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EXHIBIT 10.1

ADOLOR CORPORATION

AMENDED AND RESTATED 1994 EQUITY COMPENSATION PLAN

AS AMENDED DECEMBER 31, 2002

AS AMENDED MAY 13, 2003

AS AMENDED DECEMBER 13, 2006 EFFECTIVE JANUARY 1, 2007

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Adolor Corporation, a Delaware corporation, wishes to attract employees and
consultants to the Company, to induce employees, Directors and consultants to
remain with the Company, to encourage them to increase their efforts to make the
Company’s business more successful and to enhance stockholder value. In
furtherance thereof, the Adolor Amended and Restated 1994 Equity Compensation
Plan is designed to provide incentive and non-qualified stock options to
employees, Directors and consultants of the Company.

 

1. DEFINITIONS.

Whenever used herein and unless otherwise provided in the Optionee’s Grant
Letter, the following terms shall have the meanings set forth below:

“Administrator” means the Board, or a committee, the members of which shall be
appointed by the Board as described in Section 3.

“Approved Sale” means the approval, prior to the consummation of a Public
Offering, by the holders of at least 50% of the Common Stock (including voting
and nonvoting shares voting as a single class) of (i) the merger or
consolidation of the Company, (ii) the sale of all or substantially all of its
assets or (iii) the sale of all or a majority of the outstanding capital stock
or my other similar transaction.

“Board” means the Board of Directors of the Company.

“Cause” means the Optionee’s (i) conviction for committing a felony under
federal law or of the state in which such action occurred, (ii) dishonesty in
the course of fulfilling his or her employment duties or (iii) willful and
deliberate failure to perform his or her employment duties in any material
respect, or such other events as shall be determined by the Administrator. The
Administrator shall have the sole discretion to determine whether “Cause”
exists, and its determination shall be final.

“Change of Control” means the happening of any of the following after the
consummation of a Public Offering:

(i) any Person, other than (a) the Company or any of its Subsidiaries, (b) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Subsidiaries, (c) an underwriter temporarily holding
securities pursuant to an offering of such securities, (d) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportion as their ownership of stock of the Company, or (e) an Optionee
or any “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange

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Act) which includes the Optionee), becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Subsidiaries) representing
more than 25% of either the then outstanding shares of Stock of the Company or
the combined voting power of the Company’s then outstanding securities;

(ii) the individuals who serve on the Board as of the effective date hereof (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of
the Board; provided, however, any person who becomes a director subsequent to
the effective date hereof, whose election or nomination for election was
approved by a vote of at least a majority of the directors then constituting the
Incumbent Board, shall for purposes of this clause (ii) be considered an
Incumbent Director;

(iii) the consummation of a merger or consolidation of the Company in which the
stockholders of the Company immediately prior to such merger or consolidation,
would not, immediately after the merger or consolidation, beneficially own (as
such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, shares representing in the aggregate 50% or more of the combined
voting power of the securities of the corporation issuing cash or securities in
the merger or consolidation (or of its ultimate parent corporation, if any); or

(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company, or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least 50% of the combined voting power of
the voting securities of which are owned by Persons in substantially the same
proportion as their ownership of the Company immediately prior to such sale.

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

“Common Stock” means the Common Stock of the Company, par value $.0001 per
share, either currently existing or authorized hereafter.

“Company” means Adolor Corporation, a Delaware corporation.

“Director” means a member of the Board who is not an employee of the Company or
its Subsidiaries.

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

“Exercise Price” means the exercise price per Share of an Option.

“Fair Market Value” per Share as of a particular date means (i) if Shares are
then listed on a national stock exchange, the closing sales price per share of
Common Stock on the exchange for the last preceding date on which there was a
sale of shares of Common Stock on such exchange, as determined by the
Administrator, (ii) if Shares are then listed on the Nasdaq National Market or
the Nasdaq SmallCap Market, the closing sales price (or the closing bid price

 

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if no sales were reported) per share of Common Stock on the Nasdaq National
Market or the Nasdaq SmallCap Market, as applicable, for the last preceding date
on which there was a sale of shares of Common Stock on the Nasdaq National
Market or the Nasdaq SmallCap Market, as applicable, as determined by the
Administrator, (iii) if Shares are not then listed on a national stock exchange,
the Nasdaq National Market or the Nasdaq SmallCap Market but are then traded on
an over-the-counter market, the average of the closing bid and asked prices for
the shares of Common Stock in such over-the-counter market for the last
preceding date on which there was a sale of such shares of Common Stock in such
market, as determined by the Administrator, or (iv) if Shares are not then
listed on a national stock exchange or traded on an over-the-counter market, or
if the Administrator determines that the value as determined pursuant to Section
(i), (ii) or (iii) above does not reflect fair market value, the Administrator
shall determine fair market value after taking into account such factors that it
deems appropriate. Notwithstanding the foregoing, if Shares are listed on a
national stock exchange or traded on an over-the-counter market, solely for
purposes of determining the Exercise Price of any Option granted hereunder, the
Fair Market Value per Share shall be the closing sales price on the applicable
exchange or market on the date such Option is granted.

“Grant Letter” means a written agreement in a form approved by the Administrator
to be entered into by the Company and the Optionee as provided in Section 3.

“Incentive Stock Option” means “incentive stock option” within the meaning of
Section 422(b) of the Code.

“Non-Qualified Option” means an Option which is not intended to be an “incentive
stock option” within the meaning of Section 422(b) of the Code.

“Option” means the right to purchase, at the price and for the term fixed by the
Administrator in accordance with the Plan, and subject to such other limitations
and restrictions in the Plan and the applicable Grant Letter, a number of Shares
determined by the Administrator.

“Optionee” means an employee or Director of or consultant to, the Company to
whom an Option is granted, or the Successors of the Optionee, as the context so
requires.

“Person” means any individual, partnership, corporation, company, limited
liability company, association, trust, joint venture, unincorporated
organization, entity or division, or any government, governmental department or
agency or political subdivision thereof.

“Plan” means this Adolor Corporation Amended and Restated 1994 Equity
Compensation Plan as amended from time to time.

“Public Offering” means a successfully completed firm-commitment underwritten
public offering (other than a Unit Offering, as hereinafter defined) pursuant to
an effective registration statement under the Securities Act in respect to the
offer and sale of shares of Common Stock for the account of the Company
resulting in aggregate net proceeds to the Company and any stockholder selling
shares of Common Stock in such offering of not less than $25 million.

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

 

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“Shares” means shares of Common Stock of the Company.

“Subsidiary” means any corporation (other than the Company) that is a
“subsidiary corporation” with respect to the Company under Section 424(f) of the
Code. In the event the Company becomes a subsidiary of another company, the
provisions hereof applicable to subsidiaries shall, unless otherwise determined
by the Administrator, also be applicable to any company that is a “parent
corporation” with respect to the Company under Section 424(e) of the Code.

“Successor of the Optionee” means: (i) the legal representative of the estate of
a deceased Optionee or the person, (ii) persons who shall acquire the right to
exercise an Option by bequest or inheritance or other transfer or by reason of
the death of the Optionee, (iii) if permitted by the Administrator in its sole
discretion, any person who shall acquire the right to exercise an Option
pursuant to any other transfer of the Option either pursuant to Section 12
hereof or pursuant to Court Order or (iv) persons who shall acquire the right to
exercise an Option on behalf of the Optionee as the result of a determination by
a court or other governmental agency of the incapacity of the Optionee.

“Termination of Service” means an Optionee’s termination of employment or other
service, as applicable, with the Company and its Subsidiaries. Cessation of
service as an officer, employee, director or consultant shall not be treated as
a Termination of Service if the Optionee continues without interruption to serve
thereafter in a material manner in another one (or more) of such other
capacities, as determined by the Administrator in its sole discretion.

“Unit Offering” means an underwritten public offering of a combination of debt
securities and Common Stock (or warrants or exchange rights to purchase Common
Stock) of the Company in which not more than 15% of the gross proceeds received
for the sale of such securities is attributed to Common Stock.

 

2. EFFECTIVE DATE AND TERMINATION OF PLAN.

The effective date of the amendment and restatement of the Plan is August 28,
2001. The Plan shall terminate on, and no Option shall be granted hereunder on
or after, the 10-year anniversary of the earlier of the approval of the Plan by
(i) the Board or (ii) the stockholders of the Company; provided, however, that
the Board may at any time prior to that date terminate the Plan.

 

3. ADMINISTRATION OF PLAN.

(a) The Plan shall be administered by the Administrator, which shall be either
the Board, or a Committee appointed by the Board, who shall, on behalf of the
Board, have full responsibility and authority to administer the Plan. The
Administrator shall consist of at least two individuals each of whom shall be a
“nonemployee director” as defined in Rule 16b-3 as promulgated by the Securities
and Exchange Commission under the Exchange Act and shall, at such times as the
Company is subject to Section 162(m) of the Code (to the extent relief from the
limitation of Section 162(m) of the Code is sought), qualify as “outside
directors” for purposes of Section 162(m) of the Code and related Treasury
regulations. Notwithstanding the foregoing, the Board may designate one or more
of its members or officers of the Company to serve as a

 

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secondary committee and delegate to the secondary committee authority to grant
Options to eligible individuals who are not subject to the requirements of Rule
16b-3 under the Exchange Act or Section 162(m) of the Code. The secondary
committee shall have the same authority with respect to selecting the
individuals to whom such Options are granted and establishing the terms and
conditions of such Options as the Administrator has under the terms of the Plan.

(b) The acts of a majority of the members present at any meeting of the
Administrator at which a quorum is present, or acts approved in writing by a
majority of the entire Administrator, shall be the acts of the Administrator for
purposes of the Plan. If and to the extent applicable, no member of the
Administrator may act as to matters under the Plan specifically relating to such
member.

(c) Subject to the provisions of the Plan, the Administrator shall in its
discretion as reflected by the terms of the Grant Letters (i) authorize the
granting of Incentive Stock Options and Non-Qualified Options to employees,
Directors and consultants of the Company and its Subsidiaries; and
(ii) determine the eligibility of an employee, Director or consultant to receive
an Option subject to Section 4 hereof, (iii) specify whether such Option is an
Incentive Stock Option or Non-Qualified Option and (iv) determine the number of
Shares to be covered under any Grant Letter, considering the position and
responsibilities of the employee, Director or consultant, the nature and value
to the Company of the employee’s, Director’s or consultant’s present and
potential contribution to the success of the Company whether directly or through
a Subsidiaries and such other factors as the Administrator may deem relevant.

(d) The Grant Letter shall contain such other terms, provisions and conditions
not inconsistent herewith as determined by the Administrator. The Optionee shall
take whatever additional actions and execute whatever additional documents the
Administrator may in its reasonable judgment deem necessary or advisable in
order to carry out or effect one or more of the obligations or restrictions
imposed on the Optionee pursuant to the express provisions of the Plan and the
Grant Letter .

 

4. ELIGIBILITY.

Any employee, Director or consultant of the Company or a Subsidiary who is
designated by the Administrator as eligible to participate in the Plan shall be
eligible to receive an Option under the Plan.

 

5. SHARES AND UNITS SUBJECT TO THE PLAN.

(a) Subject to adjustments as provided in Section 16, the total number of Shares
subject to Options granted under the Plan, in the aggregate, may not exceed
5,350,000 Shares distributed under the Plan may be treasury Shares or authorized
but unissued Shares. Any Shares that have been reserved for distribution in
payment for Options but are later forfeited or for any other reason are not
payable under the Plan may again be made the subject of Options under the Plan.

(b) The certificates for Shares issued hereunder may include any legend which
the Administrator deems appropriate to reflect any restrictions on transfer
hereunder or under the Grant Letter , or as the Administrator may otherwise deem
appropriate.

 

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(c) In no event may any Optionee receive Options for more than 200,000 shares in
any calendar year. The aggregate fair market value of the shares on the date of
the grant with respect to which Incentive Stock Options are exercisable for the
first time by an Optionee during any calendar year under the Plan and under any
other stock option plan of the Company shall not exceed $100,000.

 

6. GRANT OF OPTION.

Subject to the other terms of the Plan, the Administrator shall, in its
discretion as reflected by the terms of the applicable Grant Letter:
(i) determine and designate from time to time those eligible employees,
Directors and consultants of the Company and its Subsidiaries to whom Options
are to be granted and the number of Shares to be optioned to each employee and
consultant (provided that Incentive Stock Options may only be granted to
employees); (ii) determine the time or times when and the manner and condition
in which each Option shall be exercisable and the duration of the exercise
period; and (iii) determine or impose other conditions to the grant or exercise
of Options under the Plan as it may deem appropriate.

 

7. OPTION PRICE.

Unless otherwise determined by the Administrator as reflected in the Grant
Letter, the Exercise Price shall not be less than 100% (or 110% for Incentive
Stock Options with respect to individuals described in Section 422(b)(6) of the
Code (relating to 10% owners)) of the Fair Market Value of a Share on the day
the Option is granted.

 

8. TERM OF OPTIONS; VESTING AND EXERCISABILITY.

(a) The Administrator shall establish the term of each Option, as set forth in
the Grant Letter; provided that in no event shall any Option have a term greater
than 10 years from the date of grant (except that, in the case of an individual
described in Section 422(b)(6) of the Code (relating to 10% owners), the term of
any Incentive Stock Option shall be no more than five years from the date of
grant). Unless earlier expired, forfeited or otherwise terminated, each Option
shall expire in its entirety upon the day after the last day of its term. The
Option shall also expire, be forfeited and terminate at such times and in such
circumstances as otherwise provided hereunder or under the Grant Letter.

(b) Each Option, to the extent that the Optionee has not had a Termination of
Service and the Option has not otherwise lapsed, expired, terminated or been
forfeited, shall vest according to the vesting schedule which shall be
determined in the sole and absolute discretion of the Administrator as set forth
in the Grant Letter

(c) The Grant Letter may, but need not, include a provision whereby the Optionee
may elect at any time while still an employee of or a consultant to the Company
to exercise a Non-Qualified Option as to any part or all of the Shares subject
to the Option prior to the full vesting of the Option. Any Shares so purchased
(i) shall vest in accordance with the vesting schedule otherwise applicable to
the Option, (ii) shall be subject to a repurchase right in favor of the Company
as provided in Section 9 below, and (iii) shall be subject to any other
restriction the Company determines to be appropriate.

 

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(d) Notwithstanding the foregoing provisions of this Section 8, Options
exercisable pursuant to the schedule set forth by the Administrator at the time
of grant may be fully or more rapidly exercisable or vested, and Shares subject
to such schedule may be fully or more rapidly vested, at any time in the
discretion of the Administrator. Upon and after the death of an Optionee, such
Optionee’s Options, if and to the extent otherwise exercisable hereunder or
under the applicable Grant Letter after the Optionee’s death, may be exercised
by the Successors of the Optionee.

 

9. EXERCISABILITY UPON AND AFTER TERMINATION OF OPTIONEE.

 

  9.1. Termination on Retirement, Disability, Death or without Cause.

Unless otherwise provided in the applicable Grant Letter, if an Optionee has a
Termination of Service other than a Termination of Service due to death or for
cause, the unexercised and vested portion of such Optionee’s Option will remain
exercisable by the Optionee, the Optionee’s estate, the persons who acquired the
right to exercise the Option by bequest or inheritance, as applicable, for a
period of 90 days following such Termination of Service, but in no event later
than the last day of the term of the Option. Such portion of the Option shall
terminate to the extent not exercised within such period. Unless otherwise
provided in the Grant Letter, upon such a Termination of Service, any unvested
portion of an Option will terminate and will be forfeited, and any Shares
purchased pursuant to Section 8(c) above which are unvested at the time of such
Termination of Service shall be subject to a repurchase right in favor of the
Company for a price equal to the lesser of (x) the Exercise Price of the Shares
or (y) the Fair Market Value of such Shares on the date of repurchase, which
right must be exercised by the Company within 90 days of such Termination of
Service; provided that if the Company does not exercise such right within such
90-day period, the Optionee shall become fully and immediately vested in such
Shares.

 

  9.2. Termination for Cause.

If an Optionee has a Termination of Service on account of a termination for
Cause, any Option held by the Optionee will immediately expire on the date of
such Termination of Service, and the Company has the right (but not the
obligation to) repurchase any unvested or vested Shares held by the Optionee for
a price equal to the lesser of (x) the Option Price of the Shares or (y) the
Fair Market Value of the Shares on the date of repurchase; provided such right
must be exercised within six months of the applicable Termination of Service,
and provided, further, that if the Company does not exercise such right within
such six-month period, the Optionee shall become fully and immediately vested in
such Shares.

 

  9.3. Termination due to Optionee’s Death.

Unless otherwise provided in the applicable Grant Letter, if an Optionee has a
Termination of Service due to the Optionee’s death or if the Optionee dies
within the 90-day period following any Termination of Service other than a
Termination for Cause, the unexercised and vested portion of such Optionee’s
Option will remain exercisable by the Optionee’s estate or the persons who
acquired the right to exercise the Option by bequest or inheritance, as
applicable, until one year from the date of death but in no event later than the
last day of the term

 

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of the Option. Such portion of the Option shall terminate to the extent not
exercised within such period. Unless otherwise provided in the Grant Letter ,
upon such Termination of Service, any unvested portion of an Option will
terminate and will be forfeited, and any Shares purchased pursuant to
Section 8(c) above which are unvested at the time of such Termination of Service
shall be subject to a repurchase right in favor of the Company for a price equal
to the lesser of (x) the Exercise Price of the Shares or (y) the Fair Market
Value of such Shares on the date of repurchase, which right must be exercised by
the Company within 90 days of such Termination of Service; provided that if the
Company does not exercise such right within such 90-day period, the Optionee
shall become fully and immediately vested in such Shares.

 

  9.4. In General.

Except as may otherwise be expressly set forth in Section 8 or this Section 9 or
as may otherwise be expressly provided under the Grant Letter, no provision of
this Section 9 is intended to or shall permit the exercise of the Option to the
extent the Option was not exercisable upon the Termination of Service.

 

10. EXERCISE OF OPTIONS; PAYMENT.

 

  10.1. Notice of Exercise.

(a) Subject to vesting and other restrictions provided for hereunder or
otherwise imposed in accordance herewith, an Option may be exercised, and
payment in full of the aggregate Exercise Price made, by an Optionee only by
written notice (in the form prescribed by the Administrator) to the Company
specifying the number of Shares to be purchased.

(b) Without limiting the scope of the Administrator’s discretion hereunder, the
Administrator may impose such other restrictions on the exercise of Incentive
Stock Options (whether or not in the nature of the foregoing restrictions) as it
may deem necessary or appropriate.

(c) If Shares acquired upon the exercise of an Incentive Stock Option are
disposed of in a disqualifying disposition within the meaning of Section 422 of
the Code by an Optionee prior to the expiration of either two years from the
date of grant of such Option or one year from the transfer of Shares to the
Optionee pursuant to the exercise of such Option, or in any other disqualifying
disposition within the meaning of Section 422 of the Code, such Optionee shall
notify the Company in writing as soon as practicable thereafter of the date and
terms of such disposition and, if the Company (or any affiliate thereof)
thereupon has a tax withholding obligation, shall pay to the company (or such
affiliate) an amount equal to any withholding tax the Company (or affiliate) is
required to pay as a result of the disqualifying disposition.

 

  10.2. Form of Payment.

(a) The aggregate Exercise Price shall be paid in full upon the exercise of the
Option. Payment must be made by one of the following methods:

(i) cash or a certified or bank cashier’s check;

 

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(ii) the proceeds of a Company loan program or third party sale program or a
note acceptable to the Administrator given as consideration under such a
program, in each case if permitted by the Administrator in its discretion, if
such a program has been established and the Optionee is eligible to participate
therein;

(iii) if approved by the Administrator in its discretion Shares of previously
owned Common Stock having an aggregate Fair Market Value on the date of exercise
equal to the aggregate Option Price;

(iv) if approved by the Administrator in its discretion, by assigning to the
Company a sufficient amount of the proceeds from the sale of Shares to be
acquired pursuant to such exercise and instructing the broker or selling agent
to pay that amount to the Company, which amount shall be paid in cash to the
Company on the date such Shares are issued to the Optionee; or or

(v) by a combination of such methods of payment or any other method acceptable
to the Administrator in its discretion.

(b) Except in the case of Options exercised by certified or bank cashier’s
check, the Administrator may impose limitations and prohibitions on the exercise
of Options as it deems appropriate, including, without limitation, any
limitation or prohibition designed to avoid accounting consequences which may
result from the use of Common Stock as payment upon exercise of an Option. Any
fractional Shares resulting from an Optionee’s election that is accepted by the
Company shall be paid in cash.

 

11. EXERCISE BY SUCCESSORS.

An Option may be exercised, and payment in full of the aggregate Exercise Price
made, by the Successors of the Optionee only by written notice (in the form
prescribed by the Administrator) to the Company specifying the number of Shares
to be purchased. Such notice shall state that the aggregate Option Price will be
paid in full, or that the Option will be exercised as otherwise provided
hereunder, in the discretion of the Company or the Administrator, if and as
applicable.

 

12. NONTRANSFERABILITY OF OPTION.

Each Option granted under the Plan shall by its terms be nontransferable by the
Optionee except by will or the laws of descent and distribution of the state
wherein the Optionee is domiciled at the time of his death; provided, however,
that the Administrator may (but need not) permit other transfers of
Non-Qualified Options where the Administrator concludes that such
transferability does not result in accelerated U.S. federal income taxation and
is otherwise appropriate and desirable.

 

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13. TAX WITHHOLDING.

 

  13.1. In General.

The Company shall be entitled to withhold from any payments or deemed payments
any amount of tax withholding determined by the Administrator to be required by
law. Without limiting the generality of the foregoing, the Administrator may, in
its discretion, require an Optionee to pay to the Company at such time as the
Administrator determines the amount that the Administrator deems necessary to
satisfy the Company’s obligation to withhold federal, state or local income or
other taxes incurred by reason of the exercise of any Option.

 

  13.2. Share Withholding.

Upon the exercise of an Option, the Optionee may, if approved by the
Administrator in its discretion, make a written election to have Shares then
issued withheld by the Company from the Shares otherwise to be received, or to
deliver previously owned Shares, in order to satisfy the liability for such
withholding taxes. In the event that the Optionee makes, and the Administrator
permits, such an election, the number of Shares so withheld or delivered shall
have an aggregate Fair Market Value on the date of exercise sufficient to
satisfy the applicable withholding taxes.

 

  13.3. Withholding Required.

Notwithstanding anything contained in the Plan to the contrary, the Optionee’s
satisfaction of any tax-withholding requirements imposed by the Administrator
shall be a condition precedent to the Company’s obligation as may otherwise be
provided hereunder to provide Shares to the Optionee and to the release of any
restrictions as may otherwise be provided hereunder, as applicable; and the
applicable Option shall be forfeited upon the failure of the Optionee to satisfy
such requirements with respect to the exercise of the Option.

 

14. REGULATIONS AND APPROVALS

(a) The obligation of the Company to sell Shares with respect to an Option
granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Administrator.

(b) The Administrator may make such changes to the Plan as may be necessary or
appropriate to comply with the rules and regulations of any government authority
or to obtain tax benefits applicable to an Option.

(c) Each grant of Options is subject to the requirement that, if at any time the
Administrator determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the issuance of Options no payment shall be
made in whole or in part, unless listing, registration, qualification, consent
or approval has been effected or obtained free of any conditions in a manner
acceptable to the Administrator.

(d) In the event that the disposition of stock acquired pursuant to the Plan is
not covered by a then current registration statement under the Securities Act,
and is not otherwise exempt from such registration, such Shares shall be
restricted against transfer to the extent

 

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required under the Securities Act, and the Administrator may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that such Shares
will be disposed of only if registered for sale under the Securities Act or if
there is an available exemption for such disposition.

 

15. INTERPRETATION AND AMENDMENTS, OTHER RULES.

15.1. The Administrator may make such rules and regulations and establish such
procedures for the administration of the Plan as it deems appropriate. Without
limiting the generality of the foregoing, the Administrator may (i) determine
the extent, if any, to which Options shall be forfeited (whether or not such
forfeiture is expressly contemplated hereunder); (ii) interpret the Plan and the
Grant Letters hereunder, with such interpretations to be conclusive and binding
on all persons and otherwise accorded the maximum deference permitted by law,
provided that the Administrator’s interpretation shall not be entitled to
deference on and after a Change of Control except to the extent that such
interpretations are made exclusively by members of the Administrator who are
individuals who served as Administrator members before the Change of Control;
and (iii) take any other actions and make any other determinations or decisions
that it deems necessary or appropriate in connection with the Plan or the
administration or interpretation thereof. Unless otherwise expressly provided
hereunder, the Administrator, with respect to any grant, may exercise its
discretion hereunder at the time of the grant or thereafter. In the event of any
dispute or disagreement as to the interpretation of the Plan or of any rule,
regulation or procedure, or as to any question, right or obligation arising from
or related to the Plan, the decision of the Administrator, except as provided in
clause (ii) of the foregoing sentence, shall be final and binding upon all
persons. The Board may amend the Plan as it shall deem advisable, except that no
amendment may adversely affect an Optionee with respect to an Option previously
granted unless such amendments are required in order to comply with applicable
laws; provided that the Board may not make any amendment in the Plan that would,
if such amendment were not approved by the holders of the Common Stock, cause
the Plan to fail to comply with any requirement of applicable law or regulation,
unless and until the approval of the holders of such Common Stock is obtained.
In addition, except pursuant to Section 16 below, no amendment shall be
effective without the approval of the holders of the Common Stock that results
in (1) any material increase in the number of shares to be issued under the Plan
(other than as permitted by Section 16); (2) any material increase in benefits
to Optionees, including any material change to: (i) permit a repricing (or
decrease in exercise price) of outstanding Options, (ii) reduce the price at
which Shares or Options to purchase Shares may be offered, or (iii) extend the
duration of the Plan; (3) any material expansion of the class of persons
eligible to receive Options; or (4) the grant of any awards other than Options
under the Plan.

 

16. CHANGES IN CAPITAL STRUCTURE; CHANGE OF CONTROL.

 

  16.1. Changes in Capital Structure.

(a) If (i) the Company shall at any time be involved in a merger, consolidation,
dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of the Company or a transaction similar
thereto, (ii) any

 

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stock dividend, stock split, reverse stock split, stock combination,
reclassification, recapitalization or other similar change in the capital
structure of the Company or any distribution to holders of Common Stock other
than cash dividends, shall occur or (iii) any other event shall occur which in
the judgment of the Administrator necessitates action by way of adjusting the
terms of the outstanding Options, then (x) the maximum aggregate number of
Shares which may be made subject to Options under the Plan shall be
appropriately adjusted by the Administrator; and (y) the Administrator shall
take any such action as in its judgment shall be necessary to preserve the
Optionees’ rights in their respective Options substantially proportionate to the
rights existing in such Options prior to such event, including, without
limitation, adjustments in (A) the number of Options granted, (B) the number and
kind of shares or other property to be distributed in respect of Options, and
(C) the Exercise Price.

 

  16.2. Change of Control or Approved Sale.

(a) Upon a Change of Control or an Approved Sale unless otherwise provided in an
Optionee’s Grant Letter, the vesting and exercisability of all Options that are
outstanding and unexercised as of such Change of Control, to the extent
unvested, and any unvested shares held by the Optionee shall be accelerated such
that all outstanding Options are fully vested and exercisable and all Shares
held by the Optionee are fully vested, and, if the Company does not survive such
Change of Control or an Approved Sale, the Company shall, if the Company does
not cash-out all outstanding options, require the successor corporation to the
Company to assume all outstanding Options and to substitute such Options with
awards involving the common stock of such successor corporation on terms and
conditions necessary to preserve the rights of Optionees with respect to such
Options. Upon a Change of Control or an Approved Sale, the Administrator, in its
sole discretion, may require the Company to cancel all outstanding vested
Options (including those Options vested upon a Change of Control or an Approved
Sale) in exchange for a cash payment in an amount equal to the excess, if any,
of the Fair Market Value of the Common Stock underlying the unexercised portion
of the Option as of the date of the Change of Control or Approved Sale over the
Option Price of such portion. Notwithstanding anything in the Plan to the
contrary, in the event of an Approved Sale or a Change of Control, the
Administrator shall not have the right to take any actions described in the Plan
(including without limitation actions described in this Section 16.2) that would
make the Approved Sale or Change of Control ineligible for pooling of interests
accounting treatment or that would make the Approved Sale or Change of Control
ineligible for desired tax treatment if, in the absence of such right, the
transaction would qualify for such treatment and the Company intends to use such
treatment with respect to the transaction, in which case the Administrator and
the Company shall be required to take the action described in the first sentence
of this Section 16.2.

16.3. Administrator Authority. The judgment of the Administrator with respect to
any matter referred to in this Section 16 shall be conclusive and binding upon
each Optionee without the need for any amendment to the Plan.

 

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17. MISCELLANEOUS.

 

  17.1. No Rights to Employment or Other Service.

Nothing in the Plan or in any grant made pursuant to the Plan shall confer on
any individual any right to continue in the employ or other service of the
Company or its Subsidiaries or interfere in any way with the right of the
Company or its Subsidiaries and its stockholders to terminate the individual’s
employment or other service at any time.

 

  17.2. No Fiduciary Relationship.

Nothing contained in the Plan, and no action taken pursuant to the provisions of
the Plan, shall create or shall be construed to create a trust of any kind, or a
fiduciary relationship between the Company or its Subsidiaries, or their
officers or the Administrator, on the one hand, and the Optionee, the Company,
its Subsidiaries or any other person or entity, on the other.

 

  17.3. Notices.

All notices under the Plan shall be in writing, and if to the Company, shall be
delivered to the Board or mailed to its principal office, addressed to the
attention of the Board; and if to the Optionee, shall be delivered personally,
sent by facsimile transmission or mailed to the Optionee at the address
appearing in the records of the Company. Such addresses may be changed at any
time by written notice to the other party given in accordance with this
Section 17.3.

 

  17.4. Exculpation and Indemnification.

The Company shall indemnify and hold harmless the members of the Board and the
members of the Administrator, from and against any and all liabilities, costs
and expenses incurred by such persons as a result of any act or omission to act
in connection with the performance of such person’s duties, responsibilities and
obligations under the Plan, to the maximum extent permitted by law, other than
such liabilities, costs and expenses as may result from the gross negligence,
bad faith, willful misconduct or criminal acts of such persons.

 

  17.5. Captions.

The use of captions in this Plan is for convenience. The captions are not
intended to provide substantive rights.

 

  17.6. Governing Law.

THE PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.

IN WITNESS WHEREOF, on behalf of Adolor Corporation and pursuant to the
direction of the Board, the undersigned hereby adopts the Plan as set forth
herein.

 

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Adolor Corporation By:  

 

Title:  

 

759776.4.01

AS AMENDED DECEMBER 31, 2002

AS AMENDED MAY 13, 2003

AS AMENDED DECEMBER 13, 2006 EFFECTIVE JANUARY 1, 2007

 

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