Exhibit 10.1
 

NEKTAR THERAPEUTICS

AMENDED AND RESTATED CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

PLAN DOCUMENT AND SUMMARY PLAN DESCRIPTION

 
 

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NEKTAR THERAPEUTICS
AMENDED AND RESTATED
CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

PLAN DOCUMENT AND SUMMARY PLAN DESCRIPTION

Section 1.                                Introduction

The Nektar Therapeutics Amended and Restated Change of Control Severance Benefit
Plan (the “Plan”) is designed to provide severance benefits to eligible
employees of Nektar Therapeutics (the “Company” or “Nektar”) whose employment is
involuntarily terminated by the Company following a Change of Control (as
defined below).  The Plan was initially approved by the Company’s Board of
Directors (the “Board of Directors”) on December 6, 2006 and subsequently
amended and restated and approved by the Board of Directors on February 14,
2007, on October 21, 2008 and on September 14, 2010.  The Plan supersedes any
prior plan, policy or practice involving the payment of severance benefits by
Nektar in the event of an involuntary termination that occurs in connection with
or following a Change of Control.  While the Plan is in effect, any severance
benefits provided to an employee by the Company with respect to an employee’s
involuntary termination in connection with or following a Change of Control must
be paid pursuant to the Plan or pursuant to an express written agreement between
Nektar and the individual employee.

The Plan is designed to be an “employee welfare benefit plan,” as defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) and, accordingly, this Plan is governed by ERISA.  This document
constitutes both the official plan document and the required summary plan
description under ERISA.

Section 2.                                Eligibility For Participation in the
Plan

Each employee of the Company is eligible to participate in the Plan; provided,
however, that an employee who has an individual agreement with the Company
providing for severance benefits with respect to termination of employment with
the Company in connection with or following a Change of Control that would
otherwise be covered by this Plan shall not be eligible to participate in this
Plan (i.e. an eligible employee cannot receive severance benefits both under
their individual agreement and this Plan), and an individual who is not treated
as an employee of the Company for payroll and income tax withholding purposes or
who is treated as a consultant or independent contractor, regardless of a court
or agency’s determination of employee status of such person during any period
for any purpose, shall not be eligible to participate in this Plan.

Section 3.                                Eligibility For Severance Benefits

3.1           Conditions for Eligibility.  To be eligible to receive severance
benefits under the Plan, in addition to meeting the requirements for eligibility
to participate in the Plan, the participant must terminate employment with the
Company under circumstances that the Plan Administrator determines constitute a
Covered Termination, and the participant must meet the following conditions:
 
 
 

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·  
The participant must execute and deliver to the Company a Separation and General
Release Agreement in substantially the form attached hereto as Exhibit A and
must not revoke such agreement within any revocation period provided under
applicable law.

·  
If the participant is notified by the Company or Successor Company that his or
her employment will be terminated following a Change of Control in advance of
his or her termination date, the participant must not voluntarily terminate his
or her employment or fail to perform his or her assigned duties prior to the
termination date established by the Company or Successor Company.

·  
The participant must not at any time have engaged in conduct that would be Cause
for termination, as defined in Section 3.3 below, as determined by the Plan
Administrator in its sole discretion.  The Plan Administrator shall have the
discretion to terminate any and all severance benefits provided under this Plan
to a participant who is discovered to have engaged in such conduct, regardless
of when such discovery occurs.

3.2           Covered Termination.  For purposes of this Plan, a Covered
Termination is an involuntary termination of the participant’s employment with
the Company or Successor Company in conjunction with a Change of Control under
the circumstances described below applicable to the participant, as follows:

·  
Officer Participants.  For a participant who is an officer holding a position of
Chief Executive Officer, President, Senior Vice President, Vice President or
Principal Fellow (an “Officer Participant”), a Covered Termination is the
involuntary termination of the participant’s employment by the Company or
Successor Company without Cause, other than on account of the participant’s
death or disability, or the participant’s Good Reason Resignation, which
(i)  termination occurs at the request of a third party in the context of
discussions regarding a Change of Control or (ii) termination or resignation
occurs within the period beginning with the execution of an agreement providing
for a Change of Control (and such Change of Control is consummated) and ending
12 months following the Change of Control.

·  
Non-Officer Participants.  For any other participant (a “Non-Officer
Participant”), a Covered Termination is the involuntary termination of the
participant’s employment by the Company or Successor Company without Cause,
other than on account of the participant’s death or disability, which
termination occurs within the period beginning on the date of the Change of
Control and ending 12 months following the Change of Control.

 
·  
Termination of Employment - Asset Sale.  Notwithstanding anything else contained
in this Plan to the contrary, a participant shall not be entitled to benefits
under this Plan as a result of a termination of the participant’s employment
with the Company or Successor Company if such termination of employment occurs
in connection with a sale of assets by the Company or Successor Company and each
of the following conditions is satisfied in connection with such sale: (1) the
participant becomes employed by the purchaser (which term shall include for
these purposes a parent, subsidiary, or other affiliated entity of such
purchaser) of such assets upon or within sixty (60) days following such sale or
such purchaser offers the participant employment effective upon or within sixty
(60) days following such sale (regardless of whether the participant actually
accepts or commences such employment) on substantially the same terms; and (2)
such purchaser adopts this Plan (or a substantially similar severance plan) to
provide the participant with substantially the same severance protections
afforded by this Plan had this Plan continued in effect as to the participant
after such sale on its terms (subject, without limitation, to any such entity’s
right to terminate this Plan as provided herein).  Whether employment is on
“substantially the same terms” for this purpose shall be determined by comparing
the relevant aspects of the terms of the participant’s employment before giving
effect to such asset sale to the relevant aspects of the terms of the
participant’s employment (or offer of employment, as the case may be) with the
purchaser after giving effect to such asset sale (in each case relative to the
Company and its subsidiaries, or the purchaser and its parent, subsidiary, and
other affiliated entities, as the case may be, on a consolidated basis, not
simply with reference to the participant’s employer).

 
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3.3           Cause.  For purposes of this Plan, Cause shall mean, as determined
by the Plan Administrator:

·  
An employee’s conviction of any felony or any crime involving fraud, dishonesty
or moral turpitude;

·  
An employee’s commission of, or participation in, a fraud or act of dishonesty
against the Company or Successor Company that materially benefits the employee;

·  
An employee’s intentional, material violation of any contract or agreement
between the employee and the Company or Successor Company or of any statutory or
fiduciary duty owed to the Company or Successor Company;

·  
An employee’s intentional unauthorized use of Company or Successor Company
property that materially benefits the employee or intentional unauthorized use
or disclosure of Company or Successor Company confidential information or trade
secrets;

·  
An employee’s intentional gross misconduct or intentional material failure to
comply with the Company’s or Successor Company’s written policies; or

·  
An employee’s intentional material failure or refusal to perform his or her
position responsibilities, other than on account of a mental or physical
disability.

No act or failure to act on the part of an individual shall be considered
“intentional” unless done, or omitted to be done, by that individual not in good
faith and without reasonable belief that such individual’s action or omission
was in the best interest of the Company.  In no event shall mere failure to
achieve desired strategic, operational, financial or other results constitute
Cause.

 
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3.4           Good Reason Resignation.  For purposes of this Plan, an Officer
Participant’s Good Reason Resignation shall mean a voluntary resignation by the
Officer Participant following the occurrence of any of the following conditions
without the Officer Participant’s express written consent:

·  
Assignment of any authority, duties or responsibilities that results in a
material diminution in the participant’s authority, duties or responsibilities
as in effect immediately prior to the Change of Control.

·  
Assignment to a work location more than 50 miles from the participant’s
immediately previous work location, unless such reassignment of work location
decreases the participant’s commuting distance from his or her residence to his
or her assigned work location.

·  
A material diminution in the participant’s monthly base salary as in effect on
the date of the Change of Control or as increased thereafter.

·  
Notice to the participant by the Company or Successor Company during the
12-month period following the Change of Control that the participant’s
employment will be terminated under circumstances that would be a Covered
Termination but for the designation of a date for termination that is greater
than 12 months following the Change of Control (provided that such participant
does in fact terminate his or her employment within the time period prescribed
below).

·  
In the case of the Chief Executive Officer and President, such individual does
not serve in that position in the Successor Company (as defined below) and/or is
not appointed to the board of directors of the Successor Company.

provided, however, that any such condition shall not constitute grounds for a
Good Reason Resignation unless both (x) the Officer Participant provides written
notice to the Company of the condition claimed to constitute grounds for the
Good Reason Resignation within sixty (60) days of the initial existence of such
condition, and (y) the Company fails to remedy such condition within thirty (30)
days of receiving such written notice thereof; and provided, further, that in
all events the termination of the Officer Participant’s employment with the
Company shall not be treated as a Good Reason Resignation unless such
termination occurs not more than six (6) months following the initial existence
of the condition claimed to constitute “Good Reason.”

3.5           Change of Control.  A Change of Control with respect to the
Company shall mean any of the following events or circumstances:

·  
The sale, lease or other disposition of all or substantially all of the
Company’s assets;

·  
The acquisition 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;

 
 
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·  
The merger, consolidation or similar transaction involving the Company,
immediately after which the stockholders of the Company immediately prior
thereto do not own either (i) 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 (ii) more than 50% of the
combined outstanding voting power of the parent of the surviving entity in such
merger, consolidation or similar 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; or

·  
Individuals who, on the date the 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 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
will, for purposes of the Plan, be considered as a member of the Incumbent
Board.

In the event of a Change of Control following which Nektar is not the surviving
entity, the surviving entity for purposes of this Plan is the “Successor
Company.”

Section 4.                                Severance Benefits

A participant who is eligible to participate in this Plan in accordance with
Section 2 and who becomes eligible to receive severance benefits under this Plan
as determined under Section 3 shall be entitled to receive, subject to the terms
and conditions herein, the following severance benefits set forth in this
Section 4:

4.1           Cash Severance Pay; Amount.  The amount of a participant’s Cash
Severance Pay benefit under this Plan shall be determined based on position
title as follows, and then reduced as specified below:

·  
Chief Executive Officer and President:  Cash Severance Pay shall equal 24 months
of monthly base salary plus annual target incentive pay as in effect immediately
prior to the Covered Termination or for the immediately preceding calendar year,
whichever is greater.

·  
Senior Vice Presidents, Vice Presidents and Principal Fellows:  Cash Severance
Pay shall equal 12 months of monthly base salary plus annual target incentive
pay as in effect immediately prior to the Covered Termination or for the
immediately preceding calendar year, whichever is greater.

·  
All Other Participants:  Cash Severance Pay shall equal 6 months of monthly base
salary plus annual target incentive pay as in effect immediately prior to the
Covered Termination or for the immediately preceding calendar year, whichever is
greater.

Cash Severance Pay shall be reduced by each of the following:
 
 
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·  
any severance benefits (including, without limitation, any other
change-in-control severance benefits and any other severance benefits generally)
that the participant may be entitled to under any other plan or program with the
Company.  For purposes of the foregoing, any cash severance benefits payable to
the participant under any other plan or program with the Company (including,
without limitation, the Company’s Severance Benefit Plan or any similar
successor plan) shall offset the Cash Severance Pay otherwise payable to the
participant under this Plan on a dollar-for-dollar basis.  For purposes of the
foregoing, non-cash severance benefits to be provided to the participant under
any other plan or program with the Company shall offset any corresponding
benefits otherwise to be provided to the participant under this Plan or, if
there are no corresponding benefits otherwise to be provided to the participant
under this Plan, the value of such benefits shall offset the cash severance
benefits otherwise payable to the participant under this Plan on a
dollar-for-dollar basis.  If the amount of other benefits to be offset against
the Cash Severance Pay otherwise payable to the participant under this Plan in
accordance with the preceding two sentences exceeds the amount of Cash Severance
Pay otherwise payable to the participant under this Plan, then the excess may be
used to offset other non-cash severance benefits otherwise to be provided to the
participant under this Plan on a dollar-for-dollar basis.  For purposes of this
paragraph, the Plan Administrator shall reasonably determine the value of any
non-cash benefits;

·  
any wages or wage replacement benefits paid or payable to the participant with
respect to any applicable notice period (including any pay in lieu of notice) in
connection with the participant’s termination of employment, whether such notice
period is required under the Worker Adjustment and Retraining Notification Act
or any state law with respect to notice, if applicable, or any Company policy,
or any written agreement between the participant and the Company;

·  
the amount of any wages or other compensation the participant has received
during a leave of absence in excess of his or her accrued paid time off (other
than disability plan income replacement benefits); and

·  
to the extent permitted by law, by any debt that the participant owes the
Company at the time the Cash Severance Pay becomes payable;

provided that any reduction or offset under this provision does not create an
impermissible acceleration of payments under Treasury Regulation Section
1.409A-1(j).
 
 
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4.2           Cash Severance Pay: Time of Payment.  The Cash Severance Pay for
which a participant is eligible under this Plan will be paid to the participant
in a lump sum cash payment no later than sixty (60) days following the date on
which the participant’s Separation from Service (as defined below) occurs,
subject to the provisions of Section 3.1.  Notwithstanding the foregoing
sentence or any other provision of this Plan to the contrary, if the participant
is an Officer Participant or is otherwise a “specified employee” within the
meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the
participant’s Separation from Service, the participant shall not be entitled to
any payment of Cash Severance Pay until the earlier of (i) the date which is six
(6) months after the participant’s Separation from Service for any reason other
than death, or (ii) the date of the participant’s death.  Any amounts otherwise
payable to the participant upon or in the six (6) month period following the
participant’s Separation from Service that are not so paid by reason of this
paragraph shall be paid (without interest) as soon as practicable (and in all
events within thirty (30) days) after the date that is six (6) months after the
participant’s Separation from Service (or, if earlier, as soon as practicable,
and in all events within thirty (30) days, after the date of the participant’s
death).  The provisions of this paragraph shall only apply if, and to the
extent, required to avoid the imputation of any tax, penalty or interest
pursuant to Section 409A of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”).

As used herein, a participant’s “Separation from Service” occurs when the
participant dies, retires, or otherwise has a termination of employment with the
Company that constitutes a “separation from service” within the meaning of
Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional
alternative definitions available thereunder.

4.3           COBRA Premiums.  For an eligible participant who is covered by one
or more of the Company’s group health plans on the date of termination of
employment and who makes a timely election to continue such coverage under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Company will pay
the portion of such participant’s COBRA premium equal to the portion of such
group health plan premium cost the Company pays for active employees for the
number of months base salary represented by the participant’s Cash Severance Pay
determined under Section 4.1 for up to a maximum of eighteen (18) months;
provided that such payment of a portion of the COBRA premium by the Company
shall cease earlier on the date the participant becomes eligible for group
medical, dental or vision coverage through a subsequent employer.  To the extent
that the payment of any COBRA premiums pursuant to this Section 4.3 is taxable
to the participant, any such payment shall be paid to the participant on or
before the last day of the participant’s taxable year following the taxable year
in which the related expense was incurred.  The participant’s right to payment
of such premiums is not subject to liquidation or exchange for another benefit
and the amount of such benefits that the participant receives in one taxable
year shall not affect the amount of such benefits that the participant receives
in any other taxable year.

4.4           Outplacement Program. An eligible participant shall receive
reimbursement for reasonable outplacement services up to a maximum of $5,000 for
services received within 12 months following the participant’s Separation from
Service, any such reimbursement to be made in accordance with the Company’s
reimbursement policies generally and in all events not later than the end of the
calendar year following the year in which the related expense was incurred.  The
participant’s right to benefits under this Section 4.4 is not subject to
liquidation or exchange for another benefit and the amount of such benefits that
the participant receives in one taxable year shall not affect the amount of such
benefits that the participant receives in any other taxable year.

 
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4.5           Withholding.  All cash and reimbursement severance benefits
provided under the Plan will be subject to all applicable withholding deductions
as required by law.

4.6           Equity Acceleration.  An eligible participant will become fully
vested in any outstanding stock awards held by such participant as of the date
of termination, including restricted stock and stock options unless otherwise
provided for in the equity award agreement.

4.7           Limitation on Benefits Subject to Parachute
Rules.  Notwithstanding Section 4.1 and 4.6, in the event the severance benefits
payable hereunder to a participant who is a “disqualified individual” within the
meaning of Code Section 280G, together with all other payments to which such
participant is entitled in connection with a Change of Control (collectively,
the “Payments”), would cause any portion of the Payments to be nondeductible
under Code Section 280G and subject to the excise tax imposed under Code Section
4999 (the “Excise Tax”), then:

(i)
For each participant other than a New Participant (as defined below), the
following rules shall apply:

(a)
If a reduction in the amount of the Payments by an amount up to but not in
excess of ten percent (10%) of the amount of the Payments would avoid the
imputation of any Excise Tax on the remaining Payments (after such reduction),
then the Payments shall be reduced (but not below zero) if and to the extent
that such a reduction in the Payments would result in the participant retaining
a larger amount, on an after-tax basis (taking into account federal, state and
local income taxes and the Excise Tax), than if the participant received the
entire amount of the Payments.  The Company shall reduce or eliminate the
Payments by first reducing or eliminating any Cash Severance Pay, then by
reducing or eliminating any accelerated vesting of equity awards, then by
reducing or eliminating any other remaining Payments.

(b)
If a reduction in the amount of the Payments by 10% of the amount of the
Payments would not avoid the imputation of any Excise Tax on the remaining
Payments (after such reduction), then the Company shall pay to the participant
(or to the applicable taxing authority on participant’s behalf) an additional
cash payment (the “Gross-Up Payment”) equal to an amount such that after payment
by the participant of all taxes, interest, penalties, additions to tax and costs
imposed or incurred with respect to the Gross-Up Payment (including, without
limitation, any income and excise taxes imposed upon the Gross-Up Payment), the
participant retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon such Payment or Payments.  The Gross-Up Payment, if triggered
pursuant to this Section 4.7(i)(b), is intended to put the participant in the
same position as the participant would have been had no Excise Tax been imposed
upon or incurred as a result of any Payment.  Any such Gross-Up Payment shall be
paid as soon as practicable and in all events no later than the end of the
calendar year following the year in which the participant remits the related
taxes.

 
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(ii)
For each participant that either (i) commenced employment with the Company on or
after September 14, 2010; or (ii) commenced employment prior to September 14,
2010 but on or after September 14, 2010 was promoted to a position that would
entitle the participant to additional benefits under this Plan as a result of
the promotion (any participant meeting the description of (i) or (ii) is
referred to herein as a “New Participant”), the following rule  shall apply:  If
a New Participant’s Payments are subject to the Excise Tax, then the Payments
shall be reduced (but not below zero) if and to the extent that such a reduction
in the Payments would result in the New Participant retaining a larger amount,
on an after-tax basis (taking into account federal, state and local income taxes
and the Excise Tax), than if the New Participant received the entire amount of
the Payments.  If the Payments are to be reduced pursuant to the preceding
sentence, the Company shall reduce or eliminate the Payments by first reducing
or eliminating any Cash Severance Pay, then by reducing or eliminating any
accelerated vesting of equity awards, then by reducing or eliminating any other
remaining Payments.

Section 5.                                Notices

Any notice or other communication under the Plan must be in writing and will be
deemed given when delivered personally or when sent by certified or registered
mail, return receipt requested, or by overnight courier, addressed as follows or
to such other address as any party may hereafter designate in accordance with
this provision:

            If to Nektar or the Plan Administrator:

Nektar Therapuetics
201 Industrial Road
San Carlos, CA 94070
Attn: Vice President, Human Resources

If to the participant: to the address appearing in the payroll records of the
Company.

Section 6.                                Claims

6.1           Initial Claims Procedure. Any employee who does not receive a
benefit under the Plan that he or she feels he or she is entitled to receive may
make a written claim to the Plan Administrator within 90 days after his or her
termination, in accordance with the Notice provisions described above, and which
explains the reasons for such claim.  The claimant will be informed of the Plan
Administrator’s decision with respect to the claim within 90 days after it is
filed.  Under special circumstances, the Plan Administrator may require an
additional period of not more than 90 days to review the claim.  If that
happens, the claimant will receive a written notice of that fact, which will
also indicate the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to make a determination with
respect to the claim.  If the extension is required due to the claimant’s
failure to submit information necessary to decide the claim, the period for
making the determination will be tolled from the date on which the extension
notice is sent until the date on which the claimant responds to the Plan
Administrator’s request for information.

 
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6.2           Notice of Claim Determination.  If a claim is denied in whole or
in part, or any adverse benefit determination is made with respect to the claim,
the claimant will be provided with a written notice setting forth the reason for
the determination, along with specific references to Plan provisions on which
the determination is based.  This notice will also provide an explanation of
what additional information is needed to evaluate the claim (and why such
information is necessary), together with an explanation of the Plan’s claims
review procedure and the time limits applicable to such procedure, as well as a
statement of the claimant’s right to bring a civil action under Section 502(a)
of ERISA following an adverse benefit determination on review.  If an internal
rule, guideline, protocol, or other similar criterion was relied upon in making
the determination, the notice will either provide that rule, guideline, protocol
or other similar criterion or will contain a statement that it will be provided
upon request.

6.3           Claims Appeal Procedure.  If the claim has been denied, and the
claimant wishes to pursue the claim further, the claimant must request that the
Plan Administrator review the denial.  The request must be in writing and must
be made within 60 days after written notification of denial.  In connection with
this request, the claimant may review documents pertinent to the claim (other
than those that are legally privileged) and may submit to the Plan Administrator
written comments, documents, records, and other information related to the
claim.

The review by the Plan Administrator will take into account all comments,
documents, records, and other information that the claimant submits relating to
the claim.  The Plan Administrator will make a final written decision on a claim
review, in most cases within 60 days after receipt of a request for a
review.  In some cases, the claim may take more time to review, and an
additional processing period of up to 60 days may be required.  If that happens,
the claimant will receive a written notice of that fact, which will also
indicate the special circumstances requiring the extension of time and the date
by which the Plan Administrator expects to make a determination with respect to
the claim.  If the extension is required due to the claimant’s failure to submit
information necessary to decide the claim, the period for making the
determination will be tolled from the date on which the extension notice is sent
to the claimant until the date on which the claimant responds to the Plan’s
request for information.

6.4           Notice of Appeal Determination.  The Plan Administrator’s decision
on the claim for review will be communicated to the claimant in writing.  If an
adverse benefit determination is made with respect to the claim, the notice will
include (i) the specific reason(s) for any adverse benefit determination, with
references to the specific Plan provisions on which the determination is based;
(ii) a statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to (and copies of) all documents, records and other
information relevant to the claim (other than those that are legally
privileged); and (iii) a statement of the claimant’s right to bring a civil
action under Section 502(a) of ERISA.  If an internal rule, guideline, protocol,
or other similar criterion was relied upon in making the determination, the
notice will either provide that rule, guideline, protocol or other similar
criterion or will contain a statement that it will be provided upon
request.  The decision of Plan Administrator is final and binding on all
parties.

 
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6.5           Requirement to Follow Claims Procedures.  If a claimant does not
file his or her claim in accordance with the Plan’s claim procedures described
above, including applicable time limits, the claimant will not be entitled to
benefits under this Plan.

6.6           Limitation on Legal Action.  No legal action with respect to this
Plan may be brought until a claimant has exhausted the claims procedures
described above, including the claims appeal procedure.  No legal action for
coverage or benefits under the Plan may be commenced or maintained more than 2
years after the circumstances giving rise to the claim arose or, if earlier, 1
year after the claims procedures, including the claims appeal procedure, is
exhausted.

Section 7.                                Plan Amendment and Termination

The Company reserves the right to amend or modify the Plan at any time, and in
any respect, by action of its duly authorized officer, with or without prior
notice to, and effective with respect to, employees who may become eligible to
participate in the Plan or become eligible for benefits under the Plan in the
case of a reduction in benefits payable under the Plan, or who may otherwise
have become eligible to participate in the Plan in the case of an amendment that
excludes such employees from eligibility to participate under the
Plan.  However, no such amendment or termination will be effective to: (i)
decrease benefits under the Plan for which an employee has already met all of
the eligibility criteria and payment conditions set forth herein or (ii)
negatively or adversely impact the rights of the Chief Executive Officer and
President hereunder without the written consent of the Chief Executive Officer
and President.

Section 8.                                Legal Rights Under ERISA

An employee covered under the Plan is entitled to certain rights and protections
under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).  ERISA provides that you are entitled to:

Receive Information About Your Plan and Benefits

Examine, without charge, at the Plan Administrator’s office and at other
specified locations, such as worksites, all documents governing the Plan,
including a copy of the latest annual report (Form 5500 Series), if any, filed
by the Plan with the U.S. Department of Labor and available at the Public
Disclosure Room of the Employee Benefits Security Administration.

Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan, including copies of the latest annual
report (Form 5500 Series), if any, and updated summary plan description.  The
Plan Administrator may make a reasonable charge for the copies.

Receive a summary of the Plan’s annual financial report (if any).  The Plan
Administrator is required by law to furnish each participant with a copy of this
summary annual report.
 
 
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Prudent Actions by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan.  The people who
operate the Plan, called “fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of the Plan participants and beneficiaries.  No
one, including the employer or any other person, may fire an employee or
otherwise discriminate against an employee in any way to prevent such employee
from obtaining a welfare benefit or exercising such employee’s rights under
ERISA.

Enforce Rights

If a claim for a welfare benefit is denied or ignored, in whole or in part, the
claimant has a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.

Under ERISA, there are steps an employee can take to enforce the above
rights.  For instance, if an employee makes a written request for a copy of Plan
documents or the latest annual report from the Plan Administrator and does not
receive them within 30 days, the employee may file suit in a Federal court.  In
such a case, the court may require the Plan Administrator to provide materials
and pay the employee up to $110 a day until the employee receives the materials,
unless the materials were not sent because of reasons beyond the control of the
Plan Administrator.

If an employee has a claim for benefits that is denied or ignored, in whole or
in part, the employee may file suit in a state or Federal court.  If it should
happen that Plan fiduciaries misuse the Plan’s money or if an employee is
discriminated against for asserting his or her rights, such employee may seek
assistance from the U.S. Department of Labor, or such employee may file suit in
a Federal court.  The court will decide who should pay court costs and legal
fees.  If the employee is successful, the court may order the person sued to pay
these costs and fees.  If the employee loses, the court may order the employee
to pay these costs and fees, for example, if it finds the employee’s claim is
frivolous.

An employee who has any questions about the Plan should contact the Plan
Administrator.  An employee who has any questions about this statement or his or
her rights under ERISA should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in the
telephone directory, or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue, N.W., Washington, D.C. 20210.
 
 
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Section 9.                                Other Important Information

9.1           No Additional Rights Created.  Neither the establishment of this
Plan, nor any modification thereof, nor the payment of any benefits hereunder,
shall be construed as giving to any individual (or any beneficiary of either),
or other person any legal or equitable right against the Company, or any of its
affiliates, or any officer, director or employee thereof; and in no event shall
the terms and conditions of employment by the Company (or any affiliate) of any
individual be modified or in any way affected by this Plan.

9.2           Records.  The records of the Company with respect to the
determination of  Eligible Years of Service, employment history, Base Pay,
absences, and all other relevant matters shall be conclusive for all purposes of
this Plan.

9.3           Construction.  The Plan is intended to be governed by ERISA.  The
respective terms and provisions of the Plan shall be construed, whenever
possible and for all purposes, to be in conformity with the requirements of
ERISA, or any subsequent laws or amendments thereto.  To the extent not in
conflict with ERISA or the terms of the Plan, the construction and
administration of the Plan shall be in accordance with applicable federal law
and the laws of the State of California applicable to contracts made and to be
performed within the State of California (without application of California
conflict of laws provisions).  The Plan is intended to comply with Section 409A
of the Code (including the Treasury regulations and other published guidance
relating thereto) so as not to subject any participant to payment of any
interest or additional tax imposed under Code Section 409A.  The provisions of
the Plan shall be construed and interpreted to avoid the imputation of any such
additional tax, penalty or interest under Code Section 409A yet preserve (to the
nearest extent reasonably possible) the intended benefit payable to the
participant.

9.4           Nontransferability of Benefits Rights.  In no event shall the
Company make any payment under this Plan to any assignee or creditor of an
employee, except as otherwise required by law.  Prior to the time of a payment
hereunder, an employee shall have no rights by way of anticipation or otherwise
to assign or otherwise dispose of any interest under this Plan, nor shall rights
be assigned or transferred by operation of law.

9.5           Plan Interpretation and Benefit Determination.  The Plan is
administered and operated by the Plan Administrator, which has complete
authority, in such person or entity’s sole and absolute discretion, to construe
and interpret the terms of the Plan (and any related or underlying documents or
policies), and to determine the eligibility for, and amount of, benefits due
under the Plan.  All such interpretations and determinations of the Plan
Administrator shall be final and binding upon all parties and persons affected
thereby.  The Plan Administrator may appoint one or more individuals and
delegate such of its powers and duties with respect to this Plan as it deems
desirable to any such individual(s), in which case every reference herein made
to the Plan Administrator shall be deemed to mean or include the appointed
individual(s) as to matters within their jurisdiction as delegated by the Plan
Administrator.   The discretion and authority of the Plan Administrator under
this Section 9.5 is subject to the notice, claims and appeals procedures set
forth in Section 6.
 
 
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Section 10.                                Important Plan Information

Sponsor’s Name and Address:
Nektar Therapeutics
 
201 Industrial Road
 
San Carlos, CA 94070
Plan Number:
503
Employer Identification Number:
94-3134940
Plan Administrator:
Nektar Therapeutics
 
201 Industrial Road
 
San Carlos, CA 94070
 
Tel:  650-631-3100
 
The Plan Administrator has delegated day-to-day administration of the Plan to
the following person:
 
Vice President, Human Resources
Agent to Receive Process:
Nektar Therapeutics
 
201 Industrial Road
 
San Carlos, CA 94070
 
Attn:  General Counsel
Type of Plan:
The Plan is an unfunded employee welfare benefit plan.  Benefits under the Plan
are paid from the general assets of Nektar Therapeutics.  Benefits under the
Plan are not insured by the Pension Benefit Guaranty Corporation.
Effective Date:
January 1, 2007
   
Plan Year:
The calendar year, from January 1 to December 31.

 
 
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EXHIBIT A

FORM OF SEPARATION AND GENERAL RELEASE AGREEMENT

This Separation and General Release Agreement (this “Agreement”) is entered into
this ___ day of _________ 20_, by and between _____________________, an
individual (“Employee”), and Nektar Therapeutics, a Delaware corporation (the
“Company”).
 
WHEREAS, Employee has been employed by the Company or one of its subsidiaries;
and
 
WHEREAS, Employee’s employment by the Company or one of its subsidiaries has
terminated and, in connection with the Company’s Amended and Restated Change in
Control Severance Plan (the “Plan”), the Company and Employee desire to enter
into this Agreement upon the terms set forth herein;
 
NOW, THEREFORE, in consideration of the covenants undertaken and the releases
contained in this Agreement, and in consideration of the Company’s (or one of
its subsidiaries’) obligation to pay severance benefits (conditioned upon this
release) under and pursuant to the Plan, Employee and the Company agree as
follows:
 
1. Separation Date.  Your last day of work is [__________, 20__] (the
“Separation Date”).
 
2. Accrued Salary and Paid Time Off.
 
(a) Accrued Salary.  The Company will pay you on the Separation Date all accrued
and unpaid salary through the Separation Date subject to applicable payroll
deduction and withholding.
 
(b) Accrued Paid Time Off.  The Company will pay you any accrued and unused paid
time off earned by you through the Separation Date, subject to applicable
payroll deduction and withholding.  In the event you have negative paid time off
balance, such amount will be deducted from your Severance (as defined below) as
provided in Section 6(a).
 
3. Incentive Compensation.  You will be eligible for payments under the
Company’s Discretionary Performance-Based Incentive Compensation Policy (“Bonus
Plan”) if the Company meets its corporate objectives and goals under the Bonus
Plan for the six-month performance period that ended on [___________,
20__].  Your bonus payment (if any) will be based on the Company’s corporate
performance percentage rating such six-month performance period and your
manager’s rating of your individual performance, and will be paid to you at
approximately the same time payments are made to the Company’s employees under
the Bonus Plan for such period.  The foregoing payments (if any) are subject to
standard payroll deductions and withholdings.
 
4. Payment in Full.  You acknowledge and agree that you have received all
salary, wages, accrued vacation, bonuses, commissions, expense reimbursements,
or other such sums due to you other than the severance benefits to be paid or
provided to you pursuant to the Plan.  In light of the payment by Company of all
wages due, you and the Company further acknowledge and agree that California
Labor Code § 206.5 is not applicable.  That section provides in pertinent part
as follows:
 
 
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No employer shall require the execution of any release of any claim or right on
account of wages due, or to become due, or made as an event on wages to be
earned, unless payment of such wages has been made.
 
5. Non-Disparagement. Both you and the Company (through its officers and
directors) agree not to disparage the other party, and the other party’s
officers, directors, employees, shareholders and agents, in any manner likely to
be harmful to them or their business, business reputation or personal
reputation; provided that both you and the Company shall respond accurately and
fully to any question, inquiry or request for information when required by legal
process.
 
6. Confidentiality.  The provisions of this Agreement shall be held in strictest
confidence by you and the Company and shall not be publicized or disclosed in
any manner whatsoever; provided, however, that:  (a) you may disclose this
Agreement to your immediate family; (b) the parties may disclose this Agreement
in confidence to their respective attorneys, accountants, auditors, tax
preparers, and financial advisors; (c) the Company may disclose this Agreement
as necessary to fulfill standard or legally required corporate reporting or
disclosure requirements; and (d) the parties may disclose this Agreement insofar
as such disclosure may be necessary to enforce its terms or as otherwise
required by law.
 
7. Expense Reimbursements.  You agree that, within ten (10) business days
following the Separation Date, you will submit your final documented expense
reimbursement statement reflecting all business expenses you incurred through
the Separation Date, if any, for which you seek reimbursement.  The Company will
reimburse you for these expenses pursuant to its regular business practice.
 
8.   Return of Company Property.  You agree that, on the Separation Date, you
shall return to the Company all Company documents (and all copies thereof) and
other Company property in your possession or control, including, but not limited
to:  Company files, email, notes, memoranda, correspondence, agreements, draft
documents, notebooks, logs, drawings, records, plans, proposals, reports,
forecasts, financial information, sales and marketing information, research and
development information, personnel information, specifications,
computer-recorded information, tangible property and equipment, cell phones,
pagers, PDAs (e.g., Blackberrys), credit cards, entry cards, identification
badges and keys; and any materials of any kind that contain or embody any
proprietary or confidential information of the Company (and all reproductions
thereof in whole or in part).  If you have used any personal computer, server,
or e-mail system to receive, store, review, prepare or transmit any Company
confidential or proprietary data, materials or information, you agree to provide
the Company with a computer-useable copy of such information and then
permanently delete and expunge such Company confidential or proprietary
information from those systems; and you agree to provide the Company access to
your system as requested to verify that the necessary copying and/or deletion is
done.  YOU AGREE NOT TO RETAIN ANY PAPER OR ELECTRONIC COPIES OF ANY COMPANY
DOCUMENTS OR DATA (INCLUDING BUT NOT LIMITED TO EMAIL) OTHER THAN THIS AGREEMENT
AND OTHER DOCUMENTS EVIDENCING YOUR EMPLOYMENT RELATIONSHIP WITH THE
COMPANY.  YOU WILL NOT BE ENTITLED TO ANY SEVERANCE BENEFITS UNLESS AND UNTIL
YOU COMPLY FULLY WITH THE TERMS SET FORTH IN THIS PARAGRAPH.
 
 
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9.  Employment Agreement Continues.  Following the Separation Date, you have
continuing obligations under your Employee Agreement with the Company which
include, among other obligations, not to use or disclose any confidential or
proprietary information of the Company.
 
10.  Non-Solicitation.  You agree that, for twelve (12) months following the
Separation Date, you shall not, directly or indirectly (e.g. through directing a
recruiting firm to target Company employees), without prior written consent of
the Company, solicit or induce any employee of the Company to leave the employ
of the Company.
 
11.  General Release.  Except as otherwise stated in this Agreement, and in
exchange for the consideration given under the Plan, you hereby generally and
completely release the Company and its subsidiaries, successors, predecessors
and affiliates, and its and their respective partners, members, directors,
officers, employees, stockholders, shareholders, agents, attorneys,
predecessors, insurers, affiliates and assigns, from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring at any time
prior to and including the date you sign this Agreement.  This general release
includes, but is not limited to:
 
(a) all claims arising out of or in any way related to your employment with the
Company or the termination of that employment;
 
(b) all claims related to your compensation or benefits, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, restricted stock units, or any other
ownership interests in the Company;
 
(c) all claims for breach of contract, wrongful termination, and breach of the
implied covenant of good faith and fair dealing;
 
(d) all tort claims, including claims for fraud, defamation, emotional distress,
and discharge in violation of public policy; and
 
(e) all federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act (as amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended).
 
You represent that you have no lawsuits, claims or actions pending in your name,
or on behalf of any other person or entity, against the Company or any other
person or entity subject to the release granted in this paragraph.
 
 
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Notwithstanding the release of claims otherwise provided for in this Section of
the Agreement, it is expressly understood that nothing in this Agreement will
prevent you from filing a charge of discrimination with the Equal Employment
Opportunity Commission or any of its state or local deferral agencies, or
participating in any investigation by the Equal Employment Opportunity
Commission or any of its state or local deferral agencies, although you
understand that by signing this Agreement, you waive the right to recover any
damages or to receive other relief in any claim or suit brought by or through
the Equal Employment Opportunity Commission or any other state or local deferral
agency on your behalf.  Further, it is expressly understood that nothing in this
Agreement shall be construed to be a waiver by you of any benefit that vested in
any benefit plan prior to his termination date or as a waiver of his right to
continue any benefit in accordance with the terms of a benefit plan.  Likewise
nothing in this Agreement shall be construed to waive any right that is not
subject to waiver by private agreement, including any right that you may have
under California Labor Code Section 2802 to indemnification of any expenses or
losses incurred in discharging your duties.  It is also expressly understood
that nothing in this Agreement shall in any way prohibit you from bringing any
complaint, claim or action seeking to challenge the validity of this Agreement
and/or bringing any complaint claim or action alleging a breach of this
Agreement by the Company.
 
12. [ADEA Waiver.1 You acknowledge that your waiver and release of any rights
you may have under ADEA is knowing and voluntary, and that the consideration
given under the Plan (severance, COBRA payments, outplacement), in exchange for
your general waiver and release, is in addition to anything of value to which
you were already entitled.  You are hereby advised that:
 
(a) your waiver and release do not apply to any rights or claims that may arise
after the date you sign this Agreement;
 
(b) prior to signing this Agreement you should consult with an attorney
(although you may choose voluntarily not to do so);
 
(c) you have [twenty-one (21)/forty-five (45)] days to consider this Agreement
(although you may choose voluntarily to sign it earlier);
 
(d) you have seven (7) days following the date you sign this Agreement to revoke
it by providing written notice to the Company’s General Counsel;
 
(e) this Agreement shall not be effective until the revocation period expires
which will be the eighth day after you sign this Agreement;
 
(f) nothing in this Agreement prevents or precludes you from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs for doing
so, unless specifically authorized by federal law; and
 
________________________
1 Section 12 will be included if the Employee is age 40 or older as of the date
that the Employee’s employment with the Company terminates or in such other
circumstances (if any) as the Employee may have claims under the ADEA.  In the
event Section 12 is included, whether the Employee has 21 days, 45 days, or some
other period in which to consider the Release Agreement will be determined with
reference to the requirements of the ADEA in order for such waiver to be valid
in the circumstances.  The determinations referred to in the preceding two
sentences shall be made by the Company in its sole discretion.
 
 
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(g) in order to revoke this Agreement, you must deliver to Gil Labrucherie’s
attention at the following address a written revocation before 12:00 a.m.
(midnight) p.s.t. on the seventh calendar day following the date you sign the
Agreement:
 
Gil M. Labrucherie
General Counsel
Nektar Therapeutics
201 Industrial Road
San Carlos, CA 94070
(650) 620-5360]

13.  Waiver of Unknown Claims.  You further agree and acknowledge that the
release provided for in this Agreement shall apply to all unknown and
unanticipated injuries and/or damages.  You acknowledge and understand that
Section 1542 of the Civil Code of the State of California provides as follows:
 
A general release does not extend to claims which the creditor does not know or
suspect to exist in his/her favor at the time of executing the release, which if
known by him/her must have materially affected his/her settlement with the
debtor.
 
Being aware of Section 1542 of the California Civil Code, you by signing this
Agreement expressly waive the provision of Section 1542 of the California Civil
Code and any similar provisions of law that may be applicable.
 
14.  Entire Agreement; Modification.  This Agreement, together with the Plan and
your Employee Agreement, constitute the complete and only agreement between you
and the Company on these subjects.  You are agreeing to it without reliance on
any promise or representation, written or oral, other than those expressly
contained in this Agreement, and it supersedes any other such promises,
warranties or representations.  This Agreement may not be modified except in a
writing signed by both you and the Company’s Vice President, Human
Resources.  This Agreement shall bind the heirs, personal representatives,
successors and assigns of both you and the Company, and inure to the benefit of
both you and the Company, their heirs, successors and assigns.  Any
determination that a provision of this Agreement is invalid or unenforceable, in
whole or in part, will not affect any other provision of this Agreement, and the
provision in question shall be modified by the court so as to be rendered
enforceable in accordance with the intent of the parties to the extent possible.
 
 
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If this Agreement is acceptable to you, please sign below and return the
original to Human Resources on or before ______________, 2008.  You will not be
entitled to any severance benefits under the Plan if we do not receive the fully
executed Agreement from you by the aforementioned date and you do not revoke
this Agreement within any revocation period provided under applicable law.
 

 
Nektar Therapeutics
 
 
By:  _________________________________
 
Dated:  _________________________________
 
Dorian Rinella
SVP, Human Resources
     

 
 
 
[Employee Name]
 
 
_____________________________________
 
Dated:  _________________________________
 
 
     

 
 
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