Exhibit 10.3

VIROPHARMA INCORPORATED

AMENDED AND RESTATED

2005 EQUITY INCENTIVE PLAN

The purposes of the Plan are to: (a) further the growth and success of
ViroPharma Incorporated (the “Company”) and its Subsidiaries by enabling
selected employees, directors, consultants and advisors of the Company and any
Subsidiaries to acquire shares of common stock of the Company, thereby
increasing their personal interest in such growth and success and (b) to provide
a means of rewarding outstanding performance of such persons. The terms of the
Plan shall be incorporated in the Award Agreement to be executed by the
Participant.

1. Definitions

1.1 “Affiliate” means, with respect to a Person, another Person that directly or
indirectly controls, or is controlled by, or is under common control with such
Person.

1.2 “Award” means a grant of Options, Restricted Shares or Restricted Share
Units to an Eligible Person pursuant to the provisions of this Plan. Each
separate grant of Options, Restricted Shares or Restricted Share Units to an
Eligible Person and each group of Options that vests on a separate date, or a
group of Restricted Shares or Restricted Share Units with respect to which
restrictions lapse on a separate date, is treated as a separate Award.

1.3 “Award Agreement” means a written agreement evidencing and reflecting the
terms of an Award.

1.4 “Award Committee” means a committee appointed by the Committee in accordance
with Section 3.1(b) of the Plan, and if one is appointed, then such committee
shall possess all of the power and authority, and shall be authorized to take
any and all actions required to be taken hereunder, and make any and all
determinations required to be made hereunder, to the extent authorized by the
Committee.

1.5 “Board” means the Board of Directors of the Company, as constituted from
time to time.

1.6 “Change of Control” means the happening of an event, which shall be deemed
to have occurred upon the earliest to occur of the following events:

a. the dissolution or liquidation of the Company;

b. the sale or other disposition of all or substantially all of the assets of
the Company;

c. the merger or consolidation the Company with or into another corporation,
other than, in either case, a merger or consolidation of the Company in which
holders of shares of the Company’s voting capital stock immediately prior to the
merger or consolidation will have more than 50% of the ownership of voting
capital stock of the surviving corporation immediately after the merger or
consolidation (on a fully diluted basis), which voting capital stock is to be
held in the same proportion (on a fully diluted basis) as such holders’
ownership of voting capital stock of the Company immediately before the merger
or consolidation;

d. the date any entity, Person or group (within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act), other than (i) the Company, or
(ii) any of its Subsidiaries, or (iii) any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its Subsidiaries, or
(iv) any Affiliate (as such term is defined in Rule 405 promulgated under the
Securities Act) of any of the foregoing, shall have acquired beneficial
ownership of, or shall have acquired voting control over, 50% or more of the
outstanding shares of the Company’s voting capital stock (on a fully diluted
basis), unless the transaction pursuant to which such Person, entity or group
acquired such beneficial ownership or control resulted from the original
issuance by the Company of shares of its voting capital stock and was approved
by at least a majority of Directors who were either members of the Board on the
date that this Plan was originally adopted by the Board or members of the Board
for at least twelve (12) months before the date of such approval; or

e. the first day after the date of this Plan when Directors are elected such
that there is a change in the composition of the Board such that a majority of
Directors have been members of the Board for less than twelve (12) months,
unless the nomination for election of each new Director who was not a Director
at the beginning of such twelve (12) month period was approved by a vote of at
least sixty percent (60%) of the Directors then still in office who were
Directors at the beginning of such period.

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Notwithstanding the foregoing, the Committee may provide for a different
definition of a “Change of Control” in an Award Agreement if such Award is
subject to the requirements of Code Section 409A and the Award will become
payable on a Change of Control.

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

1.8 “Committee” means a committee appointed by the Board in accordance with
Section 3.1 of the Plan, and if one is appointed, then such committee shall
possess all of the power and authority of, and shall be authorized to take any
and all actions required to be taken hereunder by, and make any and all
determinations required to be taken hereunder by, the Board.

1.9 “Common Stock” means common stock of the Company, $.002 par value per Share.

1.10 “Company” means ViroPharma Incorporated.

1.11 “Director” means an individual who is a member of the Board of Directors of
the Company.

1.12 “Disability” means a total and permanent disability, as defined in Code
Section 22(e)(3).

1.13 “Effective Date” means the date set forth in Section 18.1 below.

1.14 “Eligible Person” means:

a. with respect to Awards of Incentive Stock Options, any person employed by the
Company or by any of its Subsidiaries;

b. with respect to Awards of non-qualified stock options, any person employed by
the Company or by any of its Subsidiaries, advisors and consultants to the
Company or any Subsidiary, Directors and members of the board of directors of a
Subsidiary;

c. with respect to any Award of Restricted Shares or Restricted Share Units, any
person employed by the Company or by any of its Subsidiaries, and Directors and
members of the board of directors of a Subsidiary.

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

1.16 “Fair Market Value Per Share” means:

a. If Shares of Common Stock are traded in the over-the-counter market: the mean
of the bid and asked prices for a Share of Common Stock on the relevant
valuation date as reported in The Wall Street Journal (or, if not so reported,
as otherwise reported by the National Association of Securities Dealers
Automated Quotations (“NASDAQ”) System), as applicable or, if there is no
trading on such date, on the next preceding date on which there were reported
Share prices.

b. If Shares of Common Stock are listed on a national or regional securities
exchange: the closing price during regular trading hours for a Share of Common
Stock on the exchange, as reported in The Wall Street Journal on the relevant
valuation date, or if there is no trading on that date, the closing price during
regular trading hours on the next preceding date on which there were reported
Share prices.

c. If neither of Sections 1.15(a-b) apply, then the Fair Market Value Per Share
of Common Stock shall be determined in good faith by the Board or the Committee
in its sole discretion.

1.17 “Incentive Stock Option” means an Option that is an incentive stock option
as described in Code Section 422.

1.18 “Non-Employee Director” shall have the meaning set forth in Rule
16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor definition adopted by the Securities and Exchange
Commission; provided, however, that the Board or the Committee may, to the
extent it deems it necessary or desirable to comply with Code Section 162(m) and
applicable regulations thereunder, ensure that each Non-Employee Director also
qualifies as an outside director as that term is defined in the regulations
under Code Section 162(m).

1.19 “Option” means an Incentive Stock Option or a non-qualified stock option to
purchase Shares that is awarded pursuant to the Plan.

 

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1.20 “Participant” means an Eligible Person to whom an Award is granted pursuant
to the Plan.

1.21 “Performance Goals” means one or more objective measurable performance
goals established by the Committee with respect to a Performance Period based
upon one or more of the following criteria: (i) operating income; (ii) earnings
before interest, taxes, depreciation and amortization; (iii) earnings; (iv) cash
flow; (v) market share; (vi) sales or revenue; (vii) expenses; (viii) cost of
goods sold; (ix) profit/loss or profit margin; (x) working capital; (xi) return
on equity or assets; (xii) earnings per share; (xiii) total shareholder return;
(xiv) price/earnings ratio; (xv) debt or debt-to-equity; (xvi) accounts
receivable; (xvii) writeoffs; (xviii) cash; (xix) assets; (xx) liquidity;
(xxi) operations; (xxii) intellectual property (e.g., patents); (xxiii) product
development; (xxiv) manufacturing, production or inventory; (xxv) mergers and
acquisitions or divestitures; and/or (xxvi) individual performance objective.
Any criteria used may be measured, as applicable, (a) in absolute terms, (b) in
relative terms (including but not limited to, the passage of time and/or against
other companies or financial metrics), (c) on a per share and/or share per
capita basis, (d) against the performance of the Company as a whole or against
particular entities, segments, operating units or products of the Company and
/or (e) on a pre-tax or after tax basis. Awards issued to persons who are not
Section 162(m) Employees may take into account any other factors deemed
appropriate by the Committee.

1.22 “Performance Period” means any period specified in connection with a
Performance Award. The Committee may establish different Performance Periods for
different Participants, and the Committee may establish concurrent or
overlapping Performance Periods.

1.23 “Person” means an individual, partnership, corporation, limited liability
company, trust, joint venture, unincorporated association, or other entity or
association.

1.24 “Plan” means this ViroPharma Incorporated Amended and Restated 2005 Equity
Incentive Plan (f/k/a the ViroPharma Incorporated 2005 Stock Option and
Restricted Share Plan), as amended from time to time.

1.25 “Pool” means the pool of Shares subject to the Plan, as described in
Article 4, and as adjusted in accordance with Article 9 of the Plan.

1.26 “Restricted Shares” means Shares that are subject to restrictions pursuant
to Article 6 of the Plan.

1.27 “Restricted Share Units” means a right granted under and subject to
restrictions pursuant to Article 7 of the Plan.

1.28 “Section 162(m) Employee” means those persons who the Committee determines
are subject to the limitations of Code Section 162(m).

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

1.30 “Shares” means shares of Common Stock including, without limitation,
Restricted Shares.

1.31 “Subsidiary” means a subsidiary corporation, whether now or hereafter
existing, as defined in Code Sections 424(f) and (g).

2. Participation

Subject to the terms of the Plan, the Board, the Committee or the Award
Committee (i) will select Participants from among the Eligible Persons and
(ii) may make Awards at any time and from time to time to Eligible Persons. Any
Award may include or exclude any Eligible Person, as the Board, the Committee or
the Award Committee shall determine in its sole discretion. An Eligible Person
who has received an Award, if he or she is otherwise eligible, may receive
additional Awards.

3. Administration

3.1 Procedure.

(a) Committee. The Board shall administer the Plan. The Board may at any time
appoint a Committee of Non-Employee Directors of at least two persons to
administer the Plan on behalf of the Board subject to such terms and conditions
as the Board may prescribe. Members of the Committee shall serve for such period
of time as the Board may determine. Members of the Board or the Committee who
are eligible for Awards or who have received Awards may vote on any matters
affecting the administration of the Plan or the granting of Awards pursuant to
the Plan, except that no such member shall act upon an Award to himself or
herself, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board or the Committee during which action is taken
with respect to an Award to himself or herself. From time to time the Board may
increase the size of the Committee and appoint additional members thereto,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.

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(b) Award Committee. To the extent authorized by the Board, the Committee may at
any time appoint an Award Committee of at least two officers of the Company to
administer the Plan on behalf of the Committee to the fullest extent allowed by
law subject to such terms, conditions and limitations as the Committee may
prescribe. Members of the Award Committee shall serve for such period of time as
the Committee may determine. Members of the Award Committee who have received
Awards may vote on any matters affecting the administration of the Plan or the
granting of Awards pursuant to the Plan, except that no such member shall act
upon an Award to himself or herself, but any such member may be counted in
determining the existence of a quorum at any meeting of the Award Committee
during which action is taken with respect to an Award to himself or herself.
From time to time the Committee may increase the size of the Award Committee and
appoint additional members thereto, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however caused, or
remove all members of the Award Committee and thereafter directly administer the
Plan.

3.2 Powers. Subject to the provisions of the Plan:

(a) The Board or, to the extent delegated by the Board, the Committee shall have
the authority, in its discretion:

 

  1. to make Awards to any Eligible Person;

 

  2. to determine the Fair Market Value Per Share;

 

  3. to determine the exercise price of the Options to be awarded in accordance
with Article 5 of the Plan;

 

  4. to determine the purchase price, if any, for Restricted Shares awarded in
accordance with Article 6 of the Plan;

 

  5. to determine the Eligible Persons to whom, and the time or times at which,
Awards shall be made, and the number of Shares to be subject to each Award;

 

  6. to determine the Participant’s to which dividend equivalents will be
granted;

 

  7. to prescribe, amend and rescind rules and regulations relating to the Plan;

 

  8. to determine the terms and provisions of each Award under the Plan and each
Award Agreement (which need not be identical with the terms of other Awards and
Award Agreements) and, with the consent of the Participant, to modify or amend
an outstanding Award or Award Agreement;

 

  9. to determine the conditions that must be satisfied under any Award in order
for an Option to vest and become exercisable, or, for the restrictions on any
Restricted Share or Restricted Share Units to lapse, which conditions may
include satisfaction of performance goals, passage of set periods of time and/or
other criteria as determined by the Board or the Committee;

 

  10. to accelerate the vesting or exercise date of any Option and/or to waive,
in whole or in part any or all remaining restrictions on any Restricted Shares
or Restricted Share Units;

 

  11. to interpret the Plan or any agreement entered into with respect to an
Award, the exercise of Options, or the removal of restrictions on Restricted
Shares or Restricted Share Units;

 

  12. to authorize any person to execute on behalf of the Company any instrument
required to effectuate an Award or to take such other actions that may be
necessary or appropriate with respect to the Company’s rights pursuant to Awards
or Award Agreements; and

 

  13. to make such other determinations and establish such other procedures as
it deems necessary or advisable for the administration of the Plan.

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(b) To the fullest extent allowed by applicable law and subject to the scope of
authority delegated by the Board and/or the Committee and to the limitations of
Section 3.1(b), the Award Committee shall have the authority, in its discretion:

 

  1. to make Awards to any Eligible Person who is employed by the Company or any
Subsidiary;

 

  2. to determine the Fair Market Value Per Share;

 

  3. to determine the exercise price of the Options to be awarded in accordance
with Article 5 of the Plan;

 

  4. to determine the purchase price, if any, for Restricted Shares awarded in
accordance with Article 6 of the Plan;

 

  5. to determine the Eligible Persons to whom, and the time or times at which,
Awards shall be made, and the number of Shares to be subject to each Award;

 

  6. to determine the terms and provisions of each Award under the Plan and each
Award Agreement (which need not be identical with the terms of other Awards and
Award Agreements) and, with the consent of the Participant, to modify or amend
an outstanding Award or Award Agreement;

 

  7. to determine the conditions that must be satisfied under any Award in order
for an Option to vest and become exercisable, or, for the restrictions on any
Restricted Share or Restricted Share Unit to lapse, which conditions may include
satisfaction of performance goals, passage of set periods of time and/or other
criteria as determined by the Board or the Committee; and

 

  8. to authorize any person to execute on behalf of the Company any instrument
required to effectuate an Award or to take such other actions that may be
necessary or appropriate with respect to the Company’s rights pursuant to Awards
or Award Agreements.

3.3 Effect of Decisions. All decisions, determinations and interpretations of
the Board or the Committee shall be final and binding with respect to all Awards
and Award Agreements under the Plan. All Awards shall be made conditional upon
the Participant’s acknowledgement, in writing or by acceptance of the Award,
that all decisions and determinations of the Board or the Committee shall be
final and binding on the Participant, his or her beneficiaries and any other
person having or claiming an interest under such Award.

3.4 Limitation of Liability. Notwithstanding anything herein to the contrary, no
member of the Board or the Committee shall be liable for any good faith
determination, act or failure to act in connection with the Plan, any Award, or
any Award Agreement hereunder.

4. Stock Subject to the Plan

4.1 Subject to the provisions of this Article 4 and the provisions of Article 9
of the Plan, the total aggregate number of Shares of Common Stock that may be
issued under the Plan shall be the sum of the following: (i) 2,500,000 new
Shares, plus (ii) the number of Shares of Common Stock subject to outstanding
grants under the Plan as of the Effective Date, plus (iii) the number of Shares
of Common Stock remaining available for issuance under the Plan but not subject
to previously exercised, vested or paid Awards as of the Effective Date
(collectively, the “Pool”). Within the Pool, no more than 1,000,000 Shares may
be issued with respect to Restricted Shares or Restricted Share Units granted
pursuant to the Plan on and after the Effective Date. The foregoing 1,000,000
Share sublimit does not apply to grants of Restricted Shares or Restricted Share
Units granted pursuant to the Plan prior to the Effective Date that are
outstanding as of the Effective Date. All Shares available under this sublimit
are subject to adjustment as described in Article 9 of the Plan. Options granted
pursuant to the Plan may be either Incentive Stock Options or non-qualified
stock options, as determined by the Board or the Committee. Without limiting the
generality of this Section 4.1, any number of the maximum number of Shares
available for issuance hereunder may be subject to Options. If an Option expires
or becomes unexercisable for any reason without having been exercised in full,
the unexercised Shares shall be returned to the Pool and become available for
future award under the Plan, unless the Plan was terminated earlier. Similarly,
if and to the extent that any Restricted Share or Restricted Share Unit is
canceled, repurchased or forfeited for any reason, that Share will again become
available for issuance under the Plan. Upon the exercise of an Option through
the net exercise procedure under Section 5.3, then both for purposes of
calculating the number of Shares of Common Stock remaining available for
issuance under the Plan and the number of Shares of Common Stock remaining
available for exercise under such Option, the number of such Shares shall be
reduced by the gross number of shares for which the Option is exercised. Shares
of Common Stock surrendered in payment of the exercise price of an Option, and
Shares withheld or surrendered for payment of taxes, shall not be available for
re-issuance under the Plan.

 

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4.2 All Awards under the Plan shall be expressed in Shares of Common Stock. The
maximum aggregate number of Shares of Common Stock that may be issued with
respect to all Awards under the Plan to any individual during any calendar year
shall be 2,000,000 Shares, subject to adjustment as described in Article 9
below. The individual limits of this Section 4.2 shall apply without regard to
whether the Awards are to be paid in Common Stock or cash. All cash payments
(other than with respect to dividend equivalents) shall equal the Fair Market
Value Per Shares of Common Stock to which the cash payments relate. To the
extent that any Awards are paid in cash, and not in Shares of Common Stock, such
Awards shall not count against the Share limits in Section 4.1. A Participant
may not accrue dividend equivalents during any calendar year in excess of
$1,000,000.

4.3 Shares to be delivered under the Plan will be made available, at the
discretion of the Board or the Committee, from authorized but unissued Shares
and/or from previously issued Shares reacquired by the Company.

5. Terms and Conditions of Options

5.1 Option Awards. Options may be granted either alone or in conjunction with
other Awards. Each Option awarded pursuant to the Plan shall be authorized by
the Board, the Committee, or, to the extent delegated by the Committee and
permitted by the terms of the Plan, the Award Committee and shall be evidenced
by an Award Agreement in such form as the Board, the Committee, or the Award
Committee may from time to time determine. The provisions of Awards need not be
the same with respect to each Participant. The prospective recipient of an Award
of Options will not have any rights with respect to such Award, unless and until
such recipient has executed an Award Agreement and has delivered a fully
executed copy thereof to the Company, and has otherwise complied with the
applicable terms and conditions of such Award.

5.2 Option Award Agreements. Each Award Agreement shall incorporate by reference
all other terms and conditions of the Plan, including the following terms and
conditions:

a. Number of Shares. The Award Agreement shall state the number of Shares
subject to the Option, which shall not include fractional Shares.

b. Option Price. The price per Share payable on the exercise of any Option shall
be stated in the Award Agreement and shall be no less than the Fair Market Value
Per Share on the date such Option is awarded. Notwithstanding the foregoing, if
an Incentive Stock Option is awarded under this Plan to any person who, at the
time of the award of such Incentive Stock Option, owns stock possessing more
than 10% of the total combined voting power of all classes of the Company’s
stock, the price per Share payable upon exercise of such Incentive Stock Option
shall be no less than 110 percent (110%) of the Fair Market Value Per Share on
the date such Option is awarded. Except as provided in Article 9, the terms of
any outstanding Option may not be amended to reduce the exercise price of such
Option, nor may any outstanding Option be cancelled in exchange for cash, other
Awards or Options with an exercise price that is less than the exercise price of
the original Option, without stockholder approval.

c. Form of Option. The Award Agreement will state whether the Option awarded is
an Incentive Stock Option or a non-qualified stock option, and will constitute a
binding determination as to the form of Option awarded, subject to the
provisions of Section 5.5(c) below.

The Award Agreement may contain such other provisions as the Board, the
Committee, or the Award Committee in its discretion deems advisable and which
are not inconsistent with the provisions of this Plan.

5.3 Consideration. The Board or the Committee shall determine the method of
payment for the Shares to be issued upon the exercise of an Option, which may
consist entirely of cash, personal or certified check, or, at the election of
the Participant and as the Board or the Committee may, in its sole discretion,
approve, by surrendering Shares with an aggregate Fair Market Value Per Share
equal to the aggregate Option price, or by delivering such combination of Shares
and cash as the Board or the Committee may, in its sole discretion, approve;
provided, however, that the Option price may not be paid in Shares if the Board
or the Committee determines that such method of payment would result in
liability under Section 16(b) of the Exchange Act to a Participant. In addition
to the foregoing, with the approval of the Board or the Committee, to the extent
an Option is at the time exercisable for vested Shares of Common Stock, all or
any part of that vested portion may be surrendered to the Company for an
appreciation distribution payable in Shares of Common Stock with a Fair Market
Value Per Share at the time of the Option surrender equal to the dollar amount
by which the then Fair Market Value Per Shares of Common Stock subject to the
surrendered portion exceeds the aggregate exercise price payable for those
Shares.

 

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Except as otherwise provided by the Board or the Committee, if payment is made
in whole or in part in Shares, the Participant shall deliver to the Company
certificates registered in the name of such Participant representing Shares
legally and beneficially owned by such Participant, free of all liens, claims
and encumbrances of every kind and having an aggregate Fair Market Value Per
Share on the date of delivery that is not greater than the aggregate Option
price accompanied by stock powers duly endorsed in blank by the record holder of
the Shares represented by such certificates. If the Board or the Committee, in
its sole discretion, should refuse to accept Shares in payment of the Option
price, any certificates representing Shares which were delivered to the Company
shall be returned to the Participant with notice of the refusal of the Board or
the Committee to accept such Shares in payment of the option price. The Board or
the Committee may impose such limitations and prohibitions on the use of Shares
to exercise an Option as it deems appropriate.

5.4 Exercise of Options. Any Option awarded hereunder shall be exercisable at
such times and under such conditions as shall be set forth in the Award
Agreement (as may be determined by the Board, the Committee, or the Award
Committee and as shall be permissible under the terms of the Plan), which may
include performance criteria with respect to the Company and/or the Participant,
and as shall be permissible under the terms of the Plan.

An Option may be exercised in accordance with the provisions of this Plan as to
all or any portion of the Shares then exercisable under an Option from time to
time during the term of the Option. No fractional shares of Common Stock shall
be issued or delivered pursuant to the Plan or any Award. The Committee or Board
shall determine whether cash or other Awards shall be issued or paid in lieu of
such fractional Shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

An Option shall be deemed to be exercised when written notice of such exercise
has been given to the Company at its principal executive office in accordance
with the terms of the Award Agreement by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is
exercised has been received by the Company, accompanied by any agreements
required by the terms of the Plan and/or Award Agreement. Full payment may
consist of such consideration and method of payment allowable under this Article
5 of the Plan. No adjustment shall be made for a dividend or other right for
which the record date is earlier than the date the Option is exercised, except
as provided in Article 9 of the Plan.

As soon as practicable after any proper exercise of an Option in accordance with
the provisions of the Plan, the Company shall, without transfer or issue tax to
the Participant, deliver to the Participant at the principal executive office of
the Company or such other place as shall be mutually agreed upon between the
Company and the Participant, a certificate or certificates representing the
Shares for which the Option shall have been exercised.

Exercise of an Option in any manner shall result in a decrease in the number of
Shares that thereafter may be available for sale under the Option by the number
of Shares as to which the Option is exercised.

5.5 Term and Vesting of Options.

a. Except as provided in Section 5.6(d), Options awarded hereunder shall vest
and become exercisable in whole or in part, in accordance with such vesting
conditions as the Board, the Committee, or the Award Committee shall determine,
which conditions shall be stated in the Award Agreement. Vested Options may be
exercised in any order elected by the Participant whether or not the Participant
holds any unexercised Options under this Plan or any other plan of the Company.

b. Notwithstanding any other provision of this Plan, no Option shall be:
(i) awarded under this Plan after ten (10) years from the date on which this
Plan is approved by the Company’s stockholders, or (ii) exercisable more than
ten (10) years from the date of award; provided, however, that if an Option that
is intended to be an Incentive Stock Option shall be awarded under this Plan to
any person who, at the time of the award of such Option, owns stock possessing
more than 10% of the total combined voting power for all classes of the
Company’s stock, the foregoing clause (ii) shall be deemed modified by
substituting “five (5) years” for the term “ten (10) years” that appears
therein.

c. No Option awarded to any Participant shall be treated as an Incentive Stock
Option, to the extent such Option would cause the aggregate Fair Market Value
Per Share (determined as of the date of award of each such Option) of the Shares
with respect to which Incentive Stock Options are exercisable by such
Participant for the first time during any calendar year to exceed $100,000. For
purposes of determining whether an Incentive Stock Option would cause such
aggregate Fair Market Value Per Share to exceed the $100,000 limitation, such
Incentive Stock Options shall be taken into account in the order awarded. For
purposes of this subsection, Incentive Stock Options include all Incentive Stock
Options under all plans of the Company and of any Subsidiary that are Incentive
Stock Option plans within the meaning of Code Section 422.

d. The awarding or vesting of an Option shall impose no obligation upon the
Participant to exercise such Option.

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e. A recipient of an Option shall have no rights as a stockholder of the Company
and shall neither have the right to vote nor receive dividends with respect to
any Shares subject to an Option until such Option has been exercised and a
certificate with respect to the Shares purchased upon such exercise has been
issued to him.

5.6 Termination of Options.

a. Unless sooner terminated as provided in this Plan, each Option shall be
exercisable for such period of time as shall be determined by the Board, the
Committee, or the Award Committee and set forth in the Award Agreement, and
shall be void and unexercisable thereafter.

b. Except as otherwise provided herein or by the terms of any Award, with
respect to a Participant who is an employee or Director, upon the termination of
such Participant’s employment or other relationship with the Company for any
reason, Options exercisable on the date of such termination shall be exercisable
by the Participant (or in the case of the Participant’s death subsequent to
termination of employment or such other relationship, by the Participant’s
executor(s) or administrator(s)) for a period of three (3) months from the date
of the Participant’s termination.

Except as otherwise provided herein or by the terms of any Award, with respect
to a Participant who is an advisor or consultant, the termination of such
Participant’s relationship with the Company for any reason shall not accelerate
the expiration date of Options exercisable on the date of termination; provided,
however, that if such Participant dies following such termination, the Option
shall be exercisable for a period of twelve (12) months commencing on the date
of the Participant’s death by such Participant’s executor(s) or
administrator(s).

c. Except as otherwise provided herein or by the terms of any Award, upon the
Disability or death of a Participant while in the service of the Company,
Options held by such Participant which are exercisable on the date of Disability
or death shall be exercisable for a period of twelve (12) months commencing on
the date of the Participant’s Disability or death, by the Participant or his
legal guardian or representative or, in the case of death, by his executor(s) or
administrator(s).

d. Options may be terminated at any time by agreement between the Company and
the Participant.

5.7 Forfeiture.

a. Termination for Cause. Notwithstanding any other provision of this Plan, if
the Participant’s employment or engagement is terminated by the Company, and the
Board, the Committee, or the Award Committee makes a determination that the
Participant has:

 

  i. engaged in any type of disloyalty to the Company, including without
limitation, fraud, embezzlement, theft, or dishonesty in the course of his
employment or engagement, or has otherwise breached any fiduciary duty owed to
the Company;

 

  ii. been convicted of a felony;

 

  iii. disclosed trade secrets or confidential information of the Company; or

 

  iv. breached any agreement with or duty to the Company in respect of
confidentiality, non-disclosure, non-competition or otherwise;

then all unexercised Options shall terminate upon the date of such a finding,
or, if earlier, the date of termination of employment or engagement for such a
finding, and the Participant shall forfeit all Shares for which the Company has
not yet delivered Share certificates to the Participant and the Company shall
refund to the Participant the Option purchase price paid to it, if any, in the
same form as it was paid (or in cash at the Company’s discretion).
Notwithstanding anything herein to the contrary, the Company may withhold
delivery of Share certificates pending the resolution of any inquiry that could
lead to a finding resulting in forfeiture.

b. Non-Competition. Notwithstanding any other provision of this Plan, if, during
the 3-month period following a termination of service, which period shall be
extended to 12 months in the event of a termination due to Disability, a
Participant who is not a consultant or advisor commences any employment or
engagement with or by a competitor of the Company (including, but not limited
to, full or part-time employment or independent consulting work), as determined
in the sole discretion of the Board or the Committee, all unexercised Options
shall terminate immediately upon the commencement thereof. In the event a
Participant who is a consultant or advisor has entered into an agreement with
the Company that contains non-competition covenants and such consultant or
advisor violates the terms of his or her non-competition covenant, all
unexercised Options shall terminate immediately upon the date of such violation.

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6. Terms and Conditions of Restricted Shares

6.1 Restricted Share Awards. Restricted Shares may be granted either alone or in
conjunction with other Awards. Restricted Shares granted under an Award will be
issued for such consideration, if any, as the Board, the Committee, or the Award
Committee shall determine. Any Restricted Shares awarded pursuant to the Plan
shall be authorized by the Board, the Committee, or the Award Committee and
shall be evidenced by an Award Agreement in such form as the Board, the
Committee, or the Award Committee may from time to time determine. The Board,
the Committee, or the Award Committee will determine the time or times within
which Restricted Shares may be subject to forfeiture, and all other conditions
of such Awards. The provisions of Awards need not be the same with respect to
each Participant. The prospective recipient of an Award of Restricted Shares
will not have any rights with respect to such Award, unless and until such
recipient has executed an Award Agreement and has delivered a fully executed
copy thereof to the Company, and has otherwise complied with the applicable
terms and conditions of such Award.

6.2 Restricted Share Award Agreements. Each Award Agreement shall incorporate by
reference all other terms and conditions of the Plan, including the following
terms and conditions:

a. Number of Shares. The Award Agreement shall state the number of Restricted
Shares subject to the Award, which shall not include fractional Shares.

b. Price. The price per Restricted Share, if any, and the time of payment for
the awarding of the Restricted Shares shall be stated in the Award Agreement.

The Award Agreement may contain such other provisions as the Board, the
Committee, or the Award Committee in its discretion deems advisable and which
are not inconsistent with the provisions of this Plan.

6.3 Consideration. The Board or the Committee shall determine the method of
payment, if any payment is required, for the Restricted Shares to be granted
under an Award, which may consist entirely of cash, personal or certified check,
or, at the election of the Participant and as the Board or the Committee may, in
its sole discretion, approve, by surrendering Shares with an aggregate Fair
Market Value Per Share equal to the aggregate price payable for the restricted
Shares, or by delivering such combination of Shares and cash as the Board or the
Committee may, in its sole discretion, approve; provided, however, that the
Restricted Share price may not be paid in Shares if the Board or the Committee
determines that such method of payment would result in liability under
Section 16(b) of the Exchange Act to a Participant.

Except as otherwise provided by the Board or the Committee, if payment is made
in whole or in part in Shares, the Participant shall deliver to the Company
certificates registered in the name of such Participant representing Shares
legally and beneficially owned by such Participant, free of all liens, claims
and encumbrances of every kind and having an aggregate Fair Market Value Per
Share on the date of delivery that is not greater than the aggregate Restricted
Share price accompanied by stock powers duly endorsed in blank by the record
holder of the Shares represented by such certificates. If the Board or the
Committee, in its sole discretion, should refuse to accept Shares in payment of
the Restricted Share price, any certificates representing Shares which were
delivered to the Company shall be returned to the Participant with notice of the
refusal of the Board or the Committee to accept such Shares in payment of the
Restricted Share price. The Board or the Committee may impose such limitations
and prohibitions on the use of Shares to satisfy a Restricted Share price as it
deems appropriate.

6.4 Restricted Share Certificates and Legends. A Share certificate will be
issued in connection with each Award of Restricted Shares. Such certificate will
be registered in the name of the Participant receiving the Award, and will bear
the following legend and/or any other legend required by this Plan, the Award
Agreement, any other applicable agreement, or by applicable law:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS OF THE VIROPHARMA INCOPORATED AMENDED AND
RESTATED 2005 EQUITY INCENTIVE PLAN AND AN AGREEMENT ENTERED INTO BETWEEN THE
PARTICIPANT AND VIROPHARMA INCORPORATED (WHICH TERMS AND CONDITIONS MAY INCLUDE,
WITHOUT LIMITATION, CERTAIN TRANSFER RESTRICTIONS, REPURCHASE RIGHTS AND
FORFEITURE CONDITIONS). COPIES OF THAT PLAN AND AGREEMENT ARE ON FILE IN THE
PRINCIPAL OFFICES OF VIROPHARMA INCORPORATED AND WILL BE MADE AVAILABLE TO THE
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE
COMPANY.

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Share certificates evidencing Restricted Shares will be held in custody by the
Company or in escrow by an escrow agent until the restrictions thereon have
lapsed. As a condition to any Restricted Share Award, the Participant may be
required to deliver to the Company a Share power, endorsed in blank, relating to
the Restricted Shares covered by such Award.

6.5 Restrictions and Conditions. Restricted Shares awarded pursuant to this
Article 6 will be subject to the following restrictions and conditions:

a. Except as provided in Section 6.6, the restrictions on Restricted Shares
shall lapse in accordance with such conditions as the Board, the Committee, or
the Award Committee shall determine, which conditions shall be stated in the
Award Agreement and which may include the continued employment, engagement or
service of the recipient for a period of time, the attainment of specified
individual or corporate performance goals, or any other factors that the Board,
the Committee, or the Award Committee selects, in its sole and absolute
discretion. During the period beginning on the date of an Award of Restricted
Shares and ending when the restrictions on such Restricted Shares lapse as set
forth in the Award Agreement or pursuant to Section 3.2(a) or Article 15 (the
“Restriction Period”), the Participant will not be permitted to sell, transfer,
pledge, assign or otherwise encumber such Restricted Shares.

b. During the Restriction Period, the Participant will be entitled to receive
any cash distributions or dividends paid with respect to Restricted Shares and
will be entitled to vote such Restricted Shares. Consistent with Article 9, a
Participant will be entitled to receive any distributions or dividends paid in
the form of securities with respect to Restricted Shares, but such securities
will be subject to the same terms and conditions as the Restricted Shares with
respect to which they were paid, including, without limitation, the same
Restriction Period.

c. If and when the restrictions on Restricted Shares lapse through the
expiration of the Restriction Period or pursuant to Section 3.2(a) or Article
15, the certificates for such Restricted Shares will be replaced with new
certificates, without the restrictive legends described in Section 6.4
applicable to such lapsed restrictions, and such new certificates will be
promptly delivered to the Participant, the Participant’s representative (if the
Participant has suffered a Disability), or the Participant’s estate or heir (if
the Participant has died) at the principal executive office of the Company or
such other place as shall be mutually agreed upon between the Company and the
Participant, the Participant’s representative (if the Participant has suffered a
Disability), or the Participant’s estate or heir (if the Participant has died).

6.6 Forfeiture.

a. Except as otherwise provided herein or by the terms of any Award Agreement,
upon the termination of a Participant’s employment or other relationship with
the Company for any reason, all of that Participant’s Restricted Shares then
subject to a Restriction Period will be forfeited.

b. Except as otherwise provided herein or by the terms of any Award Agreement,
if an individual or corporate performance goal specified in an Award Agreement
is not attained, and if it is not possible later to attain such goal, all of a
Participant’s Restricted Shares then subject to a Restriction Period linked to
the attainment of such goal will be forfeited.

c. Restricted Shares may be forfeited at any time during the applicable
Restriction Period by agreement between the Company and the Participant.

d. If a Participant has paid the Company for Restricted Shares that are
subsequently forfeited, the Company shall refund to the Participant the amounts
paid to it for the forfeited Restricted Shares in the same form as it was paid
(or in cash at the Company’s discretion).

7. Restricted Share Units

Restricted Share Units may be granted hereunder, subject to such terms and
conditions as the Board may impose and which may include the continued
employment, engagement or service of the recipient for a period of time, the
attainment of specified individual or corporate performance goals, or any other
factors that the Board, the Committee, or the Award Committee selects, in its
sole and absolute discretion. Each Restricted Share Unit will represent the
right to receive from the Company, after fulfillment of any applicable
conditions, a distribution from the Company in an amount equal to the Fair
Market Value Per Share (at the time of the distribution). Distributions may be
made in cash and/or Shares. Unless otherwise determined by the Board, Restricted
Share Units may not be sold, pledged, assigned, hypothecated, gifted,
transferred or disposed of in any manner, either voluntarily or involuntarily by
operation of law, other than by will or by the laws of descent or distribution.
All other terms governing Restricted Share Units, such as vesting, dividend
equivalent rights, time and form of payment and termination of units shall be
set forth in the applicable Award Agreement.

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8. Performance Awards

The Committee may, in its discretion, include performance conditions in an
Award, including with respect to dividend equivalents. If performance conditions
are included in Awards to Section 162(m) Employees and such Awards are intended
to qualify as “performance-based compensation” under Code Section 162(m), then
such Awards will be subject to the achievement of Performance Goals with respect
to a Performance Period established in writing by the Committee no later than
the earlier of (i) 90 days after the Performance Period specified for such
Performance Award or (ii) the date on which 25% of the Performance Period
specified for such Performance Award has elapsed. Such Awards shall be granted
and administered pursuant to the requirements of Code Section 162(m), including
the requirement that the achievement of the goals be substantially uncertain at
the time they are established and that the performance goals be established in
such a way that a third party with knowledge of the relevant facts could
determine whether and to what extent the performance goals have been met.
Performance Goals shall be adjusted to mitigate the unbudgeted impact of
material, unusual or nonrecurring gains and losses, accounting changes or other
extraordinary events not foreseen at the time the targets were set unless the
Committee provides otherwise at the time of establishing the targets. Before any
Shares underlying an Award or any Award payments are released to a
Section 162(m) Employee with respect to a Performance Period, the Committee
shall certify in writing that the Performance Goals for such Performance Period
have been satisfied. Awards with performance conditions that are granted to
Participants who are not Covered Employees need not comply with the requirements
of Code Section 162(m). The Committee shall not have discretion to increase the
amount of compensation that is payable, but may reduce the amount of
compensation that is payable, pursuant to Awards identified by the Committee as
“qualified performance-based compensation.” The Committee may provide in the
Award Agreement that Awards under this Article 8 shall be payable, in whole or
in part, in the event of the Participant’s death or Disability, a Change of
Control or under other circumstances consistent with the Treasury regulations
and rulings under Code Section 162(m).

9. Adjustments

9.1 Subject to required action by the stockholders, if any, if there is any
change in the number or kind of shares of Common Stock outstanding (i) by reason
of a stock dividend, spinoff, recapitalization, stock split, or combination or
exchange of shares, (ii) by reason of a merger, reorganization or consolidation,
(iii) by reason of a reclassification or change in par value, or (iv) by reason
of any other extraordinary or unusual event affecting the outstanding Common
Stock as a class without the Company’s receipt of consideration, or if the value
of outstanding Shares of Common Stock is substantially reduced as a result of a
spinoff or the Company’s payment of an extraordinary dividend or distribution,
the maximum number of shares of Common Stock available for issuance under the
Plan, the maximum number of shares of Common Stock for which any individual may
receive Awards in any year, the kind and number of shares covered by outstanding
Awards, the kind and number of shares issued and to be issued under the Plan,
and the price per share or the applicable market value of such Awards shall be
equitably adjusted by the Committee, in such manner as the Committee deems
appropriate, to reflect any increase or decrease in the number of, or change in
the kind or value of, the issued shares of Common Stock to preclude, to the
extent practicable, the enlargement or dilution of rights and benefits under the
Plan and such outstanding Awards. In addition, in the event of a Change of
Control of the Company, the provisions of Article 15 of the Plan shall apply.
Any adjustments determined by the Committee shall be final, binding and
conclusive.

9.2 No fractional shares shall be issuable on account of any action mentioned in
Section 9.1, and any fractional shares resulting from such adjustment shall be
eliminated.

9.3 Any adjustments to outstanding Awards shall be consistent with Code
Section 409A or 424, to the extent applicable.

10. Time of Award

The date of an Award shall, for all purposes, be the date which the Board, the
Committee, or the Award Committee specifies when the Board, the Committee, or
the Award Committee makes its determination that an Award is made, or if none is
specified, then the date of such determination. Notice of the determination
shall be given to each Eligible Person to whom an Award is made within a
reasonable time after the date of such Award.

11. Modification, Extension and Renewal of Award

Subject to the terms and conditions of the Plan, the Board or the Committee may
modify, extend or renew an Award, or accept the surrender of an Award to the
extent that an Option under the Award has not already been exercised, or the
restrictions on Restricted Shares under the Award have not already lapsed.
Notwithstanding the foregoing: (a) no modification of an Award that adversely
affects the Participant shall be made without the consent of the Participant,
and (b) no Incentive Stock Option may be modified, extended or renewed if such
action would cause it to cease to be an “Incentive Stock Option” within the
meaning of Code Section 422, unless the Participant specifically acknowledges
and consents to the tax consequences of such action.

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12. Dividend Equivalents

Any participant selected by the Board or the Committee may be granted dividend
equivalents based on the dividends declared of Shares that are subject to any
Award, to be credited as of dividend payment dates, during the period between
the date the award is granted and the date the award is exercised, vests,
forfeits or expires, as determined by the Board or the Committee in its sole
discretion. Such dividend equivalents shall be converted to cash or additional
Shares by such formula and at such time and subject to such limitations as may
be determined by the Board or the Committee in its sole discretion.

13. Purchase for Investment and Other Restrictions

13.1 The obligation of the Company to issue Shares to a Participant upon the
exercise of an Option, upon the Award of Restricted Shares, or upon the
distribution of Shares with respect to Restricted Share Units granted under the
Plan is conditioned upon such issuance complying with all relevant provisions of
applicable law, including, without limitation, the Securities Act, the Exchange
Act, the rules and regulations promulgated thereunder and any applicable foreign
laws.

13.2 At the option of the Board or the Committee, the obligation of the Company
to issue Shares to a Participant upon the exercise of an Option, upon the Award
of Restricted Shares or upon the distribution of Shares with respect to
Restricted Share Units granted under the Plan may be conditioned upon obtaining
appropriate representations, warranties, restrictions and agreements of the
Participant. Among other representations, warranties, restrictions and
agreements, the Participant may be required to represent and agree that the
purchase or receipt of Shares shall be for investment, and not with a view to
the public resale or distribution thereof, unless the Shares are registered
under the Securities Act and the issuance and sale of the Shares complies with
all other laws, rules and regulations applicable thereto. Unless the issuance of
such Shares is registered under the Securities Act (and any similar law of a
foreign jurisdiction applicable to the Participant), the Participant shall
acknowledge that the Shares purchased are not registered under the Securities
Act (or any such other law) and may not be sold or otherwise transferred unless
the Shares have been registered under the Securities Act (or any such other law)
in connection with the sale or other transfer thereof, or that counsel
satisfactory to the Company has issued an opinion satisfactory to the Company
that the sale or other transfer of such Shares is exempt from registration under
the Securities Act (or any such other law), and unless said sale or transfer is
in compliance with all other applicable laws, rules and regulations, including
all applicable federal, state and foreign securities laws, rules and
regulations. Unless the Shares subject to an Award are registered under the
Securities Act, the certificates representing such Shares issued shall contain
the following legend in substantially the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE SECURITIES LAWS.
THESE SHARES HAVE NOT BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND
MAY NOT BE SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF, BY GIFT OR OTHERWISE, OR IN ANY WAY
ENCUMBERED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR
A SATISFACTORY OPINION OF COUNSEL SATISFACTORY TO VIROPHARMA INCORPORATED THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS.

If required under the laws of any jurisdiction in which the Participant resides,
the certificate or certificates may bear any such legend.

14. Transferability

No Award shall be assignable or transferable otherwise than by will or by the
laws of descent and distribution. During the lifetime of the Participant, the
Participant’s rights regarding Awards shall be exercisable only by such
Participant, or, in the event of the legal incapacity or Disability of such
Participant, then by the Participant’s legal guardian or representative.

15. Change of Control

15.1 Discontinuation of Plan and Non-Substitution of Shares. Notwithstanding
anything to the contrary set forth in this Plan other than Section 15.4 or
Section 15.5, if there is a Change of Control in which the Plan is not continued
by a successor corporation, and in which equivalent, substituted options for
common stock and substituted restricted shares in a successor corporation are
not provided to Participants, then the Plan shall be terminated and, for a
Participant who is an employee of the Company or any of its Subsidiaries or who
is a Director, all unvested options shall vest and restrictions on Restricted
Shares shall lift, as follows:

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a. if the Participant has been employed by the Company or a Subsidiary or has
been a Director for at least two years as of the Change of Control, then:
(i) all of the Participant’s unvested Options shall be fully and immediately
vested and exercisable, and (ii) the restrictions on all of the Participant’s
Restricted Shares shall lapse and the Shares shall become nonforfeitable; and

b. if the Participant has been employed by the Company or a Subsidiary or has
been a Director for less than two years as of the Change of Control, then:
(i) fifty percent (50%) of the Participant’s unvested Options as of the date of
the Change of Control shall be immediately vested and exercisable and the
remaining portion of the Options which are not vested shall lapse and be
forfeited, and (ii) the restrictions on fifty percent (50%) of all of the
Participant’s Restricted Shares subject to a Restriction Period as of the date
of the Change of Control shall lapse and the remaining portion of such
Restricted Shares shall be forfeited.

15.2 Continuation of Plan or Substitution of Shares. If there is a Change of
Control in which the Plan is continued by a successor corporation or in which
equivalent substituted options for common stock and substituted restricted
shares in a successor corporation are provided to Participants, with respect to
Participants who are employees of the Company or any of its Subsidiaries or who
are Directors, Options shall vest and restrictions on Restricted Shares shall
lift as follows:

a. if a Participant who is employed by the Company is not offered substantially
equivalent employment or service with the successor corporation or a related
employer (both in terms of duties and compensation), then any unvested Options
and Restricted Shares held by such Participant as of the date of the Change of
Control shall be fully and immediately vested and exercisable and shall have
restrictions lifted in accordance with Section 15.1(a) or 15.1(b), as
applicable, taking into account all service performed with the Company in any
capacity for purposes of vesting; and

b. if any Participant is offered substantially equivalent employment or service
with the successor corporation or a related employer (both in terms of duties
and compensation), then Options and Restricted Shares shall not be subject to
accelerated vesting; provided however, that if the Participant’s employment with
the successor corporation or related employer is terminated by the successor
corporation or related employer during the six month period following such
Change of Control, then any unvested Options and Restricted Shares or
substituted options or restricted shares shall be fully and immediately vested
and exercisable and have restrictions lifted at the date of the Participant’s
termination of employment in accordance with Section 15.1(a) or 15.1(b), as
applicable, taking into account service performed with the Company and the
successor corporation and all related employers for purpose of vesting.

15.3 In addition to arranging for the exchange of Options for options to
purchase common stock in a successor corporation and the exchange of Restricted
Shares for similarly restricted shares of common stock in a successor
corporation, in the event of a Change of Control of the Company by reason of a
merger, consolidation or tax free reorganization or sale of all or substantially
all of the assets of the Company, the Board shall have the authority, in its
discretion, to terminate this Plan and (i) to distribute to each Participant
cash and/or other property in an amount equal to and in the same form as the
Participant would have received from the successor corporation if the
Participant had owned the Shares subject to the Option rather than the Option at
the time of the Change of Control, provided that any such amount paid to a
Participant shall reflect the deduction of the exercise price the Participant
would have paid to purchase such Shares and (ii) to redeem any Restricted Share
for cash and/or other property in an amount equal to and in the same form as the
Participant would have received from the successor corporation if the
Participant had owned the Restricted Shares at the time of the Change of
Control. The form of payment or distribution to the Participant pursuant to this
Section shall be determined by the Committee.

15.4 Notwithstanding anything in this Article 15 to the contrary, each Award
Agreement which evidences the grant of an award of Restricted Share Units shall
set forth the consequences of the Change of Control upon such award of
Restricted Share Units.

16. Amendment of the Plan

Insofar as permitted by law and the Plan, and subject to Section 18.2, the Board
or the Committee may from time to time suspend, terminate or discontinue the
Plan or revise or amend it in any respect whatsoever with respect to any Shares
at the time not subject to an Award, including amendments necessary or advisable
to assure that the Incentive Stock Options, non-qualified stock options and
Restricted Shares available under the Plan continue to be treated as such,
respectively, under all applicable laws.

17. Application of Funds

The proceeds received by the Company from the sale of Shares pursuant to the
exercise of Options and any sale of Restricted Shares shall be used for general
corporate purposes or such other purpose as may be determined by the Board.

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18. Approval of the Plan

18.1 Effective Date of Plan. The Plan shall become effective on May 21, 2012,
provided that it is approved by the Company’s stockholders on such date.

18.2 Stockholder Approval of Certain Amendments.

a. If the Board or the Committee amends the Plan to increase the aggregate
number of Shares for which Awards may be awarded hereunder, and approval of the
stockholders by a majority of the votes cast at a duly held stockholder meeting
at which a quorum representing a majority of the Company’s outstanding voting
shares is present (either in person or by proxy), is not obtained within twelve
(12) months of the adoption of such amendment, all Awards with respect to such
increased number of Shares shall lapse automatically on the first anniversary of
the date of the adoption of such amendment.

b. If the Board or the Committee amends the Plan to change the designation of
the class of employees eligible to receive Options, and approval of the
stockholders by a majority of the votes cast at a duly held stockholder meeting
at which a quorum representing a majority of the Company’s outstanding voting
shares is present (either in person or by proxy), is not obtained within twelve
(12) months of the adoption of such amendment, all Incentive Stock Options
awarded after the date of such adoption automatically shall be converted into
non-qualified stock options on the first anniversary of the date of the adoption
of such amendment.

c. Section 5.2(b) of the Plan may not be amended to permit the grant of Options
with an exercise price below Fair Market Value Per Share, to permit the
repricing of outstanding Options or the cancellation of outstanding Options for
a cash payment with an exercise price below Fair Market Value Per Share, unless
such amendment is approved by the stockholders by a majority of the votes cast
at a duly held stockholder meeting at which a quorum representing a majority of
the Company’s outstanding voting shares is present (either in person or by
proxy). The term “repricing” shall have the meaning given that term in
accordance with the applicable stock exchange in which such Shares of Common
Stock are registered, as in effect from time to time.

19. Conditions Upon Issuance of Shares

Shares shall not be issued pursuant to the exercise of an Option, grant of
Restricted Shares or distribution of Shares with respect to Restricted Share
Units unless the exercise of such Option, grant of such Restricted Shares or
distribution of Shares with respect to such Restricted Share Units and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, the rules and regulations promulgated thereunder, the
requirements of any stock exchange upon which the Shares may then be listed, the
laws of any foreign country or jurisdiction where awards are or will be granted,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

20. Reservation of Shares

20.1 The Company, during the term of this Plan, shall at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

20.2 The Company, during the term of this Plan, shall use its best efforts to
seek to obtain from appropriate regulatory agencies any requisite authorization
in order to issue and sell such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. The inability of the Company to obtain
from any such regulatory agency having jurisdiction the requisite
authorization(s) deemed by the Company’s counsel to be necessary for the lawful
issuance and sale of any Shares hereunder, or the inability of the Company to
confirm to its satisfaction that any issuance and/or sale of any Shares
hereunder will meet applicable legal requirements, shall relieve the Company of
any liability in respect to the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

21. Taxes, Fees, Expenses and Withholding of Taxes

21.1 The Company shall pay all original issue and transfer taxes (but not income
taxes, if any) with respect to the award of Options, Restricted Shares and
Restricted Share Units and/or the issue and transfer of Shares pursuant to the
exercise of Options or the distribution of Restricted Share Units, and all other
fees and expenses necessarily incurred by the Company in connection therewith,
and will use its best efforts to comply with all laws and regulations that, in
the opinion of counsel for the Company, shall be applicable thereto.

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21.2 The granting of Awards hereunder and the issuance of Shares pursuant to the
grant of Restricted Shares, the distribution of Restricted Share Units, and the
exercise of Options is conditioned upon the Company’s reservation of the right
to withhold in accordance with any applicable law, from any compensation or
other amounts payable to the Participant, any taxes required to be withheld
under federal, state, foreign or local law as a result of: the grant of an
Award, the vesting of an Option, the exercise of an Option, the lapse of
restrictions with respect to Restricted Shares and Restricted Share Units, the
distribution of Restricted Share Units, or the sale of Shares. The Company may
require that the Participant or other person receiving or exercising Awards pay
to the Company the amount of any federal, state, foreign or local taxes that the
Company is required to withhold with respect to such Awards, or the Company may
deduct from other wages paid by the Company the amount of any withholding taxes
due with respect to such Awards. If the Committee so permits, a Participant may
elect to satisfy the Company’s tax withholding obligation with respect to Awards
paid in Common Stock by having Shares withheld up to an amount that does not
exceed the minimum applicable withholding tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and may be subject to the prior approval of the
Committee.

22. Compliance with Law

22.1 The Plan, the exercise of Options and the obligations of the Company to
issue or transfer Shares of Common Stock under Awards shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as may
be required. With respect to persons subject to section 16 of the Exchange Act,
it is the intent of the Company that the Plan and all transactions under the
Plan comply with all applicable provisions of Rule 16b-3 or its successors under
the Exchange Act. In addition, it is the intent of the Company that Incentive
Stock Options comply with the applicable provisions of Code Section 422, and
Awards of “qualified performance-based compensation” comply with the applicable
provisions of Code Section 162(m). To the extent that any legal requirement of
section 16 of the Exchange Act or Code Section 422 or 162(m) as set forth in the
Plan ceases to be required under section 16 of the Exchange Act or Code
Section 422 or 162(m), such Plan provision shall cease to apply. The Board or
the Committee may revoke any Award if it is contrary to law or modify an Award
to bring it into compliance with any valid and mandatory government regulation.
The Board or the Committee may also adopt rules regarding the withholding of
taxes on payments to Participants. The Board or the Committee may, in its sole
discretion, agree to limit its authority under this Section.

22.2 The Plan is intended to comply with the requirements of Code Section 409A,
to the extent applicable. Each Award shall be construed and administered such
that the Award either (a) qualifies for an exemption from the requirements of
Code Section 409A or (b) satisfies the requirements of Code Section 409A. If an
Award is subject to Code Section 409A, (i) distributions shall only be made in a
manner and upon an event permitted under Code Section 409A, (ii) payments to be
made upon a termination of employment shall only be made upon a “separation from
service” under Code Section 409A, (iii) unless the Award specifies otherwise,
each installment payment shall be treated as a separate payment for purposes of
Code Section 409A, and (iv) in no event shall a Participant, directly or
indirectly, designate the calendar year in which a distribution is made except
in accordance with Code Section 409A.

22.3 Any Award that is subject to Code Section 409A and that is to be
distributed to a Key Employee (as defined below) upon separation from service
shall be administered so that any distribution with respect to such Award shall
be postponed for six months following the date of the Participant’s separation
from service, if required by Code Section 409A. If a distribution is delayed
pursuant to Code Section 409A, the distribution shall be paid within 15 days
after the end of the six-month period. If the Participant dies during such
six-month period, any postponed amounts shall be paid within 90 days of the
Participant’s death. The determination of Key Employees, including the number
and identity of persons considered Key Employees and the identification date,
shall be made by the Committee or its delegate each year in accordance with Code
Section 416(i) and the “specified employee” requirements of Code Section 409A.

22.4 Notwithstanding anything in the Plan or any Award Agreement to the
contrary, each Participant shall be solely responsible for the tax consequences
of Awards under the Plan, and in no event shall the Company have any
responsibility or liability if an Award does not meet any applicable
requirements of Code Section 409A. Although the Company intends to administer
the Plan to prevent taxation under Code Section 409A, the Company does not
represent or warrant that the Plan or any Award complies with any provision of
federal, state, local or other tax law.

23. Miscellaneous

23.1 Stockholder Approval for “Qualified Performance-Based Compensation.” If
Awards are made under Article 8 above, the Plan must be reapproved by the
Company’s stockholders no later than the first stockholders meeting that occurs
in the fifth year following the year in which the stockholders previously
approved the provisions of Article 8, if additional Awards are to be made under
Article 8 and if required by Code Section 162(m) or the regulations thereunder.

23.2 Notices. Any notice to be given to the Company pursuant to the provisions
of this Plan shall be addressed to the Company in care of its Secretary (or such
other person as the Company may designate from time to time) at its principal
executive office, and any notice to be given to a Participant shall be delivered
personally or addressed to him or her at the address given beneath his or her
signature on his or her Award Agreement, or at such other address as such
Participant or his or her

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permitted transferee (upon the permitted transfer) may hereafter designate in
writing to the Company. Any such notice shall be deemed duly given on the date
and at the time delivered via hand delivery, courier or recognized overnight
delivery service or, if sent via telecopier, on the date and at the time
telecopied with confirmation of delivery or, if mailed, on the date five
(5) days after the date of the mailing (which shall be by regular, registered or
certified mail). Delivery of a notice by telecopy (with confirmation) shall be
permitted and shall be considered delivery of a notice notwithstanding that it
is not an original that is received. It shall be the obligation of each
Participant and each permitted transferee holding Shares purchased upon exercise
of an Option, granted pursuant to an Award of Restricted Shares, or distributed
with respect to Restricted Share Units to provide the Secretary of the Company,
by letter mailed as provided herein, with written notice of his or her direct
mailing address.

23.3 No Enlargement of Participant Rights. This Plan is purely voluntary on the
part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Participant, or to be
consideration for or a condition of the employment or service of any
Participant. Nothing contained in this Plan shall be deemed to give any
Participant the right to be retained in the employ or service of the Company or
any Subsidiary, or to interfere with the right of the Company or any such
corporation to discharge or retire any Participant thereof at any time subject
to applicable law. No Participant shall have any right to or interest in Awards
authorized hereunder prior to the award thereof to such Participant, and upon
such Award the Participant shall have only such rights and interests as are
expressly provided herein, subject, however, to all applicable provisions of the
Company’s Certificate of Incorporation, as the same may be amended from time to
time.

23,4 Application of Company Clawback Policy. All Awards under the Plan are
subject to the applicable provisions of the Company’s clawback or recoupment
policy approved by the Board or Committee, as such policy may be in effect from
time to time.

23.5 Information to Participants. The Company, upon request, shall provide
without charge to each Participant copies of such annual and periodic reports as
are provided by the Company to its stockholders generally.

23.6 Availability of Plan. A copy of this Plan shall be delivered to the
Secretary of the Company and shall be shown by him to any eligible person making
reasonable inquiry concerning it.

23.7 Section Headings. The descriptive headings of this Plan are for convenience
only, and shall be of no force or effect in construing or interpreting any of
the provisions of this Plan.

23.8 Invalid Provisions. If any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed to render any other provisions contained
herein as invalid or unenforceable, and all such other provisions shall be given
full force and effect to the same extent as though the invalid or unenforceable
provision were not contained herein.

23.9 Employees Resident or Subject to Taxation Outside the United States. With
respect to Participants who are resident or subject to taxation in countries
other than the United States, the Board or the Committee may make Awards on such
terms and conditions as the Board or the Committee deems appropriate to comply
with the laws of the applicable countries, and the Committee may create such
procedures, addenda and subplans and make such modifications as may be necessary
or advisable to comply with such laws.

23.10 Applicable Law. This Plan shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania, without regard to the
conflict of law principles of Pennsylvania or any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

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Executed this 21st day of May, 2012.

 

[Corporate Seal]     VIROPHARMA INCORPORATED Attest:   /s/ J. Peter Wolf     By:
  /s/ Vincent J. Milano