CYTRX CORPORATION 2008 STOCK INCENTIVE PLAN GRANT NOTICE

Name of Participating Optionee:   Grant No.	[Daniel J.Levitt, M.D., Ph.D.]; [Steven A. Kriegsman]
Total Number of Shares Awarded:	[___] Non-Qualified Stock Options
Exercise price:	$
Grant date:
Vesting Schedule:	Unless the exercisability of the Option is accelerated in accordance with the Plan, the Option shall vest (become exercisable) in thirty-six (36) equal monthly installments, beginning on the one-month anniversary of the Date of Grant. Under certain conditions specified in Section 1 of the Stock Option Agreement, any and all unvested options in this Grant No. _____ shall become immediately exercisable.

 

	CYTRX CORPORATION
	By:	/s/ STEVEN A. KRIEGSMAN
		Steven A. Kriegsman
		Title: Chairman and Chief Executive Officer
		[in the case of Daniel Levitt, M.D., Ph.D]; [John Y. Caloz, Chief Financial Officer in the case of Steven A. Kriegsman]

 

 

1.            VESTING. Subject to acceleration of vesting as provided in the Plan and to the limitations contained herein, your option shall vest (become exercisable) as provided in your Notice of Award; provided, that your option shall immediately vest in full upon FDA marketing approval of the Company's lead product candidate, aldoxorubicin; and provided further, that your option shall immediately vest in full upon the termination of your employment (i) by the Company without "Cause", upon your resignation with "Good Reason" as defined in the Employment Agreement dated __________ between the Company and you (the "Employment Agreement") or (ii) due to your death or by the Company by reason of your "Disability" as defined in the Employment Agreement.

2.            NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for capitalization adjustments, as provided in the Plan.

3.            METHOD OF PAYMENT. The Exercise Price may be paid to the Company (i) in cash or cash equivalent; or (ii) in any other method of Consideration acceptable to the Board pursuant to the Plan.

4.            WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

5.            SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

6.            TERM. You may not exercise your option before the commencement of its term or after its term expires. The term of your option commences on the Date of Grant and expires at 5:00 P.M., Pacific Time, on the day immediately prior to the tenth anniversary of the Date of Grant, subject to earlier termination as provided in the Plan in the event of termination of your Service for "Cause" as defined in the Employment Agreement; provided, that in the event of the termination of your employment (i) by the Company without "Cause", upon your resignation with "Good Reason" as defined in the Employment Agreement or (ii) due to your death or by the Company by reason of your "Disability" as defined in the Employment Agreement, your option shall remain exercisable thereafter for its full term.

7.        EXERCISE.

(a)            You may exercise the vested portion of your option during its term by delivering a written Notice of Exercise to the Secretary of the Company at the principal executive offices of the Company, in substantially the form attached hereto as Exhibit A, or such other form as the Committee may approve, together with such additional documents as the Company may then require.

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

8.            TRANSFERABILITY. The transferability provisions contained in the Plan are incorporated into and made a part of this Option Agreement.

9.            OPTION NOT A SERVICE CONTRACT. Pursuant to the Plan, your option is not an employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate to continue any relationship that you might have as a Director or Consultant.

10.            WITHHOLDING OBLIGATIONS.

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

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

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

11.            NOTICES. Notices and communications under this Option Agreement must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid.  Notices to the Company must be addressed to:

12.            PLAN.  The terms contained in the Plan are incorporated into and made a part of this Option Agreement and this Option Agreement shall be governed by and construed in accordance with the Plan.  In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Option Agreement, the provisions of the Plan shall be controlling and determinative; provided, however, that the accelerated vesting and exercise period set forth in sections 1 and 6 of this Option Agreement shall prevail over any contrary provision in the Plan.

CYTRX CORPORATION	[DANIEL J. LEVITT, M.D., Ph.D.]; [STEVEN A. KRIEGSMAN]
/s/   [__________________________]	/s/ [__________________________]
Steven A. Kriegsman	Optionee
Chairman and Chief Executive Officer  [in the case of Daniel Levitt, M.D., Ph.D.]; [John Y. Caloz, Chief Financial Officer, in the case of Steven A. Kriegsman]