Document:

exv10w3

Exhibit 10.3

ARDEA BIOSCIENCES, INC.

EXECUTIVE SEVERANCE BENEFIT PLAN

Amended and Restated Effective November 7, 2008

Section 1. Introduction.

          
This Ardea Biosciences, Inc. Executive Severance Benefit Plan was established effective July
1, 2001 and amended and restated effective November 7, 2008 (the “Plan”). The purpose of the Plan
is to provide for the payment of severance benefits to certain eligible employees of Ardea
Biosciences, Inc. (the “Company”) whose employment with the Company is terminated pursuant to a
Covered Termination (as defined below). This Plan shall supersede any other severance benefit
plan, policy or practice previously maintained by the Company with respect to Eligible Employees
covered under this Plan, except to the extent eligible employees are parties to written agreements
with the Company that expressly contemplate otherwise. This Plan document also is the Summary Plan
Description for the Plan.

Section 2. Definitions.

          
For purposes of the Plan, the following terms are defined as follows:

          
(a) “Base Salary” means the Eligible Employee’s annual base pay (excluding incentive pay,
premium pay, commissions, overtime, bonuses and other forms of variable compensation), at the rate
in effect during the last regularly scheduled payroll period immediately preceding the date of the
Eligible Employee’s Covered Termination, and prior to any reduction in base pay that would permit
such Eligible Employee to voluntarily terminate employment in a Constructive Termination pursuant
to Section 2(d)(i).

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

          
(c) “Company” means Ardea Biosciences, Inc.

          
(d) “Constructive Termination” means, with respect to an Eligible Employee, that such Eligible
Employee voluntarily terminates his or her employment with the Company (A) after (1) any of the
following are undertaken without Cause and without such Eligible Employee’s express written
consent; (2) the Eligible Employee notifies the Company in writing, within ninety (90) days after
the occurrence of one of the following events, which notice specifies the condition giving rise to
a Constructive Termination and that the Eligible Employee intends to terminate his employment no
earlier than thirty (30) days after the Company’s receipt of such notice; and (3) the Company does
not cure such condition within thirty (30) days following its receipt of such notice (the “Cure
Period”) or states unequivocally in writing that it does not intend to attempt to cure such
condition, and (B) such voluntary termination occurs within ninety (90) days following the end of
the Cure Period:

          
     
(i) a material reduction by the Company in the Eligible Employee’s Base Salary; provided,
however, that (A) a reduction of Base Salary of five percent (5%) or less

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shall in no event be considered a material reduction for purposes of this Plan, and (B) a
reduction by the Company of the Eligible Employee’s Base Salary by up to ten percent (10%) shall
not constitute a material reduction for purposes of this Plan if it is made in connection with an
across-the-board reduction by the Company of all Eligible Employees’ annual base salaries by a
percentage at least equal to the percentage by which the Eligible Employee’s Base Salary is
reduced;

          
     
(ii) a relocation of the Eligible Employee’s business office to a location more than fifty
(50) miles from the location at which the Eligible Employee performs his or her duties, except for
required travel by the Eligible Employee on the Company’s business to an extent substantially
consistent with the Eligible Employee’s business travel obligations; provided, however, that no
relocation of the Eligible Employee’s business office shall constitute a Constructive Termination
for purposes of this Plan if the Eligible Employee provides services to the Company from a remote
location (e.g., through telecommuting) at the time of the relocation; or

          
     
(iii) a material breach by the Company of any provision of this Plan or any other Agreement
between the Eligible Employee and the Company concerning the terms and conditions of his or her
employment.

          
(e) “Continuation Period” means a period of nine (9) months following the Eligible Employee’s
Covered Termination.

          
(f) “Covered Termination” means an Involuntary Termination Without Cause or a Constructive
Termination, notice of either of which is given on or after the Effective Date.

          
(g) “Effective Date” means July 1, 2001, the effective date of the Plan.

          
(h) “Eligible Employee” means any full-time, regular hire employee of the Company who holds
the title of Vice President (who is not eligible or designated by the Board or Compensation
Committee to participate in the Senior Executive Severance Benefit Plan) and any other person
designated by the Board or its Compensation Committee to participate in the Plan from time to time,
and whose employment with the Company terminates due to a Covered Termination.

          
(i) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

          
(j) “Involuntary Termination Without Cause” means the Eligible Employee’s dismissal or
discharge for reasons other than Cause. For this purpose, “Cause” means that, in the reasonable
determination of the Company, the Eligible Employee has

          
     
(i) been convicted of or pleaded guilty or no contest to any felony or any crime involving
dishonesty that is likely to inflict or has inflicted demonstrable and material injury on the
business of the Company;

          
     
(ii) willfully participated in any fraud against the Company;

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(iii) willfully and materially breached a Company policy;

          
     
(iv) intentionally damaged any property of the Company thereby causing demonstrable and
material injury to the business of the Company;

          
     
(v) willfully and materially breached the Eligible Employee’s Proprietary Information and
Inventions Agreement with the Company; or

          
     
(vi) engaged in conduct that, in the reasonable determination of the Company’s Board of
Directors, demonstrates gross unfitness to serve.

          
Notwithstanding the foregoing, Cause shall not exist based on conduct described in clause
(iii) or (vi) above unless the conduct described in such clause has not been cured within fifteen
(15) days following the Eligible Employee’s receipt of written notice from the Company specifying
the particulars of the conduct constituting Cause.

          
(k) “Target Performance Bonus” means either: (i) the target performance bonus then in effect
for the Eligible Employee for the year in which the Covered Termination occurs, (ii) if, on or
prior to the date of the Covered Termination, the Company shall not have approved a target
performance bonus applicable to such Eligible Employee for the year in which such Covered
Termination occurs, but a target performance bonus applicable to such Eligible Employee exists for
the year immediately preceding the year in which such Covered Termination occurs, the target
performance bonus amount in effect for the Eligible Employee for such immediately preceding year,
or (iii) if there is no target performance bonus in effect for the Eligible Employee for either the
year in which such Covered Termination occurs or the immediately preceding year, the largest
maximum target performance bonus payable to any other Company officer with an employment title
equivalent to or below the employment title of such Eligible Employee for the year that includes
such Covered Termination.

Section 3. Eligibility For Benefits.

          
(a) General Rules. Subject to the requirements set forth in this Section, the Company shall
provide the severance benefits described in Section 4 of the Plan to Eligible Employees.

          
     
(i) In order to be eligible to receive benefits under the Plan, an Eligible Employee whose
employment is terminated pursuant to a Covered Termination that is an Involuntary Termination
Without Cause must continue to provide services to the Company, at the Company’s request, through
such date as determined by the Company; provided, however, that such date shall not be more than
ninety (90) days from the date the Eligible Employee is notified by the Company, in writing, of his
or her Involuntary Termination Without Cause.

          
     
(ii) In order to be eligible to receive benefits under the Plan, an Eligible Employee also
must execute a general waiver and release (the “Release”) in substantially the form attached hereto
as Exhibit A, Exhibit B or Exhibit C, as appropriate, within the applicable time period set forth
therein, but in no event later than forty-five (45) days following termination of the Eligible
Employee’s employment, and permitting such Release and Waiver to become fully effective in
accordance with its terms, (the date Executive’s Release

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becomes fully effective, the “Release
Effective Date”), and such release must become effective
in accordance with its terms. The Company, in its sole discretion, may modify the form of the
required release to comply with applicable state law and shall determine the form of the required
release.

          
(b) Exceptions to Benefit Entitlement. An employee who otherwise is an Eligible Employee
shall not receive benefits under the Plan in any of the following circumstances, as determined by
the Company in its sole discretion:

          
     
(i) The employee has executed an individually negotiated employment contract or agreement with
the Company relating to severance benefits that is in effect on his or her termination date, in
which case such employee’s severance benefit, if any, shall be governed by the terms of such
individually negotiated employment contract or agreement and shall be governed by this Plan only to
the extent that the reduction pursuant to Section 5(a) below does not entirely eliminate benefits
under this Plan;

          
     
(ii) The Company involuntarily terminates the employee’s employment with the Company, and such
termination does not constitute an Involuntary Termination Without Cause;

          
     
(iii) The employee voluntarily terminates employment with the Company, and such termination
does not constitute a Constructive Termination. Voluntary terminations include, but are not
limited to, resignation, retirement or failure to return from a leave of absence on the scheduled
date;

          
     
(iv) The employee voluntarily terminates employment with the Company in order to accept
employment with another entity that is wholly or partly owned (directly or indirectly) by the
Company or an affiliate of the Company;

          
     
(v) The employee is offered employment, with the same title and reporting responsibilities and
no diminution in duties and responsibilities, with the Company, an affiliate of the Company, or a
successor to the Company; or

          
     
(vi) The employee is rehired by the Company or an affiliate of the Company prior to the date
benefits under the Plan are scheduled to commence.

Section 4. Amount of Benefit.

          
(a) Severance. Each Eligible Employee, shall receive the following benefits:

          
     
(i) Base Salary for the Continuation Period;

          
     
(ii) Target Performance Bonus for the period in which the Eligible Employee’s termination
occurs, prorated to the date of termination; and

          
     
(iii) Accelerated vesting of shares subject to all stock awards, for the number of shares
which would have vested accordingly had the Eligible Employee continued employment with the Company
for the Continuation Period.

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Salary continuation shall be paid in regular installments on the normal payroll dates of the
Company commencing on the Release Effective Date (except as provided in Section 5(g) below) and
shall be subject to all required tax withholding. Target Performance Bonus payments shall be paid
within ten (10) days after the Release Effective Date.

          
(b) Severance in connection with a Change in Control. An Eligible Employee whose employment
with the Company terminates due to a Covered Termination within three (3) months before or within
twelve (12) months following a Change in Control, (as defined in the Appendix, Section C, of the
Company’s 2004 Stock Equity Incentive Plan), shall receive the following benefits, and not the
benefits described in Section 4(a) above:

          
     
(i) A payment equal to nine (9) months of Base Salary; and

          
     
(ii) A payment equal to the greater of (1) the Target Performance Bonus for the year in which
the Eligible Employee’s termination occurs or (2) the Target Performance Bonus earned for the year
preceding the year in which the Eligible Employee’s termination occurs.

          
Payments of Base Salary and Target Performance Bonus amounts shall be paid within ten (10)
days after the Release Effective Date (except as provided in Section 5(g) below) and shall be
subject to all required tax withholding.

          
(c) Continued Insurance Benefits. Provided that the Eligible Employee elects continued
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), upon a
severance described in Sections 4(a) and 4(b) above, the Company shall pay the portion of premiums
(the “COBRA Premiums”) of each Eligible Employee’s group medical, dental and vision coverage,
including coverage for the Eligible Employee’s eligible dependents, that the Company paid prior to
the Covered Termination for the Continuation Period described in Section 4(a) or, if shorter, for
the duration of the COBRA continuation period. Such premium payments shall continue for the
duration of the Continuation Period; provided, however, that no such premium payments shall be made
following the effective date of the Eligible Employee’s coverage by a medical, dental or vision
insurance plan of a subsequent employer, or cancellation of coverage due to non-payment by the
Eligible Employee of his or her portion of the applicable premiums. Each Eligible Employee shall
be required to notify the Company immediately if the Eligible Employee becomes covered by a
medical, dental or vision insurance plan of a subsequent employer.

          
No provision of this Plan will affect the continuation coverage rules under COBRA, except that
the Company’s payment of any COBRA premiums during the Continuation Period will be credited as
payment by the Eligible Employee for purposes of the Eligible Employee’s payments required under
COBRA. Therefore, the period during which an Eligible Employee may elect to continue the Company’s
group medical coverage at his or her own expense under COBRA, the length of time during which COBRA
coverage will be made available to the Eligible Employee, and all other rights and obligations of
the Eligible Employee under COBRA (except the obligation to pay such portion of the insurance
premiums that the Company pays during the Continuation Period) will be applied in the same manner
that such rules would apply in the absence of this Plan. At the conclusion of the Continuation
Period, the

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Eligible Employee shall be responsible for the entire payment of premiums required under COBRA
for the duration of the COBRA continuation period. For purposes of this Section 4(b), such portion
of the applicable premiums that will be paid by the Company during the Continuation Period shall
not include any amounts payable by the Eligible Employee under a Section 125 health care
reimbursement plan, which amounts, if any, are the sole responsibility of the Eligible Employee.

Section 5. Limitations on Benefits.

          
(a) Certain Reductions and Offsets. Notwithstanding any other provision of the Plan to the
contrary, any benefits payable to an Eligible Employee under this Plan shall be reduced by any
severance benefits payable by the Company to such individual under any other policy, plan, program
or arrangement, including, without limitation, a contract between the Eligible Employee and any
entity, covering such individual, unless such contract expressly contemplates that the Eligible
Employee is also eligible to participate in the Plan. Furthermore, to the extent that any federal,
state or local laws, including, without limitation, so-called “plant closing” laws, require the
Company to give advance notice or make a payment of any kind to an Eligible Employee because of
that Eligible Employee’s involuntary termination due to a layoff, reduction in force, plant or
facility closing, sale of business, change of control, or any other similar event or reason, the
benefits payable under this Plan shall either be reduced or eliminated, but not below one (1) week
of Base Salary. The benefits provided under this Plan are intended to satisfy any and all
statutory obligations that may arise out of an Eligible Employee’s involuntary termination of
employment for the foregoing reasons, and the Plan Administrator shall so construe and implement
the terms of the Plan.

          
(b) Mitigation. Except as otherwise specifically provided herein, Eligible Employees shall
not be required to mitigate damages or the amount of any payment provided under this Plan by
seeking other employment or otherwise, nor shall the amount of any payment provided for under this
Plan be reduced by any retirement benefits received by such Eligible Employee after the Covered
Termination.

          
(c) Termination of Benefits. Benefits under this Plan shall terminate immediately if the
Eligible Employee, at any time, violates any proprietary information or confidentiality obligation
to the Company.

          
(d) Non-Duplication of Benefits. No Eligible Employee is eligible to receive benefits under
this Plan more than one time.

          
(e) Indebtedness of Eligible Employees. To the extent permitted by law, if a terminating
employee is indebted to the Company or an affiliate of the Company at his or her termination date,
the Company reserves the right to offset any severance payments under the Plan by the amount of
such indebtedness. Additionally, if a Covered Employee is subject to withholding for taxes related
to any non-Plan benefits, the Company may offset any salary severance payment or other payments
under the Plan by the amount of such withholding taxes.

          
(f) Parachute Payments. If any payment or benefit the Eligible Employee would receive in
connection with a change in ownership or effective control of the Company

6.

 

from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii)
but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall
be either (x) the largest portion of the Payment that would result in no portion of the Payment
being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal
rate), results in the Eligible Employee’s receipt, on an after-tax basis, of the greater amount of
the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise
Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that
the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of
cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.
In the event that acceleration of vesting of stock award compensation is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date of grant of the
Eligible Employee’s stock awards.

          
The accounting firm engaged by the Company for general audit purposes as of the day prior to
the effective date of the change in ownership or effective control of the Company shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant
or auditor for the individual, entity or group effecting the change in ownership or effective
control of the Company, the Company shall appoint a nationally recognized accounting firm to make
the determinations required hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

          
The accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company and the Eligible
Employee within fifteen (15) calendar days after the date on which the Eligible Employee’s right to
a Payment is triggered (if requested at that time by the Company or the Eligible Employee) or such
other time as requested by the Company or the Eligible Employee. If the accounting firm determines
that no Excise Tax is payable with respect to a Payment, either before or after the application of
the Reduced Amount, it shall furnish the Company and the Eligible Employee with an opinion
reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment.
Any good faith determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Company and the Eligible Employee.

          
(g) Application of Internal Revenue Code Section 409A. Notwithstanding anything to the
contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance
Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code
and the regulations and other guidance thereunder and any state law of similar effect (collectively
“Section 409A”) shall not commence in connection with Executive’s termination of employment unless
and until Executive has also incurred a “separation from service” (as such term is defined in
Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably
determines that such amounts

7.

 

may be provided to Executive without causing Executive to incur the additional 20% tax under
Section 409A.

          
It is intended that each installment of the Severance Benefits payments provided for in this
Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).
For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in
this Agreement satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9). However, if the Company (or, if applicable, the successor entity thereto)
determines that the Severance Benefits constitute “deferred compensation” under Section 409A and
Executive is, on the termination of Executive’s service, a “specified employee” of the Company or
any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code,
then, solely to the extent necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed
until the earlier to occur of: (i) the date that is six months and one day after Executive’s
Separation From Service or (ii) the date of Executive’s death (such applicable date, the “Specified
Employee Initial Payment Date”), and the Company (or the successor entity thereto, as applicable)
shall (A) pay to Executive a lump sum amount equal to the sum of the Severance Benefit payments
that Executive would otherwise have received through the Specified Employee Initial Payment Date if
the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this
Section and (B) commence paying the balance of the Severance Benefits in accordance with the
applicable payment schedules set forth in this Agreement.

          
Except to the extent that payments may be delayed until the Specified Employee Initial Payment
Date pursuant to the preceding paragraph, on the first regular payroll pay day following the
effective date of the Release, the Company will pay Executive the Severance Benefits Executive
would otherwise have received under the Agreement on or prior to such date but for the delay in
payment related to the effectiveness of the Release, with the balance of the Severance Benefits
being paid as originally scheduled. All amounts payable under the Agreement will be subject to
standard payroll taxes and deductions.

Section 6. Company Property.

          
Notwithstanding anything to the contrary set forth herein, a Covered Employee will not be
entitled to any benefit under the Plan unless and until the Covered Employee promptly returns all
Company Property, except to the extent such obligation is waived in writing by the Company. For
this purpose, “Company Property” means all Company documents (and all copies thereof) and other
Company property which the Covered Employee had in his or her possession at any time, including,
but not limited to, Company files, notes, drawings records, plans, forecasts, reports, studies,
analyses, proposals, agreements, financial information, research and development information, sales
and marketing information, operational and personnel information, specifications, code, software,
databases, computer-recorded information, tangible property and equipment (including, but not
limited to, leased vehicles, computers, facsimile machines, mobile telephones, servers), credit
cards, entry cards, identification badges and keys; and any materials of any kind which contain or
embody any proprietary or confidential information of the Company (and all reproductions thereof in
whole or in part). As a condition

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to receiving benefits under the Plan, Covered Employees must not make or retain copies,
reproductions or summaries of any such Company property.

Section 7. Right To Interpret Plan; Amendment and Termination. 

          
(a) Exclusive Discretion. The Plan Administrator shall have the exclusive discretion and
authority to establish rules, forms, and procedures for the administration of the Plan and to
construe and interpret the Plan and to decide any and all questions of fact, interpretation,
definition, computation or administration arising in connection with the operation of the Plan,
including, but not limited to, the eligibility to participate in the Plan and amount of benefits
paid under the Plan. The rules, interpretations, computations and other actions of the Plan
Administrator shall be binding and conclusive on all persons.

          
(b) Amendment or Termination. The Company reserves the right to amend or terminate this Plan
or the benefits provided hereunder at any time; provided, however, that no such amendment or
termination shall affect the right to any unpaid benefit of any Eligible Employee whose termination
date has occurred prior to amendment or termination of the Plan. Any action amending or terminating
the Plan shall be in writing and executed by the chairman of the Compensation Committee of the
Board of Directors of the Company.

          
(c) Successors and Assigns. The Company shall obtain the assumption of this Plan by any
successor or assign of the Company, which successor or assign shall agree to assume the obligations
and perform all of the terms and conditions of this Plan.

Section 8. Termination of Certain Employee Benefits.

          
All non-health benefits (such as life insurance, disability and 401(k) plan coverage) shall
terminate as of the employee’s termination date (except to the extent that a conversion privilege
may be available thereunder).

Section 9. No Implied Employment Contract.

          
The Plan shall not be deemed (i) to give any employee or other person any right to be retained
in the employ of the Company or (ii) to interfere with the right of the Company to discharge any
employee or other person at any time and for any reason, which right is hereby reserved.

Section 10. Legal Construction.

          
This Plan is intended to be governed by and shall be construed in accordance with ERISA and,
to the extent not preempted by ERISA, the laws of the State of California.

Section 11. Claims, Inquiries And Appeals.

          
(a) Applications for Benefits and Inquiries. Any application for benefits, inquiries about
the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan
Administrator in writing by an applicant (or his or her authorized representative). The Plan
Administrator is:

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Ardea Biosciences, Inc.

4939 Directors Place

San Diego, CA 92121

          
(b) Denial of Claims. In the event that any application for benefits is denied in whole or in
part, the Plan Administrator must provide the applicant with written or electronic notice of the
denial of the application, and of the applicant’s right to review the denial. Any electronic
notice will comply with the regulations of the U.S. Department of Labor. The written notice of
denial will be set forth in a manner designed to be understood by the employee and will include the
following:

          
     
(i) the specific reason or reasons for the denial;

          
     
(ii) references to the specific Plan provisions upon which the denial is based;

          
     
(iii) a description of any additional information or material that the Plan Administrator
needs to complete the review and an explanation of why such information or material is necessary;
and

          
     
(iv) an explanation of the Plan’s review procedures and the time limits applicable to such
procedures, including a statement of the applicant’s right to bring a civil action under section
502(a) of ERISA following a denial on review of the claim, as described in Section 11(d) below.

          
This written notice will be given to the applicant within ninety (90) days after the Plan
Administrator receives the application, unless special circumstances require an extension of time,
in which case, the Plan Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice of the extension
will be furnished to the applicant before the end of the initial ninety (90) day period.

          
This notice of extension will describe the special circumstances necessitating the additional
time and the date by which the Plan Administrator is to render its decision on the application. If
written notice of denial of the application for benefits is not furnished within the specified
time, the application shall be deemed to be denied. The applicant will then be permitted to appeal
the denial in accordance with the Review Procedure described below.

          
(c) Request for a Review. Any person (or that person’s authorized representative) for whom an
application for benefits is denied (or deemed denied), in whole or in part, may appeal the denial
by submitting a request for a review to the Plan Administrator within sixty (60) days after the
application is denied (or deemed denied). A request for a review shall be in writing and shall be
addressed to:

Ardea Biosciences, Inc.

4939 Directors Place

San Diego, CA 92121

10.

 

          
A request for review must set forth all of the grounds on which it is based, all facts in
support of the request and any other matters that the applicant feels are pertinent. The applicant
(or his or her representative) shall have the opportunity to submit (or the Plan Administrator may
require the applicant to submit) written comments, documents, records, and other information
relating to his or her claim. The applicant (or his or her representative) shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents, records and other
information relevant to his or her claim. The review shall take into account all comments,
documents, records and other information submitted by the applicant (or his or her representative)
relating to the claim, without regard to whether such information was submitted or considered in
the initial benefit determination.

          
(d) Decision on Review. The Plan Administrator will act on each request for review within
sixty (60) days after receipt of the request, unless special circumstances require an extension of
time (not to exceed an additional sixty (60) days), for processing the request for a review. If an
extension for review is required, written notice of the extension will be furnished to the
applicant within the initial sixty (60) day period. This notice of extension will describe the
special circumstances necessitating the additional time and the date by which the Plan
Administrator is to render its decision on the review. The Plan Administrator will give prompt,
written or electronic notice of its decision to the applicant. Any electronic notice will comply
with the regulations of the U.S. Department of Labor. In the event that the Plan Administrator
confirms the denial of the application for benefits in whole or in part, the notice will set forth,
in a manner calculated to be understood by the applicant, the following:

          
     
(i) the specific reason or reasons for the denial;

          
     
(ii) references to the specific Plan provisions upon which the denial is based;

          
     
(iii) a statement that the applicant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other information relevant to his
or her claim; and

          
     
(iv) a statement of the applicant’s right to bring a civil action under section 502(a) of
ERISA.

          
If written notice of the Plan Administrator’s decision is not given to the applicant within
the time prescribed in this Subsection (d), the application will be deemed denied on review.

          
(e) Rules and Procedures. The Plan Administrator will establish rules and procedures,
consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its
responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who
wishes to submit additional information in connection with an appeal from the denial (or deemed
denial) of benefits to do so at the applicant’s own expense.

          
(f) Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until
the claimant (i) has submitted a written application for benefits in accordance with the procedures
described by Section 11(a) above, (ii) has been notified by the Plan

11.

 

Administrator that the application is denied (or the application is deemed denied due to the
Plan Administrator’s failure to act on it within the established time period), (iii) has filed a
written request for a review of the application in accordance with the appeal procedure described
in Section 11(c) above, and (iv) has been notified in writing that the Plan Administrator has
denied the appeal (or the appeal is deemed to be denied due to the Plan Administrator’s failure to
take any action on the claim within the time prescribed by Section 11(d) above).

Section 12. Basis Of Payments To And From Plan.

          
All benefits under the Plan shall be paid by the Company. The Plan shall be unfunded, and
benefits hereunder shall be paid only from the general assets of the Company. A Covered Employee’s
right to receive payments under the Plan is no greater than that of the Company’s unsecured general
creditors. Therefore, if the Company were to become insolvent, the Covered Employee might not
receive benefits under the Plan.

Section 13. Non-Alienation Of Benefits

          
No Plan benefit may be anticipated, alienated, sold, transferred, assigned, pledged,
encumbered or charged, and any attempt to do so will be void.

Section 14. Other Plan Information.

          
(a) Employer and Plan Identification Numbers. The Employer Identification Number assigned to
the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal Revenue
Service is 94-3200380. The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the
instructions of the Internal Revenue Service is 513.

          
(b) Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year for the
purpose of maintaining the Plan’s records is December 31.

          
(c) Agent for the Service of Legal Process. The agent for the service of legal process with
respect to the Plan is Ardea Biosciences, Inc., 4939 Directors Place, San Diego, CA 92121.

          
(d) Plan Sponsor and Administrator. The “Plan Sponsor” and the “Plan Administrator” of the
Plan is Ardea Biosciences, Inc., 4939 Directors Place, San Diego, CA 92121. The Plan Sponsor’s and
Plan Administrator’s telephone number is (858) 652-6500. The Plan Administrator is the named
fiduciary charged with the responsibility for administering the Plan.

Section 15. Statement Of ERISA Rights.

          
Participants in this Plan (which is a welfare benefit plan sponsored by Ardea Biosciences,
Inc.) are entitled to certain rights and protections under ERISA. If you are an Eligible Employee,
you are considered a participant in the Plan and, under ERISA, you are entitled to:

12.

 

          
(a) Examine, without charge, at the Plan Administrator’s office and at other specified
locations, such as work sites, all Plan documents and copies of all documents filed by the Plan
with the U.S. Department of Labor, such as detailed annual reports;

          
(b) Obtain copies of all Plan documents and Plan information upon written request to the Plan
Administrator. The Administrator may make a reasonable charge for the copies; and

          
(c) Receive a summary of the Plan’s annual financial report, in the case of a plan that is
required to file an annual financial report with the Department of Labor. (Generally, all pension
plans and welfare plans with one hundred (100) or more participants must file these annual
reports.)

          
In addition to creating rights for Plan participants, ERISA imposes duties upon the people
responsible for the operation of the employee benefit plan. The people who operate the Plan,
called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and
other Plan participants and beneficiaries.

          
No one, including your employer or any other person, may fire you or otherwise discriminate
against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under
ERISA. If your claim for a Plan benefit is denied in whole or in part, you must receive a written
explanation of the reason for the denial. You have the right to have the Plan review and
reconsider your claim.

          
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you
request materials from the Plan and do not receive them within thirty (30) days, you may file suit
in a federal court. In such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $110 a day until you receive the materials, unless the materials were
not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for
benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal
court. If it should happen that the Plan fiduciaries misuse the Plan’s money, or if you are
discriminated against for asserting your rights, you may seek assistance from the U.S. Department
of Labor, or you may file suit in a federal court. The court will decide who should pay court
costs and legal fees. If you are successful, the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these costs and fees, for
example, if it finds your claim is frivolous.

          
If you have any questions about the Plan, you should contact the Plan Administrator. If you
have any questions about this statement or about your rights under ERISA, or if you need assistance
in obtaining documents from the Plan Administrator, you should contact the nearest office of the
Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security
Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.
You may also obtain certain publications about your rights and responsibilities under ERISA by
calling the publications hotline of the Employee Benefits Security Administration or accessing its
website at http://www.dol.gov/ebsa/.

13.

 

Section 16. Execution.

          
To record the adoption of the Plan, as amended and restated effective as of November 7, 2008,
Ardea Biosciences, Inc. has caused its duly authorized officer to execute the same this 7th day of
November, 2008.

	 	 	 	 	 	 	 
	 	 	Ardea Biosciences, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barry D. Quart, Pharm.D.	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 

	 	 	 	 	 	 

14.

 

Exhibit A

RELEASE

(Individual Termination, Eligible Employee age 40 or older)

     I understand and agree completely to the terms set forth in the Ardea Biosciences, Inc.
Executive Severance Benefit Plan (the “Plan”). Certain capitalized terms used in this Release are
defined in the Plan.

     I hereby confirm my obligations under the Company’s proprietary information and inventions
agreement.

     I acknowledge that I have read and understand Section 1542 of the California Civil Code which
reads as follows: “A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of similar effect with
respect to my release of any claims I may have against the Company.

     In exchange for the benefits I am receiving under the Plan to which I am otherwise not
entitled, I hereby generally and completely release the Company and its directors, officers,
employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to my signing this Agreement. This general release includes,
but is not limited to: (1) all claims arising out of or in any way related to my employment with
the Company or the termination of that employment; (2) all claims related to my compensation or
benefits from the Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership
interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for
fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964
(as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination
in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended).

     I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have
under ADEA. I also acknowledge that the consideration given under the Plan for the waiver and
release in the preceding paragraph hereof is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this writing, as required by
the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise on
or after the date I execute this Release; (B) I should consult with an attorney prior to executing
this Release; (C) I have twenty-one (21) days to consider this Release (although I may choose to
voluntarily execute this Release earlier); (D) I have seven (7) days following my

1.

 

execution of this Release to revoke the Release; and (E) this Release shall not be effective
until the date upon which the revocation period has expired unexercised, which shall be the eighth
(8th) day after I execute this Release.

	 	 	 	 	 	 	 
	 	 	Employee	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

2.

 

Exhibit B

RELEASE

(Individual and Group Termination, Eligible Employee under age 40)

     I understand and agree completely to the terms set forth in the Ardea Biosciences, Inc.
Executive Severance Benefit Plan (the “Plan”). Certain capitalized terms used in this Release are
defined in the Plan.

     I hereby confirm my obligations under the Company’s proprietary information and inventions
agreement.

     I acknowledge that I have read and understand Section 1542 of the California Civil Code which
reads as follows: “A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of similar effect with
respect to my release of any claims I may have against the Company.

     In exchange for the benefits I am receiving under the Plan to which I am otherwise not
entitled, I hereby generally and completely release the Company and its directors, officers,
employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to my signing this Agreement. This general release includes,
but is not limited to: (1) all claims arising out of or in any way related to my employment with
the Company or the termination of that employment; (2) all claims related to my compensation or
benefits from the Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership
interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for
fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964
(as amended), the federal Americans with Disabilities Act of 1990, and the California Fair
Employment and Housing Act (as amended).

1.

 

     I understand that I have seven (7) days to consider this Release (although I may voluntarily
execute the Release earlier).

	 	 	 	 	 	 	 
	 	 	Employee	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	 	 	 
	 

	 	 	 	 	 	 

2.

 

Exhibit C

RELEASE

(Group Termination, Eligible Employee age 40 or older)

     I understand and agree completely to the terms set forth in the Ardea Biosciences, Inc.
Executive Severance Benefit Plan (the “Plan”). Certain capitalized terms used in this Release are
defined in the Plan.

     I hereby confirm my obligations under the Company’s proprietary information and inventions
agreement.

     I acknowledge that I have read and understand Section 1542 of the California Civil Code which
reads as follows: “A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of similar effect with
respect to my release of any claims I may have against the Company.

     In exchange for the benefits I am receiving under the Plan to which I am otherwise not
entitled, In exchange for the benefits I am receiving under the Plan to which I am otherwise not
entitled, I hereby generally and completely release the Company and its directors, officers,
employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to my signing this Agreement. This general release includes,
but is not limited to: (1) all claims arising out of or in any way related to my employment with
the Company or the termination of that employment; (2) all claims related to my compensation or
benefits from the Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership
interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for
fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964
(as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination
in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended).

     I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have
under ADEA. I also acknowledge that the consideration given under the Plan for the waiver and
release in the preceding paragraph hereof is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this writing, as required by
the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise on
or after the date I execute this Release; (B) I should consult with an attorney prior to executing
this Release; (C) I have forty-five (45) days to consider this Release (although I may

1.

 

choose to voluntarily execute this Release earlier); (D) I have seven (7) days following my
execution of this Release to revoke the Release; (E) this Release shall not be effective until the
date upon which the revocation period has expired unexercised, which shall be the eighth day (8th)
after I execute this Release; and (F) I have received with this Release a detailed list of the job
titles and ages of all employees who are eligible for severance benefits under the Plan in this
group termination and the ages of all employees of the Company in the same job classification or
organizational unit who are not eligible for severance benefits under the Plan.

	 	 	 	 	 	 	 
	 	 	Employee	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	 	 	 
	 

	 	 	 	 	 	 

2.exv10w6

Exhibit 10.6

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (the “Agreement”) is made and entered
into effective as of November 7, 2008 (the “Effective Date”), by and between Ardea Biosciences,
Inc., (the “Company”), and Dr. Barry Quart (the “Executive”). The Company and the
Executive are hereinafter collectively referred to as the “Parties”, and individually referred to
as a “Party”.

Recitals

     A. The Company and the Executive are parties to that certain Executive Employment Agreement
dated December 21, 2006 (the “Prior Agreement”).

     B. The Parties now desire to amend and restate the Prior Agreement and to continue the
Parties’ employment relationship on the terms and conditions set forth below.

Agreement

     In consideration of the foregoing Recitals and the mutual promises and covenants herein
contained, and for other good and valuable consideration, the Parties, intending to be legally
bound, agree as follows:

     1. Employment.

          1.1 Title. The Executive shall initially have the title of President and Chief Executive
Officer of the Company and shall serve in such other capacity or capacities as the Company may from
time to time prescribe. The Executive shall initially report to the Board of Directors of the
Company (the “Board”).

          1.2 Duties. The Executive shall do and perform all services, acts or things necessary or
advisable to manage and conduct the business of the Company and which are normally associated with
the position of President and Chief Executive Officer, consistent with the bylaws of the Company
and as required by the Board.

          1.3 Directorship. The Executive shall serve as a member of the Board, subject to election and
reelection by the Company’s stockholders in accordance with the Company’s Certificate of
Incorporation and Bylaws. The Executive shall devote such time to the business of the Company as
is necessary for the fulfillment of the Executive’s duties as a member of the Board. The Executive
shall not be paid a fee for serving as a member of the Board. The Company shall reimburse the
Executive for reasonable expenses incurred in connection with his service as a member of the Board.

          1.4 Policies and Practices. The employment relationship between the Parties shall be governed
by the policies and practices established by the Company and the Board. The Executive acknowledges
that he has read the Company’s Employee Handbook and other governing policies, which will govern
the terms and conditions of his employment with the Company, along with this Agreement. In the
event that the terms of this Agreement differ from or are in conflict with the Company’s policies
or practices or the Company’s Employee Handbook, this Agreement shall control.

          1.5 Location. Unless the Parties otherwise agree in writing, during the term of this
Agreement, the Executive shall perform the services the Executive is required to perform pursuant
to this Agreement at the Company’s offices, located in San Diego, California, or at any other place at
which the

1

 

Company maintains an office; provided, however, that the Company may from time to time
require the Executive to travel temporarily to other locations in connection with the Company’s
business.

     2. Loyal and Conscientious Performance; Noncompetition.

          2.1 Loyalty. During the Executive’s employment by the Company, the Executive shall devote the
Executive’s full business energies, interest, abilities and productive time to the proper and
efficient performance of the Executive’s duties under this Agreement. Notwithstanding the
foregoing, the Executive may continue to serve as a member of the Board of Directors of Trimeris, Inc. and Atherotope Incorporated
and the Executive may provide occasional scientific consulting, including but not limited to
Napo Pharmaceuticals, Inc., not to exceed twelve (12) hours per month to endeavors that are not
competitive with the Company.

          2.2 Covenant not to Compete. Except with the prior written consent of the Company’s Board of
Directors or the CEO, which shall not be unreasonably withheld, the Executive will not, during his
employment by the Company, engage in competition with the Company and/or any of its Affiliates,
either directly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate,
promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or member
of any association or otherwise, in any phase of the business of developing, manufacturing and
marketing of products or services which are in the same field of use or which otherwise compete
with the products or services or proposed products or services of the Company and/or any of its
Affiliates. For purposes of this Agreement, “Affiliate” means, with respect to any specific
entity, any other entity that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified entity.

          2.3 Agreement not to Participate in Company’s Competitors. During any period during which the
Executive is receiving any compensation or consideration from the Company, the Executive agrees not
to acquire, assume or participate in, directly or indirectly, any position, investment or interest
known by the Executive to be adverse or antagonistic to the Company, its business or prospects,
financial or otherwise or in any company, person or entity that is, directly or indirectly, in
competition with the business of the Company or any of its Affiliates. Ownership by the Executive,
as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock
of any corporation with one or more classes of its capital stock listed on a national securities
exchange or publicly traded on the Nasdaq Stock Market or in the over-the-counter market shall not
constitute a breach of this paragraph.

     3. Compensation of the Executive.

          3.1 Base Salary. The Company shall pay the Executive a base salary of Four Hundred Thousand
Dollars ($400,000) per year, less payroll deductions and all required withholdings payable in
regular periodic payments in accordance with Company policy. Such base salary shall be prorated
for any partial year of employment on the basis of a 365-day fiscal year.

          3.2 Performance Bonus. In addition to the Executive’s base salary, the Executive shall be
eligible for a performance bonus based upon the Executive’s and the Company’s achievement of
specified objectives established by the Board during the first quarter of each year after
consultation with the Executive, as evaluated by the Board in its discretion. The target bonus for
full achievement of all objectives shall be fifty percent (50%) of the Executive’s Base Salary.

          3.3 Changes to Compensation. The Executive’s compensation will be reviewed on a regular basis
by the Company and may be changed from time to time as deemed appropriate.

2.

 

          3.4 Employment Taxes. All of the Executive’s compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to be collected or
withheld by the Company.

     4. Termination.

          4.1 Termination By the Company. The Executive’s employment by the Company shall be at will.
The Executive’s employment with the Company may be terminated by the Company at any time and for
any reason or no reason, with or without “Cause” (as defined below), subject to the provisions of
this Section 4.

          4.2 Termination by Mutual Agreement of the Parties. The Executive’s employment pursuant to
this Agreement may be terminated at any time upon a mutual agreement in writing of the Parties.
Any such termination of employment shall have the consequences specified in such agreement.

          4.3 Termination by the Executive. The Executive’s employment by the Company shall be at will.
The Executive shall have the right to resign or terminate the Executive’s employment at any time
and for any reason, or no reason, with or without “Good Reason” (as defined below), subject to the
provisions of this Section 4.

          4.4 Compensation Upon Termination.

               4.4.1 With Cause or Without Good Reason. If the Executive’s employment shall be terminated by
the Company for Cause, or if the Executive terminates employment hereunder for other than Good
Reason, the Company shall pay the Executive’s base salary and accrued and unused vacation benefits
earned through the date of termination at the rate in effect at the time of termination, less
standard deductions and withholdings, and the Company shall thereafter have no further obligations
to the Executive under this Agreement.

               4.4.2 Without Cause or With Good Reason. If the Executive’s employment shall be terminated by
the Company without Cause, or by the Executive for Good Reason, the Executive shall receive the
payments specified in Section 4.4.1, and, in addition, within ten (10) days of the Executive’s
delivery to the Company of a fully effective Release and Waiver in the form attached hereto as
Exhibit A, within the applicable time period set forth therein, but in no event later than
forty-five (45) days following termination of the Executive’s employment, the Executive shall
receive the following: (i) a lump sum payment equal to the sum of the Executive’s annual base
salary then in effect and the Executive’s target performance bonus then in effect, less required
deductions and withholdings; (ii) accelerated vesting of shares subject to all stock awards, for
the number of shares which would have vested accordingly had the Executive continued employment
with the Company for a period of twelve (12) months after termination; and (iii) provided that the
Executive timely elects continued coverage under the Consolidated Comprehensive Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), the COBRA benefit specified in Section 4(c) of the Company’s
Senior Executive Severance Benefit Plan as it may be amended from time to time.

               4.4.3 Change in Control. The provisions of Article Two, Section IVB(i) and (ii) of the
Company’s 2004 Stock Equity Incentive Plan (the “Plan”) providing for acceleration of outstanding
option rights in the event of a “Change in Control” (as defined in the Appendix, Section C, of the
Plan) and an “Involuntary Termination” thereafter (as defined in the Plan) are hereby incorporated
into this Agreement and shall apply in full.

3.

 

               If the Executive’s employment shall be terminated by the Company without Cause, or by the
Executive for Good Reason within three (3) months before or within twelve (12) months following a
Change in Control, the Executive shall receive the payments specified in Section 4.4.1, and, in
addition, within ten (10) days of the Executive’s delivery to the Company of a fully effective
Release and Waiver in the form attached hereto as Exhibit A, within the applicable time period set
forth therein, but in no event later than forty-five (45) days following termination of the
Executive’s employment, the Executive shall receive the following: (i) a lump sum payment equal to
one-hundred-fifty percent (150%) of the Executive’s annual base salary then in effect, less
required deductions and withholdings; (ii) the greater of the Executive’s target performance bonus
then in effect, less required deductions and withholdings, or the Executive’s target performance
bonus paid in accordance with the year preceding the year in which termination occurs, less
required deductions and withholdings; and (iii) provided that the Executive timely elects continued
coverage under COBRA, the COBRA benefit specified in Section 4(c) of the Company’s Senior Executive
Severance Benefit Plan as it may be amended from time to time, for a period of eighteen (18) months
or, if shorter, for the duration of the COBRA continuation period.

               4.4.4 Parachute Payment. If any payment or benefit Executive would receive pursuant to a
Change of Control or otherwise (“Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the
Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that
would result in no portion of the Payment being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payment, whichever amount, after taking into account
all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all
computed at the highest applicable marginal rate), results in the Executive’s receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall
occur in the following order: reduction of cash payments; cancellation of accelerated vesting of
stock awards; reduction of employee benefits. In the event that acceleration of vesting of stock
award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of Executive’s stock awards.

               The accounting firm engaged by the Company for general audit purposes as of the day prior to
the effective date of the Change of Control shall perform the foregoing calculations. If the
accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, then the Company shall appoint a nationally
recognized accounting firm to make the determinations required hereunder. The Company shall bear
all expenses with respect to the determinations by such accounting firm required to be made
hereunder.

               The accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Executive and the Company
within fifteen (15) calendar days after the date on which the Executive’s right to a Payment is
triggered (if requested at that time by the Executive or the Company) or such other time as
requested by the Executive or the Company. If the accounting firm determines that no Excise Tax is
payable with respect to a Payment, either before or after the application of the Reduced Amount, it
shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive
that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of
the accounting firm made hereunder shall be final, binding and conclusive upon the Executive and
the Company.

4.

 

               4.4.5 Application of Section 409A. Notwithstanding anything to the contrary set forth herein,
any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute
“deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar
effect (collectively “Section 409A”) shall not commence in connection with Executive’s termination
of employment unless and until Executive has also incurred a “separation from service” (as such
term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the
Company reasonably determines that such amounts may be provided to Executive without causing
Executive to incur the additional 20% tax under Section 409A.

               It is intended that each installment of the Severance Benefits payments provided for in this
Agreement is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).
For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in
this Agreement satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9). However, if the Company (or, if applicable, the successor entity thereto)
determines that the Severance Benefits constitute “deferred compensation” under Section 409A and
Executive is, on the termination of Executive’s service, a “specified employee” of the Company or
any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code,
then, solely to the extent necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed
until the earlier to occur of: (i) the date that is six months and one day after Executive’s
Separation From Service or (ii) the date of Executive’s death (such applicable date, the “Specified
Employee Initial Payment Date”), and the Company (or the successor entity thereto, as applicable)
shall (A) pay to Executive a lump sum amount equal to the sum of the Severance Benefit payments
that Executive would otherwise have received through the Specified Employee Initial Payment Date if
the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this
Section and (B) commence paying the balance of the Severance Benefits in accordance with the
applicable payment schedules set forth in this Agreement.

               Except to the extent that payments may be delayed until the Specified Employee Initial Payment
Date pursuant to the preceding paragraph, on the first regular payroll pay day following the
effective date of the Release, the Company will pay Executive the Severance Benefits Executive
would otherwise have received under the Agreement on or prior to such date but for the delay in
payment related to the effectiveness of the Release, with the balance of the Severance Benefits
being paid as originally scheduled. All amounts payable under the Agreement will be subject to
standard payroll taxes and deductions.

          4.5 Definitions.

               4.5.1 Cause. For purposes of this Agreement, “Cause” means that, in the reasonable
determination of the Company, the Executive has:

                    (i) been indicted for or convicted of or pleaded guilty or no contest to any felony or crime
involving dishonesty that is likely to inflict or has inflicted demonstrable and material injury on
the business of the Company;

                    (ii) participated in any fraud against the Company;

                    (iii) willfully and materially breached a Company policy;

                    (iv) intentionally damaged any property of the Company thereby causing demonstrable and
material injury to the business of the Company;

5.

 

                    (v) willfully and materially breached the Executive’s Proprietary Information and Inventions
Agreement with the Company; or

                    (vi) engaged in conduct that, in the reasonable determination of the Company, demonstrates
gross unfitness to serve.

               Notwithstanding the foregoing, Cause shall not exist based on conduct described in clause
(iii) or (vi) above unless the conduct described in such clause has not been cured within fifteen
(15) days following the Executive’s receipt of written notice from the Company specifying the
particulars of the conduct constituting Cause.

               4.5.2 Good Reason. “Good Reason” for the Executive to terminate the Executive’s employment
hereunder shall mean the occurrence of any of the following events without the Executive’s consent;
provided however, that any resignation by the Executive due to any of the following conditions
shall only be deemed for Good Reason if: (i) the Executive gives the Company written notice of the
intent to terminate for Good Reason within ninety (90) days following the first occurrence of the
condition(s) that the Executive believes constitutes Good Reason, which notice shall describe such
condition(s); (ii) the Company fails to remedy, if remediable, such condition(s) within thirty (30)
days following receipt of the written notice (the “Cure
Period”) of such condition(s) from the
Executive; and (iii) Executive actually resigns his employment within the first fifteen (15) days
after expiration of the Cure Period.

                    (i) a material reduction by the Company of the Executive’s Base Salary as initially set forth
herein or as the same may be increased from time to time;

                    (ii) the relocation of the Company’s executive offices or principal business location to a
point more than fifty (50) miles from the location at which the Executive performs his or her
duties; or

                    (iii) a material breach of this Agreement by the Company.

     5. Confidential And Proprietary Information; Nonsolicitation.

          5.1 As a condition of employment the Executive agrees to execute and abide by the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B.

          5.2 While employed by the Company and for one (1) year thereafter, the Executive agrees that
in order to protect the Company’s Confidential and Proprietary Information from unauthorized use,
that the Executive will not, either directly or through others, solicit or attempt to solicit any
employee, consultant or independent contractor of the Company to terminate his or her relationship
with the Company in order to become an employee, consultant or independent contractor to or for any
other person or business entity; or the business of any customer, supplier, service provider,
vendor or distributor of the Company which, at the time of termination or one (1) year immediately
prior thereto, was doing business with the Company or listed on Company’s customer, supplier,
service provider, vendor or distributor list.

6.

 

     6. Assignment and Binding Effect.

          This Agreement shall be binding upon and inure to the benefit of the Executive and the
Executive’s heirs, executors, personal representatives, assigns, administrators and legal
representatives. Because of the unique and personal nature of the Executive’s duties under this
Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be
assignable by the Executive. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors, assigns and legal representatives.

     7. Choice of Law.

          This Agreement is made in California. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of California.

     8. Integration.

          This Agreement, including Exhibits A and B, contains the complete, final and exclusive
agreement of the Parties relating to the terms and conditions of the Executive’s employment and the
termination of Executive’s employment, and supersedes all prior and contemporaneous oral and
written employment agreements or arrangements between the Parties, including the Senior Executive
Severance Benefit Plan and all applicable provisions therein, including those relating to the Chief
Executive Officer. To the extent this Agreement conflicts with the Proprietary Information and
Inventions Agreement attached as Exhibit B hereto, the Proprietary Information and Inventions
Agreement controls. To the extent this Agreement conflicts with the terms of the Employee
Handbook, this Agreement controls.

     9. Amendment.

          This Agreement cannot be amended or modified except by a written agreement signed by the
Executive and the Company.

     10. Waiver.

          No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived,
except with the written consent of the Party against whom the wavier is claimed, and any waiver or
any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.

     11. Severability.

          The finding by a court of competent jurisdiction of the unenforceability, invalidity or
illegality of any provision of this Agreement shall not render any other provision of this
Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or
replace the invalid or unenforceable term or provision with a valid and enforceable term or
provision which most accurately represents the Parties’ intention with respect to the invalid or
unenforceable term or provision.

     12. Interpretation; Construction.

          The headings set forth in this Agreement are for convenience of reference only and shall not
be used in interpreting this Agreement. This Agreement has been drafted by legal counsel
representing the Company, but the Executive has been encouraged to consult with, and has consulted
with, the Executive’s own

7.

 

independent counsel and tax advisors with respect to the terms of this Agreement. The Parties
acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to
review and revise, this Agreement, and the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.

     13. Representations and Warranties.

          The Executive represents and warrants that the Executive is not restricted or prohibited,
contractually or otherwise, from entering into and performing each of the terms and covenants
contained in this Agreement, and that the Executive’s execution and performance of this Agreement
will not violate or breach any other agreements between the Executive and any other person or
entity.

     14. Counterparts.

          This Agreement may be executed in two counterparts, each of which shall be deemed an original,
all of which together shall contribute one and the same instrument.

     15. Arbitration.

          To ensure the rapid and economical resolution of disputes that may arise in connection with
the Executive’s employment with the Company, the Executive and the Company agree that any and all
disputes, claims, or causes of action, in law or equity, arising from or relating to the
Executive’s employment, or the termination of that employment, will be resolved pursuant to the
Federal Arbitration Act and to the fullest extent permitted by law, by final, binding and
confidential arbitration in San Diego, California conducted by the Judicial Arbitration and
Mediation Services (“JAMS”), or its successors, under the then current rules of JAMS for employment
disputes; provided that the arbitrator shall: (a) have the authority to compel adequate discovery
for the resolution of the dispute and to award such relief as would otherwise be permitted by law;
and (b) issue a written arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. Both the Executive and the Company shall be entitled to
all rights and remedies that either the Executive or the Company would be entitled to pursue in a
court of law. The Company shall pay all fees in excess of those which would be required if the
dispute was decided in a court of law, including the arbitrator’s fee. Nothing in this Agreement
is intended to prevent either the Executive or the Company from obtaining injunctive relief in
court to prevent irreparable harm pending the conclusion of any such arbitration.

     16. Trade Secrets Of Others.

          It is the understanding of both the Company and the Executive that the Executive shall not
divulge to the Company and/or its subsidiaries any confidential information or trade secrets
belonging to others, including the Executive’s former employers, nor shall the Company and/or its
Affiliates seek to elicit from the Executive any such information. Consistent with the foregoing,
the Executive shall not provide to the Company and/or its Affiliates, and the Company and/or its
Affiliates shall not request, any documents or copies of documents containing such information.

     17. Advertising Waiver.

          The Executive agrees to permit the Company and/or its Affiliates, and persons or other
organizations authorized by the Company and/or its Affiliates, to use, publish and distribute
advertising or sales promotional literature concerning the products and/or services of the Company
and/or its Affiliates, or the machinery and equipment used in the provision thereof, in which the
Executive’s name and/or pictures of the Executive taken in the course of the Executive’s provision of services to the Company and/or
its Affiliates,

8.

 

appear. The Executive hereby waives and releases any claim or right the Executive
may otherwise have arising out of such use, publication or distribution.

[Signature Page Follows]

9.

 

     In Witness Whereof, the Parties have executed this Agreement as of the date first
above written.

	 	 	 	 	 
	Ardea Biosciences, Inc.	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	/s/ John Poyhonen	 	 
	 	 	 
	Member	 	 
	Board of Directors	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Dated:

	 	November 7, 2008	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Executive:	 	 
	 
	 	 	 	 
	/s/ Barry Quart	 	 
	 	 	 
	Barry Quart	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Dated:

	 	November 7, 2008	 	 
	 

	 	 	 	 

[Signature Page to Quart Employment Agreement]

 

 

EXHIBIT A

RELEASE
AND WAIVER OF CLAIMS

TO BE
SIGNED AT TIME OF TERMINATION WITHOUT CAUSE OR

RESIGNATION FOR GOOD REASON

     In
consideration of the payments and other benefits set forth in
Section 4.4 of the Amended
and Restated Executive Employment Agreement dated November 7, 2008, to which this form is attached,
I, Dr. Barry Quart
hereby furnish Ardea Biosciences, Inc. (the “Company”), with
the following release and waiver (“Release and Waiver”).

     In exchange for the consideration provided to me by the Employment Agreement that I am not
otherwise entitled to receive, I hereby generally and completely release the Company and its
directors, officers, employees, stockholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, Affiliates, and assigns from any and all
claims, liabilities and obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing this Release and
Waiver. This general release includes, but is not limited to: (1) all claims arising out of or in
any way related to my employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits,
stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including, but not limited to, claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964
(as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination
in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended).

     I also acknowledge that I have read and understand Section 1542 of the California Civil Code
which reads as follows: “A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release, which if known by him
must have materially affected his settlement with the debtor.” I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any jurisdiction of similar
effect with respect to any claims I may have against the Company.

     I acknowledge that, among other rights, I am waiving and releasing any rights I may have under
ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for
this Release and Waiver is in addition to anything of value to which I was already entitled as an
executive of the Company. If I am 40 years of age or older upon execution of this Release and
Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit
Protection Act, that: (a) the release and waiver granted herein does not relate to claims under
the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an
attorney prior to executing this Release and Waiver; (c) I have twenty-one (21) days in which to
consider this Release and Waiver (although I may choose voluntarily to execute this Release and
Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to
revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be
effective until the eighth day after I execute this Release and Waiver and the revocation period
has expired (the “Effective Date”).

2.

 

     I acknowledge my continuing obligations under my Proprietary Information and Inventions
Agreement (“PIIA”), a copy of which is attached as Exhibit B to the Employment Agreement. I
understand that among other things, I must not use or disclose any confidential or proprietary
information of the Company and I must immediately return all Company property and documents
(including all embodiments of proprietary information) and all copies thereof in my possession or
control. I understand and agree that my right to the severance pay I am receiving in exchange for
my agreement to the terms of this Release and Waiver is contingent upon my continued compliance
with section 5 of the Employment Agreement and with the PIIA.

     This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire
agreement between the Company and me with regard to the subject matter hereof. I am not relying on
any promise or representation by the Company that is not expressly stated herein. This Release and
Waiver may only be modified by a writing signed by both me and a duly authorized officer of the
Company.

	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Barry Quart

3.

 

EXHIBIT B

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

     In consideration of my employment or continued employment by Ardea Biosciences, Inc.
(“Company”), and the compensation paid to me now and during my employment with the Company, I agree
to the terms of this Agreement as follows:

1. Confidential Information Protections.

     1.1 Nondisclosure; Recognition of Company’s Rights. At all times during and after my
employment, I will hold in confidence and will not disclose, use, lecture upon, or publish any of
Company’s Confidential Information (defined below), except as may be required in connection with my
work for Company, or as expressly authorized by the Chief Executive Officer (the “CEO”) of Company.
I will obtain the CEO’s written approval before publishing or submitting for publication any
material (written, oral, or otherwise) that relates to my work at Company and/or incorporates any
Confidential Information. I hereby assign to Company any rights I may have or acquire in any and
all Confidential Information and recognize that all Confidential Information shall be the sole and
exclusive property of Company and its assigns.

     1.2 Confidential Information. The term “Confidential Information” shall mean any and all
confidential knowledge, data or information related to Company’s business or its actual or
demonstrably anticipated research or development, including without limitation (a) trade secrets,
inventions, ideas, processes, computer source and object code, data, formulae, programs, other
works of authorship, know-how, improvements, discoveries, developments, designs, and techniques;
(b) information regarding products, services, plans for research and development, marketing and
business plans, budgets, financial statements, contracts, prices, suppliers, and customers; (c)
information regarding the skills and compensation of Company’s employees, contractors, and any
other service providers of Company; and (d) the existence of any business discussions,
negotiations, or agreements between Company and any third party.

     1.3 Third Party Information. I understand that Company has received and in the future will
receive from third parties confidential or proprietary information
(“Third Party Information”)
subject to a duty on Company’s part to maintain the confidentiality of such information and to use
it only for certain limited purposes. During and after the term of my employment, I will hold
Third Party Information in strict confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for Company) or use,
Third Party Information, except in connection with my work for Company or unless expressly
authorized by an officer of Company in writing.

     1.4 No Improper Use of Information of Prior Employers and Others. I represent that my
employment by Company does not and will not breach any agreement with any former employer,
including any noncompete agreement or any agreement to keep in confidence or refrain from using
information acquired by me prior to my employment by Company. I further represent that I have not
entered into, and will not enter into, any agreement, either written or oral, in conflict with my
obligations under this Agreement. During my employment by Company, I will not improperly make use
of, or disclose, any information or trade secrets of any former employer or other third party, nor
will I bring onto the premises of Company or use any unpublished documents or any property
belonging to any former employer or other third party, in violation of any lawful agreements with
that former employer or third party. I will use in the performance of my duties only information
that is generally known and used by persons with training and experience comparable to my own, is
common knowledge in the industry or otherwise legally in the public domain, or is otherwise
provided or developed by Company.

2. Inventions.

     2.1 Inventions and Intellectual Property Rights. As used in this Agreement, the term
“Invention” means any ideas, concepts, information, materials, processes, data, programs, know-how,
improvements, discoveries, developments, designs, artwork, formulae, other copyrightable works, and
techniques and all Intellectual Property Rights in any of the items listed above. The term
“Intellectual Property Rights” means all trade secrets, copyrights, trademarks, mask work rights,
patents and other intellectual property rights recognized by the laws of any jurisdiction or
country.

     2.2 Prior Inventions. I have disclosed on Exhibit A a complete list of all Inventions that
(a) I have, or I have caused to be, alone or jointly with others, conceived, developed, or reduced
to practice prior to the commencement of my employment by Company; (b) in which I have an ownership
interest or which I have a license to use; (c) and that I wish to have excluded from the scope of
this Agreement (collectively referred to as “Prior Inventions”). If no Prior Inventions are listed
in Exhibit A, I warrant that there are no Prior Inventions. I agree that I will not incorporate,
or permit to be incorporated, Prior Inventions in any Company Inventions (defined below) without
Company’s prior written

4.

 

consent. If, in the course of my employment with Company, I incorporate a
Prior Invention into a Company process, machine or other work, I hereby grant Company a non-exclusive,
perpetual, fully-paid and royalty-free, irrevocable and worldwide license, with rights to
sublicense through multiple levels of sublicensees, to reproduce, make derivative works of,
distribute, publicly perform, and publicly display in any form or medium, whether now known or
later developed, make, have made, use, sell, import, offer for sale, and exercise any and all
present or future rights in, such Prior Invention.

     2.3 Assignment of Company Inventions. Inventions assigned to the Company or to a third party
as directed by the Company pursuant to the section titled “Government or Third Party” are referred
to in this Agreement as “Company Inventions.” Subject to the section titled “Government or Third
Party” and except for Inventions that I can prove qualify fully under the provisions of California
Labor Code section 2870 and I have set forth in Exhibit A, I hereby assign and agree to assign in
the future (when any such Inventions or Intellectual Property Rights are first reduced to practice
or first fixed in a tangible medium, as applicable) to Company all my right, title, and interest in
and to any and all Inventions (and all Intellectual Property Rights with respect thereto) made,
conceived, reduced to practice, or learned by me, either alone or with others, during the period of
my employment by Company.

     2.4 Obligation to Keep Company Informed. During the period of my employment and for one (1)
year after my employment ends, I will promptly and fully disclose to Company in writing (a) all
Inventions authored, conceived, or reduced to practice by me, either alone or with others,
including any that might be covered under California Labor Code section 2870, and (b) all patent
applications filed by me or in which I am named as an inventor or co-inventor.

     2.5 Government or Third Party. I agree that, as directed by the Company, I will assign to a
third party, including without limitation the United States, all my right, title, and interest in
and to any particular Company Invention.

     2.6 Enforcement of Intellectual Property Rights and Assistance. During and after the period
of my employment, I will assist Company in every proper way to obtain and enforce United States and
foreign Intellectual Property Rights relating to Company Inventions in all countries. If the
Company is unable to secure my signature on any document needed in connection with such purposes, I
hereby irrevocably designate and appoint Company and its duly authorized officers and agents as my
agent and attorney in fact, which appointment is coupled with an interest, to act on my behalf to
execute and file any such documents and to do all other lawfully permitted acts to further such
purposes with the same legal force and effect as if executed by me.

     2.7 Incorporation of Software Code. I agree that I will not incorporate into any Company
software or otherwise deliver to Company any software code licensed under the GNU General Public
License or Lesser General Public License or any other license that, by its terms, requires or
conditions the use or distribution of such code on the disclosure, licensing, or distribution of
any source code owned or licensed by Company.

3. Records. I agree to keep and maintain adequate and current records (in the form of
notes, sketches, drawings and in any other form that is required by the Company) of all Inventions
made by me during the period of my employment by the Company, which records shall be available to,
and remain the sole property of, the Company at all times.

4. Additional Activities. I agree that (a) during the term of my employment by Company, I
will not, without Company’s express written consent, engage in any employment or business activity
that is competitive with, or would otherwise conflict with my employment by, Company, and (b) for
the period of my employment by Company and for one (l) year thereafter, I will not, either directly
or indirectly, solicit or attempt to solicit any employee, independent contractor, or consultant of
Company to terminate his, her or its relationship with Company in order to become an employee,
consultant, or independent contractor to or for any other person or entity.

5. Return Of Company Property.  Upon termination of my employment or upon Company’s
request at any other time, I will deliver to Company all of Company’s property, equipment, and
documents, together with all copies thereof, and any other material containing or disclosing any
Inventions, Third Party Information or Confidential Information and certify in writing that I have
fully complied with the foregoing obligation. I agree that I will not copy, delete, or alter any
information contained upon my Company computer or Company equipment before I return it to Company.
In addition, if I have used any personal computer, server, or e-mail system to receive, store,
review, prepare or transmit any Company information, including but not limited to, Confidential
Information, I agree to provide the Company with a computer-useable copy of all such Confidential
Information and then permanently delete and expunge such Confidential Information from those
systems; and I agree to provide the Company access to my system as reasonably requested to verify
that the necessary copying and/or deletion is completed. I further agree that any property
situated on Company’s premises and owned by Company is subject to inspection by Company’s personnel
at any time with or without notice. Prior to the termination of my employment or promptly after
termination of my employment, I will cooperate with Company in attending an exit interview and
certify in writing that I have complied with the requirements of this section.

6. Notification Of New Employer. If I leave the employ of Company, I consent to the
notification of my new employer of my rights and obligations under this Agreement, by Company
providing a copy of this Agreement or otherwise.

5

 

7. General Provisions.

     7.1 Governing Law and Venue. This Agreement and any action related thereto will be governed
and interpreted by and under the laws of the State of California, without giving effect to any
conflicts of laws principles that require the application of the law of a different state. I
expressly consent to personal jurisdiction and venue in the state and federal courts for the county
in which Company’s principal place of business is located for any lawsuit filed there against me by
Company arising from or related to this Agreement.

     7.2 Severability. If any provision of this Agreement is, for any reason, held to be invalid
or unenforceable, the other provisions of this Agreement will remain enforceable and the invalid or
unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum
extent permitted by law.

     7.3 Survival. This Agreement shall survive the termination of my employment and the
assignment of this Agreement by Company to any successor or other assignee and be binding upon my
heirs and legal representatives.

     7.4 Employment. I agree and understand that nothing in this Agreement shall give me any right
to continued employment by Company, and it will not interfere in any way with my right or Company’s
right to terminate my employment at any time, with or without cause and with or without advance
notice.

     7.5 Notices. Each party must deliver all notices or other communications required or
permitted under this Agreement in writing to the other party at the address listed on the signature
page, by courier, by certified or registered mail (postage prepaid and return receipt requested),
or by a nationally-recognized express mail service. Notice will be effective upon receipt or
refusal of delivery. If delivered by certified or registered mail, notice will be considered to
have been given five (5) business days after it was mailed, as evidenced by the postmark. If
delivered by courier or express mail service, notice will be considered to have been given on the
delivery date reflected by the courier or express mail service receipt. Each party may change its
address for receipt of notice by giving notice of the change to the other party.

     7.6 Injunctive Relief. I acknowledge that, because my services are personal and unique and
because I will have access to the Confidential Information of Company, any breach of this Agreement
by me would cause irreparable injury to Company for which monetary damages would not be an adequate
remedy and, therefore, will entitle Company to injunctive relief (including specific performance).
The rights and remedies provided to each party in this Agreement are cumulative and in addition to
any other rights and remedies available to such party at law or in equity.

     7.7 Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion
will not be deemed a waiver of that provision or any other provision on any other occasion.

     7.8 Export. I agree not to export, directly or indirectly, any U.S. technical data acquired
from Company or any products utilizing such data, to countries outside the United States, because
such export could be in violation of the United States export laws or regulations.

     7.9 Entire Agreement. If no other agreement governs nondisclosure and assignment of
inventions during any period in which I was previously employed or am in the future employed by
Company as an independent contractor, the obligations pursuant to sections of this Agreement titled
“Confidential Information Protections” and “Inventions” shall apply. This Agreement is the final,
complete and exclusive agreement of the parties with respect to the subject matter hereof and
supersedes and merges all prior communications between us with respect to such matters. No
modification of or amendment to this Agreement, or any waiver of any rights under this Agreement,
will be effective unless in writing and signed by me and the CEO of Company. Any subsequent change
or changes in my duties, salary or compensation will not affect the validity or scope of this
Agreement.

6

 

              This Agreement shall be effective as of the first day of my employment with Company.

	 	 	 	 	 	 	 
	 

	 	     BARRY QUART:
	 	 	 	ARDEA BIOSCIENCES, INC.:
	 
	 	 	 	 	 	 
	 

	 	     I have read, understand, and
Accept this agreement and have
been given the opportunity to
Review it with independent legal
counsel.
	 	 	 	Accepted and agreed:
	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	(Signature)
	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	By:
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	 	 	Date:
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	Address:
	 
	 	 	 	 	 	 
	 	 	 

[Signature Page to Quart Proprietary Information and Inventions Agreement]

 

 

EXHIBIT A

INVENTIONS

     1. Prior Inventions Disclosure. The following is a complete list of all Prior Inventions (as
provided in Section 2.2 of the attached Employee Confidential Information and Inventions Assignment
Agreement, defined herein as the “Agreement”):

     o None

     o See immediately below:

 

 

     2. Limited Exclusion Notification.

     This is to notify you in accordance with Section 2872 of the California Labor Code
that the foregoing Agreement between you and Company does not require you to assign or offer to
assign to Company any Invention that you develop entirely on your own time without using Company’s
equipment, supplies, facilities or trade secret information, except for those Inventions that
either:

     a. Relate at the time of conception or reduction to practice to Company’s business, or actual
or demonstrably anticipated research or development; or

     b. Result from any work performed by you for Company.

     To the extent a provision in the foregoing Agreement purports to require you to assign an
Invention otherwise excluded from the preceding paragraph, the provision is against the public
policy of this state and is unenforceable.

     This limited exclusion does not apply to any patent or Invention covered by a contract between
Company and the United States or any of its agencies requiring full title to such patent or
Invention to be in the United States.

[Exhibit
A to Quart Proprietary Information and Inventions Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]