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Exhibit 10.3    
    

METABASIS THERAPEUTICS, INC.
  

 2004 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
  

 Adopted by Board on May 6, 2004

Approved by Stockholders on May 10, 2004  

1.     PURPOSES.  

        (a)    Eligible Option Recipients.    The persons eligible to receive Options are the Non-Employee
Directors of the Company. 

        (b)    Available Options.    The purpose of the Plan is to provide a means by which Non-Employee Directors
may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Nonstatutory Stock Options. 

        (c)    General Purpose.    The Company, by means of the Plan, seeks to retain the services of its
Non-Employee Directors, to secure and retain the services of new Non-Employee Directors and to provide incentives for such persons to exert maximum efforts for the success of
the Company and its Affiliates. 

2.     DEFINITIONS.  

        (a)   "Accountant" means the independent public accountants of the Company. 

        (b)   "Affiliate" means any parent corporation or subsidiary corporation of the Company, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. 

        (c)   "Annual Grant" means an Option granted annually to all Non-Employee Directors who
meet the specified criteria pursuant to Section 6(b). 

        (d)   "Annual Meeting" means the annual meeting of the stockholders of the Company. 

        (e)   "Board" means the Board of Directors of the Company. 

        (f)    "Capitalization Adjustment" has the meaning ascribed to that term in Section 11(a). 

        (g)   "Change in Control" means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events: 

        (i)    any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than
50% of the combined voting power of the Company's then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the Company in a transaction or
series of related transactions the primary purpose of which is to obtain financing for the company through the issuance of equity securities or (B) solely because the level of Ownership held by
any Exchange Act Person (the "Subject Person") exceeds the designated percentage threshold of the outstanding voting securities as a result of a
repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the
repurchase or other acquisition had not occurred, increases the 

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percentage
of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur; 

        (ii)   there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or
(B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction in each case in substantially the same
proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; 

        (iii) there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity,
more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or other disposition; or 

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

        Notwithstanding
the foregoing or any other provision of this Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or
any Affiliate and the Optionholder shall supersede the foregoing definition with respect to Stock Awards subject to such agreement (it being understood, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply). 

        (h)   "Code" means the Internal Revenue Code of 1986, as amended. 

        (i)    "Committee" means a committee of one or more members of the Board appointed by the Board in
accordance with Section 3(c). 

        (j)    "Common Stock" means the common stock of the Company. 

        (k)   "Company" means Metabasis Therapeutics, Inc., a Delaware corporation. 

        (l)    "Consultant" means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or (ii) serving as a member of the Board of Directors of an Affiliate. However, the term
"Consultant" shall not include either Directors of the Company who are not compensated by the Company for their services as Directors or Directors of the Company who are merely paid a director's fee
by the Company for their services as Directors. 

        (m)  "Continuous Service" means that the Optionholder's service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. The Optionholder's Continuous Service shall not be deemed to have terminated merely because of a change in the
capacity in which the Optionholder renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Optionholder renders such service,
provided that 

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there
is no interruption or termination of the Optionholder's Continuous Service. For example, a change in status from a Non-Employee Director of the Company to a Consultant of an
Affiliate or an Employee of the Company will not constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party's sole discretion, may
determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. 

        (n)   "Corporate Transaction" means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events: 

        (i)    a sale or other disposition of all or substantially all, as determined by the Board in its discretion, of the
consolidated assets of the Company and its Subsidiaries; 

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

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

        (iv)  a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares
of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other
property, whether in the form of securities, cash or otherwise. 

        (o)   "Director" means a member of the Board of Directors of the Company. 

        (p)   "Disability" means the inability of a person, in the opinion of a qualified physician acceptable
to the Company, to perform the major duties of that person's position with the Company or an Affiliate of the Company because of the sickness or injury of the person. 

        (q)   "Employee" means any person employed by the Company or an Affiliate. Service as a Director or
payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate. 

        (r)   "Entity" means a corporation, partnership or other entity. 

        (s)   "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (t)    "Exchange Act Person" means any natural person, Entity or "group" (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" shall not include (A) the Company or any Subsidiary of the Company, (B) any employee benefit plan of
the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (C) an
underwriter temporarily holding securities pursuant to an offering of such securities, or (D) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their Ownership of stock of the Company. 

        (u)   "Fair Market Value" means, as of any date, the value of the Common Stock determined as follows: 

        (i)    If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable. 

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        (ii)   In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the
Board. 

        (v)   "Initial Grant" means an Option granted to a Non-Employee Director who meets the
specified criteria pursuant to Section 6(a). 

        (w)  "IPO Date" means the effective date of the initial public offering of the Common Stock. 

        (x)   "Non-Employee Director" means a Director who is not an Employee. 

        (y)   "Nonstatutory Stock Option" means an Option not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

        (z)   "Officer" means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder. 

        (aa) "Option" means a Nonstatutory Stock Option granted pursuant to the Plan. 

        (bb) "Option Agreement" means a written agreement between the Company and an Optionholder evidencing the terms and
conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 

        (cc) "Optionholder" means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Option. 

        (dd) "Own," "Owned," "Owner," "Ownership" A person or Entity shall be deemed to "Own," to have "Owned," to be the
"Owner" of, or to have acquired "Ownership" of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares
voting power, which includes the power to vote or to direct the voting, with respect to such securities. 

        (ee) "Plan" means this Metabasis Therapeutics, Inc. 2004 Non-Employee Directors' Stock Option
Plan. 

        (ff) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time. 

        (gg) "Securities Act" means the Securities Act of 1933, as amended. 

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

3.     ADMINISTRATION.  

        (a)   Administration by Board. The Plan shall be administered by the Board unless and until the Board delegates administration
of the Plan to a Committee, as provided in Section 3(c). 

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

        (i)    To determine the provisions of each Option to the extent not specified in the Plan. 

        (ii)   To construe and interpret the Plan and Options granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, 

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may
correct any defect, omission or inconsistency in the Plan or in any Option Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 

        (iii) To amend the Plan or an Option as provided in Section 12. 

        (iv)  To terminate or suspend the Plan as provided in Section 13. 

        (v)   Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company and that are not in conflict with the provisions of the Plan. 

        (c)   Delegation to Committee. The Board may delegate administration of the Plan to a Committee or Committees of one or more
members of the Board, and the term "Committee" shall apply to any person or persons to whom such
authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan. 

        (d)   Effect of Board's Decision. All determinations, interpretations and constructions made by the Board in good faith shall
not be subject to review by any person and shall be final, binding and conclusive on all persons. 

4.     SHARES SUBJECT TO THE PLAN.  

        (a)   Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon changes in the Common Stock,
the Common Stock that may be issued pursuant to Options shall not exceed in the aggregate 300,000 shares of Common Stock, plus an annual increase to be added on the first day of the fiscal year of the
Company for a period commencing on the first day of the fiscal year that begins on January 1, 2005 and ending on (and including) the first day of the fiscal year that begins on
January 1, 2014 (each such day, a "Calculation Date"), equal to 100,000 shares of Common Stock. Notwithstanding the foregoing, the Board may act, prior to the first day of any fiscal year of
the Company, to increase the share reserve by such number of shares of Common Stock as the Board shall determine, which number shall be less than 100,000. 

        (b)   Reversion of Shares to the Share Reserve. If any Option shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, the shares of Common Stock not acquired under such Option shall revert to and again become available for issuance under the Plan. If the exercise price
of any Option is satisfied by tendering shares of Common Stock held by the Optionholder (either by actual delivery or attestation), then the number of such tendered shares shall revert to and again
become available for issuance under the Plan. 

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

5.     ELIGIBILITY.  

        The Options, as set forth in Section 6, automatically shall be granted under the Plan to all Non-Employee Directors who meet the criteria
specified in Section 6. 

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6.     NON-DISCRETIONARY GRANTS.  

        (a)    Initial Grants.    Without any further action of the Board, each person who is serving as a
Non-Employee Director on the IPO Date automatically shall, on the IPO Date, be granted, on the terms and conditions set forth herein, an Initial Grant to purchase 20,000 shares of Common
Stock, less the number of shares of Common Stock (if any) subject to a stock option or options granted by the Company to such Non-Employee Director within the six month period prior to the IPO Date
(if applicable, as adjusted for the reverse stock split effected by the Company prior to the IPO Date). Additionally, without any further action of the Board, each person who after the IPO Date is
elected or appointed for the first time to be a Non-Employee Director automatically shall, upon the date of his or her initial election or appointment to be a Non-Employee
Director, be granted an Initial Grant to purchase 20,000 shares of Common Stock on the terms and conditions set forth herein. 

        (b)    Annual Grants.    Without any further action of the Board, on the date of each Annual Meeting, commencing with
the first Annual Meeting following the IPO Date, each person who is then a Non-Employee Director automatically shall be granted an Annual Grant to purchase 10,000 shares of Common Stock on
the terms and conditions set forth herein; provided, however, that if the person has not been serving as a Non-Employee Director for the
entire twelve month period preceding the date of grant, then the number of shares subject to such Annual Grant shall be reduced pro rata for each full quarter prior to the date of grant during which
such person did not serve as a Non- Employee Director. 

7.     OPTION PROVISIONS.  

        Each Option shall be in such form and shall contain such terms and conditions as required by the Plan. Each Option shall contain such additional terms and
conditions, not inconsistent with the Plan, as the Board shall deem appropriate. Each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions: 

        (a)    Term.    No Option shall be exercisable after the expiration of ten years from the date it was granted. 

        (b)    Exercise Price.    The exercise price of each Option shall be 100% of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. 

        (c)    Consideration.    The purchase price of stock acquired pursuant to an Option may be paid, to the extent
permitted by applicable law, in any combination of (i) cash or check, (ii) delivery to the Company of other Common Stock or (iii) pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. The purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six months (or such
longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). 

        (d)    Transferability.    An Option is transferable by will or by the laws of descent and distribution. An Option
also may be transferable upon written consent of the Company if, at the time of transfer, a Form S-8 registration statement under the Securities Act is available for the exercise of
the Option and the subsequent resale of the underlying securities. In addition, an Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 

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        (e)    Vesting.    Except as otherwise provided in Section 11 herein, Options shall vest as follows: 

        (i)    Initial Grants shall provide for vesting of 1/24th of the shares each month after the date of the grant. 

        (ii)   Annual Grants shall provide for vesting of 1/12th of the shares each month after the date of the grant. 

        (f)    Termination of Continuous Service.    In the event that an Optionholder's Continuous Service terminates (other
than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i) the date three months following the termination of the Optionholder's Continuous Service (or such longer or shorter
period specified in the Option Agreement or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or
her Option within the time specified in the Option Agreement, the Option shall terminate. 

        (g)    Extension of Termination Date.    An Optionholder's Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionholder's Continuous Service (other than upon the Optionholder's death or Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set
forth in the Option Agreement or (ii) the expiration of a period of three months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not
be in violation of such registration requirements. 

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

        (i)    Death of Optionholder.    In the event that (i) an Optionholder's Continuous Service terminates as a
result of the Optionholder's death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder's Continuous Service for
a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder's death pursuant to Section 6(d), but only within the
period ending on the earlier of (1) the date 18 months following the date of death (or such longer or shorter period specified in the Option Agreement or (2) the expiration of the
term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate. 

8.     SECURITIES LAW COMPLIANCE.  

        The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Options
and to issue and sell shares of Common Stock upon exercise of the Options; provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Option or any stock issued or issuable pursuant to any such Option. If, after reasonable efforts, the Company is unable to obtain from any 

7

 

such
regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such Options unless and until such authority is obtained. 

9.     USE OF PROCEEDS FROM STOCK.  

        Proceeds from the sale of stock pursuant to Options shall constitute general funds of the Company. 

10.   MISCELLANEOUS.  

        (a)    Acceleration of Exercisability and Vesting.    The Board shall have the power to accelerate the time at which
an Option may first be exercised or the time during which an Option or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Plan or the Option stating the time
at which it may first be exercised or the time during which it will vest. 

        (b)    Stockholder Rights.    No Optionholder shall be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares subject to such Option unless and until such Optionholder has satisfied all requirements for exercise of the Option pursuant to its terms. 

        (c)    No Service Rights.    Nothing in the Plan or any instrument executed or Option granted pursuant thereto shall
confer upon any Optionholder any right to continue to serve the Company as a Non-Employee Director or shall affect the right of the Company or an Affiliate to terminate (i) the
employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's agreement with the Company or an
Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the
Affiliate is incorporated, as the case may be. 

        (d)    Investment Assurances.    The Company may require an Optionholder, as a condition of exercising or acquiring
stock under any Option, (i) to give written assurances satisfactory to the Company as to the Optionholder's knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of exercising the Option; and (ii) to give written assurances satisfactory to the Company stating that the Optionholder is acquiring the
stock subject to the Option for the Optionholder's own account and not with any present intention of selling or otherwise distributing the stock. The foregoing requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (1) the issuance of the shares upon the exercise or acquisition of stock under the Option has been registered under a then currently
effective registration statement
under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. 

        (e)    Withholding Obligations.    The Optionholder may satisfy any federal, state or local tax withholding obligation
relating to the exercise or acquisition of stock under an Option by any of the following means (in addition to the Company's right to withhold from any compensation paid to the Optionholder by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares from the shares of the Common Stock otherwise issuable to the
Optionholder as a result of the exercise or acquisition of stock under the Option; 

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 provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to
the Company owned and unencumbered shares of the Common Stock. 

11.   ADJUSTMENTS UPON CHANGES IN COMMON STOCK.  

        (a)    Capitalization Adjustments.    If any change is made in, or other events occur with respect to, the stock
subject to the Plan, or subject to any Option, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend,
dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company (each a "Capitalization Adjustment")), the Plan will be appropriately adjusted in the class(es) and maximum number of
securities subject both to the Plan pursuant to Section 4 and to the nondiscretionary Options specified in Section 6, and the outstanding Options will be appropriately adjusted in the
class(es) and number of securities and price per share of stock subject to such outstanding Options. The Board shall make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction "without receipt of consideration" by the Company.) 

        (b)    Dissolution or Liquidation.    In the event of a dissolution or liquidation of the Company, then all
outstanding Options shall terminate immediately prior to the completion of such dissolution or liquidation. 

        (c)    Corporate Transaction.    In the event of a Corporate Transaction, any surviving corporation or acquiring
corporation may assume or continue any or all Options outstanding under the Plan or may substitute similar stock options for Options outstanding under the Plan (it being understood that similar stock
options include, but are not limited to, options to acquire the same consideration paid to the stockholders of the Company, as the case may be, pursuant to the Corporate Transaction). In the event
that any surviving corporation or acquiring corporation does not assume or continue all such outstanding Options or substitute similar stock options for all such outstanding Options, then with respect
to Options that have not been assumed, continued or substituted and that are held by Optionholders whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction,
the vesting of such Options (and, if applicable, the time at which such Options may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in full to a
date prior to the effective time of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five days prior to the effective time
of the Corporate Transaction), such Options shall terminate if not exercised (if applicable) at or prior to such effective time. With respect to any other Options outstanding under the Plan that have
been neither assumed nor substituted, the vesting of such Options (and, if applicable, the time at which such Options may be exercised) shall not be accelerated unless otherwise provided in
Section 11(d) or in a written agreement between the Company or any Affiliate and the holder of such Options, and such Options shall terminate if not exercised (if applicable) prior to the
effective time of the Corporate Transaction. 

        (d)    Change in Control.    Notwithstanding any other provisions of the Plan to the contrary, if a Change in Control
occurs and the Optionholder's Continuous Service has not terminated as of the date immediately prior to the effective date of such Change in Control, then the vesting and exercisability of the shares
of Common Stock subject to the Optionholder's Options shall be accelerated in full as of the effective date of the Change in Control. Following such Change in Control and notwithstanding any other
provision of the Plan to the contrary and provided that the Optionholder's Continuous Service has not terminated prior to the effective date of the Change in Control, then the Optionholder's Options
shall remain exercisable pursuant to their terms until the earlier of (i) 12 months following the 

9

 

effective
date of such Change in Control or (ii) the Expiration Date indicated in the Optionholder's Grant Notice. 

        (e)    Parachute Payments.    If any payment or benefit the Optionholder would receive pursuant to a Change in Control
from the Company or otherwise (a "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 Optionholder'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 unless the Optionholder elects in writing a different order (provided, however, that such election shall be subject to Company approval
if made on or after the effective date of the event that triggers the Payment): reduction of cash payments; cancellation of accelerated vesting of Options; reduction of employee benefits. In the event
that acceleration of vesting of Option compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Optionholder's Options unless the
Optionholder elects in writing a different order for cancellation. 

        The
accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in 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 in Control, 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 Optionholder and the Company
within 15 calendar days after the date on which the Optionholder's right to a Payment is triggered (if requested at that time by the Optionholder or the Company) or such other time as requested by the
Optionholder 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 Company and the Optionholder with an opinion reasonably acceptable to the Optionholder 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 Optionholder and the Company. 

12.   AMENDMENT OF THE PLAN AND OPTIONS.  

        (a)    Amendment of Plan.    The Board, at any time and from time to time, may amend the Plan. However, except as
provided in Section 11 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy the requirements of applicable laws. 

        (b)    Stockholder Approval.    The Board, in its sole discretion, may submit any other amendment to the Plan for
stockholder approval. 

        (c)    No Impairment of Rights.    Rights under any Option granted before amendment of the Plan shall not be impaired
by any amendment of the Plan unless (i) the Company requests the consent of the Optionholder and (ii) the Optionholder consents in writing. 

10

 

        (d)    Amendment of Options.    The Board, at any time, and from time to time, may amend the terms of any one or more
Options; provided, however, that the rights under any Option shall not be impaired by any such amendment unless (i) the Company requests the
consent of the Optionholder and (ii) the Optionholder consents in writing. 

13.   TERMINATION OR SUSPENSION OF THE PLAN.  

        (a)    Plan Term.    The Board may suspend or terminate the Plan at any time. No Options may be granted under the Plan
while the Plan is suspended or after it is terminated. 

        (b)    No Impairment of Rights.    Suspension or termination of the Plan shall not impair rights and obligations under
any Option granted while the Plan is in effect except with the written consent of the Optionholder. 

14.   EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective on the IPO Date, but no Option shall be exercised unless and until the Plan has been approved by the stockholders of the Company,
which approval shall be within 12 months before or after the date the Plan is adopted by the Board. 

15.   CHOICE OF LAW.  

        The law of the state of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such
state's conflict of laws rules. 

11

   METABASIS THERAPEUTICS, INC.  

 2004 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN  

 STOCK OPTION AGREEMENT

        Pursuant
to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement, Metabasis Therapeutics, Inc. (the
"Company") has granted you an option under its 2004 Non-Employee Directors' Stock Option Plan (the
"Plan") to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant
Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan. 

        The
details of your option are as follows: 

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

        2.    NUMBER OF SHARES AND EXERCISE PRICE.    The number of shares of Common Stock subject to
your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan. 

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

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

        (b)   Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in  The Wall Street Journal, by delivery of
already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the
Company's reported earnings (generally six months) or that you did not acquire, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security
interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to
the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock. 

        4.    WHOLE SHARES.    You may exercise your option only for whole shares of Common Stock. 

        5.    SECURITIES LAW COMPLIANCE.    Notwithstanding anything to the contrary contained herein,
you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so
registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other
applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and
regulations. 

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

        (a)   three months after the termination of your Continuous Service for any reason other than your Disability or death,
provided that if during any part of such three-month period your option is not exercisable solely because of the condition set forth in Section 5, your option shall not expire until the earlier
of the Expiration Date or until it shall have been exercisable for an aggregate period of three months after the termination of your Continuous Service; 

        (b)   12 months after the termination of your Continuous Service due to your Disability; 

        (c)   18 months after your death if you die either during your Continuous Service or within three months after your
Continuous Service terminates; 

        (d)   the Expiration Date indicated in your Grant Notice; or 

        (e)   the day before the tenth anniversary of the date of grant. 

        7.    EXERCISE.    You may exercise your option during its term by delivering a Notice of
Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require. 

        8.    TRANSFERABILITY.    Your option is not transferable, except (i) by will or by the
laws of descent and distribution, (ii) with the prior written approval of the Company, by instrument to an inter vivos or testamentary trust, in a form accepted by the Company, in which the
option is to be passed to beneficiaries upon the death of the trustor (settlor) and (iii) with the prior written approval of the Company, by gift, in a form accepted by the Company, to a
permitted transferee under Rule 701 of the Securities Act. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a
third party who, in the event of your death, shall thereafter be entitled to exercise your option. 

        9.    OPTION NOT A SERVICE CONTRACT.    Your option is not an employment or service contract,
and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to
continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees to continue any
relationship that you might have as a Director or Consultant for the Company or an Affiliate. 

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

        11.    GOVERNING PLAN DOCUMENT.    Your option is subject to all the provisions of the Plan,
the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted
pursuant to the Plan. In the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control. 

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Exhibit 10.4    
    

         METABASIS THERAPEUTICS, INC.  

 2004 EMPLOYEE STOCK PURCHASE PLAN  

 Adopted by Board on May 6, 2004

Approved by Stockholders on May 10, 2004  

1.     PURPOSE.  

        (a)   The purpose of the Plan is to provide a means by which Employees of the Company and certain designated Related
Corporations may be given an opportunity to purchase shares of the Common Stock of the Company. 

        (b)   The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of
new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations. 

        (c)   The Company intends that the Purchase Rights be considered options issued under an Employee Stock Purchase Plan. 

2.     DEFINITIONS.  

        As used in the Plan and any Offering, unless otherwise specified, the following terms have the meanings set forth below: 

        (a)   "Board" means the Board of Directors of the Company. 

        (b)   "Code" means the Internal Revenue Code of 1986, as
amended.

        (c)   "Committee" means a committee appointed by the Board in accordance with Section 3(c) of
the Plan. 

        (d)   "Common Stock" means the common stock of the Company. 

        (e)   "Company" means Metabasis Therapeutics, Inc., a Delaware corporation. 

        (f)    "Contributions" means the payroll deductions and other additional payments that a Participant
contributes to fund the exercise of a Purchase Right. A Participant may make payments not through payroll deductions only if specifically provided for in the Offering, and then only if the Participant
has not already had the maximum permitted amount withheld through payroll deductions during the Offering. 

        (g)   "Corporate Transaction" means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events: 

        (i)    a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company; 

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

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

        (iv)  a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares
of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, 

1

 

consolidation
or similar transaction into other property, whether in the form of securities, cash or otherwise. 

        (h)   "Director" means a member of the Board. 

        (i)    "Eligible Employee" means an Employee who meets the requirements set forth in the Offering for
eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan. 

        (j)    "Employee" means any person, including Officers and Directors, who is employed for purposes of
Section 423(b)(4) of the Code by the Company or a Related Corporation. Neither service as a Director nor payment of a director's fee shall be sufficient to make an individual an Employee of the
Company or a Related Corporation. 

        (k)   "Employee Stock Purchase Plan" means a plan that grants Purchase Rights intended to be options
issued under an "employee stock purchase plan," as that term is defined in Section 423(b) of the Code. 

        (l)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (m)  "Fair Market Value" means the value of a security, as determined in good faith by the Board. If
the security is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of the security, unless otherwise determined by
the Board, shall be the closing sales price (rounded up where necessary to the nearest whole cent) for such security (or the closing bid, if no sales were reported) as quoted on such exchange or
market (or the exchange or market with the greatest volume of trading in the relevant security of the Company) on the Trading Day prior to the relevant determination date, as reported in  The Wall Street Journal or such other source as the Board deems reliable. 

        (n)   "Offering" means the grant of Purchase Rights to purchase shares of Common Stock under the Plan
to Eligible Employees. 

        (o)   "Offering Date" means a date selected by the Board for an Offering to commence. 

        (p)   "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 

        (q)   "Participant" means an Eligible Employee who holds an outstanding Purchase Right granted pursuant
to the Plan. 

        (r)   "Plan" means this Metabasis Therapeutics, Inc. 2004 Employee Stock Purchase Plan. 

        (s)   "Purchase Date" means one or more dates during an Offering established by the Board on which
Purchase Rights shall be exercised and as of which purchases of shares of Common Stock shall be carried out in accordance with such Offering. 

        (t)    "Purchase Period" means a period of time specified within an Offering beginning on the Offering
Date or on the next day following a Purchase Date within an Offering and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods. 

        (u)   "Purchase Right" means an option to purchase shares of Common Stock granted pursuant to the Plan. 

        (v)   "Related Corporation" means any parent corporation or subsidiary corporation, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. 

        (w)  "Securities Act" means the Securities Act of 1933, as amended. 

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        (x)   "Trading Day" means any day on which the exchange(s) or market(s) on
which shares of Common Stock are listed, whether it be an established stock exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or otherwise, is open for trading. 

3.     ADMINISTRATION.  

        (a)   The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in
Section 3(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the
administration of the Plan. 

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

        (i)    To determine when and how Purchase Rights to purchase shares of Common Stock shall be granted and the provisions of each
Offering of such Purchase Rights (which need not be identical). 

        (ii)   To designate from time to time which Related Corporations of the Company shall be eligible to participate in the Plan. 

        (iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for
the administration of the Plan. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective. 

        (iv)  To amend the Plan as provided in Section 15. 

        (v)   Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best
interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan. 

        (c)   The Board may delegate administration of the Plan to a Committee of the Board composed of one or more members of the
Board. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. If administration is delegated to a Committee, references to the Board in this Plan and in the Offering document shall thereafter be deemed to be to the Board or the
Committee, as the case may be. 

        (d)   All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons. 

4.     SHARES OF COMMON STOCK SUBJECT TO THE PLAN.  

        Subject to the provisions of paragraph 14 relating to adjustments upon changes in stock, the stock that may be sold pursuant to Purchase Rights granted
under the Plan shall not exceed in the aggregate 500,000 shares of the Common Stock, plus an annual increase to be added on the first day of the fiscal year of the Company for a period commencing on
the first day of the fiscal year that begins on January 1, 2005 and ending on (and including) the first day of the fiscal year that begins on January 1, 2014 (each such day, a
"Calculation Date"), equal to the lesser of (i) 1% of the fully diluted (i.e., assuming exercise for, or conversion into, Common Stock of all
then outstanding options, warrants and convertible securities of the Company) shares of Common Stock outstanding on each such Calculation Date (rounded down to the nearest whole share); or
(ii) 500,000 shares of Common Stock. Notwithstanding the foregoing, the Board may act, prior to the first day of any fiscal year of the 

3

 

Company,
to increase the share reserve by such number of shares of Common Stock as the Board shall determine, which number shall be less than each of (i) and (ii). If any Purchase Right granted
under the Plan shall for any reason terminate without having been exercised, the shares of Common Stock not purchased under such Purchase Right shall again become available for issuance under the
Plan. 

5.     GRANT OF PURCHASE RIGHTS; OFFERING.  

        (a)   The Board may from time to time grant or provide for the grant of Purchase Rights to purchase shares of Common Stock
under the Plan to Eligible Employees in an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate, which shall comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights
shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate
Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period
during which the Offering shall be effective, which period shall not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 6 through 9,
inclusive. 

        (b)   If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in
agreements or notices delivered hereunder: (i) each agreement or notice delivered by that Participant shall be deemed to apply to all of his or her Purchase Rights under the Plan, and
(ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) shall be exercised to the fullest possible
extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) shall be exercised. 

6.     ELIGIBILITY.  

        (a)   Purchase Rights may be granted only to Employees of the Company or, as the Board may designate as provided in
Section 3(b), to Employees of a Related Corporation. Except as provided in Section 6(b), an Employee shall not be eligible to be granted Purchase Rights under the Plan unless, on the
Offering Date, such Employee has been in the employ of the Company or the Related Corporation, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but
in no event shall the required period of continuous employment be greater than two years. In addition, the Board may provide that no Employee shall be eligible to be granted Purchase Rights under the
Plan unless, on the Offering Date, such Employee's customary employment with the Company or the Related Corporation is more than 20 hours per week and/or more than five months per calendar
year. 

        (b)   The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee shall,
on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering,
which Purchase Right shall thereafter be deemed to be a part of that Offering. Such Purchase Right shall have the same characteristics as any Purchase Rights originally granted under that Offering, as
described herein, except that: 

        (i)    the date on which such Purchase Right is granted shall be the "Offering Date" of such Purchase Right for all purposes,
including determination of the exercise price of such Purchase Right; 

        (ii)   the period of the Offering with respect to such Purchase Right shall begin on its Offering Date and end coincident with
the end of such Offering; and 

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        (iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before
the end of the Offering, he or she shall not receive any Purchase Right under that Offering. 

        (c)   No Employee shall be eligible for the grant of any Purchase Rights under the Plan if, immediately after any such Purchase
Rights are granted, such Employee owns stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any Related Corporation. For purposes of
this Section 6(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all
outstanding Purchase Rights and options shall be treated as stock owned by such Employee. 

        (d)   As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the Plan
only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employee's rights
to purchase stock of the Company or any Related Corporation to accrue at a rate which exceeds $25,000 of Fair Market Value of such stock (determined at the time such rights are granted, and which,
with respect to the Plan, shall be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time. 

        (e)   Officers of the Company and any designated Related Corporation, if they are otherwise Eligible Employees, shall be
eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may provide in an Offering that Employees who are highly compensated Employees within the meaning of
Section 423(b)(4)(D) of the Code shall not be eligible to participate. 

7.     PURCHASE RIGHTS; PURCHASE PRICE.  

        (a)   On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted a Purchase
Right to purchase up to that number of shares of Common Stock purchasable either with a percentage or with a maximum dollar amount, as designated by the Board, but in either case not exceeding 15%, of
such Employee's Earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends
on the date stated in the Offering, which date shall be no later than the end of the Offering. 

        (b)   The Board shall establish one or more Purchase Dates during an Offering as of which Purchase Rights granted pursuant to
that Offering shall be exercised and purchases of shares of Common Stock shall be carried out in accordance with such Offering. 

        (c)   In connection with each Offering made under the Plan, the Board may specify a maximum number of shares of Common Stock
that may be purchased by any Participant on any Purchase Date during such Offering. In connection with each Offering made under the Plan, the Board may specify a maximum aggregate number of shares of
Common Stock that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board may specify a
maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon
exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata allocation of the shares of Common
Stock available shall be made in as nearly a uniform manner as shall be practicable and equitable. 

5

 

        (d)   The purchase price of shares of Common Stock acquired pursuant to Purchase Rights shall be not less than the lesser of: 

        (i)    an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the Offering Date; or 

        (ii)   an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date. 

8.     PARTICIPATION; WITHDRAWAL; TERMINATION.  

        (a)   A Participant may elect to authorize payroll deductions pursuant to an Offering under the Plan by completing and
delivering to the Company, within the time specified in the Offering, an enrollment form (in such form as the Company may provide). Each such enrollment form shall authorize an amount of Contributions
expressed as a percentage of the submitting Participant's Earnings (as defined in each Offering) during the Offering (not to exceed the maximum percentage specified by the Board). Each Participant's
Contributions shall remain the property of the Participant at all times prior to the purchase of Common Stock, but such Contributions may be commingled with the assets of the Company and used for
general corporate purposes except where applicable law requires that Contributions be deposited with an independent third party. To the extent provided in the Offering, a Participant may begin making
Contributions after the beginning of the Offering. To the extent provided in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. To the extent
specifically provided in the Offering, in addition to making Contributions by payroll deductions, a Participant may make Contributions through the payment by cash or check prior to each Purchase Date
of the Offering. 

        (b)   During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the
Company a notice of withdrawal in such form as the Company may provide. Such withdrawal may be elected at any time prior to the end of the Offering, except as provided otherwise in the Offering. Upon
such withdrawal from the Offering by a Participant, the Company shall distribute to such Participant all of his or her accumulated Contributions (reduced to the extent, if any, such Contributions have
been used to acquire shares of Common Stock for the Participant) under the Offering, and such Participant's Purchase Right in that Offering shall thereupon terminate. A Participant's withdrawal from
an Offering shall have no effect upon such Participant's eligibility to participate in any other Offerings under the Plan, but such Participant shall be required to deliver a new enrollment form in
order to participate in subsequent Offerings. 

        (c)   Purchase Rights granted pursuant to any Offering under the Plan shall terminate immediately upon a Participant ceasing to
be an Employee for any reason or for no reason (subject to any post-employment participation period required by law) or other lack of eligibility. The Company shall distribute to such
terminated or otherwise ineligible Employee all of his or her accumulated Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the
terminated or otherwise ineligible Employee) under the Offering. 

        (d)   Purchase Rights shall not be transferable by a Participant otherwise than by will, the laws of descent and distribution,
or a beneficiary designation as provided in Section 13. During a Participant's lifetime, Purchase Rights shall be exercisable only by such Participant. 

        (e)   Unless otherwise specified in an Offering, the Company shall have no obligation to pay interest on Contributions. 

9.     EXERCISE.  

        (a)   On each Purchase Date during an Offering, each Participant's accumulated Contributions shall be applied to the purchase
of shares of Common Stock up to the maximum number of shares of 

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Common
Stock permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon the exercise of
Purchase Rights unless specifically provided for in the Offering. 

        (b)   If any amount of accumulated Contributions remains in a Participant's account after the purchase of shares of Common
Stock and such remaining amount is less than the amount required to purchase one share of Common Stock on the final Purchase Date of an Offering, then such remaining amount shall be held in such
Participant's account for the purchase of shares of Common Stock under the next Offering under the Plan, unless such Participant withdraws from such next Offering, as provided in Section 8(b),
or is not eligible to participate in such Offering, as provided in Section 6, in which case such amount shall be distributed to such Participant after the final Purchase Date, without interest.
If the amount of Contributions remaining in a Participant's account after the purchase of shares of Common Stock is at least equal to the amount required to purchase one whole share of Common Stock on
the final Purchase Date of the Offering, then such remaining amount shall be distributed in full to such Participant at the end of the Offering. 

        (c)   No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under
the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all laws applicable to the Plan. If on a Purchase Date during any
Offering hereunder the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights or any Offering shall be exercised on such Purchase Date, and the Purchase
Date shall be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in such compliance, except that the Purchase Date shall not be delayed
more than 12 months and the Purchase Date shall in no event be more than 27 months from the Offering Date. If, on the Purchase Date under any Offering hereunder, as delayed to the
maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in such compliance, no Purchase Rights or any Offering shall be exercised and all Contributions
accumulated during the Offering (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock) shall be distributed to the Participants. 

10.   COVENANTS OF THE COMPANY.  

        The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as
may be required to issue and sell shares of Common Stock upon exercise of the Purchase Rights. If, after commercially reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of shares of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell shares of Common Stock upon exercise of such Purchase Rights unless and until such authority is obtained. 

11.   USE OF PROCEEDS FROM SHARES OF COMMON STOCK.  

        Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights shall constitute general funds of the Company. 

12.   RIGHTS AS A STOCKHOLDER.  

        A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock subject to Purchase Rights
unless and until the Participant's shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent). 

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13.   DESIGNATION OF BENEFICIARY.  

        (a)   A Participant may file a written designation of a beneficiary who is to receive any shares of Common Stock and/or
cash, if any, from the Participant's account under the Plan in the event of such Participant's death subsequent to the end of an Offering but prior to delivery to the Participant of such shares of
Common Stock or cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant's account under the Plan in the event of such
Participant's death during an Offering. Any such designation shall be on a form provided by or otherwise acceptable to the Company. 

        (b)   The Participant may change such designation of beneficiary at any time by written notice to the Company. In the event of
the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company shall deliver such shares of Common
Stock and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its
sole discretion, may deliver such shares of Common Stock and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate. 

14.   ADJUSTMENTS UPON CHANGES IN SECURITIES; CORPORATE TRANSACTIONS.  

        (a)   If any change is made in the shares of Common Stock, subject to the Plan, or subject to any Purchase Right, without the
receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan shall be
appropriately adjusted in the type(s), class(es) and maximum number of shares of Common Stock subject to the Plan pursuant to Section 4(a), and the outstanding Purchase Rights shall be
appropriately adjusted in the type(s), class(es), number of shares and purchase limits of such outstanding Purchase Rights. The Board shall make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company.") 

        (b)   In the event of a Corporate Transaction, then: (i) any surviving or acquiring corporation may continue or assume
Purchase Rights outstanding under the Plan or may substitute similar rights (including a right to acquire the same consideration paid to stockholders in the Corporate Transaction) for those
outstanding under the Plan, or (ii) if any surviving or acquiring corporation does not continue or assume such Purchase Rights or does not substitute similar rights for Purchase Rights
outstanding under the Plan, then, the Participants' accumulated Contributions shall be used to purchase shares of Common Stock within ten business days prior to the Corporate Transaction under the
ongoing Offering, and the Participants' Purchase Rights under the ongoing Offering shall terminate immediately after such purchase. 

15.   AMENDMENT OF THE PLAN.  

        (a)   The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 14
relating to adjustments upon changes in securities and except as to amendments solely to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain
favorable tax, exchange control or regulatory treatment for Participants or the Company or any Related Corporation, no amendment shall be effective unless approved by the stockholders of the Company
to the extent stockholder approval is necessary for the Plan to satisfy the requirements of Section 423 of the Code or other applicable laws or regulations. 

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        (b)   It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to
provide Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Employee Stock Purchase Plans or to bring
the Plan and/or Purchase Rights into compliance therewith. 

        (c)   The rights and obligations under any Purchase Rights granted before amendment of the Plan shall not be impaired by any
amendment of the Plan except: (i) with the consent of the person to whom such Purchase Rights were granted, or (ii) as necessary to comply with any laws or governmental regulations
(including, without limitation, the provisions of the Code and the regulations promulgated thereunder relating to Employee Stock Purchase Plans). 

16.   TERMINATION OR SUSPENSION OF THE PLAN.  

        (a)   The Board in its discretion may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall
terminate at the time that all of the shares of Common Stock reserved for issuance under the Plan, as increased and/or adjusted from time to time, have been issued under the terms of the Plan. No
Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated. 

        (b)   Any benefits, privileges, entitlements and obligations under any Purchase Rights while the Plan is in effect shall not be
impaired by suspension or termination of the Plan except (i) as expressly provided in the Plan or with the consent of the person to whom such Purchase Rights were granted, (ii) as
necessary to comply with any laws, regulations, or listing requirements, or (iii) as necessary to ensure that the Plan and/or Purchase Rights comply with the requirements of Section 423
of the Code. 

17.   EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective as determined by the Board, but no Purchase Rights shall be exercised unless and until the Plan has been approved by the
stockholders of the Company within 12 months before or after the date the Plan is adopted by the Board. 

18.   MISCELLANEOUS PROVISIONS.  

        (a)   The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering shall in any way
alter the at will nature of a Participant's employment or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related
Corporation, or on the part of the Company or a Related Corporation to continue the employment of a Participant. 

        (b)   The provisions of the Plan shall be governed by the laws of the State of California without resort to that state's
conflicts of laws rules. 

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   METABASIS THERAPEUTICS, INC.  

 2004 EMPLOYEE STOCK PURCHASE PLAN OFFERING DOCUMENT  

 Adopted by Board on May 6, 2004  

        In this document, capitalized terms not otherwise defined shall have the same definitions of such terms as in the Metabasis Therapeutics, Inc. 2004
Employee Stock Purchase Plan. 

1.     GRANT; OFFERING DATE.  

        (a)   The Board hereby authorizes a series of Offerings pursuant to the terms of this Offering document. 

        (b)   The first Offering hereunder (the "Initial Offering") shall begin on the
date the Company's Common Stock is first offered to the public under a registration statement declared effective under the Securities Act (the "IPO
Date") and shall end on                        , 2006, unless terminated earlier as provided below.
After the Initial Offering, an additional new Offering shall begin on the day after
the first Purchase Date of the immediately preceding Offering. The first day of an Offering is that Offering's "Offering Date." Except as provided below, each Offering shall be approximately
24 months in duration, with four Purchase Periods which, except for the first Purchase Period of the Initial Offering (which may be longer or shorter than 6 months) shall be
approximately 6 months in length. Except as provided below, a Purchase Date is the last day of a Purchase Period or of an Offering, as the case may be. The Initial Offering shall consist of
four Purchase Periods with the first Purchase Period of the Initial Offering ending on                        , 2004. 

        (c)   Notwithstanding the foregoing: (i) if any Offering Date falls on a day that is not a Trading Day, then such
Offering Date shall instead fall on the next subsequent Trading Day, and (ii) if any Purchase Date falls on a day that is not a Trading Day, then such Purchase Date shall instead fall on the
immediately preceding Trading Day. 

        (d)   Prior to the commencement of any Offering, the Board may change any or all terms of such Offering and any subsequent
Offerings. The granting of Purchase Rights pursuant to each Offering hereunder shall occur on each respective Offering Date unless prior to such date (i) the Board determines that such Offering
shall not occur, or (ii) no shares of Common Stock remain available for issuance under the Plan in connection with the Offering. 

        (e)   If the Company's accountants advise the Company that the accounting treatment of purchases under the Plan will change or
has changed in a manner that the Company determines is detrimental to its best interests, then the Company may, in its discretion, take any or all of the following actions: (i) terminate each
ongoing Offering as of the next Purchase Date (after the purchase of stock on such Purchase Date) under such Offering; (ii) set a new Purchase Date for each ongoing Offering and terminate each
such Offering after the purchase of stock on such Purchase Date; (iii) amend the Plan and one or more of the ongoing Offerings to reduce or eliminate an accounting treatment that is detrimental
to the Company's best interests and (iv) terminate each ongoing Offering and refund any money contributed to the participants. 

        (f)    Notwithstanding anything in this Section 1 to the contrary, if on the first day of a new Purchase Period during an
Offering the Fair Market Value of a share of Common Stock is less than it was on the Offering Date for that Offering, then the Offering shall immediately terminate and that day shall become the
Offering Date, and the Participants who were enrolled in the terminated Offering shall automatically be enrolled in the new Offering that starts on such day. 

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2.     ELIGIBLE EMPLOYEES.  

        (a)   Each Eligible Employee who, on the Offering Date of an Offering hereunder, is (i) an employee of the Company;
(ii) an employee of a Subsidiary incorporated in the United States; or (iii) an employee of a Subsidiary that is not incorporated in the United States, provided that the Board or
Committee has designated the employees of such Subsidiary as eligible to participate in the Offering, shall be granted a Purchase Right on the Offering Date of such Offering. 

        (b)   Notwithstanding the foregoing, the following Employees shall not be
Eligible Employees or be granted Purchase Rights under an Offering: 

        (i)    part-time or seasonal Employees whose customary employment is 20 hours per week or less or five months
per calendar year or less; 

        (ii)   5% stockholders (including ownership through unexercised and/or unvested stock options) as described in
Section 6(c) of the Plan; or 

        (iii) Employees in jurisdictions outside of the United States if, as of the Offering Date of the Offering, the grant of such
Purchase Rights would not be in compliance with the applicable laws of any jurisdiction in which the Employee resides or is employed. 

        (c)   Notwithstanding the foregoing, each person who first becomes an Eligible Employee during an ongoing Offering shall not be
able to participate in such Offering. 

3.     PURCHASE RIGHTS.  

        (a)   Subject to the limitations herein and in the Plan, a Participant's Purchase Right shall permit the purchase of the number
of shares of Common Stock purchasable with up to 15% of such Participant's Earnings paid during the period of such Offering beginning immediately after such Participant first commences participation;  provided,
however, that no Participant may have more than 15% of such Participant's Earnings applied to purchase shares of Common Stock under all
ongoing Offerings under the Plan and all other plans of the Company and Related Corporations that are intended to qualify as Employee Stock Purchase Plans. 

        (b)   For Offerings hereunder, "Earnings" means the base compensation paid to a Participant, including all salary, wages
(including amounts elected to be deferred by the Participant, that would otherwise have been paid, under any cash or deferred arrangement or other deferred compensation program established by the
Company or a Related Corporation), but excluding all overtime pay, commissions, bonuses, and other remuneration paid directly to such Participant, profit sharing, the cost of employee benefits paid
for by the Company or a Related Corporation, education or tuition reimbursements, imputed income arising under any Company or Related Corporation group insurance or benefit program, traveling
expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company or a Related Corporation under any employee benefit plan, and
similar items of compensation. 

        (c)   Notwithstanding the foregoing, the maximum number of shares of Common Stock that a Participant may purchase on any
Purchase Date in an Offering shall be such number of shares as has a Fair Market Value (determined as of the Offering Date for such Offering) equal to (x) $25,000 multiplied by the number of
calendar years in which the Purchase Right under such Offering has been outstanding at any time, minus (y) the Fair Market Value of any other shares of Common Stock (determined as of the
relevant Offering Date with respect to such shares) that, for purposes of the limitation of Section 423(b)(8) of the Code, are attributed to any of such calendar years in which the Purchase
Right is outstanding. The amount in clause (y) of the previous sentence shall be determined in accordance with regulations applicable under Section 423(b)(8) of the Code based on
(i) the number of shares previously purchased with respect to such calendar years pursuant to such Offering or any 

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other
Offering under the Plan, or pursuant to any other Company or Related Corporation plans intended to qualify as Employee Stock Purchase Plans, and (ii) the number of shares subject to other
Purchase Rights outstanding on the Offering Date for such Offering pursuant to the Plan or any other such Company or Related Corporation Employee Stock Purchase Plan. 

        (d)   The maximum aggregate number of shares of Common Stock available to be purchased by all Participants under an Offering
shall be the number of shares of Common Stock remaining available under the Plan on the Offering Date. If the aggregate purchase of shares of Common Stock upon exercise of Purchase Rights granted
under the Offering would exceed the maximum aggregate number of shares available, the Board shall make a pro rata allocation of the shares available in a uniform and equitable manner. 

        (e)   Notwithstanding the foregoing, the maximum number of shares of Common Stock that an Eligible Employee may purchase on any
Purchase Date during any Offering shall not exceed 2,500 shares. 

4.     PURCHASE PRICE.  

        The purchase price of shares of Common Stock under an Offering shall be the lesser of: (i) 85% of the Fair Market Value of such shares of Common Stock on
the applicable Offering Date, or (ii) 85% of the Fair Market Value of such shares of Common Stock on the applicable Purchase Date, in each case rounded up to the nearest whole cent per share.
For the Initial Offering, the Fair Market Value of the shares of Common Stock at the time when the Offering commences shall be the price per share at which shares are first sold to the public in the
Company's initial public offering as specified in the final prospectus for that initial public offering. 

5.     PARTICIPATION.  

        (a)   An Eligible Employee may elect to participate in an Offering on the Offering Date. An Eligible Employee shall elect his
or her payroll deduction percentage on such enrollment form as the Company provides. The completed enrollment form must be delivered to the Company prior to the date participation is to be effective,
unless a later time for filing the enrollment form is set by the Company for all Eligible Employees with respect to a given Offering. Payroll deduction percentages must be expressed in whole
percentages of Earnings, with a minimum percentage of 1% and a maximum percentage of 15%. Except as provided in paragraph (e) below with respect to the Initial Offering, Contributions may be
made only by way of payroll deductions. 

        (b)   A Participant may change (increase or decrease) his or her participation level twice during a Purchase Period. In
addition, a Participant may decrease to 0% his or her participation level only once during a Purchase Period. Any such increase or decrease in participation level shall be made by delivering a notice
to the Company or a designated Subsidiary in such form as the Company provides prior to the ten day period (or such shorter period of time as determined by the Company and communicated to
Participants) immediately preceding the next Purchase Date of the Purchase Period for which it is to be effective. 

        (c)   A Participant may withdraw from an Offering and receive a refund of his or her Contributions (reduced to the extent, if
any, such Contributions have been used to acquire shares of Common Stock for the Participant on any prior Purchase Date) without interest, at any time prior to the end of the Offering, excluding only
each ten day period immediately preceding a Purchase Date (or such shorter period of time determined by the Company and communicated to Participants), by delivering a withdrawal notice to the Company
or a designated Subsidiary in such form as the Company provides. A Participant who has withdrawn from an Offering shall not again participate in such Offering, but may participate in subsequent
Offerings under the Plan in accordance with the terms of the Plan and the terms of such subsequent Offerings. 

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        (d)   Notwithstanding the foregoing or any other provision of this Offering document or of the Plan to the contrary, neither
the enrollment of any Eligible Employee in the Plan nor any forms relating to participation in the Plan shall be given effect until such time as a registration statement covering the registration of
the shares under the Plan that are subject to the Offering has been filed by the Company and has become effective. 

        (e)   Notwithstanding the foregoing or any other provision of this Offering document or of the Plan to the contrary, with
respect to the Initial Offering only, each Eligible Employee who is employed on the IPO Date automatically shall be enrolled in the Initial Offering, with a Purchase Right to purchase up to the number
of shares of Common Stock that are purchasable with 15% of the Eligible Employee's Earnings, subject to the limitations set forth in Section 3(c)-(f) above. Following the filing of an effective
registration statement pursuant to a Form S-8, such Eligible Employee shall be provided a certain period of time, as determined by the Company in its sole discretion, within which
to elect to authorize payroll deductions for the purchase of shares during the Initial Offering (which may be for a percentage that is less than 15% of the Eligible Employee's Earnings). If such
Eligible Employee elects not to authorize such payroll deductions, the Eligible Employee instead may purchase shares of Common Stock under the Plan by delivering a single cash payment for the purchase
of such shares to the Company or a designated Subsidiary prior to the ten day period (or such shorter period of time as determined by the Company and communicated to Participants) immediately
preceding the Purchase Date under the Initial Offering. If an Eligible Employee neither elects to authorize payroll deductions nor chooses to make a cash payment in accordance with the foregoing
sentence, then the Eligible Employee shall not purchase any shares of Common Stock during the Initial Offering. After the end of the Initial Offering, in order to participate in any subsequent
Offerings, an Eligible Employee must enroll and authorize payroll deductions prior to the commencement of the Offering, in accordance with paragraph (a) above; provided,
however, that once an Eligible Employee enrolls in an Offering and authorizes payroll deductions (including in connection with the Initial Offering), the Eligible Employee
automatically shall be enrolled for all subsequent Offerings until he or she elects to withdraw from an Offering pursuant to paragraph (c) above or terminates his or her participation in the
Plan. 

6.     PURCHASES.  

        Subject to the limitations contained herein, on each Purchase Date, each Participant's Contributions (without any increase for interest) shall be applied to the
purchase of whole shares, up to the maximum number of shares permitted under the Plan and the Offering. 

7.     NOTICES AND AGREEMENTS.  

        Any notices or agreements provided for in an Offering or the Plan shall be given in writing, in a form provided by the Company, and unless specifically provided
for in the Plan or this Offering, shall be deemed effectively given upon receipt or, in the case of notices and agreements delivered by the Company, five days after deposit in the United States mail,
postage prepaid. 

8.     EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.  

        The Purchase Rights granted under an Offering are subject to the approval of the Plan by the stockholders of the Company as required for the Plan to obtain
treatment as an Employee Stock Purchase Plan. 

9.     OFFERING SUBJECT TO PLAN.  

        Each Offering is subject to all the provisions of the Plan, and the provisions of the Plan are hereby made a part of the Offering. The Offering is further subject
to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of an
Offering and those of the Plan (including interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan), the provisions of the Plan
shall control. 

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QuickLinks

Exhibit 10.4

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