Exhibit 10.1

SEPARATION AND GENERAL RELEASE AGREEMENT

In exchange for the terms, conditions and releases set forth below, Nektar
Therapeutics (“Nektar” or the “Company”) and Tim Harkness (“you”) hereby agree
as follows:

1. Effective Date. This Agreement will become effective on the eighth day after
you sign and deliver this Agreement to the Company (the “Effective Date”),
provided that you do not revoke this Agreement before such date pursuant to
Paragraph 7(c) below.

2. Termination of Employment. Your employment as Senior Vice President and Chief
Financial Officer of the Company, as well as your employment in any other
capacity for the Company or any of its affiliates, shall terminate, effective
December 10, 2007 (the “Termination Date”). Following the Termination Date, you
shall not be authorized to transact any business on behalf of the Company or any
its affiliates or subsidiaries.

3. Consideration. Provided that you comply with all of the terms of this
Agreement, the Company shall provide you with the following severance benefits
(the “Severance Benefits”): (a) the Company will make a severance payment to you
within three (3) business days following the Effective Date in the amount of
$385,000.00, less all applicable withholdings and standard deductions (the
“First Severance Payment”); (b) the Company will also make monthly severance
payments to you in the amount of $27,500.00, less all applicable withholdings
and standard deductions (the “Monthly Severance Payment”) commencing on the one
month anniversary of the Effective Date and continuing on each one-month
anniversary of the Effective Date and ending on the twelve month anniversary of
the Effective Date; provided, however, following the first two (2) Monthly
Severance Payments, you shall not be paid, and instead will accrue, the Monthly
Severance Payments until the first business day following the six month
anniversary of the Effective Date when all previously accrued but unpaid Monthly
Severance Payment will be paid to you, and thereafter, you will be paid Monthly
Severance Payments on or before each monthly anniversary of the Effective Date;
and provided, further that (except as set forth in the next parenthetical
phrase) you shall cease accruing or being entitled to receive Monthly Severance
Payments on the earlier to occur of (i) the date you commence new employment; or
(ii) on the one-year anniversary of the Effective Date (it being understood that
if you obtain new employment during the one year period after the Termination
Date, you will be entitled to a proportionate payment at the next regularly
scheduled payment date, in respect of the Monthly Severance Payments, based on
the number of days elapsed since the Termination Date until the date you obtain
such new employment; thus, for example, if you obtain employment on the 95th day
after the Termination Date, you will receive a Monthly Severance Payment on the
six month anniversary of the Termination Date, equal to $27,500 x 12 x 95/360,
less amounts previously paid to you, i.e., the first two Monthly Severance
Payments described above); (c) in accordance with your offer letter, dated
August 9, 2007 (the “Offer Letter”) and as set forth below in Paragraph 17, you
shall become immediately vested in those shares of the Company’s common stock
that would have vested pursuant to your Option (as such term is defined below in
Paragraph 17) as if your Option allowed monthly vesting during your first year
of your employment with the Company; and (d) in accordance with your Offer
Letter and as set forth below in Paragraph 17, your deadline to exercise your
right to acquire the shares of the Company’s common stock underlying the vested
portion of your Option will be extended to the twelve month anniversary of the
Termination Date; and (e) provided that you timely exercise

 

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your right to continue your health insurance coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company will pay the
monthly health insurance coverage payments for you and your eligible dependents
for a period commencing on the Termination Date and ending on the earlier to
occur of (i) the twelve month anniversary of the Termination Date, and (b) the
date you become eligible to receive health insurance coverage from a subsequent
employer. You shall notify the Company promptly upon accepting employment with
any other person or entity, but no later than three calendar days prior to
commencing such employment, and at the same time, you shall notify the Company
whether you are eligible to receive health coverage in connection with such
employment. You acknowledge that the Severance Benefits represent payments that
you would not otherwise be entitled to receive, now or in the future, without
entering into this Agreement, and constitutes valuable consideration for the
promises and undertakings set forth in this Agreement.

4. Payment of Salary and Expenses. On your Termination Date, the Company will
pay to you all accrued and unpaid salary and any accrued but unused paid time
off as of the Termination Date (collectively, the “Accrued Obligations”). In the
event that you have a negative paid time off balance, you agree that such amount
will be deducted from the Company’s payment to you of your Accrued Obligations.
By signing below, you acknowledge and represent that, upon receiving the Accrued
Obligations, you will have received all salary, wages, bonuses, accrued vacation
and paid time off, and all other benefits and compensation due to you through
the Termination Date. You agree that, within ten (10) days after the Termination
Date, you will submit your final documented expense reimbursement statement
reflecting all business expenses you incurred through the Termination Date, if
any, for which you seek reimbursement. The Company will reimburse you for these
expenses pursuant to its regular business practice.

5. Return of Property; Proprietary Information Agreement. Within five days
following the Termination Date, you shall return to the Company any and all
Company property, including, but not limited to, documents (in whatever paper or
electronic form they exist), things relating to the business of the Company and
all intellectual, electronic and physical property belonging to the Company that
is in your possession or control, including but not limited to any emails,
documents, power point presentations, business plans, financial plans, personnel
information and/or financial statements belonging to the Company or that contain
confidential information of the Company. Your signature below constitutes your
certification that you have returned all documents and other items provided to
you by the Company, developed or obtained by you as a result of your employment
with the Company, or otherwise belonging to the Company. Notwithstanding the
foregoing, you may keep your computer and your cellular telephone (and
corresponding telephone number for your personal use) and the Company will
provide to you reasonable IT assistance in transitioning your calendar and
contacts information from the Company’s network to your personal system;
provided, however, you will, at the earliest practicable date, deliver your
computer to the Company’s IT department for the purpose of creating a mirror
data back-up copy for the Company’s archival records. You hereby reaffirm and
agree to observe and abide by the terms of your Employment Agreement (the
“Employment Agreement”) with the Company, specifically including the provisions
therein regarding assignment of inventions, nondisclosure of the Company’s trade
secrets and confidential and proprietary information, and non-solicitation of
Company employees. The obligations under the Employment Agreement that survive
the termination of your employment are specifically incorporated herein by
reference.

 

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6. Release of Claims. You agree that the foregoing consideration represents
settlement in full of all outstanding obligations owed to you by the Company and
its officers, directors, agents and employees, and is satisfactory consideration
for the release of claims set forth herein. On behalf of yourself, and your
respective heirs, family members, executors and assigns, you hereby fully and
forever release the Company and its past and present subsidiaries and
affiliates, and each of their past, present and future officers, agents,
directors, employees, investors, stockholders, administrators, attorneys,
representatives, affiliates, divisions, subsidiaries, parents, predecessor and
successor corporations, and assigns (the “Releasees”), from, and agree not to
sue or institute, prosecute or pursue, or cause to be instituted, prosecuted, or
pursued, any claim, cause of action, charge, controversy, duty, obligation,
demand, loss, cost, debt, damages, penalties, judgment, order, or liability
relating to or arising out of any matters of any kind, whether presently known
or unknown, suspected or unsuspected, that you may possess against any of the
Releasees arising from any omissions, acts or facts that have occurred up until
and including the date you sign this Agreement (collectively “Claims”). The
released Claims include, but are not limited to: (i) any and all Claims relating
to or arising from your employment relationship with the Company and the
termination of that relationship, including any Claims with respect to wages,
bonuses, commissions, vacation pay, or any other form or amount of compensation,
or any Claim arising out of your offer letter, dated August 24, 2007, or the
Company’s Change of Control Severance Plan; (ii) any and all Claims relating to,
or arising from, your right to receive or purchase any form of equity in the
Company or any Releasee, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable
state corporate law, and securities fraud under any state or federal law;
(iii) any and all Claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of a covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion; (iv) any and all Claims for violation of any federal, state or
municipal law, regulation, ordinance, constitution or common law, including, but
not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act
of 1991; the Age Discrimination in Employment Act of 1967; the Americans with
Disabilities Act of 1990; the Fair Labor Standards Act; the Employee Retirement
Income Security Act of 1974; The Worker Adjustment and Retraining Notification
Act; the Sarbanes-Oxley Act; the California Fair Employment and Housing Act; the
California Family Rights Act; and the California Labor Code, including, but not
limited to section 201, et seq,. section 970, et seq., sections 1400-1408; and
all amendments to each such Act as well as the regulations issued thereunder;
and (v) any and all Claims for attorneys’ fees and costs.

Notwithstanding the foregoing, nothing in this Paragraph 6 shall release (i) any
obligations owed by the Company expressly described in this Agreement, (ii) any
claims you may have for indemnification under any of the Company’s charter
documents, or under California Labor Code Section 2802 or other applicable law,
or for coverage under any of the Company’s directors and officers insurance
policies; (iii) your claims for any benefits that are vested as of the
Termination Date under the Company’s health, welfare, 401k or stock option
plans; (iv) your claims for underlying workers’ compensation benefits; or
(v) any claims pursuant to Paragraph 7(e) of this Agreement.

 

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Except for those obligations created by or arising out of this Agreement, or any
intentional misappropriation of trade secrets, a breach of fiduciary duty that
you would not otherwise be entitled to indemnification by the Company under
Section 145 of the Delaware General Corporation Law, theft, embezzlement and/or
other crimes committed by you, the Company hereby covenants not to sue and fully
releases and discharges you from and with respect to any and all claims,
agreements, obligations, demands and causes of action, known or unknown,
suspected or unsuspected, including without limitation those arising out of or
in any way connected with your employment or termination of employment with the
Company.

7. Acknowledgment of Waiver of Claims under ADEA. You acknowledge that you are
waiving and releasing any rights you may have under the Age Discrimination in
Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and
voluntary. You and the Company agree that this waiver and release does not apply
to any rights or claims that may arise under the ADEA after the Effective Date
of this Agreement. You acknowledge that the consideration given for this waiver
and release Agreement is in addition to anything of value to which you were
already entitled. You further acknowledge that you have been advised by this
writing that:

(a) you should consult with an attorney prior to executing this Agreement;

(b) you have at least twenty-one (21) days within which to consider this
Agreement;

(c) you have seven (7) days following the date that you sign this Agreement to
revoke the Agreement; provided, however, that any such revocation must be in
writing and delivered to Howard W. Robin at the Company’s principal office, by
close of business on or before the seventh day from the date that you sign this
Agreement;

(d) this Agreement shall not be effective until the eighth day after you execute
and do not revoke this Agreement; and

(e) nothing in this Agreement prevents or precludes you from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs from doing
so, unless specifically authorized by federal law.

8. Civil Code Section 1542/Unknown Claims. Each party represents that such party
is not aware of any claims against the other party other than the claims that
are released by this Agreement. Each party acknowledges that such party has had
the opportunity to be advised by legal counsel and is familiar with the
provisions of California Civil Code 1542, below, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

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Being aware of said code section, each party agrees to expressly waive any
rights such party may have thereunder, as well as under any statute or common
law principles of similar effect.

9. No Pending or Future Lawsuits. Each party represents that such party has no
lawsuits, claims, or actions pending in such party’s name, or on behalf of any
other person or entity, against the other party or any of the Releasees. Each
party also represents that such party does not intend to bring any claims on
such party’s own behalf or on behalf of any other person or entity against the
other party or any of the Releasees. You also promise to opt out of any class or
representative action and to take such other steps as you have the power to take
to disassociate yourself from any class or representative action seeking relief
against the Company and/or any other Releasee regarding any of the claims
released in this Agreement.

10. Confidentiality of Agreement. You agree to keep the existence and terms of
this Agreement in the strictest confidence and, except as required by law, not
reveal the existence or terms of this Agreement to any persons except your
immediate family, your attorney, and your financial advisors (and to them only
provided that they also agree to keep the information completely confidential),
and the court in any proceedings to enforce the terms of this Agreement.

11. Non-Disparagement. Each party agrees not to make any oral or written
statement that disparages or criticizes the other party, and in your case, the
Company’s management, employees, products or services, or damages the other
party’s reputation or impairs the other party’s normal operations; provided,
however, that nothing in this Agreement shall prohibit either party from
providing truthful information or testimony in response to any court order,
subpoena, or government investigation, or in connection with any legal
proceeding between the Company and you. For the purposes of this Section 11, the
reference to the Company as a party to this Agreement includes only the
Company’s Section 16(b) officers and the members of its Board of Directors.

12. Entire Agreement. Except for the Employment Agreement and Equity Award
Agreements, the terms of which are specifically incorporated herein as set forth
herein in Paragraphs 5 and 17, this Agreement constitutes the entire agreement
between you and the Company concerning your employment with and separation from
the Company and all the events leading thereto and associated therewith, and
supersedes and replaces any and all prior agreements and understandings, both
written and oral, concerning your relationship with the Company.

13. No Admission of Liability. Each party understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all potential
disputed claims. No action taken by the either party hereto, either previously
or in connection with this Agreement, shall be deemed or construed to be: (a) an
admission of the truth or falsity of any potential claims; or (b) an
acknowledgment or admission by such party of any fault or liability whatsoever
to the other party or to any third party.

 

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14. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement. Similarly,
you represent and warrant that you have the capacity to act on your own behalf
and on behalf of all who might claim through you to bind them to the terms and
conditions of this Agreement. The Company and you each warrant and represent
that there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

15. Solicitation of Employees. You agree that for a period of twelve (12) months
immediately following the Termination Date, you shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company’s employees
to terminate their employment with the Company, or attempt to solicit, induce,
recruit, or encourage employees of the Company to become employed or engaged as
a consultant, either for yourself or for any other person or entity.
Furthermore, you understand and acknowledge that the Company may at its sole
discretion notify any new employer of your ongoing rights and obligations under
this Agreement and the Employment Agreement.

16. Material Breaches of Agreement. You acknowledge and agree that any breach of
Paragraphs 5, 6, 7, 9, 11, or 15 shall constitute a material breach of the
Agreement and in the case of a breach by you, shall entitle the Company
immediately to recover the consideration discussed in Paragraph 3 above, except
as provided by law. In the event that the Company or you brings an action to
enforce or effect their rights under this Agreement, the prevailing party shall
be entitled to recover their reasonable attorneys’ fees and expenses incurred in
connection with such an action.

17. Equity Interests. The Company has previously granted an option to you to
acquire 200,000 shares of the Company’s common stock (the “Options”) and a
restricted stock unit for 10,000 shares (the “RSU”). Prior to entering into this
Agreement you did not have any vested right to acquire any of the shares
underlying the Options or RSU. In accordance with the terms of your Offer Letter
and subject to the terms of Paragraph 3 above, as of the Effective Date, you
shall become immediately vested in 12,500 shares of the Company’s common stock
underlying the Options (the “Vested Option Shares”), which represent those
shares that would have vested as of the Termination Date if you were entitled to
monthly vesting of your Options during the first year of your employment. Your
deadline to exercise your right to acquire all or any portion of the Vested
Option Shares shall be extended to the one year anniversary of the Termination
Date. The remaining 187,500 shares of the Company’s common stock underlying the
Options and all of the shares of the Company’s common stock underlying the RSU
are hereby forfeited by you in accordance with the terms of your stock option
agreement and related stock option notice, and your RSU Agreement and related
RSU notice and the Company’s 2000 Equity Incentive Plan (collectively, the
“Equity Award Agreements”). You hereby acknowledge and waive that, except as set
forth in this Paragraph 17, you have no further right or benefits under any
agreement to receive or acquire any security or derivative security in or with
respect to the Company or any of its affiliates or subsidiaries.

18. Waivers; Modifications. No waiver of any provision or consent to any
exception to the terms of this Agreement shall be effective unless in writing
and signed by the party to be bound and, then, only to the specific purpose,
extent and instance so provided. This Agreement may not be modified, amended,
altered or supplemented except by the execution and delivery of a written
agreement executed by you and an authorized representative of the Company.

 

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19. Severability. If any provision of the Agreement or the application thereof
is held invalid, such invalidity shall not affect other provisions or
applications of the Agreement which can be given effect without the invalid
provisions or application.

20. Counterparts. The Agreement may be executed in counterparts, and each
counterpart when executed shall have the efficacy of a signed original.
Photographic copies of such signed counterparts may be used in lieu of the
originals for any purpose.

21. Choice of Law. The Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of California.

22. Public Statements. In its public statements regarding your departure, the
Company will state only that: “Tim Harkness has left the Company.”

23. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the parties
hereto, with the full intent of releasing all claims. The parties acknowledge
that: (a) they have read this Agreement; (b) they understand the terms and
consequences of this Agreement and of the releases it contains; and (c) they are
fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth below.

AGREED AND ACCEPTED:

 

Nektar Therapeutics     Tim Harkness /s/ Gil M. Labrucherie     /s/ Tim Harkness
By:   Gil M. Labrucherie     Tim Harkness Title:   General Counsel       Date:  
12/10/2007     Date:   12/10/2007

 

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