Exhibit 10.1

NILE THERAPEUTICS, INC.

DIRECTOR COMPENSATION PLAN SUMMARY

Adopted: July 21, 2009

The following is a summary of the compensation plan for directors of Nile
Therapeutics, Inc. (the “Company”) who are not compensated employees of the
Company. Directors who are compensated employees of the Company do not receive
compensation for their service on the Board, but shall receive compensation only
in their capacities as employees.

 

1. Initial Equity Grant. As an inducement to accept service as a director, upon
initial appointment to the Board, a director shall receive a stock option to
purchase 130,000 shares of the Company’s common stock, which option shall vest
in three equal annual installments commencing on the first anniversary of the
date of grant.

 

2. Annual Equity Grant. Following a director’s initial appointment, on an annual
basis, (i) each non-employee director shall receive a stock option to purchase
65,000 shares of the Company’s common stock, and (ii) the Chairman of the Board
and the Chair of each of the Board’s Audit and Compensation Committees shall
receive an additional stock option to purchase 15,000 shares of common stock.
All such stock options shall vest in their entirety on the first anniversary of
the date of grant.

 

3. Other Terms of Equity Grants. The stock options described in Paragraphs 1 and
2, above, shall be issued pursuant to the Company’s Amended & Restated 2005
Stock Option Plan (the “2005 Plan”) and each shall have a term of 10 years. The
per share exercise price applicable to such stock options shall be equal to the
fair market value of the Company’s common stock on the grant date, as determined
in accordance with the Company’s then current stock option pricing policies.
Without limiting the effect of any other provision of the 2005 Plan, all such
stock options shall vest in full and be immediately exercisable upon a “Change
of Control” (as defined in the 2005 Plan) or the death of the director.

 

4. Expenses. Directors shall also be reimbursed for their reasonable out of
pocket expenses incurred in connection with attending meetings of the Board or
any committee thereof or otherwise in furtherance of their duties as directors.