employment and agrees to render the
        Services.

       

      2. Term.

       

      The
        Executive's employment under this Agreement (the "Term") shall commence as
        of
        the Effective Date (as hereinafter defined) and shall continue for a term
        of
        three (3) years, unless sooner terminated pursuant to Section 9 of this
        Agreement. Notwithstanding anything to the contrary contained herein, the
        provisions of this Agreement governing protection of Confidential Information
        shall continue in effect as specified in Section 6 hereof and survive the
        expiration or termination hereof. The Term may be extended for additional
        one
        (1) year periods upon mutual written consent of the Executive and the
        Board. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      3. Best
        Efforts; Place of Performance.

       

      (a) The
        Executive shall devote substantially all of his business time, attention
        and
        energies to the business and affairs of the Company and
        shall
        use his best efforts to advance the best interests of the Company and shall
        not
        during the Term be actively engaged in any other business activity, whether
        or
        not such business activity is pursued for gain, profit or other pecuniary
        advantage, that will interfere with the performance by the Executive of his
        duties hereunder or the Executive’s availability to perform such duties or that
        will adversely affect, or negatively reflect upon, the Company.

       

      (b) The
        duties to be performed by the Executive hereunder shall be performed primarily
        at the office of the Company in New York, New York, subject to reasonable
        travel
        requirements on behalf of the Company, or
        such
        other place as the Board may reasonably designate, subject to the provisions
        of
        Section 9(d) below.

       

      4. Directorship.
        The
        Company shall use its best efforts to cause the Executive to be elected as
        a
        member of its Board of Directors throughout the Term and shall include him
        in
        the management slate for election as a director at every stockholders meeting
        during the Term at which his term as a director would otherwise expire. The
        Executive agrees to accept election, and to serve during the Term, as director
        of the Company, without any compensation therefor other than as specified
        in
        this Agreement.

       

      5. Compensation.
        As full
        compensation for the performance by the Executive of his duties under this
        Agreement, the Company shall pay the Executive as follows:

       

      (a) Base
        Salary. The
        Company shall pay Executive a salary (the “Base Salary”) equal to Three Hundred
        Fifty Three Thousand Dollars ($350,000) per year. Payment shall be made
        semi-monthly, on the fifteenth and the last day of each calendar
        month.

       

      (b) Signing
        Bonus. The Company shall pay the Executive a one time bonus equal to Two
        Hundred
        Fifty Thousand Dollars ($250,000) within ten (10) business days of the Effective
        Date of this Agreement. 

       

      (c) Guaranteed
        Bonus. The Company shall pay the Executive a bonus (the “Guaranteed
        Bonus”)
        of Two
        Hundred Fifty Thousand Dollars ($250,000) within 30 days following each
        anniversary of the date of this Agreement during the Term, provided that
        the
        Executive is employed hereunder on such anniversary date.
        The
        Board of Directors of the Company shall annually review the Guaranteed Bonus
        to
        determine whether an increase in the amount thereof is warranted.

       

      (d) Discretionary
        Bonus. At the sole discretion of the Board of Directors of the Company, the
        Executive shall receive an additional annual bonus (the “Discretionary
        Bonus”)
        in an
        amount equal to up to 100% of his Base Salary, based upon his performance
        on
        behalf of the Company during the prior year. The Discretionary Bonus shall
        be
        payable either as a lump-sum payment or in installments as determined by
        the
        Board of Directors of the Company in its sole discretion. In addition,
the
        Board
        of Directors of the Company shall annually review the Bonus to determine
        whether
        an increase in the amount thereof is warranted.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

       

      (e) Withholding.
        The Company shall withhold all applicable federal, state and local taxes
        and
        social security and such other amounts as may be required by law from all
        amounts payable to the Executive under this Section 5.

       

      (f) Stock
        Options. 

       

      (i) As
        additional compensation for the services to be rendered by the Executive
        pursuant to this Agreement, the Company shall grant the Executive non-qualified
        stock options (“Stock
        Options”)
        to
        purchase 205,000 shares of Common Stock of the Company at a price equal to
        $0.01
        per share representing ten percent (10%) of the outstanding Common Stock
        of the
        Company, on a fully diluted basis, as
        of the
        Effective Date.
        The
        Stock
        Options shall be governed by the Company’s 2003 Stock Option Plan and
shall
        vest, if at all,
        in
        three equal installments on January 8, 2005, January 8, 2006 and January
        8, 2007
        of this Agreement, subject
        in each
        case
        to the
        provisions of Section 10 below. In connection with such grant, the Executive
        shall enter into the Company’s standard stock option agreement, which will
        incorporate the foregoing vesting schedule, exercise price and the Stock
        Option
        related provisions contained in Section 10 below.
        The
        Board of Directors of the Company shall annually review the number of Stock
        Options granted to the Executive to determine whether an increase in the
        number
        thereof is warranted.

       

      (ii) Anti-dilution
        Protection. Until such time as the Company has raised gross proceeds equal
        to
        $25,000,000 from
        the
        issuance and sale of Equity Securities (as defined below).,
        the
        Company shall issue to the Executive a number of additional Stock Options
        sufficient to maintain Executive’s ownership percentage at least equal to
        percent (5%) of the outstanding Common Stock of the Company on a fully diluted
        basis. Once the Company has raised $25,000,000 through the sale of its Equity
        Securities, Executive shall be diluted pro rata along with all other holders
        of
        securities of the Company. As
        used
        herein “Equity Securities” shall mean shares of Common Stock, options, warrants
        or other rights to purchase Common Stock or securities or evidences of
        indebtedness convertible into or exchangeable for shares of Common
        Stock.

       

      (iii) 
        Notwithstanding the foregoing, Section 3(f)(iii) shall not apply to, and
        the
        Executive shall not be entitled to anti-dilution protection with respect
        to, the
        issuance of Excluded Equity Securities and Excluded Equity Securities shall
        not
        be included in calculating the fully diluted issued and outstanding shares
        of
        Common Stock of the Company for any purpose under this Agreement. “Excluded
        Equity Securities” shall mean Equity Securities that are issued by the Company
        pursuant to any transactions approved by the Board of Directors primarily
        for
        the purpose of: (1) incentivizing employees, directors or consultants to
        the
        Company following the issuance of up to five percent (5%) of the outstanding
        shares of Common Stock of the Company for such purposes; (2) joint ventures,
        strategic alliances or research and development activities, (3) purchase
        or
        licensing of technology, or (4) any other transactions involving current
        or
        potential partners that are primarily for purposes other than raising capital.
        As long as the anti-dilution protection contained in this paragraph Section
        3(f)(iii) remains in effect, the Executive shall be diluted pari passu with
        all
        other holders of Common Stock by the issuance by the Company of Excluded
        Equity
        Securities. Upon termination of such anti-dilution protection, the Executive
        shall be diluted pari passu with all other holders of Common Stock by the
        issuance of any Equity Securities. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

       

      (g) Expenses.
        The Company shall reimburse the Executive for all reasonable out of pocket
        expenses incurred by the Executive in furtherance of the business and affairs
        of
        the Company, including reasonable travel and entertainment (which shall include
        business-class travel, unless unavailable and then first-class travel, for
        trips
        requiring air time longer than two (2) hours and the use of car service for
        business-related activities), upon timely receipt by the Company of appropriate
        vouchers or other proof of the Executive’s expenditures and otherwise in
        accordance with any expense reimbursement policy as may from time to time
        be
        adopted by the Company.

       

      (h) Life
        and
        Disability Insurance. The Company shall reimburse the Executive all premiums
        paid by the Executive on life insurance policies covering the Executive in
        amounts up to $800,000 and disability insurance policies covering the Executive
        in amounts up to $20,000 per month.

       

      (i) Vacation.
        The Executive shall, during the Term, be entitled to a vacation of four (4)
        weeks per annum,
        in
        addition to holidays observed by the Company.
        The
        Executive shall not be entitled to carry any vacation forward to the next
        year
        of employment and shall not receive any compensation for unused vacation
        days.

       

      (j) Piggyback
        Registration Rights.
        The
        Company agrees that if, at any time, and from time to time, after an initial
        public offering of its Common Stock, the Board shall authorize the filing
        of a
        registration statement under the Securities Act in connection with the proposed
        offer of any of its securities by it or any of its stockholders, the Company
        shall, subject to an underwriter lockup agreement, if any, and such
        underwriter’s discretion, (A) cause such registration statement to cover all of
        Common Stock underlying the vested Options of the Executive; (B) use its
        commercially reasonable efforts to cause such registration statement to become
        effective as soon as practicable; and (C) maintain such compliance with
        applicable laws and regulations of any governmental authority for the period
        of
        two years or until the Executive has disposed all of his securities under
        the
        Registration Statement. Notwithstanding any other provision of this Section
        3(j), the Company may at any time, abandon or delay any registration commenced
        by the Company.

       

      (k) Other
        Benefits. 

       

      (i) The
        Executive shall be entitled to all rights and benefits for which he shall
        be
        eligible under any benefit or other plans (including, without limitation,
        dental, medical, medical reimbursement and hospital plans, pension plans,
        employee stock purchase plans, profit sharing plans, bonus plans and other
        so-called "fringe" benefits) as the Company shall make available to any of
        its
        senior executives from time to time.

       

      (ii) The
        Company shall reimburse the Executives for his reasonable medical licensing
        fees
        and other professional dues and memberships and journal subscriptions. In
        addition, the Company shall reimburse the Executive up to $10,000 per annum
        for
        costs associated with a consulting group retained by the Executive for the
        purpose of assisting the Executive corporate decision making.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      6. Confidential
        Information and Inventions.

       

      (a) The
        Executive recognizes and acknowledges that in the course of his duties he
        is
        likely to receive confidential or proprietary information owned by the Company,
        its affiliates or third parties with whom the Company or any of such affiliates
        has an obligation of confidentiality. Accordingly, during and after the Term,
        the Executive agrees to keep confidential and not disclose or make accessible
        to
        any other person or use for any other purpose other than in connection with
        the
        fulfillment of his duties under this Agreement, any Confidential and Proprietary
        Information (as defined below) owned by, or received by or on behalf of,
        the
        Company or any of its affiliates. “Confidential and Proprietary Information”
        shall include, but shall not be limited to, confidential or proprietary
        scientific or technical information, data, formulas and related concepts,
        business plans (both current and under development), client lists, promotion
        and
        marketing programs, trade secrets, or any other confidential or proprietary
        business information relating to development programs, costs, revenues,
        marketing, investments, sales activities, promotions, credit and financial
        data,
        manufacturing processes, financing methods, plans or the business and affairs
        of
        the Company or of any affiliate or client of the Company. The Executive
        expressly acknowledges the trade secret status of the Confidential and
        Proprietary Information and that the Confidential and Proprietary Information
        constitutes a protectable business interest of the Company. The Executive
        agrees: (i) not to use any such Confidential and Proprietary Information
        for
        himself or others; and (ii) not to take any Company material or reproductions
        (including but not limited to writings, correspondence, notes, drafts, records,
        invoices, technical and business policies, computer programs or disks) thereof
        from the Company’s offices at any time during his employment by the Company,
        except as required in the execution of the Executive’s duties to the Company.
        The Executive agrees to return immediately all Company material and
        reproductions (including but not limited, to writings, correspondence, notes,
        drafts, records, invoices, technical and business policies, computer programs
        or
        disks) thereof in his possession to the Company upon request and in any event
        immediately upon termination of employment.

       

      (b) Except
        in
        furtherance of the business of the Company, or otherwise with prior written
        authorization by the Company, the Executive agrees not to disclose or publish
        any of the Confidential and Proprietary Information, or any confidential,
        scientific, technical or business information of any other party to whom
        the
        Company or any of its affiliates owes an obligation of confidence, at any
        time
        during or after his employment with the Company. Nothing in the foregoing
        shall
        be construed to prevent the Executive from disclosing or using any Confidential
        or Proprietary Information that:

       

      (i) Executive
        can evidence through written documentation was in the Executive’s possession or
        control prior to the date of disclosure;

       

      (ii) Executive
        can evidence through written documentation was in the public domain or enters
        into the public domain through no improper act by Executive

       

      (iii) 
        is
        approved for public release by written authorization of the Company’ Board of
        Directors;

       

      (iv) 
        is
        required to be disclosed by legal, administrative or judicial process;
        or

       

      (v) is
        rightfully granted to Executive by sources independent of the Company, its
        officers, employees, agents, affiliates and consultants.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

       

      (c) The
        Executive agrees that all inventions, discoveries, improvements and patentable
        or copyrightable works (“Inventions”)
        initiated, conceived or made by him, either alone or in conjunction with
        others,
        during the Term
        shall be
        the sole property of the Company to the maximum extent permitted by applicable
        law and, to the extent permitted by law, shall be “works made for hire” as that
        term is defined in the United States Copyright Act (17 U.S.C.A., Section
        101).
        The Company shall be the sole owner of all patents, copyrights, trade secret
        rights, and other intellectual property or other rights in connection therewith.
        The Executive hereby assigns to the Company all right, title and interest
        he may
        have or acquire in all such Inventions; provided, however, that the Board
        of
        Directors of the Company may in its sole discretion agree to waive the Company’s
        rights pursuant to this Section 6(c) with respect to any Invention that is
        not
        directly or indirectly related to the Company’s business. The Executive further
        agrees to assist the Company in every proper way (but at the Company’s expense)
        to obtain and from time to time enforce patents, copyrights or other rights
        on
        such Inventions in any and all countries, and to that end the Executive will
        execute all documents necessary:

      

      (i) to
        apply
        for, obtain and vest in the name of the Company alone (unless the Company
        otherwise directs) letters patent, copyrights or other analogous protection
        in
        any country throughout the world and when so obtained or vested to renew
        and
        restore the same; and

      (ii) to
        defend
        any opposition proceedings in respect of such applications and any opposition
        proceedings or petitions or applications for revocation of such letters patent,
        copyright or other analogous protection.

       

      (d) The
        Executive acknowledges that while performing the services under this Agreement
        the Executive may locate, identify and/or evaluate patented or patentable
        inventions having commercial potential in the fields of pharmacy,
        pharmaceutical, biotechnology, healthcare, technology and other fields which
        may
        be of potential interest to the Company or one of its affiliates (the
“Third
        Party Inventions”).
        The
        Executive understands, acknowledges and agrees that all rights to, interests
        in
        or opportunities regarding, all Third-Party Inventions identified by the
        Company, any of its affiliates or either of the foregoing persons’ officers,
        directors, employees (including the Executive), agents or consultants during
        the
        Employment Term shall be and remain the sole and exclusive property of the
        Company or such affiliate and the Executive shall have no rights whatsoever
        to
        such Third-Party Inventions and will not pursue for himself or for others
        any
        transaction relating to the Third-Party Inventions which is not on behalf
        of the
        Company.

       

      (e) The
        provisions of this Section 6 shall survive any termination of this
        Agreement.

       

      7. Non-Competition,
        Non-Solicitation and Non-Disparagement.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

       

      (a) The
        Executive understands and recognizes that his services to the Company are
        special and unique and that in the course of performing such services the
        Executive will have access to and knowledge of Confidential and Proprietary
        Information (as defined in Section 6) and the Executive agrees that, during
        the
        Term and for a period of 12 months
        thereafter, he shall not without the consent of the Company in any manner,
        directly or indirectly, on behalf of himself or any person, firm, partnership,
        joint venture, corporation or other business entity (“Person”),
        enter
        into or engage in any business which is engaged in any business directly
        or
        indirectly competitive with the Company’s Business (as defined below), either as
        an individual for his own account, or as a partner, joint venturer, owner,
        executive, employee, independent contractor, principal, agent, consultant,
        salesperson, officer, director or shareholder of a Person in a business
        competitive with the Company within the geographic area of the Company’s
        Business, which is deemed by the parties hereto to be worldwide. The Executive
        acknowledges that, due to the nature of the Company’s Business, and the
        importance to the Company’s Business of its Confidential and Proprietary
        Information, a violation of this Section 7(a) could cause substantial damage
        to
        the Company and its affiliates and, therefore, the Company has a strong
        legitimate business interest in protecting the continuity of its business
        interests and the restriction herein agreed to by the Executive narrowly
        and
        fairly serves such an important and critical business interest of the Company.
        For purposes of this Agreement, the “Company’s Business” shall mean the business
        or businesses set forth on the attached Schedule 7(a), which shall be amended
        from time to time upon the mututal written agreement of the parties, but
        which
        will automatically include the research, development and commercialization
        of
        any technologies that are licensed or otherwise acquired by the Company.
        Notwithstanding the foregoing, nothing contained in this Section 7(a) shall
        be
        deemed to prohibit the Executive from (i) acquiring or holding, solely for
        investment, publicly traded securities of any corporation, some or all of
        the
        activities of which are competitive with the business of the Company so long
        as
        such securities do not, in the aggregate, constitute more than three percent
        (3%) of any class or series of outstanding securities of such
        corporation.

       

      (b) During
        the Term and for a period of 12 months thereafter, the Executive shall not,
        directly or indirectly, without the prior written consent of the
        Company:

       

      (i) solicit
        or induce any employee of the Company or any of its affiliates to leave the
        employ of the Company or any such affiliate; or hire for any purpose any
        employee of the Company or any affiliate or any employee who has left the
        employment of the Company or any affiliate within six months of the termination
        of such employee’s employment with the Company or any such affiliate or at any
        time in violation of such employee’s non-competition agreement with the Company
        or any such affiliate; or

       

      (ii) solicit
        or accept employment or be retained by any Person who, at any time during
        the
        term of this Agreement, was an agent, client or customer of the Company or
        any
        of its affiliates where his position will be related to the Company’s Business;
        or

      

      (iii) solicit
        or accept the business of any agent, client or customer of the Company or
        any of
        its affiliates with respect to products, services or investments similar
        to
        those provided or supplied by the Company or any of its affiliates.

      

      (c) The
        Company and the Executive each agree that both during the Term and at all
        times
        thereafter, neither party shall directly or indirectly disparage, whether
        or not
        true, the name or reputation of the other party or any of its affiliates,
        including but not limited to, any officer, director, employee or any stockholder
        owning greater than five percent (5%) of the Company’s outstanding Common Stock.
        This Section 7 shall not include (i) statements made by the Executive’s in
        performing his duties in the ordinary course as Chief Executive Officer (e.g.,
        employee evaluations and remarks made in private meetings of the Board) and
        (ii)
        statements made by the Executive under oath in a legal proceeding.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

       

      (d) In
        the
        event that the Executive breaches any provisions of Section 6 or this Section
        7
        or there is a threatened breach, then, in addition to any other rights which
        the
        Company may have, the Company shall (i) be entitled, without the posting
        of a
        bond or other security, to injunctive relief to enforce the restrictions
        contained in such Sections and (ii) have the right to require the Executive
        to
        account for and pay over to the Company all compensation, profits, monies,
        accruals, increments and other benefits (collectively “Benefits”)
        derived or received by the Executive as a result of any transaction constituting
        a breach of any of the provisions of Sections 6 or 7 and the Executive hereby
        agrees to account for and pay over such Benefits to the Company.

       

      (e) Each
        of
        the rights and remedies enumerated in Section 7(d) shall be independent of
        the
        others and shall be in addition to and not in lieu of any other rights and
        remedies available to the Company at law or in equity. If any of the covenants
        contained in this Section 7, or any part of any of them, is hereafter construed
        or adjudicated to be invalid or unenforceable, the same shall not affect
        the
        remainder of the covenant or covenants or rights or remedies which shall
        be
        given full effect without regard to the invalid portions. If any of the
        covenants contained in this Section 7 is held to be invalid or unenforceable
        because of the duration of such provision or the area covered thereby, the
        parties agree that the court making such determination shall have the power
        to
        reduce the duration and/or area of such provision and in its reduced form
        such
        provision shall then be enforceable. No such holding of invalidity or
        unenforceability in one jurisdiction shall bar or in any way affect the
        Company’s right to the relief provided in this Section 7 or otherwise in the
        courts of any other state or jurisdiction within the geographical scope of
        such
        covenants as to breaches of such covenants in such other respective states
        or
        jurisdictions, such covenants being, for this purpose, severable into diverse
        and independent covenants.

       

      (f) In
        the
        event that an actual proceeding is brought in equity to enforce the provisions
        of Section 6 or this Section 7, the Executive shall not urge as a defense
        that
        there is an adequate remedy at law nor shall the Company be prevented from
        seeking any other remedies which may be available. 

       

      (g) The
        provisions of this Section 7 shall survive any termination of this
        Agreement.

       

      8. Representations
        and Warranties by the Executive.

       

      The
        Executive hereby represents and warrants to the Company as follows:

       

      (a) Neither
        the execution or delivery of this Agreement nor the performance by the Executive
        of his duties and other obligations hereunder violate or will violate any
        statute, law, determination or award, or conflict with or constitute a default
        or breach of any covenant or obligation under (whether immediately, upon
        the
        giving of notice or lapse of time or both) any prior employment agreement,
        contract, or other instrument to which the Executive is a party or by which
        he
        is bound.

       

      (b) The
        Executive has the full right, power and legal capacity to enter and deliver
        this
        Agreement and to perform his duties and other obligations hereunder. This
        Agreement constitutes the legal, valid and binding obligation of the Executive
        enforceable against him in accordance with its terms. No approvals or consents
        of any persons or entities are required for the Executive to execute and
        deliver
        this Agreement or perform his duties and other obligations
        hereunder.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

       

      9. Termination.
        The Executive’s employment hereunder shall be terminated upon the Executive’s
        death and may be terminated as follows:

       

      (a) The
        Executive’s employment hereunder may be terminated by the Board of Directors of
        the Company for Cause. Any of the following actions by the Executive shall
        constitute “Cause”:

       

      (i) The
        willful misconduct, failure, disregard or refusal by the Executive to perform
        any of the material duties of his employment hereunder including,
        without limitation, insubordination with respect to written directions received
        by the Executive from the Board of Directors of the Company,
        provided, however, that Executive shall have one (1) opportunity to cure
        any
        breach of this section 9(a)(i) within five (5) business days (“Cure Period”) of
        written notice to the Executive;

      

      (ii) Any
        willful, intentional or grossly negligent act by the Executive having the
        effect
        of injuring, in a material way (whether financial or otherwise and as determined
        in good-faith by a majority of the Board of Directors of the Company), the
        business or reputation of the Company or any of its affiliates, including
        but
        not limited to, any officer, director, executive of the Company or any
        stockholder owning greater than five percent (5%) of the Company’s outstanding
        Common Stock; provided, however, that the Executive shall be granted an
        opportunity to appear personally before the Board during its deliberations
        to
        explain the reasons for such conduct; 

       

      (iii) The
        Executive’s conviction of any felony or a misdemeanor involving moral turpitude
        (including entry of a nolo contendere plea);

       

      (iv) The
        determination by the Company, after a reasonable and good-faith investigation
        by
        the Company following a written allegation by another employee of the Company,
        that the Executive engaged in some form of harassment prohibited
        by law
        (including, without limitation, harassment that constitutes age, sex or race
        discrimination),
        unless
        the Executive’s actions were specifically directed by the Board of Directors of
        the Company;

       

      (v) Any
        misappropriation or embezzlement of the property of the Company or its
        affiliates;

       

      (vi) Breach
        by
        the Executive of any of the provisions of Sections
        6, 7
        or
8
        of this
        Agreement; and

       

      (vii) Breach
        by
        the Executive of any provision of this Agreement other than those contained
        in
Sections
        6, 7
        or
8
        which is
        not cured by the Executive within thirty (30) days after notice thereof is
        given
        to the Executive by the Company.

      

      (b) The
        Executive’s employment hereunder may be terminated by the Board of Directors of
        the Company due to the Executive’s Disability. For purposes of this Agreement, a
        termination for “Disability”
        shall
        occur upon rendering of a written termination notice by the Board of Directors
        of the Company after the Executive has been unable to substantially perform
        his
        duties hereunder for 90 or more consecutive days, or more than 120 days in
        any
        consecutive 12 month period, by reason of any physical or mental illness
        or
        injury. For purposes of this Section 9(b), the Executive agrees to make himself
        available and to cooperate in any reasonable examination by a reputable
        independent physician retained by the Company.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

       

      (c) The
        Executive’s employment hereunder may be terminated by the Board of Directors of
        the Company (or its successor) upon the occurrence of a Change of Control.
        For
        purposes of this Agreement, “Change
        of Control”
        means
        (i) the acquisition, directly or indirectly, following the date hereof by
        any
        person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
        Exchange Act of 1934, as amended), in one transaction or a series of related
        transactions, of securities of the Company representing in excess of fifty
        percent (50%) or more of the combined voting power of the Company’s then
        outstanding securities if such person or his or its affiliate(s) do not own
        in
        excess of 50% of such voting power on the date of this Agreement, or (ii)
        the
        future disposition by the Company (whether direct or indirect, by sale of
        assets
        or stock, merger, consolidation or otherwise) of all or substantially all
        of its
        business and/or assets in one transaction or series of related transactions
        (other than (i) a merger effected exclusively for the purpose of changing
        the
        domicile of the Company and (ii) financing activities in the ordinary course
        in
        which the Company sells its equity securities).

       

      (d) The
        Executive’s employment hereunder may be terminated by the Executive for Good
        Reason. For purposes of this Agreement, “Good
        Reason”
        shall
        mean any of the following: (i) the assignment to the Executive of
        duties
        inconsistent with the Executive's position, duties, responsibilities, titles
        or
        offices as described herein; (ii) any material reduction by the Corporation
        of the Executive's duties and responsibilities; (iii) any reduction
        by the
        Corporation of the Executive's compensation or benefits payable hereunder
        (it
        being understood that a reduction of benefits applicable to all employees
        of the
        Corporation, including the Executive, shall not be deemed a reduction of
        the
        Executive's compensation package for purposes of this definition); (iv) a
        material breach by the Company of this Agreement; (v) moving the regular
        place
        of business of the Company to a location that is more than 60 miles from
        Fairfield, Connecticut; or (vi) upon a Change of Control (1) that (x) results
        in
        the elimination of the Board of Directors or (y) representatives of the Board
        just prior to the event causing the Change of Control do not represent a
        majority of the Board immediately subsequent to the event causing the Change
        of
        Control and (2) in which the fair market value of the Company’s Common Stock, in
        the aggregate, as determined in good faith by the Board on the date of such
        Change of Control, is greater than $50,000,000.

       

      10. Compensation
        upon Termination.

       

      (a) If
        the
        Executive’s employment is terminated as a result of his death or Disability, the
        Company shall pay to the Executive or to the Executive’s estate, as applicable,
his
        Base
        Salary for a period of one year following the date of termination and any
        accrued but unpaid Bonus and expense reimbursement amounts through the date
        of
        his Death or Disability. All Stock Options that are
        scheduled to vest by the end of the calendar year in which such termination
        occurs shall be accelerated and deemed to have vested as of the termination
        date. Any Stock Options that have vested (or been deemed pursuant to the
        immediately preceding sentence to have vested) as
        of the
        date of the Executive’s termination shall remain exercisable for a period of 90
        days.
        All
        Stock
        Options that have
        not
        vested as
        of the
        date of termination shall be deemed to have expired as of such
        date.

       

      (b) If
        the
        Executive’s employment is terminated by the Board of Directors of the Company
        for Cause, then the Company shall pay to the Executive his Base Salary through
        the date of his termination and any expense reimbursement amounts owed through
        the date of termination. The Executive shall have no further entitlement
        to any
        other compensation or benefits from the Company. All
        Stock
        Options that have
        not
        vested as
        of the
        date of termination shall be deemed to have expired as of such date.
        Any
        Stock Options that have vested as of the date of the Executive’s termination for
        Cause shall remain exercisable for a period of 90 days.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

       

      (c) If
        the
        Executive’s employment is terminated by the Company (or its successor) upon the
        occurrence of a Change of Control and on the date of termination pursuant
        to
        this Section 10(c) the fair market value of the Company’s Common Stock, in the
        aggregate, as determined in good faith by the Board on the date of such Change
        of Control, is less than $50,000,000, then the Company (or its successor,
        as
        applicable) shall continue to pay to the Executive his Base Salary and benefits
        for a period of one year following such termination as well as any expense
        reimbursement amounts owed through the date of termination. All Stock Options
        that are
        scheduled to vest by the end of the calendar year in which such termination
        occurs shall be accelerated and deemed to have vested as of the termination
        date. Any Stock Options that have vested (or been deemed pursuant to the
        immediately preceding sentence to have vested) as
        of the
        date of the Executive’s termination shall remain exercisable for a period of 90
        days.

       

      (d) If
        the
        Executive’s employment is terminated by the Company other than as a result of
        the Executive’s death or Disability and other than for reasons specified in
        Sections 10(b), or if the Executive’s employment is terminated by the Executive
        for Good Reason, then the Company shall (i) continue to pay to the Executive
        his
        Base Salary and Guaranteed Bonus for a period of one year following such
        termination and (ii) pay the Executive any expense reimbursement amounts
        owed
        through the date of termination. All Stock Options scheduled
        to vest at the end of the calendar year in which such termination occurs
        shall
        be
        accelerated and deemed to have vested as of the termination date; provided,
        however,
        that if
        on the date of termination pursuant to this Section 10(d) the fair
        market value of the Company’s Common Stock, in the aggregate, as determined in
        good faith by the Board on the date of such termination, is greater than
        $50,000,000, then all of the Executive’s unvested Stock Options shall be
        accelerated and deemed to have vested as of the termination
        date. Any
        Stock
        Options that have vested (or been deemed pursuant to this Section 10(d))
        as of
        the date of the Executive’s termination shall remain exercisable for a period of
        90 days.

       

      (e) Following
        expiration and non-renewal of the Term, should the Company, in its sole
        discretion require that the Executive continue to comply with the terms of
        Section 7 hereof, the Company shall pay the Executive his Base Salary and
        Guaranteed Bonus for a period of one year following expiration of the
        Term.

       

      (f) This
        Section 10 sets forth the only obligations of the Company with respect to
        the
        termination of the Executive’s employment with the Company, and the Executive
        acknowledges that, upon the termination of his employment, he shall not be
        entitled to any payments or benefits which are not explicitly provided in
        Section 10.

       

      (g) Upon
        termination of the Executive’s employment hereunder for any reason, the
        Executive shall be deemed to have resigned as director of the Company, effective
        as of the date of such termination.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

       

      (h) The
        provisions of this Section 10 shall survive any termination of this
        Agreement.

       

      11. Miscellaneous.

       

      (a) This
        Agreement shall be governed by, and construed and interpreted in accordance
        with, the laws of the State of New York, without giving effect to its principles
        of conflicts of laws.

       

      (b) Any
        dispute arising out of, or relating to, this Agreement or the breach thereof
        (other than Sections 6 or 7 hereof), or regarding the interpretation thereof,
        shall be finally settled by arbitration conducted in New York City in accordance
        with the Employment Dispute Rules of the American Arbitration Association
        then
        in effect before a single arbitrator appointed in accordance with such rules.
        Judgment upon any award rendered therein may be entered and enforcement obtained
        thereon in any court having jurisdiction. The arbitrator shall have authority
        to
        grant any form of appropriate relief, whether legal or equitable in nature,
        including specific performance. For the purpose of any judicial proceeding
        to
        enforce such award or incidental to such arbitration or to compel arbitration
        and for purposes of Sections 6 and 7 hereof, the parties hereby submit to
        the
        non-exclusive jurisdiction of the Supreme Court of the State of New York,
        New
        York County, or the United States District Court for the Southern District
        of
        New York, and agree that service of process in such arbitration or court
        proceedings shall be satisfactorily made upon it if sent by registered mail
        addressed to it at the address referred to in paragraph (g) below. The
        costs
        of such arbitration shall be borne proportionate to the finding of fault
        as
        determined by the arbitrator. Judgment on the arbitration award may be entered
        by any court of competent jurisdiction.

       

      (c) This
        Agreement shall be binding upon and inure to the benefit of the parties hereto,
        and their respective heirs, legal representatives, successors and
        assigns.

       

      (d) This
        Agreement, and the Executive’s rights and obligations hereunder, may not be
        assigned by the Executive. The Company may assign its rights, together with
        its
        obligations, hereunder in connection with any sale, transfer or other
        disposition of all or substantially all of its business or assets and shall
        cause the acquirer to assume all of its obligations under this
        Agreement.

       

      (e) This
        Agreement cannot be amended orally, or by any course of conduct or dealing,
        but
        only by a written agreement signed by the parties hereto.

       

      (f) The
        failure of either party to insist upon the strict performance of any of the
        terms, conditions and provisions of this Agreement shall not be construed
        as a
        waiver or relinquishment of future compliance therewith, and such terms,
        conditions and provisions shall remain in full force and effect. No waiver
        of
        any term or condition of this Agreement on the part of either party shall
        be
        effective for any purpose whatsoever unless such waiver is in writing and
        signed
        by such party.

       

      (g) All
        notices, requests, consents and other communications, required or permitted
        to
        be given hereunder, shall be in writing and shall be delivered personally
        or by
        an overnight courier service or sent by registered or certified mail, postage
        prepaid, return receipt requested, to the parties at the addresses set forth
        on
        the first page of this Agreement, and shall be deemed given when so delivered
        personally or by overnight courier, or, if mailed, five days after the date
        of
        deposit in the United States mails. Either party may designate another address,
        for receipt of notices hereunder by giving notice to the other party in
        accordance with this paragraph (g).

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

       

      (h) This
        Agreement sets forth the entire agreement and understanding of the parties
        relating to the subject matter hereof, and supersedes all prior agreements,
        arrangements and understandings, written or oral, relating to the subject
        matter
        hereof. No representation, promise or inducement has been made by either
        party
        that is not embodied in this Agreement, and neither party shall be bound
        by or
        liable for any alleged representation, promise or inducement not so set
        forth.

       

      (i) As
        used
        in this Agreement, “affiliate” of a specified Person shall mean and include any
        Person controlling, controlled by or under common control with the specified
        Person.

       

      (j) The
        section headings contained herein are for reference purposes only and shall
        not
        in any way affect the meaning or interpretation of this Agreement.

       

      (k) This
        Agreement may be executed in any number of counterparts, each of which shall
        constitute an original, but all of which together shall constitute one and
        the
        same instrument.

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        date
        first above written.

       

      
        	 	 	 
	 	ZYLOGEN,
                INC.
	 
 	 
 	 
 
	 	By:  	/s/ David
                Tanen
	 	
                
Name:
                David Tanen
	 	Title:  
                President

      

       

      
        
          	 	 	 
	 	EXECUTIVE
	 
 	 
 	 
 
	 	By:  	/s/ Jonathan
                  Lewis
	 	
                  
Name:
                  Jonathan Lewis, M.D.
	 	 

        

      
 

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      

      SCHEDULE
        7(a)

      

      1. The
        research, development, manufacture, commercialization and sale of organic
        arsenicals for the treatment of cancer and human disease.

       

         

       

      
        
          
          

        

        
          14

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