Exhibit 10.2

METABASIS THERAPEUTICS, INC.

AMENDED AND RESTATED 2001 EQUITY INCENTIVE PLAN

Amendment and Restatement Adopted by Board on June 6, 2001

Amendment and Restatement Approved by Stockholders on July 23, 2001

Amendment Adopted by Board on November 29, 2001

Amendment Adopted by Board on August 21, 2002

Amendments Approved by Stockholders on October 30, 2002

Amendment and Restatement Adopted by Board on May 6, 2004

Amendment and Restatement Approved by Stockholders on May 10, 2004

Amendment Adopted by Board on January 17, 2007

Termination Date:  May 10, 2014

1.             PURPOSES.

(a)           Amendment and Restatement.  The Plan amends and restates the
Company’s Amended and Restated 2001 Equity Incentive Plan adopted by the Board
on June 6, 2001, as amended on November 29, 2001 and August 21, 2002 (the “Prior
Plan”).  All outstanding options granted under the Prior Plan shall remain
subject to the terms of the Prior Plan.  All options granted subsequent to the
adoption of this Plan by the Board shall be subject to the terms of the Plan.

(b)           Eligible Stock Award Recipients.  The persons eligible to receive
Stock Awards are Employees, Directors and Consultants.

(c)           Available Stock Awards.  The purpose of the Plan is to provide a
means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards:  (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) Restricted Stock Awards, (iv) Stock Appreciation Rights,
(v) Phantom Stock Awards and (vi) Other Stock Awards.

(d)           General Purpose.  The Company, by means of the Plan, seeks to
retain the services of the group of persons eligible to receive Stock Awards, to
secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.

2.             DEFINITIONS.

(a)           “Affiliate” means any parent corporation or subsidiary corporation
of the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

(b)           “Board” means the Board of Directors of the Company.

1

--------------------------------------------------------------------------------

(c)           “Capitalization Adjustment” has the meaning ascribed to that term
in Section 11(a).

(d)           “Cause” means, with respect to a Participant, the occurrence of
any of the following:  (i) such Participant’s conviction of any felony or any
crime involving fraud or dishonesty which, in the Board’s sole discretion,
materially affects the business of the Company; (ii) such Participant’s
participation (whether by affirmative act or omission) in a fraud, act of
dishonesty or other act of misconduct against the Company and/or its Affiliates
which, in the Board’s sole discretion, materially affects the business of the
Company; (iii) conduct by such Participant which, based upon a good faith and
reasonable factual investigation by the Company (or, if such Participant is an
Officer, by the Board), demonstrates such Participant’s gross unfitness to
serve; (iv) such Participant’s violation of any statutory or fiduciary duty, or
duty of loyalty, owed to the Company and/or its Affiliates; (v) such
Participant’s breach of any material term of any material contract between such
Participant and the Company and/or its Affiliates; and (vi) such Participant’s
repeated violation of any material Company policy.  Notwithstanding the
foregoing, such Participant’s Disability shall not constitute Cause as set forth
herein.  The determination that a termination is for Cause shall be by the
Committee in its sole and exclusive judgment and discretion.

(e)           “Change in Control” means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:

(i)            any Exchange Act Person becomes the Owner, directly or
indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding securities other than by
virtue of a merger, consolidation or similar transaction.  Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate
thereof or any other Exchange Act Person from the Company in a transaction or
series of related transactions the primary purpose of which is to obtain
financing for the company through the issuance of equity securities or (B)
solely because the level of Ownership held by any Exchange Act Person (the
“Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;

(ii)           there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than 50%
of the combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than 50% of the combined
outstanding voting power of the parent of the surviving Entity in such merger,
consolidation or similar

2

--------------------------------------------------------------------------------

transaction, in each case in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such transaction;

(iii)         there is consummated a sale, lease, license or other disposition
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an Entity, more than 50% of the combined voting power of the voting
securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of
the Company immediately prior to such sale, lease, license or other disposition;
or

(iv)          individuals who, on the date this Plan is adopted by the Board,
are members of the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the members of the Board; provided, however,
that if the appointment or election (or nomination for election) of any new
Board member was approved or recommended by a majority vote of the members of
the Incumbent Board then still in office, such new member shall, for purposes of
this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Stock Awards subject to such
agreement (it being understood, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written
agreement, the foregoing definition shall apply).

(f)            “Code” means the Internal Revenue Code of 1986, as amended.

(g)           “Committee” means a committee of one or more members of the Board
appointed by the Board in accordance with Section 3(c).

(h)           “Common Stock” means the common stock of the Company.

(i)            “Company” means Metabasis Therapeutics, Inc., a Delaware
corporation.

(j)            “Consultant” means any person, including an advisor, (i) engaged
by the Company or an Affiliate to render consulting or advisory services and who
is compensated for such services or (ii) serving as a member of the Board of
Directors of an Affiliate and who is compensated for such services.  However,
the term “Consultant” shall not include Directors who are not compensated by the
Company for their services as Directors, and the payment of a director’s fee by
the Company for services as a Director shall not cause a Director to be
considered a “Consultant” for purposes of the Plan.

(k)           “Continuous Service” means that the Participant’s service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated.  A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, shall not terminate a
Participant’s Continuous Service.  For

3

--------------------------------------------------------------------------------

example, a change in status from an Employee of the Company to a Consultant of
an Affiliate or to a Director shall not constitute an interruption of Continuous
Service.  The Board or the chief executive officer of the Company, in that
party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave. 
Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
Service for purposes of vesting in a Stock Award only to such extent as may be
provided in the Company’s leave of absence policy or in the written terms of the
Participant’s leave of absence.

(l)            “Corporate Transaction” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:

(i)            a sale or other disposition of all or substantially all, as
determined by the Board in its discretion, of the consolidated assets of the
Company and its Subsidiaries;

(ii)           a sale or other disposition of at least 90% of the outstanding
securities of the Company;

(iii)         a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or

(iv)          a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.

(m)          “Covered Employee” means the chief executive officer and the four
other highest compensated officers of the Company for whom total compensation is
required to be reported to stockholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

(n)           “Director” means a member of the Board.

(o)           “Disability” means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

(p)           “Employee” means any person employed by the Company or an
Affiliate.  Service as a Director or payment of a director’s fee by the Company
or an Affiliate shall not be sufficient to constitute “employment” by the
Company or an Affiliate.

(q)           “Entity” means a corporation, partnership or other entity.

(r)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

(s)           “Exchange Act Person” means any natural person, Entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” shall not include (A) the Company or any Subsidiary of the
Company, (B) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding

4

--------------------------------------------------------------------------------

securities under an employee benefit plan of the Company or any Subsidiary of
the Company, (C) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (D) an Entity Owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
Ownership of stock of the Company.

(t)            “Fair Market Value” means, as of any date, the value of the
Common Stock determined as follows:

(i)            If the Common Stock is listed on any established stock exchange,
the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, and in each
case rounded up where necessary to the nearest whole cent) as quoted on such
exchange (or the exchange with the greatest volume of trading in the Common
Stock) on the day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable.  Unless otherwise provided by the
Board, if there is no closing sales price (or closing bid, if no sales were
reported) for the Common Stock on the day of determination, then the Fair Market
Value shall be the closing sales price (or the closing bid, if no sales were
reported, and in each case rounded up where necessary to the nearest whole cent)
on the last preceding date for which such quotation exists.

(ii)           In the absence of such market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.

(u)           “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

(v)            “IPO Date” means the effective date of the initial public
offering of the Common Stock.

(w)           “Non-Employee Director” means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation, either directly or indirectly, from the Company or its
parent or a subsidiary, for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not
be required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), does not possess an interest in any other
transaction for which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

(x)           “Nonstatutory Stock Option” means an Option not intended to
qualify as an Incentive Stock Option.

(y)           “Officer” means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(z)           “Option” means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

5

--------------------------------------------------------------------------------

(aa)         “Option Agreement” means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant.  Each Option Agreement shall be subject to the terms and conditions of
the Plan.

(bb)         “Optionholder” means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

(cc)         “Other Stock Award” means an award based in whole or in part by
reference to the Common Stock which is granted pursuant to the terms and
conditions of Section 7(d).

(dd)         “Other Stock Award Agreement” means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions
of an individual Other Stock Award grant.  Each Other Stock Award Agreement
shall be subject to the terms and conditions of the Plan.

(ee)         “Outside Director” means a Director who either (i) is not a current
employee of the Company or an “affiliated corporation” (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an “affiliated corporation” who receives
compensation for prior services (other than benefits under a tax-qualified
retirement plan) during the taxable year, has not been an officer of the Company
or an “affiliated corporation”, and does not receive remuneration from the
Company or an “affiliated corporation,” either directly or indirectly, in any
capacity other than as a Director or (ii) is otherwise considered an “outside
director” for purposes of Section 162(m) of the Code.

(ff)           “Own,” “Owned,” “Owner,” “Ownership”  A person or Entity shall be
deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

(gg)         “Participant” means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

(hh)         “Phantom Stock Award” means a right to receive shares of Common
Stock which is granted pursuant to the terms and conditions of Section 7(b).

(ii)           “Phantom Stock Award Agreement” means a written agreement between
the Company and a holder of a Phantom Stock Award evidencing the terms and
conditions of an individual Phantom Stock Award grant.  Each Phantom Stock Award
Agreement shall be subject to the terms and conditions of the Plan.

(jj)           “Plan” means this Metabasis Therapeutics, Inc. Amended and
Restated 2001 Equity Incentive Plan.

(kk)        “Restricted Stock Award” means an award of shares of Common Stock
which is granted pursuant to the terms and conditions of Section 7(a).

6

--------------------------------------------------------------------------------

(ll)           “Restricted Stock Award Agreement” means an agreement between the
Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of an individual Restricted Stock Award grant.  Each Restricted Stock
Award Agreement shall be subject to the terms and conditions of the Plan.

(mm)       “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.

(nn)         “Securities Act” means the Securities Act of 1933, as amended.

(oo)         “Stock Appreciation Right” means a right to receive the
appreciation of Common Stock that is granted pursuant to the terms and
conditions of Section 7(c).

(pp)         “Stock Appreciation Right Agreement” means a written agreement
between the Company and a holder of a Stock Appreciation Right evidencing the
terms and conditions of an individual Stock Appreciation Right grant.  Each
Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.

(qq)         “Stock Award” means any right granted under the Plan, including an
Option, a Restricted Stock Award, a Stock Appreciation Right, a Phantom Stock
Award or any Other Stock Award.

(rr)         “Stock Award Agreement” means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant.  Each Stock Award Agreement shall be subject to
the terms and conditions of the Plan.

(ss)         “Subsidiary” means, with respect to the Company, (i) any
corporation of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, Owned
by the Company, and (ii) any partnership in which the Company has a direct or
indirect interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50%.

(tt)           “Ten Percent Stockholder” means a person who Owns (or is deemed
to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of any
of its Affiliates.

3.             ADMINISTRATION.

(a)           Administration by Board.  The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in Section 3(c).

(b)           Powers of Board.  The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

(i)            To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what

7

--------------------------------------------------------------------------------

type or combination of types of Stock Award shall be granted; the provisions of
each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive Common Stock pursuant to a
Stock Award; and the number of shares of Common Stock with respect to which a
Stock Award shall be granted to each such person.

(ii)           To construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration.  The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

(iii)         To effect, at any time and from time to time, with the consent of
any adversely affected Optionholder, (1) the reduction of the exercise price of
any outstanding Option under the Plan, (2) the cancellation of any outstanding
Option under the Plan and the grant in substitution therefor of (A) a new Option
under the Plan or another equity plan of the Company covering the same or a
different number of shares of Common Stock, (B) a Restricted Stock Award
(including a stock bonus), (C) a Stock Appreciation Right, (D) a Phantom Stock
Award (E) an Other Stock Award, (F) cash and/or (G) other valuable consideration
(as determined by the Board, in its sole discretion), or (3) any other action
that is treated as a repricing under generally accepted accounting principles.

(iv)          To amend the Plan or a Stock Award as provided in Section 12.

(v)            To terminate or suspend the Plan as provided in Section 13.

(vi)          Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the Company
and that are not in conflict with the provisions of the Plan.

(c)           Delegation to Committee.

(i)            General.  The Board may delegate administration of the Plan to a
Committee or Committees of one or more members of the Board, and the term
“Committee” shall apply to any person or persons to whom such authority has been
delegated.  If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.  The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

(ii)           Section 162(m) and Rule 16b-3 Compliance.  In the discretion of
the Board, the Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3.  In addition, the Board
or the Committee, in their discretion, may (1) delegate to a committee of one or
more members of the Board who need not be Outside Directors the authority to
grant Stock Awards to eligible persons who are either (a) not then

8

--------------------------------------------------------------------------------

Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award, or (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code,
and/or (2) delegate to a committee of one or more members of the Board who need
not be Non-Employee Directors the authority to grant Stock Awards to eligible
persons who are not then subject to Section 16 of the Exchange Act.

(d)           Delegation to an Officer.  The Board may delegate to one or more
Officers of the Company the authority to do one or both of the following (i)
designate Officers and Employees of the Company or any of its Subsidiaries to be
recipients of Stock Awards and (ii) determine the number of shares of Common
Stock to be subject to such Stock Awards granted to such Officers and Employees
of the Company; provided, however, that the Board resolutions regarding such
delegation shall specify the total number of shares of Common Stock that may be
subject to the Stock Awards granted by such Officer and that such Officer may
not grant a Stock Award to himself or herself.  Notwithstanding the foregoing,
the Board may not delegate authority to an Officer to determine the Fair Market
Value of the Common Stock.

(e)           Effect of Board’s Decision. All determinations, interpretations
and constructions made by the Board in good faith shall not be subject to review
by any person and shall be final, binding and conclusive on all persons.

4.             SHARES SUBJECT TO THE PLAN.

(a)           Share Reserve.  Subject to the provisions of Section 11(a)
relating to Capitalization Adjustments, the shares of Common Stock that may be
issued pursuant to Stock Awards shall not exceed in the aggregate 2,213,995
shares of Common Stock, plus an annual increase to be added on the first day of
the fiscal year of the Company for a period commencing on the first day of the
fiscal year that begins on January 1, 2005 and ending on (and including) the
first day of the fiscal year that begins on January 1, 2014 (each such day, a
“Calculation Date”), equal to the lesser of (i) 3% of the fully diluted (i.e.
assuming exercise for or conversion into Common Stock of all then outstanding
options, warrants and convertible securities of the Company) shares of Common
Stock outstanding on each such Calculation Date (rounded down to the nearest
whole share); or (ii) 1,000,000 shares of Common Stock.  Notwithstanding the
foregoing, the Board may act, prior to the first day of any fiscal year of the
Company, to increase the share reserve by such number of shares of Common Stock
as the Board shall determine, which number shall be less than each of (i) and
(ii).

(b)           Reversion of Shares to the Share Reserve.  If any Stock Award
shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, or if any shares of Common Stock issued to a
Participant pursuant to a Stock Award are forfeited back to or repurchased by
the Company, including, but not limited to, any repurchase or forfeiture caused
by the failure to meet a contingency or condition required for the vesting of
such shares, then the shares of Common Stock not acquired under such Stock
Award, or forfeited back to or repurchased by the Company, shall revert to and
again become available for issuance under the Plan.  If any shares subject to a
Stock Award are not delivered to a Participant because such shares are withheld
for the payment of taxes or the Stock Award is exercised through a reduction of
shares subject to the Stock Award (i.e., “net exercised”), the number of shares
that are not delivered to the Participant as a result thereof shall revert to
and again become available

9

--------------------------------------------------------------------------------

for issuance under the Plan.  If the exercise price of any Stock Award is
satisfied by tendering shares of Common Stock held by the Participant (either by
actual delivery or attestation), then the number of such tendered shares shall
revert to and again become available for issuance under the Plan. 
Notwithstanding anything to the contrary in this Section 4(b), subject to the
provisions of Section 11(a) relating to Capitalization Adjustments the aggregate
maximum number of shares of Common Stock that may be issued as Incentive Stock
Options shall be 11,000,000 shares of Common Stock.

(c)           Source of Shares.  The shares of Common Stock subject to the Plan
may be unissued shares or reacquired shares, bought on the market or otherwise.

5.             ELIGIBILITY.

(a)           Eligibility for Specific Stock Awards.  Incentive Stock Options
may be granted only to Employees.  Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.

(b)           Ten Percent Stockholders.  A Ten Percent Stockholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is at
least 110% of the Fair Market Value of the Common Stock on the date of grant and
the Option is not exercisable after the expiration of five years from the date
of grant.

(c)           Section 162(m) Limitation on Annual Grants.  Subject to the
provisions of Section 11(a) relating to Capitalization Adjustments, no Employee
shall be eligible to be granted Options covering more than 1,000,000 shares of
Common Stock during any calendar year, and no Employee shall be eligible to be
granted Stock Appreciation Rights covering more than 1,000,000 shares of Common
Stock during any calendar year.

(d)           Consultants.  A Consultant shall not be eligible for the grant of
a Stock Award if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act (“Form S-8”) is not available to register either the offer or
the sale of the Company’s securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company, because the
Consultant is not a natural person, or because of any other rule governing the
use of Form S-8, unless the Company determines both (i) that such grant (A)
shall be registered in another manner under the Securities Act (e.g., on a Form
S-3 Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.

6.             OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and,
if certificates are issued, a separate certificate or certificates shall be
issued for shares of Common Stock purchased on exercise of each type of Option. 
The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:

10

--------------------------------------------------------------------------------

(a)           Term.  The Board shall determine the term of an Option; provided
that, subject to the provisions of Section 5(b) regarding Ten Percent
Stockholders, no Incentive Stock Option shall be exercisable after the
expiration of ten years from the date on which it was granted.

(b)           Exercise Price of an Incentive Stock Option.  Subject to the
provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise
price of each Incentive Stock Option shall be not less than 100% of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is
granted.  Notwithstanding the foregoing, an Incentive Stock Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

(c)           Exercise Price of a Nonstatutory Stock Option.  The Board, in its
discretion, shall determine the exercise price of each Nonstatutory Stock
Option.

(d)           Consideration.  The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable law,
either (i) in cash at the time the Option is exercised or (ii) at the discretion
of the Board at the time of the grant of the Option (or subsequently in the case
of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common
Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder, (3) by a “net exercise” of the Option (as further described
below), (4) pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board that, prior to the issuance of Common Stock, results
in either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds or (5) in any other form of legal consideration that may be
acceptable to the Board.  Unless otherwise specifically provided in the Option,
the purchase price of Common Stock acquired pursuant to an Option that is paid
by delivery to the Company of other Common Stock acquired, directly or
indirectly from the Company, shall be paid only by shares of the Common Stock of
the Company that have been held for more than six months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes).  At any time that the Company is incorporated in Delaware,
payment of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.

In the case of any deferred payment arrangement, interest shall be compounded at
least annually and shall be charged at the minimum rate of interest necessary to
avoid (1) the treatment as interest, under any applicable provisions of the
Code, of any amounts other than amounts stated to be interest under the deferred
payment arrangement and (2) the treatment of the Option as a variable award for
financial accounting purposes.

In the case of a “net exercise” of an Option, the Company will not require a
payment of the exercise price of the Option from the Participant but will reduce
the number of shares of Common Stock issued upon the exercise by the largest
number of whole shares that has a Fair Market Value that does not exceed the
aggregate exercise price.  With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the
Participant.  The shares of Common Stock so used to pay the exercise price of an
Option under a “net exercise” will be considered to have resulted from the
exercise of the Option, and

11

--------------------------------------------------------------------------------

accordingly, the Option will not again be exercisable with respect to such
shares, the shares actually delivered to the Participant, and any shares
withheld for purposes of tax withholding.

(e)           Transferability of an Incentive Stock Option.  An Incentive Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder.  Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form provided by or otherwise
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

(f)            Transferability of a Nonstatutory Stock Option.  A Nonstatutory
Stock Option shall be transferable to the extent provided in the Option
Agreement.  If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder. 
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form provided by or otherwise satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

(g)           Vesting Generally.  The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal.  The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate.  The vesting provisions of individual Options may vary.  The
provisions of this Section 6(g) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.

(h)           Termination of Continuous Service.  In the event that an
Optionholder’s Continuous Service terminates (for reasons other than Cause or
upon the Optionholder’s death or Disability), the Optionholder may exercise his
or her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination) but only within such period of time ending
on the earlier of (i) the date three months following the termination of the
Optionholder’s Continuous Service (or such longer or shorter period specified in
the Option Agreement or (ii) the expiration of the term of the Option as set
forth in the Option Agreement.  If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Option Agreement,
the Option shall terminate.

(i)            Extension of Termination Date.  An Optionholder’s Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder’s Continuous Service (for reasons other than
Cause or upon the Optionholder’s death or Disability) would be prohibited at any
time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in the Option Agreement or (ii) the expiration of a period of three months
after the termination of the Optionholder’s Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.

12

--------------------------------------------------------------------------------

(j)            Disability of Optionholder.  In the event that an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date 12 months
following such termination (or such longer or shorter period specified in the
Option Agreement or (ii) the expiration of the term of the Option as set forth
in the Option Agreement.  If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

(k)           Death of Optionholder.  In the event that (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder’s Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder’s death pursuant to Section 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date 18 months following the
date of death (or such longer or shorter period specified in the Option
Agreement or (2) the expiration of the term of such Option as set forth in the
Option Agreement.  If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.

(l)            Termination for Cause.  In the event an Optionholder’s Continuous
Service is terminated for Cause, the Option shall terminate upon the termination
date of such Optionholder’s Continuous Service and the Optionholder is
prohibited from exercising his or her Option as of the time of such termination.

(m)          Early Exercise.  The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder’s
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
the Option.  Any unvested shares of Common Stock so purchased may be subject to
a repurchase option in favor of the Company or to any other restriction the
Board determines to be appropriate.  The Company will not exercise its
repurchase option until at least six months (or such longer or shorter period of
time required to avoid a charge to earnings for financial accounting purposes)
have elapsed following exercise of the Option unless the Board otherwise
specifically provides in the Option.

7.             PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

(a)           Restricted Stock Awards.  Each Restricted Stock Award Agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate.  At the Board’s election, shares of Common Stock may be
(i) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by
a certificate, which certificate shall be held in such form and manner as
determined by the Board.  The terms and conditions of Restricted Stock Award
Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Award Agreements need not be identical, provided,
however, that each Restricted Stock Award Agreement shall

13

--------------------------------------------------------------------------------

include (through incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

(i)            Purchase Price.  At the time of the grant of a Restricted Stock
Award, the Board will determine the price to be paid by the Participant for each
share subject to the Restricted Stock Award.  To the extent required by law, the
price to be paid by the Participant for each share of the Restricted Stock Award
will not be less than the par value of a share of Common Stock.  A Restricted
Stock Award may be awarded as a stock bonus (i.e., with no cash purchase price
to be paid) to the extent permissible under applicable law.

(ii)           Consideration.  At the time of the grant of a Restricted Stock
Award, the Board will determine the consideration permissible for the payment of
the purchase price of the Restricted Stock Award.  The purchase price of Common
Stock acquired pursuant to the Restricted Stock Award shall be paid in one of
the following ways: (i) in cash at the time of purchase; (ii) at the discretion
of the Board, according to a deferred payment or other similar arrangement with
the Participant; (iii) by services rendered or to be rendered to the Company; or
(iv) in any other form of legal consideration that may be acceptable to the
Board; provided, however, that at any time that the Company is incorporated in
Delaware, the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be paid by deferred payment and must be paid in a
form of consideration that is permissible under the Delaware Corporation Law.

(iii)         Vesting. Shares of Common Stock acquired under a Restricted Stock
Award may, but need not, be subject to a share repurchase option in favor of the
Company in accordance with a vesting schedule to be determined by the Board.

(iv)          Termination of Participant’s Continuous Service. In the event that
a Participant’s Continuous Service terminates, the Company shall have the right,
but not the obligation, to repurchase or otherwise reacquire any or all of the
shares of Common Stock held by the Participant that have not vested as of the
date of termination under the terms of the Restricted Stock Award Agreement.  At
the Board’s election, the repurchase right may be at the least of: (i) the Fair
Market Value on the relevant date; (ii) the Participant’s original cost; or
(iii) if the Participant paid the purchase price for the shares of Common Stock
with services rendered, then for no consideration.  The Company will not
exercise its repurchase option until at least six months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes) have elapsed following the purchase of the restricted stock
unless otherwise determined by the Board or provided in the Restricted Stock
Award Agreement.

(v)            Transferability. Rights to purchase or receive shares of Common
Stock granted under a Restricted Stock Award shall be transferable by the
Participant only upon such terms and conditions as are set forth in the
Restricted Stock Award Agreement, as the Board shall determine in its
discretion, and so long as Common Stock awarded under the Restricted Stock Award
remains subject to the terms of the Restricted Stock Award Agreement.

(b)           Phantom Stock.  Each Phantom Stock Award Agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate.  The terms and conditions of Phantom Stock Award Agreements may
change from time to time, and the terms

14

--------------------------------------------------------------------------------

and conditions of separate Phantom Stock Award Agreements need not be identical,
provided, however, that each Phantom Stock Award Agreement shall include
(through incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:

(i)            Consideration.  At the time of grant of a Phantom Stock Award,
the Board will determine the consideration, if any, to be paid by the
Participant upon delivery of each share of Common Stock subject to the Phantom
Stock Award. To the extent required by applicable law, the consideration to be
paid by the Participant for each share of Common Stock subject to a Phantom
Stock Award will not be less than the par value of a share of Common Stock. 
Such consideration may be paid in any form permitted under applicable law.

(ii)           Vesting.  At the time of the grant of a Phantom Stock Award, the
Board may impose such restrictions or conditions to the vesting of the Phantom
Stock Award as it, in its absolute discretion, deems appropriate.

(iii)         Payment.  A Phantom Stock Award may be settled by the delivery of
shares of Common Stock, their cash equivalent, or any combination of the two, as
the Board deems appropriate.

(iv)          Additional Restrictions.  At the time of the grant of a Phantom
Stock Award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Phantom Stock Award after the vesting of such Award.

(v)            Dividend Equivalents.  Dividend equivalents may be credited in
respect of shares of Common Stock covered by a Phantom Stock Award, as
determined by the Board and contained in the Phantom Stock Award Agreement.  At
the discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Phantom Stock Award by dividing
(1) the aggregate amount or value of the dividends paid with respect to that
number of shares of Common Stock covered by the Phantom Stock Award then
credited by (2) the Fair Market Value per share of Common Stock on the payment
date for such dividend, or in such other manner as determined by the Board.  Any
additional shares covered by the Phantom Stock Award credited by reason of such
dividend equivalents will be subject to all the terms and conditions of the
underlying Phantom Stock Award Agreement to which they relate.

(vi)          Termination of Participant’s Continuous Service.  Except as
otherwise provided in the applicable Phantom Stock Award Agreement, such portion
of the Phantom Stock Award that has not vested will be forfeited upon the
Participant’s termination of Continuous Service for any reason.

(c)           Stock Appreciation Rights.  Each Stock Appreciation Right
Agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  The terms and conditions of Stock
Appreciation Right Agreements may change from time to time, and the terms and
conditions of separate Stock Appreciation Right Agreements need not be
identical, but each Stock Appreciation Right Agreement shall include (through
incorporation of

15

--------------------------------------------------------------------------------

the provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:

(i)            Strike Price and Calculation of Appreciation.  Each Stock
Appreciation Right will be denominated in share of Common Stock equivalents. 
The appreciation distribution payable on the exercise of a Stock Appreciation
Right will be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of
share of Common Stock equivalents in which the Participant is vested under such
Stock Appreciation Right, and with respect to which the Participant is
exercising the Stock Appreciation Right on such date, over (B) an amount that
will be determined by the Committee at the time of grant of the Stock
Appreciation Right.

(ii)           Vesting.  At the time of the grant of a Stock Appreciation Right,
the Board may impose such restrictions or conditions to the vesting of such
Stock Appreciate Right as it, in its absolute discretion, deems appropriate.

(iii)         Exercise.  To exercise any outstanding Stock Appreciation Right,
the Participant must provide written notice of exercise to the Company in
compliance with the provisions of the Stock Appreciation Right Agreement
evidencing such Stock Appreciation Right.

(iv)          Payment.  The appreciation distribution in respect of a Stock
Appreciation Right may be paid in Common Stock, in cash, or any combination of
the two, or in any other form of consideration as determined by the Board and
contained in the Stock Appreciation Right Agreement evidencing such Stock
Appreciation Right.

(v)            Termination of Continuous Service.  In the event that a
Participant’s Continuous Service terminates, the Participant may exercise his or
her Stock Appreciation Right (to the extent that the Participant was entitled to
exercise such Stock Appreciation Right as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three months
following the termination of the Participant’s Continuous Service (or such
longer or shorter period specified in the Stock Appreciation Right Agreement) or
(ii) the expiration of the term of the Stock Appreciation Right as set forth in
the Stock Appreciation Right Agreement.  If, after termination, the Participant
does not exercise his or her Stock Appreciation Right within the time specified
in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall
terminate.

(d)           Other Stock Awards.  Other forms of Stock Awards valued in whole
or in part by reference to, or otherwise based on, Common Stock may be granted
either alone or in addition to Stock Awards provided for under Section 6 and the
preceding provisions of this Section 7.  Subject to the provisions of the Plan,
the Board shall have sole and complete authority to determine the persons to
whom and the time or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Awards and all other terms and conditions of such Awards.

16

--------------------------------------------------------------------------------

8.             COVENANTS OF THE COMPANY.

(a)           Availability of Shares.  During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.

(b)           Securities Law Compliance.  The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Stock Awards and to issue and sell shares
of Common Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award.  If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.

9.             USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute
general funds of the Company.

10.          MISCELLANEOUS.

(a)           Acceleration of Exercisability and Vesting.  The Board shall have
the power to accelerate the time at which a Stock Award may first be exercised
or the time during which a Stock Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the Stock Award
stating the time at which it may first be exercised or the time during which it
will vest.

(b)           Stockholder Rights.  No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Stock Award unless and until such Participant
has satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

(c)           No Employment or other Service Rights.  Nothing in the Plan or any
instrument executed or Stock Award granted pursuant thereto shall confer upon
any Participant any right to continue to serve the Company or an Affiliate in
the capacity in effect at the time the Stock Award was granted or shall affect
the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

(d)           Incentive Stock Option $100,000 Limitation.  To the extent that
the aggregate Fair Market Value (determined at the time of grant) of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionholder during any

17

--------------------------------------------------------------------------------

calendar year (under all plans of the Company and its Affiliates) exceeds
$100,000, the Options or portions thereof that exceed such limit (according to
the order in which they were granted) shall be treated as Nonstatutory Stock
Options, notwithstanding any contrary provision of a Stock Award Agreement.

(e)           Investment Assurances.  The Company may require a Participant, as
a condition of exercising or acquiring Common Stock under any Stock Award, (i)
to give written assurances satisfactory to the Company as to the Participant’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing
the Common Stock.  The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws.  The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

(f)            Withholding Obligations.  To the extent provided by the terms of
a Stock Award Agreement, the Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Common
Stock under a Stock Award by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means:  (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award; provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law (or such lesser amount as may be necessary to
avoid variable award accounting); or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

11.          ADJUSTMENTS UPON CHANGES IN STOCK.

(a)           Capitalization Adjustments.  If any change is made in, or other
event occurs with respect to, the Common Stock subject to the Plan or subject to
any Stock Award without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a “Capitalization Adjustment”), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Sections 4(a) and 4(b) and the

18

--------------------------------------------------------------------------------

maximum number of securities subject to award to any person pursuant to Section
5(c), and the outstanding Stock Awards will be appropriately adjusted in the
class(es) and number of securities and price per share of Common Stock subject
to such outstanding Stock Awards.  The Board shall make such adjustments, and
its determination shall be final, binding and conclusive.  (The conversion of
any convertible securities of the Company shall not be treated as a transaction
“without receipt of consideration” by the Company.)

(b)           Dissolution or Liquidation.  In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate
immediately prior to the completion of such dissolution or liquidation.

(c)           Corporate Transaction.  In the event of a Corporate Transaction,
any surviving corporation or acquiring corporation may assume or continue any or
all Stock Awards outstanding under the Plan or may substitute similar stock
awards for Stock Awards outstanding under the Plan (it being understood that
similar stock awards include, but are not limited to, awards to acquire the same
consideration paid to the stockholders or the Company, as the case may be,
pursuant to the Corporate Transaction), and any reacquisition or repurchase
rights held by the Company in respect of Common Stock issued pursuant to Stock
Awards may be assigned by the Company to the successor of the Company (or the
successor’s parent company), if any, in connection with such Corporate
Transaction.  In the event that any surviving corporation or acquiring
corporation does not assume or continue all such outstanding Stock Awards or
substitute similar stock awards for all such outstanding Stock Awards, then with
respect to Stock Awards that have not been assumed, continued or substituted and
that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five days prior to the effective
time of the Corporate Transaction), such Stock Awards shall terminate if not
exercised (if applicable) at or prior to such effective time, and any
reacquisition or repurchase rights held by the Company with respect to such
Stock Awards shall (contingent upon the effectiveness of the Corporate
Transaction) lapse.  With respect to any other Stock Awards outstanding under
the Plan that have not been assumed, continued or substituted, the vesting of
such Stock Awards (and, if applicable, the time at which such Stock Award may be
exercised) shall not be accelerated, unless otherwise provided in a written
agreement between the Company or any Affiliate and the holder of such Stock
Award, and such Stock Awards shall terminate if not exercised (if applicable)
prior to the effective time of the Corporate Transaction.

(d)           Change in Control.  A Stock Award held by any Participant whose
Continuous Service has not terminated prior to the effective time of a Change in
Control may be subject to additional acceleration of vesting and exercisability
upon or after such event as may be provided in the Stock Award Agreement for
such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such
provision, no such acceleration shall occur.

19

--------------------------------------------------------------------------------

12.          AMENDMENT OF THE PLAN AND STOCK AWARDS.

(a)           Amendment of Plan.  The Board at any time, and from time to time,
may amend the Plan.  However, except as provided in Section 11(a) relating to
Capitalization Adjustments, no amendment shall be effective unless approved by
the stockholders of the Company to the extent stockholder approval is necessary
to satisfy applicable law.

(b)           Stockholder Approval.  The Board, in its sole discretion, may
submit any other amendment to the Plan for stockholder approval, including, but
not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to Covered Employees.

(c)           Contemplated Amendments.  It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

(d)           No Impairment of Rights.  Rights under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.

(e)           Amendment of Stock Awards.  The Board at any time, and from time
to time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

13.          TERMINATION OR SUSPENSION OF THE PLAN.

(a)           Plan Term.  The Board may suspend or terminate the Plan at any
time.  Unless sooner terminated, the Plan shall terminate on May    , 2014.  No
Stock Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.

(b)           No Impairment of Rights.  Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect except with the written consent of the Participant.

14.          EFFECTIVE DATE OF PLAN.

The Plan shall become effective on the IPO Date, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until
the Plan has been approved by the stockholders of the Company, which approval
shall be within 12 months before or after the date the Plan is adopted by the
Board.

20

--------------------------------------------------------------------------------

15.          CHOICE OF LAW.

The laws of the State of California shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.

21

--------------------------------------------------------------------------------

METABASIS THERAPEUTICS, INC.

AMENDED AND RESTATED 2001 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT
(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock
Option Agreement, Metabasis Therapeutics, Inc. (the “Company”) has granted you
an option under its Amended and Restated 2001 Equity Incentive Plan (the “Plan”)
to purchase the number of shares of the Company’s Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice.  Defined
terms not explicitly defined in this Stock Option Agreement but defined in the
Plan shall have the same definitions as in the Plan.

The details of your option are as follows:

1.             VESTING.  Subject to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service.

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.

3.             METHOD OF PAYMENT.  Payment of the exercise price is due in full
upon exercise of all or any part of your option.  You may elect to make payment
of the exercise price in cash or by check or in any other manner permitted by
your Grant Notice, which may include one or more of the following:

(a)           In the Company’s sole discretion at the time your option is
exercised and provided that at the time of exercise the Common Stock is publicly
traded and quoted regularly in The Wall Street Journal, pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board that,
prior to the issuance of Common Stock, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the
aggregate exercise price to the Company from the sales proceeds.

(b)           Provided that at the time of exercise the Common Stock is publicly
traded and quoted regularly in The Wall Street Journal, by delivery of
already-owned shares of Common Stock either that you have held for the period
required to avoid a charge to the Company’s reported earnings (generally six
months) or that you did not acquire, directly or indirectly from the Company,
that are owned free and clear of any liens, claims, encumbrances or security
interests, and that are valued at Fair Market Value on the date of exercise. 
“Delivery” for these purposes, in the sole discretion of the Company at the time
you exercise your option, shall include delivery to the Company of your
attestation of ownership of such shares of Common Stock in a form approved by
the Company.  Notwithstanding the foregoing, you may not exercise your option by
tender to the Company of Common Stock to the extent such tender

1

--------------------------------------------------------------------------------

would violate the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock.

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 also must 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
or after the expiration of its term.  The term of your option commences on the
date of grant and expires upon the earliest of the following:

(a)           immediately upon the termination of your Continuous Service for
Cause;

(b)           three months after the termination of your Continuous Service for
any reason other than your Disability or death, provided that if during any part
of such three-month period your option is not exercisable solely because of the
condition set forth in Section 5, your option shall not expire until the earlier
of the Expiration Date or until it shall have been exercisable for an aggregate
period of three months after the termination of your Continuous Service;

(c)           12 months after the termination of your Continuous Service due to
your Disability;

(d)           18 months after your death if you die either during your
Continuous Service or within three months after your Continuous Service
terminates;

(e)           the Expiration Date indicated in your Grant Notice; or

(f)            the day before the tenth anniversary of the date of grant.

If your option is an Incentive Stock Option, note that to obtain the federal
income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the date of grant of your option and
ending on the day three months before the date of your option’s exercise, you
must be an employee of the Company or an Affiliate, except in the event of your
death or your permanent and total disability, as defined in Section 22(e) of the
Code.  (The definition of disability in Section 22(e) of the Code is different
from the definition of the Disability under the Plan).  The Company has provided
for extended exercisability of your option under certain circumstances for your
benefit but cannot guarantee that your option will necessarily be treated as an
Incentive Stock Option if you continue to provide services to the

2

--------------------------------------------------------------------------------

Company or an Affiliate as a Consultant or Director after your employment
terminates or if you otherwise exercise your option more than three months after
the date your employment with the Company or an Affiliate terminates.

7.             EXERCISE.

(a)           You may exercise the vested portion of your option during its term
by delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

(b)           By exercising your option you agree that, as a condition to any
exercise of your option, the Company may require you to enter into an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.

(c)           If your option is an Incentive Stock Option, by exercising your
option you agree that you will notify the Company in writing within 15 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 years after the date
of your option grant or within one year after such shares of Common Stock are
transferred upon exercise of your option.

8.             TRANSFERABILITY.

(a)           If your option is an Incentive Stock Option, your option is not
transferable, except by will or by the laws of descent and distribution, and is
exercisable during your life only by you.  Notwithstanding the foregoing, by
delivering written notice to the Company, in a form satisfactory to the Company,
you may designate a third party who, in the event of your death, shall
thereafter be entitled to exercise your option.

(b)           If your option is a Nonstatutory Stock Option, your option is not
transferable, except (i) by will or by the laws of descent and distribution,
(ii) with the prior written approval of the Company, by instrument to an inter
vivos or testamentary trust, in a form accepted by the Company, in which the
option is to be passed to beneficiaries upon the death of the trustor (settlor)
and (iii) with the prior written approval of the Company, by gift, in a form
accepted by the Company, to a permitted transferee under Rule 701 of the
Securities Act. Notwithstanding the foregoing, by delivering written notice to
the Company, in a form satisfactory to the Company, you may designate a third
party who, in the event of your death, shall thereafter be entitled to exercise
your option.

9.             OPTION NOT A SERVICE CONTRACT.  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

3

--------------------------------------------------------------------------------

obligate the Company or an Affiliate, their respective stockholders, Boards of
Directors, Officers or Employees to continue any relationship that you might
have as a Director or Consultant for the Company or an Affiliate.

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, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with the exercise of your option.

(b)           Upon your request and subject to approval by the Company, in its
sole discretion, and compliance with any applicable legal conditions or
restrictions, 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 (or such lower amount as may be necessary to avoid variable
award accounting).  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/or 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 unless such obligations are satisfied.

11.          NOTICES.  Any notices provided for in your option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by mail by the Company to you, five days after
deposit in the United States mail, postage prepaid, addressed to you at the last
address you provided to the Company.

12.          GOVERNING PLAN DOCUMENT.  Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
option, and is further subject to all interpretations, amendments, rules and
regulations, which may from time to time be promulgated and adopted pursuant to
the Plan.  In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.

4

--------------------------------------------------------------------------------