**Exhibit10.2**

**METABASIS THERAPEUTICS, INC.**

**AMENDED AND RESTATED 2001 EQUITY INCENTIVE PLAN**

**Amendment and Restatement Adoptedby Board on June 6, 2001**

**Amendment and RestatementApproved by Stockholders on July 23, 2001**

**Amendment Adopted by Board onNovember 29, 2001**

**Amendment Adopted by Board onAugust 21, 2002**

**Amendments Approved byStockholders on October 30, 2002**

**Amendment and Restatement Adoptedby Board on May 6, 2004**

**Amendment and RestatementApproved by Stockholders on May 10, 2004**

**Amendment Adopted by Board onJanuary 17, 2007**

**TerminationDate:  May 10, 2014**

**1.             PURPOSES.**

**(a)           Amendment and Restatement.**  The Plan amends and restates the Company’sAmended and Restated 2001 Equity Incentive Plan adopted by the Board on June 6,2001, as amended on November 29, 2001 and August 21, 2002 (the ***“Prior Plan”***).  All outstanding options granted under thePrior Plan shall remain subject to the terms of the Prior Plan.  All options granted subsequent to theadoption of this Plan by the Board shall be subject to the terms of the Plan.

**(b)           Eligible Stock Award Recipients.**  The persons eligible to receive Stock Awardsare Employees, Directors and Consultants.

**(c)           Available Stock Awards.**  The purpose of the Plan is to provide a meansby which eligible recipients of Stock Awards may be given an opportunity tobenefit from increases in value of the Common Stock through the granting of thefollowing Stock Awards:  (i) IncentiveStock Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards,(iv) Stock Appreciation Rights, (v) Phantom Stock Awards and (vi) Other StockAwards.

**(d)           General Purpose.**  The Company, by means of the Plan, seeks toretain the services of the group of persons eligible to receive Stock Awards,to secure and retain the services of new members of this group and to provideincentives for such persons to exert maximum efforts for the success of theCompany and its Affiliates.

**2.             DEFINITIONS.**

**(a)           *“Affiliate”***means any parent corporation or subsidiary corporation of the Company, whethernow or hereafter existing, as those terms are defined in Sections 424(e) and(f), respectively, of the Code.

**(b)           *“Board”***means the Board of Directors of the Company.

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**(c)           *“CapitalizationAdjustment”*** has the meaning ascribed to that termin Section 11(a).

**(d)           *“Cause”***means, with respect to a Participant, theoccurrence of any of the following:  (i)such Participant’s conviction of any felony or any crime involving fraud ordishonesty which, in the Board’s sole discretion, materially affects thebusiness of the Company; (ii) such Participant’s participation (whether byaffirmative act or omission) in a fraud, act of dishonesty or other act ofmisconduct against the Company and/or its Affiliates which, in the Board’s solediscretion, materially affects the business of the Company; (iii) conduct bysuch Participant which, based upon a good faith and reasonable factualinvestigation by the Company (or, if such Participant is an Officer, by theBoard), demonstrates such Participant’s gross unfitness to serve; (iv) suchParticipant’s violation of any statutory or fiduciary duty, or duty of loyalty,owed to the Company and/or its Affiliates; (v) such Participant’s breach of anymaterial term of any material contract between such Participant and the Companyand/or its Affiliates; and (vi) such Participant’s repeated violation of anymaterial Company policy.  Notwithstandingthe foregoing, such Participant’s Disability shall not constitute Cause as setforth herein.  The determination that atermination is for Cause shall be by the Committee in its sole and exclusivejudgment and discretion.

**(e)           *“Change in Control”***means the occurrence, in a single transaction or in a series of relatedtransactions, of any one or more of the following events:

**(i)           **any Exchange ActPerson becomes the Owner, directly or indirectly, of securities of the Companyrepresenting more than 50% ofthe combined voting power of the Company’s then outstanding securities otherthan by virtue of a merger, consolidation or similar transaction.  Notwithstandingthe foregoing, a Change in Control shall not be deemed to occur (A) on accountof the acquisition of securities of the Company by an investor, any affiliatethereof or any other Exchange Act Person from the Company in a transaction orseries of related transactions the primary purpose of which is to obtainfinancing for the company through the issuance of equity securities or (B)****solely because thelevel of Ownership held by any Exchange Act Person (the “***Subject Person***”) exceeds the designated percentage thresholdof the outstanding voting securities as a result of a repurchase or otheracquisition of voting securities by the Company reducing the number of sharesoutstanding, provided that if a Change in Control would occur (but for theoperation of this sentence) as a result of the acquisition of voting securitiesby the Company, and after such share acquisition, the Subject Person becomesthe Owner of any additional voting securities that, assuming the repurchase orother acquisition had not occurred, increases the percentage of the thenoutstanding voting securities Owned by the Subject Person over the designatedpercentage threshold, then a Change in Control shall be deemed to occur;

**(ii)          **there isconsummated a merger, consolidation or similar transaction involving (directlyor indirectly) the Company and, immediately after the consummation of suchmerger, consolidation or similar transaction, the stockholders of the Companyimmediately prior thereto do not Own, directly or indirectly, either (A)outstanding voting securities representing more than 50% of the combined outstanding voting power of the survivingEntity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding votingpower of the parent of the surviving Entity in such merger, consolidation orsimilar

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transaction, in each casein substantially the same proportions as their Ownership of the outstandingvoting securities of the Company immediately prior to such transaction;

**(iii)        **there is consummateda sale, lease, license or other disposition of all or substantially all of theconsolidated assets of the Company and its Subsidiaries, other than a sale,lease, license or other disposition of all or substantially all of theconsolidated assets of the Company and its Subsidiaries to an Entity, more than50% of the combined voting powerof the voting securities of which are Owned by stockholders of the Company insubstantially the same proportions as their Ownership of the outstanding votingsecurities of the Company immediately prior to such sale, lease, license orother disposition; or

**(iv)         **individuals who, onthe date this Plan is adopted by the Board, are members of the Board (the ***“Incumbent Board”***)cease for any reason to constitute at least a majority of the members of theBoard; *provided, however,* that if theappointment or election (or nomination for election) of any new Board memberwas approved or recommended by a majority vote of the members of the IncumbentBoard then still in office, such new member shall, for purposes of this Plan,be considered as a member of the Incumbent Board.

Notwithstanding the foregoing or any other provisionof this Plan, the definition of Change in Control (or any analogous term) in anindividual written agreement between the Company or any Affiliate and theParticipant shall supersede the foregoing definition with respect to StockAwards subject to such agreement (it being understood, however, that if nodefinition of Change in Control or any analogous term is set forth in such anindividual written agreement, the foregoing definition shall apply).

**(f)            *“Code”***means the Internal Revenue Code of 1986, as amended.

**(g)           *“Committee”***means a committee of one or more members of the Board appointed by the Board inaccordance with Section 3(c).

**(h)           *“Common Stock”***means the common stock of the Company.

**(i)            *“Company”***means Metabasis Therapeutics, Inc., a Delaware corporation.

**(j)            *“Consultant”***means any person, including an advisor, (i) engaged by the Company or anAffiliate to render consulting or advisory services and who is compensated forsuch services or (ii) serving as a member of the Board of Directors of anAffiliate and who is compensated for such services.  However, the term “Consultant” shall notinclude Directors who are not compensated by the Company for their services asDirectors, and the payment of a director’s fee by the Company for services as aDirector shall not cause a Director to be considered a “Consultant” forpurposes of the Plan.

**(k)           *“Continuous Service”***means that the Participant’s service with the Company or an Affiliate, whetheras an Employee, Director or Consultant, is not interrupted or terminated.  A change in the capacity in which theParticipant renders service to the Company or an Affiliate as an Employee, Consultantor Director or a change in the entity for which the Participant renders suchservice, provided that there is no interruption or termination of theParticipant’s service with the Company or an Affiliate, shall not terminate aParticipant’s Continuous Service.  For

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example, a change in status from an Employee of theCompany to a Consultant of an Affiliate or to a Director shall not constitutean interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party’ssole discretion, may determine whether Continuous Service shall be consideredinterrupted in the case of any leave of absence approved by that party,including sick leave, military leave or any other personal leave.  Notwithstanding the foregoing, a leave ofabsence shall be treated as Continuous Service for purposes of vesting in aStock Award only to such extent as may be provided in the Company’s leave ofabsence policy or in the written terms of the Participant’s leave of absence.

**(l)            *“Corporate Transaction”***means the occurrence, in a single transaction or in a series of relatedtransactions, of any one or more of the following events:

**(i)           **a sale****or other disposition of all or substantially all, asdetermined by the Board in its discretion, of the consolidated assets of theCompany and its Subsidiaries;

**(ii)          **a sale or otherdisposition of at least 90%****of the outstanding securities of the Company;

**(iii)        **a merger,consolidation or similar transaction following which the Company is not thesurviving corporation; or

**(iv)         **a merger,consolidation or similar transaction following which the Company is thesurviving corporation but the shares of Common Stock outstanding immediatelypreceding the merger, consolidation or similar transaction are converted orexchanged by virtue of the merger, consolidation or similar transaction intoother property, whether in the form of securities, cash or otherwise.

**(m)          *“Covered Employee”***means the chief executive officer and the four other highest compensatedofficers of the Company for whom total compensation is required to be reportedto stockholders under the Exchange Act, as determined for purposes of Section162(m) of the Code.

**(n)           *“Director”***means a member of the Board.

**(o)           *“Disability”***means the permanent and total disability of a person within the meaning ofSection 22(e)(3) of the Code.

**(p)           *“Employee”***means any person employed by the Company or an Affiliate.  Service as a Director or payment of adirector’s fee by the Company or an Affiliate shall not be sufficient to constitute“employment” by the Company or an Affiliate.

**(q)           *“Entity”***means a corporation, partnership or other entity.

**(r)           *“Exchange Act”***means the Securities Exchange Act of 1934, as amended.

**(s)           *“Exchange Act Person”***meansany natural person, Entity or “group” (within the meaning of Section 13(d) or14(d) of the Exchange Act), except that “Exchange Act Person” shall not include(A) the Company or any Subsidiary of the Company, (B) any employee benefit planof the Company or any Subsidiary of the Company or any trustee or otherfiduciary holding

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securities under an employee benefit plan of theCompany or any Subsidiary of the Company, (C) an underwriter temporarilyholding securities pursuant to an offering of such securities, or (D) an EntityOwned, directly or indirectly, by the stockholders of the Company insubstantially the same proportions as their Ownership of stock of the Company.

**(t)            *“Fair Market Value”***means, as of any date, the value of the Common Stock determined as follows:

**(i)           **If the Common Stockis listed on any established stock exchange, the Fair Market Value of a shareof Common Stock shall be the closing sales price for such stock (or the closingbid, if no sales were reported, and in each case rounded up where necessary tothe nearest whole cent) as quoted on such exchange (or the exchange with thegreatest volume of trading in the Common Stock) on the day of determination, asreported in *The Wall Street Journal*or such other source as the Board deems reliable.  Unless otherwise provided by the Board, ifthere is no closing sales price (or closing bid, if no sales were reported) forthe Common Stock on the day of determination, then the Fair Market Value shallbe the closing sales price (or the closing bid, if no sales were reported, andin each case rounded up where necessary to the nearest whole cent) on the lastpreceding date for which such quotation exists.

**(ii)          **In the absence ofsuch market for the Common Stock, the Fair Market Value shall be determined ingood faith by the Board.

**(u)           *“Incentive Stock Option”***means an Option intended to qualify as an incentive stock option within themeaning of Section 422 of the Code and the regulations promulgatedthereunder.

**(v)            *“IPO Date”*** means the effectivedate of the initial public offering of the Common Stock.

**(w)           *“Non-Employee Director”***means a Director who either (i) is not a current Employee orOfficer of the Company or its parent or a subsidiary, does not receivecompensation, either directly or indirectly, from the Company or its parent ora subsidiary, for services rendered as a consultant or in any capacity otherthan as a Director (except for an amount as to which disclosure would not berequired under Item 404(a) of Regulation S-K promulgated pursuant to theSecurities Act (***“RegulationS-K”***)), does not possess an interest in any other transactionfor which disclosure would be required under Item 404(a) of Regulation S-K, andis not engaged in a business relationship for which disclosure would berequired pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwiseconsidered a “non-employee director” for purposes of Rule 16b-3.

**(x)           *“Nonstatutory Stock Option”***means an Option not intended to qualify as an Incentive Stock Option.

**(y)           *“Officer”***means a person who is an officer of the Company within the meaning ofSection 16 of the Exchange Act and the rules and regulations promulgatedthereunder.

**(z)           *“Option”***means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuantto the Plan.

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**(aa)         *“Option Agreement”***means a written agreement between the Company and an Optionholder evidencingthe terms and conditions of an individual Option grant.  Each Option Agreement shall be subject to theterms and conditions of the Plan.

**(bb)         *“Optionholder”***means a person to whom an Option is granted pursuant to the Plan or, ifapplicable, such other person who holds an outstanding Option.

**(cc)         *“Other Stock Award”*** means anaward based in whole or in part by reference to the Common Stock which isgranted pursuant to the terms and conditions of Section 7(d).

**(dd)         *“Other Stock AwardAgreement”***means a written agreement between theCompany and a holder of an Other Stock Award evidencing the terms andconditions of an individual Other Stock Award grant.  Each Other Stock Award Agreement shall besubject to the terms and conditions of the Plan.

**(ee)         *“Outside Director”***means a Director who either (i) is not a current employee of the Company or an “affiliatedcorporation” (within the meaning of Treasury Regulations promulgated underSection 162(m) of the Code), is not a former employee of the Company or an “affiliatedcorporation” who receives compensation for prior services (other than benefitsunder a tax-qualified retirement plan) during the taxable year, has not been anofficer of the Company or an “affiliated corporation”, and does not receiveremuneration from the Company or an “affiliated corporation,” either directlyor indirectly, in any capacity other than as a Director or (ii) is otherwiseconsidered an “outside director” for purposes of Section 162(m) of the Code.

**(ff)           *“Own,” “Owned,” “Owner,” “Ownership”* **A person or Entity shall bedeemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership”of securities if such person or Entity, directly or indirectly, through any contract,arrangement, understanding, relationship or otherwise, has or shares votingpower, which includes the power to vote or to direct the voting, with respectto such securities.

**(gg)         *“Participant”***means a person to whom a Stock Award is granted pursuant to the Plan or, ifapplicable, such other person who holds an outstanding Stock Award.

**(hh)         *“Phantom Stock Award”***meansa right to receive shares of Common Stock which is granted pursuant to theterms and conditions of Section 7(b).

**(ii)           *“Phantom Stock AwardAgreement”***means a written agreement between theCompany and a holder of a Phantom Stock Award evidencing the terms andconditions of an individual Phantom Stock Award grant.  Each Phantom Stock Award Agreement shall besubject to the terms and conditions of the Plan.

**(jj)           *“Plan”***means this Metabasis Therapeutics, Inc. Amended and Restated 2001 EquityIncentive Plan.

**(kk)        *“Restricted Stock Award”*** means anaward of shares of Common Stock which is granted pursuant to the terms andconditions of Section 7(a).

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**(ll)           *“Restricted Stock Award Agreement”***means an agreement between the Company and a holder of a Restricted Stock Awardevidencing the terms and conditions of an individual Restricted Stock Awardgrant.  Each Restricted Stock AwardAgreement shall be subject to the terms and conditions of the Plan.

**(mm)       *“Rule 16b-3”***means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule16b-3, as in effect from time to time.

**(nn)         *“Securities Act”***means the Securities Act of 1933, as amended.

**(oo)         *“Stock Appreciation Right”*** meansa right to receive the appreciation of Common Stock that is granted pursuant tothe terms and conditions of Section 7(c).

**(pp)         *“Stock Appreciation RightAgreement”*** means a written agreement between theCompany and a holder of a Stock Appreciation Right evidencing the terms andconditions of an individual Stock Appreciation Right grant.  Each Stock Appreciation Right Agreement shallbe subject to the terms and conditions of the Plan.

**(qq)         *“Stock Award”***means any right granted under the Plan, including an Option, a Restricted StockAward, a Stock Appreciation Right, a Phantom Stock Award or any Other StockAward.

**(rr)         *“Stock Award Agreement”***means a written agreement between the Company and a holder of a Stock Awardevidencing the terms and conditions of an individual Stock Award grant.  Each Stock Award Agreement shall be subjectto the terms and conditions of the Plan.

**(ss)         *“Subsidiary”***means, with respect to the Company, (i) any corporation of which more than 50%of the outstanding capital stock having ordinary voting power to elect amajority of the board of directors of such corporation (irrespective ofwhether, at the time, stock of any other class or classes of such corporationshall have or might have voting power by reason of the happening of anycontingency) is at the time, directly or indirectly, Owned by the Company, and(ii) any partnership in which the Company has a direct or indirect interest(whether in the form of voting or participation in profits or capital contribution)of more than 50%.

**(tt)           *“Ten Percent Stockholder”***means a person who Owns (or is deemed to Own pursuant to Section 424(d) of theCode) stock possessing more than 10% of the total combined voting power of allclasses of stock of the Company or of any of its Affiliates.

**3.             ADMINISTRATION.**

**(a)           Administration by Board.**  The Board shall administer the Plan unlessand until the Board delegates administration to a Committee, as provided inSection 3(c).

**(b)           Powers of Board.**  The Board shall have the power, subject to,and within the limitations of, the express provisions of the Plan:

**(i)           **To determine fromtime to time which of the persons eligible under the Plan shall be grantedStock Awards; when and how each Stock Award shall be granted; what

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type or combination oftypes of Stock Award shall be granted; the provisions of each Stock Awardgranted (which need not be identical), including the time or times when aperson shall be permitted to receive Common Stock pursuant to a Stock Award;and the number of shares of Common Stock with respect to which a Stock Awardshall be granted to each such person.

**(ii)          **To construe andinterpret the Plan and Stock Awards granted under it, and to establish, amendand revoke rules and regulations for its administration.  The Board, in the exercise of this power, maycorrect any defect, omission or inconsistency in the Plan or in any Stock AwardAgreement, in a manner and to the extent it shall deem necessary or expedientto make the Plan fully effective.

**(iii)        **To effect, at anytime and from time to time, with the consent of any adversely affectedOptionholder, (1) the reduction of the exercise price of any outstanding Optionunder the Plan, (2) the cancellation of any outstanding Option under the Planand the grant in substitution therefor of (A) a new Option under the Plan oranother equity plan of the Company covering the same or a different number ofshares of Common Stock, (B) a Restricted Stock Award (including a stock bonus),(C) a Stock Appreciation Right, (D) a Phantom Stock Award (E) an Other StockAward, (F) cash and/or (G) other valuable consideration (as determined by theBoard, in its sole discretion), or (3) any other action that is treated as arepricing under generally accepted accounting principles.

**(iv)         **To amend the Plan ora Stock Award as provided in Section 12.

**(v)           **To terminate orsuspend the Plan as provided in Section 13.

**(vi)         **Generally, toexercise such powers and to perform such acts as the Board deems necessary orexpedient to promote the best interests of the Company and that are not inconflict with the provisions of the Plan.

**(c)           Delegationto Committee.**

**(i)            General.**  The Board may delegate administration of thePlan to a Committee or Committees of one or more members of the Board, and theterm ***“Committee”***shall apply to any person or persons to whom such authority has beendelegated.  If administration isdelegated to a Committee, the Committee shall have, in connection with theadministration of the Plan, the powers theretofore possessed by the Board,including the power to delegate to a subcommittee any of the administrativepowers the Committee is authorized to exercise (and references in this Plan tothe Board shall thereafter be to the Committee or subcommittee), subject,however, to such resolutions, not inconsistent with the provisions of the Plan,as may be adopted from time to time by the Board.  The Board may abolish the Committee at anytime and revest in the Board the administration of the Plan.

**(ii)           Section 162(m) and Rule 16b-3Compliance.**  In thediscretion of the Board, the Committee may consist solely of two or moreOutside Directors, in accordance with Section 162(m) of the Code, and/or solelyof two or more Non-Employee Directors, in accordance with Rule 16b-3.  In addition, the Board or the Committee, intheir discretion, may (1) delegate to a committee of one or more members of theBoard who need not be Outside Directors the authority to grant Stock Awards toeligible persons who are either (a) not then

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Covered Employees and arenot expected to be Covered Employees at the time of recognition of incomeresulting from such Stock Award, or (b) not persons with respect to whom theCompany wishes to comply with Section 162(m) of the Code, and/or (2) delegateto a committee of one or more members of the Board who need not be Non-EmployeeDirectors the authority to grant Stock Awards to eligible persons who are notthen subject to Section 16 of the Exchange Act.

**(d)           Delegation toan Officer.**  The Board maydelegate to one or more Officers of the Company the authority to do one or bothof the following (i) designate Officers and Employees of the Company or any ofits Subsidiaries to be recipients of Stock Awards and (ii) determine the numberof shares of Common Stock to be subject to such Stock Awards granted to suchOfficers and Employees of the Company; *provided,however,*that the Board resolutions regarding such delegation shallspecify the total number of shares of Common Stock that may be subject to theStock Awards granted by such Officer and that such Officer may not grant aStock Award to himself or herself. Notwithstanding the foregoing, the Board may not delegate authority toan Officer to determine the Fair Market Value of the Common Stock.

**(e)           Effect of Board’sDecision.** All determinations,interpretations and constructions made by the Board in good faith shall not besubject to review by any person and shall be final, binding and conclusive onall persons.

**4.             SHARESSUBJECT TO THE PLAN.**

**(a)           Share Reserve.**  Subject to the provisions of Section 11(a)relating to Capitalization Adjustments, the shares of Common Stock that may beissued pursuant to Stock Awards shall not exceed in the aggregate 2,213,995shares of Common Stock, plus an annual increase to be added on the first day ofthe fiscal year of the Company for a period commencing on the first day of thefiscal year that begins on January 1, 2005 and ending on (and including) thefirst day of the fiscal year that begins on January 1, 2014 (each such day, a “CalculationDate”), equal to the lesser of (i) 3% of the fully diluted (i.e. assumingexercise for or conversion into Common Stock of all then outstanding options,warrants and convertible securities of the Company) shares of Common Stockoutstanding on each such Calculation Date (rounded down to the nearest wholeshare); or (ii) 1,000,000 shares of Common Stock.  Notwithstanding the foregoing, the Board mayact, prior to the first day of any fiscal year of the Company, to increase theshare reserve by such number of shares of Common Stock as the Board shalldetermine, which number shall be less than each of (i) and (ii).

**(b)           Reversion of Shares to the ShareReserve**.  If any StockAward shall for any reason expire or otherwise terminate, in whole or in part,without having been exercised in full, or if any shares of Common Stock issuedto a Participant pursuant to a Stock Award are forfeited back to or repurchasedby the Company, including, but not limited to, any repurchase or forfeiturecaused by the failure to meet a contingency or condition required for thevesting of such shares, then the shares of Common Stock not acquired under suchStock Award, or forfeited back to or repurchased by the Company, shall revertto and again become available for issuance under the Plan.  If any shares subject to a Stock Award arenot delivered to a Participant because such shares are withheld for the paymentof taxes or the Stock Award is exercised through a reduction of shares subjectto the Stock Award (*i.e.*, “netexercised”), the number of shares that are not delivered to the Participant asa result thereof shall revert to and again become available

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for issuance under the Plan.  If the exercise price of any Stock Award issatisfied by tendering shares of Common Stock held by the Participant (eitherby actual delivery or attestation), then the number of such tendered sharesshall revert to and again become available for issuance under the Plan.  Notwithstanding anything to the contrary inthis Section 4(b), subject to the provisions of Section 11(a) relating toCapitalization Adjustments the aggregate maximum number of shares of CommonStock that may be issued as Incentive Stock Options shall be 11,000,000 sharesof Common Stock.

**(c)           Source of Shares.**  The shares of Common Stock subject to the Planmay be unissued shares or reacquired shares, bought on the market or otherwise.

**5.             ELIGIBILITY.**

**(a)           Eligibility for Specific Stock Awards**.  Incentive Stock Options may be granted onlyto Employees.  Stock Awards other thanIncentive Stock Options may be granted to Employees, Directors and Consultants.

**(b)           Ten Percent Stockholders.**  A Ten Percent Stockholder shall not begranted an Incentive Stock Option unless the exercise price of such Option isat least 110% of the Fair Market Value of the Common Stock on the date of grantand the Option is not exercisable after the expiration of five years from thedate of grant.

**(c)           Section 162(m) Limitation on AnnualGrants.**  Subject to theprovisions of Section 11(a) relating to Capitalization Adjustments, no Employeeshall be eligible to be granted Options covering more than 1,000,000 shares of Common Stock during anycalendar year, and no Employee shall be eligible to be granted StockAppreciation Rights covering more than 1,000,000 shares of Common Stock duringany calendar year.

**(d)           Consultants.**  A Consultant shall not be eligible for thegrant of a Stock Award if, at the time of grant, a Form S-8 RegistrationStatement under the Securities Act (***“Form S-8”***) is not available to registereither the offer or the sale of the Company’s securities to such Consultantbecause of the nature of the services that the Consultant is providing to theCompany, because the Consultant is not a natural person, or because of anyother rule governing the use of Form S-8, unless the Company determines both(i) that such grant (A) shall be registered in another manner under theSecurities Act (*e.g.,* on a Form S-3 RegistrationStatement) or (B) does not require registration under the Securities Act inorder to comply with the requirements of the Securities Act, if applicable, and(ii) that such grant complies with the securities laws of all other relevantjurisdictions.

**6.             OPTIONPROVISIONS.**

Each Option shall be in such form and shall containsuch terms and conditions as the Board shall deem appropriate.  All Options shall be separately designatedIncentive Stock Options or Nonstatutory Stock Options at the time of grant,and, if certificates are issued, a separate certificate or certificates shallbe issued for shares of Common Stock purchased on exercise of each type ofOption.  The provisions of separateOptions need not be identical, but each Option shall include (throughincorporation of provisions hereof by reference in the Option or otherwise) thesubstance of each of the following provisions:

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**(a)           Term.**  The Board shall determine the term of anOption; *provided that,*subject tothe provisions of Section 5(b) regarding Ten Percent Stockholders, no IncentiveStock Option shall be exercisable after the expiration of ten years from thedate on which it was granted.

**(b)           Exercise Price of an Incentive StockOption.**  Subject to theprovisions of Section 5(b) regarding Ten Percent Stockholders, the exerciseprice of each Incentive Stock Option shall be not less than 100% of the FairMarket Value of the Common Stock subject to the Option on the date the Optionis granted.  Notwithstanding theforegoing, an Incentive Stock Option may be granted with an exercise pricelower than that set forth in the preceding sentence if such Option is grantedpursuant to an assumption or substitution for another option in a mannersatisfying the provisions of Section 424(a) of the Code.

**(c)           Exercise Price of a NonstatutoryStock Option.**  TheBoard, in its discretion, shall determine the exercise price of eachNonstatutory Stock Option.

**(d)           Consideration.**  The purchase price of Common Stock acquiredpursuant to an Option shall be paid, to the extent permitted by applicable law,either (i) in cash at the time the Option is exercised or (ii) at thediscretion of the Board at the time of the grant of the Option (or subsequentlyin the case of a Nonstatutory Stock Option) (1) by delivery to the Company ofother Common Stock, (2) according to a deferred payment or other similararrangement with the Optionholder, (3) by a “net exercise” of the Option (asfurther described below), (4) pursuant to aprogram developed under Regulation T as promulgated by the Federal ReserveBoard that, prior to the issuance of Common Stock, results in either thereceipt of cash (or check) by the Company or the receipt of irrevocableinstructions to pay the aggregate exercise price to the Company from the salesproceeds or (5) in any other form of legal consideration that may beacceptable to the Board.  Unlessotherwise specifically provided in the Option, the purchase price of CommonStock acquired pursuant to an Option that is paid by delivery to the Company ofother Common Stock acquired, directly or indirectly from the Company, shall bepaid only by shares of the Common Stock of the Company that have been held formore than six months (or such longer or shorter period of time required toavoid a charge to earnings for financial accounting purposes).  At any time that the Company is incorporatedin Delaware, payment of the Common Stock’s “par value,” as defined in theDelaware General Corporation Law, shall not be made by deferred payment.

In the case of any deferred payment arrangement,interest shall be compounded at least annually and shall be charged at theminimum rate of interest necessary to avoid (1) the treatment as interest,under any applicable provisions of the Code, of any amounts other than amountsstated to be interest under the deferred payment arrangement and (2) thetreatment of the Option as a variable award for financial accounting purposes.

In the case of a “net exercise” of an Option, theCompany will not require a payment of the exercise price of the Option from theParticipant but will reduce the number of shares of Common Stock issued uponthe exercise by the largest number of whole shares that has a Fair Market Valuethat does not exceed the aggregate exercise price.  With respect to any remaining balance of theaggregate exercise price, the Company shall accept a cash payment from theParticipant.  The shares of Common Stockso used to pay the exercise price of an Option under a “net exercise” will beconsidered to have resulted from the exercise of the Option, and

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accordingly,the Option will not again be exercisable with respect to such shares, theshares actually delivered to the Participant, and any shares withheld forpurposes of tax withholding.

**(e)           Transferability of an Incentive StockOption.**  An IncentiveStock Option shall not be transferable except by will or by the laws of descentand distribution and shall be exercisable during the lifetime of theOptionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by deliveringwritten notice to the Company, in a form provided by or otherwise satisfactory tothe Company, designate a third party who, in the event of the death of theOptionholder, shall thereafter be entitled to exercise the Option.

**(f)            Transferability of a NonstatutoryStock Option.**  ANonstatutory Stock Option shall be transferable to the extent provided in theOption Agreement.  If the NonstatutoryStock Option does not provide for transferability, then the Nonstatutory StockOption shall not be transferable except by will or by the laws of descent anddistribution and shall be exercisable during the lifetime of the Optionholder onlyby the Optionholder.  Notwithstanding theforegoing, the Optionholder may, by delivering written notice to the Company,in a form provided by or otherwise satisfactory to the Company, designate athird party who, in the event of the death of the Optionholder, shallthereafter be entitled to exercise the Option.

**(g)           Vesting Generally.**  The total number of shares of Common Stocksubject to an Option may, but need not, vest and therefore become exercisablein periodic installments that may, but need not, be equal.  The Option may be subject to such other termsand conditions on the time or times when it may be exercised (which may bebased on performance or other criteria) as the Board may deem appropriate.  The vesting provisions of individual Optionsmay vary.  The provisions of this Section6(g) are subject to any Option provisions governing the minimum number ofshares of Common Stock as to which an Option may be exercised.

**(h)           Termination of Continuous Service.**  In the event that an Optionholder’s ContinuousService terminates (for reasons other than Cause or upon the Optionholder’sdeath or Disability), the Optionholder may exercise his or her Option (to theextent that the Optionholder was entitled to exercise such Option as of thedate of termination) but only within such period of time ending on the earlierof (i) the date three months following the termination of the Optionholder’sContinuous Service (or such longer or shorter period specified in the OptionAgreement or (ii) the expiration of the term of the Option as set forth in theOption Agreement.  If, after termination,the Optionholder does not exercise his or her Option within the time specifiedin the Option Agreement, the Option shall terminate.

**(i)            Extension of Termination Date.**  An Optionholder’s Option Agreement may alsoprovide that if the exercise of the Option following the termination of theOptionholder’s Continuous Service (for reasons other than Cause or upon theOptionholder’s death or Disability) would be prohibited at any time solelybecause the issuance of shares of Common Stock would violate the registrationrequirements under the Securities Act, then the Option shall terminate on theearlier of (i) the expiration of the term of the Option set forth in the OptionAgreement or (ii) the expiration of a period of three months after thetermination of the Optionholder’s Continuous Service during which the exerciseof the Option would not be in violation of such registration requirements.

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**(j)            Disability of Optionholder.**  In the event that an Optionholder’sContinuous Service terminates as a result of the Optionholder’s Disability, theOptionholder may exercise his or her Option (to the extent that theOptionholder was entitled to exercise such Option as of the date oftermination), but only within such period of time ending on the earlier of (i)the date 12 months following such termination (or such longer or shorter periodspecified in the Option Agreement or (ii) the expiration of the term of theOption as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or herOption within the time specified herein, the Option shall terminate.

**(k)           Death of Optionholder.**  In the event that (i) an Optionholder’sContinuous Service terminates as a result of the Optionholder’s death or (ii)the Optionholder dies within the period (if any) specified in the OptionAgreement after the termination of the Optionholder’s Continuous Service for areason other than death, then the Option may be exercised (to the extent theOptionholder was entitled to exercise such Option as of the date of death) bythe Optionholder’s estate, by a person who acquired the right to exercise theOption by bequest or inheritance or by a person designated to exercise theoption upon the Optionholder’s death pursuant to Section 6(e) or 6(f), but onlywithin the period ending on the earlier of (1) the date 18 months following thedate of death (or such longer or shorter period specified in the OptionAgreement or (2) the expiration of the term of such Option as set forth in theOption Agreement.  If, after death, theOption is not exercised within the time specified herein, the Option shallterminate.

**(l)            Termination for Cause.**  In the event an Optionholder’s ContinuousService is terminated for Cause, the Option shall terminate upon thetermination date of such Optionholder’s Continuous Service and the Optionholderis prohibited from exercising his or her Option as of the time of suchtermination.

**(m)          Early Exercise.**  The Option may, but need not, include aprovision whereby the Optionholder may elect at any time before theOptionholder’s Continuous Service terminates to exercise the Option as to anypart or all of the shares of Common Stock subject to the Option prior to thefull vesting of the Option.  Any unvestedshares of Common Stock so purchased may be subject to a repurchase option infavor of the Company or to any other restriction the Board determines to beappropriate.  The Company will notexercise its repurchase option until at least six months (or such longer orshorter period of time required to avoid a charge to earnings for financialaccounting purposes) have elapsed following exercise of the Option unless theBoard otherwise specifically provides in the Option.

**7.             PROVISIONSOF STOCK AWARDS OTHER THAN OPTIONS.**

**(a)           Restricted Stock Awards.**  Each Restricted Stock Award Agreement shallbe in such form and shall contain such terms and conditions as the Board shalldeem appropriate.  At the Board’selection, shares of Common Stock may be (i) held in book entry form subject tothe Company’s instructions until any restrictions relating to the RestrictedStock Award lapse; or (ii) evidenced by a certificate, which certificate shallbe held in such form and manner as determined by the Board.  The terms and conditions of Restricted StockAward Agreements may change from time to time, and the terms and conditions ofseparate Restricted Stock Award Agreements need not be identical, *provided, however,*that each RestrictedStock Award Agreement shall

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include (through incorporation of the provisionshereof by reference in the agreement or otherwise) the substance of each of thefollowing provisions:

**(i)            Purchase Price.**  At the time of the grant of a RestrictedStock Award, the Board will determine the price to be paid by the Participantfor each share subject to the Restricted Stock Award.  To the extent required by law, the price tobe paid by the Participant for each share of the Restricted Stock Award willnot be less than the par value of a share of Common Stock.  A Restricted Stock Award may be awarded as astock bonus (*i.e.,*with no cashpurchase price to be paid) to the extent permissible under applicable law.

**(ii)           Consideration.**  At the time of the grant of a RestrictedStock Award, the Board will determine the consideration permissible for thepayment of the purchase price of the Restricted Stock Award.  The purchase price of Common Stock acquiredpursuant to the Restricted Stock Award shall be paid in one of the followingways: (i) in cash at the time of purchase; (ii) at the discretion of the Board,according to a deferred payment or other similar arrangement with theParticipant; (iii) by services rendered or to be rendered to the Company; or(iv) in any other form of legal consideration that may be acceptable to theBoard; *provided, however,*that atany time that the Company is incorporated in Delaware, the Common Stock’s “parvalue,” as defined in the Delaware General Corporation Law, shall not be paidby deferred payment and must be paid in a form of consideration that ispermissible under the Delaware Corporation Law.

**(iii)         Vesting.** Shares ofCommon Stock acquired under a Restricted Stock Award may, but need not, besubject to a share repurchase option in favor of the Company in accordance witha vesting schedule to be determined by the Board.

**(iv)          Termination of Participant’sContinuous Service.** In the event that a Participant’sContinuous Service terminates, the Company shall have the right, but not theobligation, to repurchase or otherwise reacquire any or all of the shares ofCommon Stock held by the Participant that have not vested as of the date oftermination under the terms of the Restricted Stock Award Agreement.  At the Board’s election, the repurchase rightmay be at the least of: (i) the Fair Market Value on the relevant date; (ii)the Participant’s original cost; or (iii) if the Participant paid the purchaseprice for the shares of Common Stock with services rendered, then for noconsideration.  The Company will notexercise its repurchase option until at least six months (or such longer orshorter period of time required to avoid a charge to earnings for financialaccounting purposes) have elapsed following the purchase of the restrictedstock unless otherwise determined by the Board or provided in the RestrictedStock Award Agreement.

**(v)            Transferability.**Rights to purchase or receive shares of Common Stock granted under a RestrictedStock Award shall be transferable by the Participant only upon such terms andconditions as are set forth in the Restricted Stock Award Agreement, as theBoard shall determine in its discretion, and so long as Common Stock awardedunder the Restricted Stock Award remains subject to the terms of the RestrictedStock Award Agreement.

**(b)           Phantom Stock. **Each Phantom Stock AwardAgreement shall be in such form and shall contain such terms and conditions asthe Board shall deem appropriate.  Theterms and conditions of Phantom Stock Award Agreements may change from time totime, and the terms

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and conditions of separate Phantom Stock AwardAgreements need not be identical, *provided,however,*that each Phantom Stock Award Agreement shall include(through incorporation of the provisions hereof by reference in the agreementor otherwise) the substance of each of the following provisions:

**(i)            Consideration.**  At the time of grant of a Phantom StockAward, the Board will determine the consideration, if any, to be paid by theParticipant upon delivery of each share of Common Stock subject to the PhantomStock Award. To the extent required by applicable law, the consideration to bepaid by the Participant for each share of Common Stock subject to a PhantomStock Award will not be less than the par value of a share of Common Stock.  Such consideration may be paid in any formpermitted under applicable law.

**(ii)           Vesting. **At the time of the grant ofa Phantom Stock Award, the Board may impose such restrictions or conditions tothe vesting of the Phantom Stock Award as it, in its absolute discretion, deemsappropriate.

**(iii)         Payment**.  APhantom Stock Award may be settled by the delivery of shares of Common Stock,their cash equivalent, or any combination of the two, as the Board deemsappropriate.

**(iv)          Additional Restrictions. **At the time of the grant ofa Phantom Stock Award, the Board, as it deems appropriate, may impose suchrestrictions or conditions that delay the delivery of the shares of CommonStock (or their cash equivalent) subject to a Phantom Stock Award after thevesting of such Award.

**(v)            Dividend Equivalents. **Dividend equivalents may becredited in respect of shares of Common Stock covered by a Phantom Stock Award,as determined by the Board and contained in the Phantom Stock AwardAgreement.  At the discretion of the Board,such dividend equivalents may be converted into additional shares of CommonStock covered by the Phantom Stock Award by dividing (1) the aggregate amountor value of the dividends paid with respect to that number of shares of CommonStock covered by the Phantom Stock Award then credited by (2) the Fair MarketValue per share of Common Stock on the payment date for such dividend, or insuch other manner as determined by the Board. Any additional shares covered by the Phantom Stock Award credited byreason of such dividend equivalents will be subject to all the terms andconditions of the underlying Phantom Stock Award Agreement to which theyrelate.

**(vi)         ****Terminationof Participant’s Continuous Service. **Exceptas otherwise provided in the applicable Phantom Stock Award Agreement, suchportion of the Phantom Stock Award that has not vested will be forfeited uponthe Participant’s termination of Continuous Service for any reason.

**(c)           Stock Appreciation Rights. **Each Stock AppreciationRight Agreement shall be in such form and shall contain such terms andconditions as the Board shall deem appropriate. The terms and conditions of Stock Appreciation Right Agreements maychange from time to time, and the terms and conditions of separate Stock AppreciationRight Agreements need not be identical, but each Stock Appreciation RightAgreement shall include (through incorporation of

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the provisions hereof by reference in the agreement orotherwise) the substance of each of the following provisions:

**(i)            Strike Price and Calculation of Appreciation.**  Each Stock Appreciation Right will bedenominated in share of Common Stock equivalents.  The appreciation distribution payable on theexercise of a Stock Appreciation Right will be not greater than an amount equalto the excess of (A) the aggregate Fair Market Value (on the date of theexercise of the Stock Appreciation Right) of a number of shares of Common Stockequal to the number of share of Common Stock equivalents in which theParticipant is vested under such Stock Appreciation Right, and with respect towhich the Participant is exercising the Stock Appreciation Right on such date,over (B) an amount that will be determined by the Committee at the time ofgrant of the Stock Appreciation Right.

**(ii)           Vesting. **At the time of the grant ofa Stock Appreciation Right, the Board may impose such restrictions orconditions to the vesting of such Stock Appreciate Right as it, in its absolutediscretion, deems appropriate.

**(iii)         Exercise.**  Toexercise any outstanding Stock Appreciation Right, the Participant must providewritten notice of exercise to the Company in compliance with the provisions ofthe Stock Appreciation Right Agreement evidencing such Stock AppreciationRight.

**(iv)          Payment**.  Theappreciation distribution in respect of a Stock Appreciation Right may be paidin Common Stock, in cash, or any combination of the two, or in any other formof consideration as determined by the Board and contained in the StockAppreciation Right Agreement evidencing such Stock Appreciation Right.

**(v)            Termination of Continuous Service.**  In the event that a Participant’s ContinuousService terminates, the Participant may exercise his or her Stock AppreciationRight (to the extent that the Participant was entitled to exercise such StockAppreciation Right as of the date of termination) but only within such periodof time ending on the earlier of (i) the date three months following thetermination of the Participant’s Continuous Service (or such longer or shorterperiod specified in the Stock Appreciation Right Agreement) or (ii) theexpiration of the term of the Stock Appreciation Right as set forth in theStock Appreciation Right Agreement.  If,after termination, the Participant does not exercise his or her StockAppreciation Right within the time specified in the Stock Appreciation RightAgreement, the Stock Appreciation Right shall terminate.

**(d)           Other Stock Awards**. Other forms of Stock Awards valued in whole or in part by reference to,or otherwise based on, Common Stock may be granted either alone or in additionto Stock Awards provided for under Section 6 and the preceding provisions ofthis Section 7.  Subject to theprovisions of the Plan, the Board shall have sole and complete authority todetermine the persons to whom and the time or times at which such Other StockAwards will be granted, the number of shares of Common Stock (or the cashequivalent thereof) to be granted pursuant to such Awards and all other termsand conditions of such Awards.

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**8.             COVENANTSOF THE COMPANY.**

**(a)           Availability of Shares.**  During the terms of the Stock Awards, theCompany shall keep available at all times the number of shares of Common Stockrequired to satisfy such Stock Awards.

**(b)           Securities Law Compliance.**  The Company shall seek to obtain from eachregulatory commission or agency having jurisdiction over the Plan suchauthority as may be required to grant Stock Awards and to issue and sell sharesof Common Stock upon exercise of the Stock Awards; *provided,however,* that this undertaking shall not require the Company toregister under the Securities Act the Plan, any Stock Award or any Common Stockissued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company isunable to obtain from any such regulatory commission or agency the authoritywhich counsel for the Company deems necessary for the lawful issuance and saleof Common Stock under the Plan, the Company shall be relieved from anyliability for failure to issue and sell Common Stock upon exercise of suchStock Awards unless and until such authority is obtained.

**9.             USEOF PROCEEDS FROM STOCK.**

Proceeds from the sale of Common Stock pursuant toStock Awards shall constitute general funds of the Company.

**10.          MISCELLANEOUS.**

**(a)           Acceleration of Exercisability andVesting.**  The Boardshall have the power to accelerate the time at which a Stock Award may first beexercised or the time during which a Stock Award or any part thereof will vestin accordance with the Plan, notwithstanding the provisions in the Stock Awardstating the time at which it may first be exercised or the time during which itwill vest.

**(b)           Stockholder Rights.**  No Participant shall be deemed to be theholder of, or to have any of the rights of a holder with respect to, any sharesof Common Stock subject to such Stock Award unless and until such Participanthas satisfied all requirements for exercise of the Stock Award pursuant to itsterms.

**(c)           No Employment or other ServiceRights.**  Nothing in thePlan or any instrument executed or Stock Award granted pursuant thereto shallconfer upon any Participant any right to continue to serve the Company or anAffiliate in the capacity in effect at the time the Stock Award was granted orshall affect the right of the Company or an Affiliate to terminate (i) theemployment of an Employee with or without notice and with or without cause,(ii) the service of a Consultant pursuant to the terms of such Consultant’sagreement with the Company or an Affiliate or (iii) the service of a Directorpursuant to the Bylaws of the Company or an Affiliate, and any applicableprovisions of the corporate law of the state in which the Company or theAffiliate is incorporated, as the case may be.

**(d)           Incentive Stock Option $100,000Limitation.**  To the extentthat the aggregate Fair Market Value (determined at the time of grant) ofCommon Stock with respect to which Incentive Stock Options are exercisable forthe first time by any Optionholder during any

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calendar year (under all plans of the Company and itsAffiliates) exceeds $100,000, the Options or portions thereof that exceed suchlimit (according to the order in which they were granted) shall be treated asNonstatutory Stock Options, notwithstanding any contrary provision of a StockAward Agreement.

**(e)           Investment Assurances.**  The Company may require a Participant, as acondition of exercising or acquiring Common Stock under any Stock Award, (i) togive written assurances satisfactory to the Company as to the Participant’sknowledge and experience in financial and business matters and/or to employ apurchaser representative reasonably satisfactory to the Company who isknowledgeable and experienced in financial and business matters and that he orshe is capable of evaluating, alone or together with the purchaserrepresentative, the merits and risks of exercising the Stock Award; and (ii) togive written assurances satisfactory to the Company stating that theParticipant is acquiring Common Stock subject to the Stock Award for theParticipant’s own account and not with any present intention of selling orotherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to suchrequirements, shall be inoperative if (1) the issuance of the shares of CommonStock upon the exercise or acquisition of Common Stock under the Stock Awardhas been registered under a then currently effective registration statementunder the Securities Act or (2) as to any particular requirement, adetermination is made by counsel for the Company that such requirement need notbe met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel tothe Company, place legends on stock certificates issued under the Plan as suchcounsel deems necessary or appropriate in order to comply with applicablesecurities laws, including, but not limited to, legends restricting thetransfer of the Common Stock.

**(f)            Withholding Obligations.**  To the extent provided by the terms of aStock Award Agreement, the Participant may satisfy any federal, state or localtax withholding obligation relating to the exercise or acquisition of CommonStock under a Stock Award by any of the following means (in addition to theCompany’s right to withhold from any compensation paid to the Participant bythe Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withholdshares of Common Stock from the shares of Common Stock otherwise issuable tothe Participant as a result of the exercise or acquisition of Common Stockunder the Stock Award; *provided, however,*that no shares of Common Stock are withheld with a value exceeding the minimumamount of tax required to be withheld by law (or such lesser amount as may benecessary to avoid variable award accounting); or (iii) delivering to theCompany owned and unencumbered shares of Common Stock.

**11.          ADJUSTMENTSUPON CHANGES IN STOCK.**

**(a)           Capitalization Adjustments**.  If any change is made in, or other eventoccurs with respect to, the Common Stock subject to the Plan or subject to anyStock Award without the receipt of consideration by the Company (throughmerger, consolidation, reorganization, recapitalization, reincorporation, stockdividend, dividend in property other than cash, stock split, liquidatingdividend, combination of shares, exchange of shares, change in corporatestructure or other transaction not involving the receipt of consideration bythe Company (each a ***“CapitalizationAdjustment”***), the Plan will be appropriately adjusted in the class(es)and maximum number of securities subject to the Plan pursuant to Sections 4(a)and 4(b) and the

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maximum number of securities subject to award to anyperson pursuant to Section 5(c), and the outstanding Stock Awards will beappropriately adjusted in the class(es) and number of securities and price pershare of Common Stock subject to such outstanding Stock Awards.  The Board shall make such adjustments, andits determination shall be final, binding and conclusive.  (The conversion of any convertible securitiesof the Company shall not be treated as a transaction “without receipt ofconsideration” by the Company.)

**(b)           Dissolution or Liquidation**.  In the event of a dissolution or liquidationof the Company, then all outstanding Stock Awards shall terminate immediatelyprior to the completion of such dissolution or liquidation.

**(c)           Corporate Transaction**.  In the event of a Corporate Transaction, anysurviving corporation or acquiring corporation may assume or continue any orall Stock Awards outstanding under the Plan or may substitute similar stockawards for Stock Awards outstanding under the Plan (it being understood thatsimilar stock awards include, but are not limited to, awards to acquire thesame consideration paid to the stockholders or the Company, as the case may be,pursuant to the Corporate Transaction), and any reacquisition or repurchaserights held by the Company in respect of Common Stock issued pursuant to StockAwards may be assigned by the Company to the successor of the Company (or thesuccessor’s parent company), if any, in connection with such CorporateTransaction.  In the event that anysurviving corporation or acquiring corporation does not assume or continue allsuch outstanding Stock Awards or substitute similar stock awards for all suchoutstanding Stock Awards, then with respect to Stock Awards that have not beenassumed, continued or substituted and that are held by Participants whoseContinuous Service has not terminated prior to the effective time of theCorporate Transaction, the vesting of such Stock Awards (and, if applicable,the time at which such Stock Awards may be exercised) shall (contingent uponthe effectiveness of the Corporate Transaction) be accelerated in full to adate prior to the effective time of such Corporate Transaction as the Boardshall determine (or, if the Board shall not determine such a date, to the datethat is five days prior to the effective time of the Corporate Transaction),such Stock Awards shall terminate if not exercised (if applicable) at or priorto such effective time, and any reacquisition or repurchase rights held by theCompany with respect to such Stock Awards shall (contingent upon theeffectiveness of the Corporate Transaction) lapse.  With respect to any other Stock Awardsoutstanding under the Plan that have not been assumed, continued orsubstituted, the vesting of such Stock Awards (and, if applicable, the time atwhich such Stock Award may be exercised) shall not be accelerated, unlessotherwise provided in a written agreement between the Company or any Affiliateand the holder of such Stock Award, and such Stock Awards shall terminate ifnot exercised (if applicable) prior to the effective time of the CorporateTransaction.

**(d)           Change in Control.**  A Stock Award held by any Participant whoseContinuous Service has not terminated prior to the effective time of a Changein Control may be subject to additional acceleration of vesting andexercisability upon or after such event as may be provided in the Stock AwardAgreement for such Stock Award or as may be provided in any other writtenagreement between the Company or any Affiliate and the Participant, but in theabsence of such provision, no such acceleration shall occur.

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**12.          AMENDMENTOF THE PLAN AND STOCK AWARDS.**

**(a)           Amendment of Plan.**  The Board at any time, and from time to time,may amend the Plan.  However, except asprovided in Section 11(a) relating to Capitalization Adjustments, no amendmentshall be effective unless approved by the stockholders of the Company to theextent stockholder approval is necessary to satisfy applicable law.

**(b)           Stockholder Approval.**  The Board, in its sole discretion, may submitany other amendment to the Plan for stockholder approval, including, but notlimited to, amendments to the Plan intended to satisfy the requirements ofSection 162(m) of the Code and the regulations thereunder regarding theexclusion of performance-based compensation from the limit on corporatedeductibility of compensation paid to Covered Employees.

**(c)           Contemplated Amendments.**  It is expressly contemplated that the Boardmay amend the Plan in any respect the Board deems necessary or advisable toprovide eligible Employees with the maximum benefits provided or to be providedunder the provisions of the Code and the regulations promulgated thereunderrelating to Incentive Stock Options and/or to bring the Plan and/or IncentiveStock Options granted under it into compliance therewith.

**(d)           No Impairment of Rights.**  Rights under any Stock Award granted beforeamendment of the Plan shall not be impaired by any amendment of the Plan unless(i) the Company requests the consent of the Participant and (ii) theParticipant consents in writing.

**(e)           Amendment of Stock Awards.**  The Board at any time, and from time to time,may amend the terms of any one or more Stock Awards; *provided,however,* that the rights under any Stock Award shall not be impairedby any such amendment unless (i) the Company requests the consent of theParticipant and (ii) the Participant consents in writing.

**13.          TERMINATIONOR SUSPENSION OF THE PLAN.**

**(a)           Plan Term.**  The Board may suspend or terminate the Planat any time.  Unless sooner terminated,the Plan shall terminate on May    , 2014.  No Stock Awards may be granted under the Planwhile the Plan is suspended or after it is terminated.

**(b)           No Impairment of Rights.**  Suspension or termination of the Plan shallnot impair rights and obligations under any Stock Award granted while the Planis in effect except with the written consent of the Participant.

**14.          EFFECTIVEDATE OF PLAN.**

The Plan shall become effective on the IPO Date, butno Stock Award shall be exercised (or, in the case of a stock bonus, shall begranted) unless and until the Plan has been approved by the stockholders of theCompany, which approval shall be within 12 months before or after the date thePlan is adopted by the Board.

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**15.          CHOICEOF LAW.**

The laws of the State of California shall govern all questions concerning the construction,validity and interpretation of this Plan, without regard to such state’sconflict of laws rules.

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**METABASISTHERAPEUTICS, INC.**

**AMENDED ANDRESTATED 2001 EQUITY INCENTIVE PLAN**

**STOCK OPTIONAGREEMENT(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)**

Pursuant to your Stock OptionGrant Notice (“***GrantNotice***”) and this Stock Option Agreement, Metabasis Therapeutics, Inc. (the “***Company***”) has grantedyou an option under its Amended andRestated 2001 Equity Incentive Plan (the “***Plan***”) to purchase the number of sharesof the Company’s Common Stock indicated in your Grant Notice at the exerciseprice indicated in your Grant Notice. Defined terms not explicitly defined in this Stock Option Agreement butdefined in the Plan shall have the same definitions as in the Plan.

The details of your option areas follows:

**1.             VESTING.**  Subject to the limitations contained herein,your option will vest as provided in your Grant Notice, provided that vestingwill cease upon the termination of your Continuous Service.

**2.             NUMBEROF SHARES AND EXERCISE PRICE.**  The number of shares of Common Stock subjectto your option and your exercise price per share referenced in your GrantNotice may be adjusted from time to time for Capitalization Adjustments.

**3.             METHODOF PAYMENT.** Payment of the exercise price is due in full upon exercise of all or anypart of your option.  You may elect tomake payment of the exercise price in cash or by check or in any other manner ***permitted by your Grant Notice,***which may include one or more of the following:

**(a)          **In the Company’ssole discretion at the time your option is exercised and provided that at thetime of exercise the Common Stock is publicly traded and quoted regularly in *The Wall Street Journal*, pursuant to a program developedunder Regulation T as promulgated by the Federal Reserve Board that, prior tothe issuance of Common Stock, results in either the receipt of cash (or check)by the Company or the receipt of irrevocable instructions to pay the aggregateexercise price to the Company from the sales proceeds.

**(b)          **Provided that atthe time of exercise the Common Stock is publicly traded and quoted regularlyin *The Wall Street Journal*, by delivery ofalready-owned shares of Common Stock either that you have held for the periodrequired to avoid a charge to the Company’s reported earnings (generally sixmonths) or that you did not acquire, directly or indirectly from the Company,that are owned free and clear of any liens, claims, encumbrances or securityinterests, and that are valued at Fair Market Value on the date ofexercise.  “Delivery” for these purposes,in the sole discretion of the Company at the time you exercise your option,shall include delivery to the Company of your attestation of ownership of suchshares of Common Stock in a form approved by the Company.  Notwithstanding the foregoing, you may notexercise your option by tender to the Company of Common Stock to the extentsuch tender

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would violate the provisions of any law, regulation oragreement restricting the redemption of the Company’s stock.

**4.             WHOLESHARES.**  You mayexercise your option only for whole shares of Common Stock.

**5.             SECURITIESLAW COMPLIANCE.** Notwithstanding anything to the contrary contained herein, you may notexercise your option unless the shares of Common Stock issuable upon suchexercise are then registered under the Securities Act or, if such shares of CommonStock are not then so registered, the Company has determined that such exerciseand issuance would be exempt from the registration requirements of theSecurities Act.  The exercise of youroption also must comply with other applicable laws and regulations governingyour option, and you may not exercise your option if the Company determinesthat such exercise would not be in material compliance with such laws andregulations.

**6.             TERM.**  You may not exercise your option before thecommencement or after the expiration of its term.  The term of your option commences on the dateof grant and expires upon the earliest of the following:

**(a)          **immediately uponthe termination of your Continuous Service for Cause;

**(b)          **three months afterthe termination of your Continuous Service for any reason other than yourDisability or death, provided that if during any part of such three-monthperiod your option is not exercisable solely because of the condition set forthin Section 5, your option shall not expire until the earlier of the ExpirationDate or until it shall have been exercisable for an aggregate period of threemonths after the termination of your Continuous Service;

**(c)          **12 months after thetermination of your Continuous Service due to your Disability;

**(d)          **18 months afteryour death if you die either during your Continuous Service or within threemonths after your Continuous Service terminates;

**(e)          **the Expiration Dateindicated in your Grant Notice; or

**(f)           **the day before thetenth anniversary of the date of grant.

If your option is an IncentiveStock Option, note that to obtain the federal income tax advantages associatedwith an Incentive Stock Option, the Code requires that at all times beginningon the date of grant of your option and ending on the day three months beforethe date of your option’s exercise, you must be an employee of the Company oran Affiliate, except in the event of your death or your permanent and totaldisability, as defined in Section 22(e) of the Code.  (The definition of disability in Section22(e) of the Code is different from the definition of the Disability under thePlan).  The Company has provided forextended exercisability of your option under certain circumstances for yourbenefit but cannot guarantee that your option will necessarily be treated as anIncentive Stock Option if you continue to provide services to the

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Company or an Affiliate as aConsultant or Director after your employment terminates or if you otherwiseexercise your option more than three months after the date your employment withthe Company or an Affiliate terminates.

**7.             EXERCISE.**

**(a)          **You may exercisethe vested portion of your option during its term by delivering a Notice ofExercise (in a form designated by the Company) together with the exercise priceto the Secretary of the Company, or to such other person as the Company maydesignate, during regular business hours, together with such additionaldocuments as the Company may then require.

**(b)          **By exercising youroption you agree that, as a condition to any exercise of your option, theCompany may require you to enter into an arrangement providing for the paymentby you to the Company of any tax withholding obligation of the Company arisingby reason of (1) the exercise of your option, (2) the lapse of any substantialrisk of forfeiture to which the shares of Common Stock are subject at the timeof exercise, or (3) the disposition of shares of Common Stock acquired uponsuch exercise.

**(c)          **If your option isan Incentive Stock Option, by exercising your option you agree that you willnotify the Company in writing within 15 days after the date of any dispositionof any of the shares of the Common Stock issued upon exercise of your optionthat occurs within two years after the date of your option grant or within oneyear after such shares of Common Stock are transferred upon exercise of youroption.

**8.             TRANSFERABILITY.**

**(a)          **If your option isan Incentive Stock Option, your option is not transferable, except by will orby the laws of descent and distribution, and is exercisable during your lifeonly by you.  Notwithstanding theforegoing, by delivering written notice to the Company, in a form satisfactoryto the Company, you may designate a third party who, in the event of yourdeath, shall thereafter be entitled to exercise your option.

**(b)          **If your option is aNonstatutory Stock Option, your option is not transferable, except (i) by willor by the laws of descent and distribution, (ii) with the prior writtenapproval of the Company, by instrument to an inter vivos or testamentary trust,in a form accepted by the Company, in which the option is to be passed tobeneficiaries upon the death of the trustor (settlor) and (iii) with the priorwritten approval of the Company, by gift, in a form accepted by the Company, toa permitted transferee under Rule 701 of the Securities Act. Notwithstandingthe foregoing, by delivering written notice to the Company, in a formsatisfactory to the Company, you may designate a third party who, in the eventof your death, shall thereafter be entitled to exercise your option.

**9.             OPTIONNOT A SERVICE CONTRACT.**  Your option is not an employment or servicecontract, and nothing in your option shall be deemed to create in any waywhatsoever any obligation on your part to continue in the employ of the Companyor an Affiliate, or of the Company or an Affiliate to continue youremployment.  In addition, nothing in youroption shall

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obligate the Company or an Affiliate, their respectivestockholders, Boards of Directors, Officers or Employees to continue anyrelationship that you might have as a Director or Consultant for the Company oran Affiliate.

**10.          WITHHOLDING OBLIGATIONS.**

**(a)          **At the time youexercise your option, in whole or in part, or at any time thereafter asrequested by the Company, you hereby authorize withholding from payroll and anyother amounts payable to you, and otherwise agree to make adequate provisionfor (including by means of a “cashless exercise” pursuant to a programdeveloped under Regulation T as promulgated by the Federal Reserve Board to theextent permitted by the Company), any sums required to satisfy the federal,state, local and foreign tax withholding obligations of the Company or anAffiliate, if any, which arise in connection with the exercise of your option.

**(b)          **Upon your requestand subject to approval by the Company, in its sole discretion, and compliancewith any applicable legal conditions or restrictions, the Company may withholdfrom fully vested shares of Common Stock otherwise issuable to you upon theexercise of your option a number of whole shares of Common Stock having a FairMarket Value, determined by the Company as of the date of exercise, not inexcess of the minimum amount of tax required to be withheld by law (or suchlower amount as may be necessary to avoid variable award accounting).  If the date of determination of any taxwithholding obligation is deferred to a date later than the date of exercise ofyour option, share withholding pursuant to the preceding sentence shall not bepermitted unless you make a proper and timely election under Section 83(b) ofthe Code, covering the aggregate number of shares of Common Stock acquired uponsuch exercise with respect to which such determination is otherwise deferred,to accelerate the determination of such tax withholding obligation to the dateof exercise of your option. Notwithstanding the filing of such election, shares of Common Stockshall be withheld solely from fully vested shares of Common Stock determined asof the date of exercise of your option that are otherwise issuable to you uponsuch exercise.  Any adverse consequencesto you arising in connection with such share withholding procedure shall beyour sole responsibility.

**(c)          **You may notexercise your option unless the tax withholding obligations of the Companyand/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desiredeven though your option is vested, and the Company shall have no obligation toissue a certificate for such shares of Common Stock or release such shares ofCommon Stock from any escrow provided for herein unless such obligations aresatisfied.

**11.          NOTICES.**  Any notices provided for in your option orthe Plan shall be given in writing and shall be deemed effectively given uponreceipt or, in the case of notices delivered by mail by the Company to you,five days after deposit in the United States mail, postage prepaid, addressedto you at the last address you provided to the Company.

**12.          GOVERNINGPLAN DOCUMENT.** Your option is subject to all the provisions of the Plan, the provisionsof which are hereby made a part of your option, and is further subject to allinterpretations, amendments, rules and regulations, which may from time to timebe promulgated and adopted pursuant to the Plan.  In the event of any conflict between theprovisions of your option and those of the Plan, the provisions of the Planshall control.

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