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                                                                    EXHIBIT 4(b)

                            GENOME THERAPEUTICS CORP.

                             STOCK OPTION AGREEMENT

                             (Non-Statutory Option)

NON-STATUTORY STOCK OPTION granted by Genome Therapeutics Corp., a Massachusetts
corporation (the "Company"), to Steven M. Rauscher an employee of the Company
(the "Optionee").

            1. GRANT OF OPTION

This agreement evidences the grant by the Company to the Optionee of an option
to purchase, on the terms provided herein, a total of 240,000 shares (the
"Shares") of the Company's Common Stock, $.10 par value ("Common Stock"), at a
price of $14.4375 per share. This option shall terminate as to all or any part
of this option that has not been exercised by October 26, 2010 (the "Expiration
Date"). This option is subject to earlier termination as provided in Sections 5,
6 and 10 below. Subject to the other terms hereof, 60,000 of the Shares subject
to this option shall become exercisable on October 26 in each of 2001, 2002,
2003 and 2004; provided, that if any Shares shall have vested on or prior to
such October 26 pursuant to the accelerated vesting provisions set forth in the
next sentence, then the number of accelerated Shares, in aggregate, shall be
offset against the aggregate number of shares scheduled to have vested under the
time vesting provisions of this sentence. The vesting of the Shares may be
accelerated in accordance with the following schedule: 45,000 of the Shares will
vest if the average closing price of the Common Stock as reported on the NASDAQ
National Market ("NASDAQ") (or such other principal securities exchange as the
Common Stock may be traded) for a period of ten (10) out of twenty (20)
consecutive trading days after the date of grant is $35.00 or higher; 45,000 of
the Shares will vest if the average closing price of the Common Stock as
reported on NASDAQ (or such other principal securities exchange as the Common
Stock may be traded) for a period of ten (10) out of twenty (20) consecutive
trading days after the date of grant is $45.00 or higher; 50,000 of the Shares
will vest if the average closing price of the Common Stock as reported on NASDAQ
(or such other principal securities exchange as the Common Stock may be traded)
for a period of ten (10) out of twenty (20) consecutive trading days after the
date of grant is $55.00 or higher; and 100,000 of the Shares will vest if the
average closing price of the Common Stock as reported on NASDAQ (or such other
principal securities exchange as the Common Stock may be traded) for a period of
ten (10) out of twenty (20) consecutive trading days after the date of grant is
$60.00 or higher.

            2. EXERCISE OF OPTION

Each election to exercise this option shall be in writing, signed by the
Optionee or by his executor or administrator or the person or persons to whom
this option is transferred by will or the applicable laws of descent and
distribution (the "Legal Representative"), and received by the Company at its
principal office in Waltham, Massachusetts, accompanied by this agreement and
payment in full as provided in Section 3 below. In the event the option is
exercised by such Legal Representative, the Company shall be under no obligation
to deliver stock hereunder unless and until the Company is satisfied that the
person or persons exercising the option is or are the duly appointed executor or
administrator of the deceased Optionee or the person or persons to whom this
option has been transferred by Optionee's will or by the applicable laws of
descent and distribution.

            3. PAYMENT FOR STOCK

Shares shall be issued only upon receipt by the Company of full payment of the
purchase price for the shares as to which the option is exercised. The purchase
price is payable by the Optionee to the Company either (i) in cash or by
certified check or cashier's check payable to the order of the Company; or (ii)
through the delivery of shares of Common Stock (duly owned by the Optionee and
as to which the Optionee has good title free and clear of any liens and
encumbrances) having a fair market value (as determined by the Board of
Directors of the Company) equal to the purchase price; or (iii) by a combination
of cash and Common Stock as provided above. The Company will not

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be obligated to deliver any shares unless and until, in the opinion of the
Company's counsel, all applicable federal and state laws and regulations have
been complied with, nor, in the event the outstanding common stock is at the
time listed upon any stock exchange, unless and until the shares to be delivered
have been listed or authorized to be added to the list upon official notice of
legal matters in connection with the issuance and delivery of shares have been
approved by the Company's counsel. Without limiting the generality of the
foregoing, the Company may require from the Optionee such investment
representation or such agreement, if any, as counsel for the Company may
consider necessary in order to comply with the Securities Act of 1933, as
amended and may require that the Optionee agree that he will notify the Company
when he makes any disposition of the shares whether by sale, gift or otherwise.
The Company will use its best efforts to effect any such compliance or listing,
and the Optionee will take any action reasonably requested by the Company in
such connection. The Optionee will have the rights of a shareholder only as to
shares actually acquired by him upon exercise of the option granted hereby.

            4. NON-TRANSFERABILITY OF OPTION

This option may not be transferred by the Optionee otherwise than by will or by
the laws of descent and distribution; and during the Optionee's lifetime this
option may be exercised only by him.

            5. TERMINATION OF SERVICE

If the Optionee ceases to be an employee of the Company for any reason other
than his death or disability, he may thereafter exercise this option to the
extent he was entitled to exercise it on the date when his service terminated,
but only within three months after the date of such termination (unless a longer
period is allowed by the Board of Directors of the Company). In no event,
however, may the Optionee exercise this option at a time when it would not be
exercisable had the Optionee's service as an employee continued. For purposes of
this provision, the Optionee's service as an employee will not be considered
terminated in the case of a bona fide leave of absence approved by the Board of
Directors of the Company.

            6. DEATH OR DISABILITY

If the Optionee dies at a time when he is entitled to exercise all or any part
of this option, then at any time or times within three years after his death (or
such longer period as the Board of Directors of the Company may allow) such
option may be exercised, as to all or any of the shares that the Optionee was
entitled to purchase immediately prior to his death, by his executor or
administrator or the person or persons to whom the option is transferred by will
or the applicable laws of descent and distribution, and except as so exercised
such option will expire at the end of such period. In addition, if the
Optionee's employment with the Company is terminated due to disability at any
time when he is entitled to exercise all or any part of this option, then at any
time or times within three years after such date of termination this option may
be exercised, as to all or any of the shares that the Optionee was entitled to
purchase on such date of termination, by the Optionee or his legal
representative. In no event, however, may this option be exercised after the
termination of the option pursuant to any other provision of this Agreement.

            7. CHANGE OF CONTROL

In the event that within twenty-four (24) months following a Change of Control
(as hereinafter defined): (i) the Optionee's employment is terminated by the
surviving company for any reason other than Cause (as defined in the Optionee's
Employment Agreement with the Company dated [_______], 2001 (the "Employment
Agreement")); or (ii) the Optionee terminates his employment with the surviving
company due to the fact that (a) the surviving company takes any action that
results in a material diminution in Optionee's position, authority or duties as
such position, authority or duties existed immediately prior to the Change of
Control or (b) the surviving company takes any action that would require
Optionee to have his principal place of work changed to any location outside a
thirty-five mile radius of the City of Boston, then this option shall
immediately vest in full upon such termination date and shall remain exercisable
for a period of two years therefrom but not to exceed the Expiration Date.

For purposes of this Agreement, a "Change of Control " shall be deemed to have
occurred if and when:

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      (iv)  the Company executes an agreement of acquisition, merger, or
            consolidation which contemplates that after the effective date
            provided for in the agreement, all or substantially all of the
            business and/or assets of the Company shall be controlled by another
            corporation or other entity; PROVIDED, HOWEVER, for purposes of this
            clause (i) that (A) if such an agreement requires as a condition
            precedent approval by the Company's shareholders of the agreement or
            transaction, a Change in Control shall not be deemed to have taken
            place unless and until such approval is secured and, (B) if
            immediately after such effective date the voting shareholders of
            such other corporation or entity shall be substantially the same as
            the voting shareholders of the Company immediately prior to such
            effective date, the execution of such agreement shall not, by
            itself, constitute a "Change in Control;" or

      (v)   any "person" (as such term is used in Sections 13(d) or 14(d)(2) of
            the Securities Exchange Act of 1934 becomes the beneficial owner,
            directly or indirectly, of securities of the Company that represent
            35% or more of the votes that could then be cast in an election for
            members of the Company's board of directors; or

      (vi)  during any period of 24 consecutive months, commencing after the
            effective date of this Agreement, individuals who at the beginning
            of such 24-month period were directors of the Company shall cease to
            constitute at least a majority of the Company's board of directors,
            unless the election of each director who was not a director at the
            beginning of such period has been approved in advance by directors
            representing at least two thirds of (A) the directors then in office
            who were directors at the beginning of the 24-month period, or (B)
            the directors specified in clause (A) plus directors whose election
            has been so approved by directors specified in clause (A).

            8. ADMINISTRATION

The option granted by this agreement will be administered by the Board of
Directors of the Company which will have the authority to interpret this
agreement and to decide all questions and settle all controversies and disputes
which may arise in connection therewith. All decisions, determinations and
interpretations of the Board of Directors will be binding on all parties
concerned. A majority of the members of the Board of Directors will constitute a
quorum, and all determinations of the Board of Directors will be made by a
majority of its members. Any determination of the Board of Directors under this
agreement may be made without notice or meeting of the Board of Directors by a
written instrument signed by a majority of the members of the Board of
Directors.

            9. STOCK TO BE DELIVERED

Stock to be delivered upon exercise of this option will be common stock of the
Company and may constitute an original issue of authorized but unissued stock or
may consist of previously issued stock acquired by the Company as determined
from time to time by the Board of Directors. The Board of Directors and the
proper officers of the Company will take any appropriate action required for
such delivery.

            10. CHANGES IN STOCK

In the event of a stock dividend, split-up or combination of shares,
recapitalization or merger in which the Company is the surviving corporation, or
other similar capital change, the number and kind of shares of stock or
securities of the Company subject to the option granted hereby, the option price
and other relevant provisions will be appropriately adjusted by the Board of
Directors of the Company, whose determination will be binding on the Optionee.

In the event of a consolidation or merger in which the Company is not the
surviving corporation or which results in the acquisition of substantially all
the Company's outstanding common stock by a single person or entity or by a
group of persons and/or entities acting in concert, or in the event of the sale
or transfer of substantially all the Company's assets, this option shall
thereupon terminate, provided that this option shall become exercisable
immediately prior to consummation of such merger, consolidation or sale of
assets unless, if there is a surviving or

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acquiring corporation, the Board of Directors has arranged, subject to
consummation of the merger, consolidation or sale of assets, for the assumption
of this option or the grant to the Optionee of a replacement award (in each
case, on substantially the same terms as set forth in this agreement, including,
without limitation, the provisions of Sections 6 and 7 hereof) by the surviving
or acquiring corporation or an affiliate of that corporation.

            11. AMENDMENTS

The Board of Directors of the Company may at any time or times amend the option
granted hereby for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which may at the time be
permitted by law, provided that no such amendment will adversely affect the
rights of the Optionee without his consent.

            12. GOVERNING LAW

This agreement shall be governed by and construed in accordance with the
internal laws of The Commonwealth of Massachusetts.

     IN WITNESS WHEREOF, the Company has caused this agreement to be executed by
its duly authorized officer, under its corporate seal. This option is granted at
the Company's office, on the date stated below.

GENOME THERAPEUTICS CORP.

By: /s/ NORBERT RIEDEL
   -------------------------------------------
   Chairman of the Compensation Committee
   of the Board of Directors

Date: As of October 26, 2000

Accepted and Agreed:

/s/ STEVEN M. RAUSCHER
---------------------------
Steven M. Rauscher

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                                                                    EXHIBIT 4(c)

                            GENOME THERAPEUTICS CORP.
                               2001 INCENTIVE PLAN

1.   DEFINED TERMS

     Exhibit A, which is incorporated by reference, defines the terms used in
the Plan and sets forth certain operational rules related to those terms.

1.   GENERAL

     The Plan has been established to advance the interests of the Company by
giving selected Employees, directors and other persons (including both
individuals and entities) who provide services to the Company or its Affiliates
stock-based incentives or incentives based on Performance Criteria.

2.   ADMINISTRATION

     The Administrator has discretionary authority, subject only to the express
provisions of the Plan, to interpret the Plan; determine eligibility for and
grant Awards; determine, modify or waive the terms and conditions of any Award;
prescribe forms, rules and procedures (which it may modify or waive); and
otherwise do all things necessary to carry out the purposes of the Plan. Once an
Award has been communicated in writing to a Participant, the Administrator may
not, without the Participant's consent, alter the terms of the Award so as to
affect adversely the Participant's rights under the Award, unless the
Administrator expressly reserved the right to do so in writing at the time of
such communication. In the case of any Award intended to be eligible for the
performance-based compensation exception under Section 162(m), the Administrator
shall exercise its discretion consistent with qualifying the Award for such
exception.

3.   LIMITS ON AWARD UNDER THE PLAN

     a.   NUMBER OF SHARES

     A maximum of 3,400,000 shares of Stock may be delivered in satisfaction of
Awards under the Plan. For purposes of the preceding sentence, the following
shares shall not be considered to have been delivered under the Plan: (i) shares
remaining under an Award that terminates without having been exercised in full;
(ii) shares subject to an Award, where cash is delivered to a Participant in
lieu of such shares; and (iii) shares of Restricted Stock that have been
forfeited in accordance with the terms of the applicable Award; and (iv) shares
held back in satisfaction of tax withholding requirements from shares that would
otherwise have been delivered pursuant to an Award. The number of shares of
Stock delivered under an Award shall be determined net of any previously
acquired shares of Stock tendered by the Participant in payment of withholding
taxes.

     b.   TYPE OF SHARES

     Stock delivered by the Company under the Plan may be authorized but
unissued Stock or previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock will be delivered under the Plan.

     c.   OPTION & SAR LIMITS

     The maximum number of shares of Stock for which Stock Options may be
granted to any person in any calendar year, the maximum number of shares of
Stock subject to SARs granted to any person in any calendar year and the
aggregate maximum number of shares of Stock subject to other Awards (other than
Restricted Stock Awards) that may be delivered to any person in any calendar
year shall each be 1,000,000, and the aggregate

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maximum number of shares of Stock subject to Restricted Stock Awards that may be
delivered to any person in any calendar year shall each be 100,000. For purposes
of the preceding sentence, the repricing of a Stock Option or SAR shall be
treated as a new grant to the extent required under Section 162(m). Subject to
these limitations, each person eligible to participate in the Plan shall be
eligible in any year to receive Awards covering up to the full number of shares
of Stock then available for Awards under the Plan.

     d.   OTHER AWARD LIMITS

     No more than $500,000 may be paid to any individual with respect to any
Cash Performance Award. In applying the limitation of the preceding sentence:
(A) multiple Cash Performance Awards to the same individual that are determined
by reference to performance periods of one year or less ending with or within
the same fiscal year of the Company shall be subject in the aggregate to one
limit of such amount, and (B) multiple Cash Performance Awards to the same
individual that are determined by reference to one or more multi-year
performance periods ending in the same fiscal year of the Company shall be
subject in the aggregate to a separate limit of such amount. With respect to any
Performance Award other than a Cash Performance Award or a Stock Option or SAR,
the maximum Award opportunity shall be 100,000 shares of Stock or their
equivalent value in cash, subject to the limitations of Section 4.c.

4.   ELIGIBILITY AND PARTICIPATION

     The Administrator will select Participants from among those Employees,
directors and other individuals or entities providing services to the Company or
its Affiliates who, in the opinion of the Administrator, are in a position to
make a significant contribution to the success of the Company and its
Affiliates. Eligibility for ISOs is further limited to those individuals whose
employment status would qualify them for the tax treatment described in Sections
421 and 422 of the Code.

5.   RULES APPLICABLE TO AWARDS

     a.   ALL AWARDS

          (1) TERMS OF AWARDS. The Administrator shall determine the terms of
all Awards subject to the limitations provided herein.

          (2) PERFORMANCE CRITERIA. Where rights under an Award depend in whole
or in part on satisfaction of PERFORMANCE Criteria, actions by the Company that
have an effect, however material, on such Performance Criteria or on the
likelihood that they will be satisfied will not be deemed an amendment or
alteration of the Award.

          (3) TRANSFERABILITY OF AWARDS. Except as the Administrator otherwise
expressly provides, Awards may not be TRANSFERRED other than by will or by the
laws of descent and distribution, and during a Participant's lifetime an Award
requiring exercise may be exercised only by the Participant (or in the event of
the Participant's incapacity, the person or persons legally appointed to act on
the Participant's behalf).

          (4) VESTING, ETC. Without limiting the generality of Section 3, the
Administrator may determine the time or times at which an Award will vest (i.e.,
become free of forfeiture restrictions) or become exercisable and the terms on
which an Award requiring exercise will remain exercisable. Unless the
Administrator expressly provides otherwise, immediately upon the cessation of
the Participant's employment or other service relationship with the Company and
its Affiliates, an Award requiring exercise will cease to be exercisable, and
all Awards to the extent not already fully vested will be forfeited, except
that:

     (A) all Stock Options and SARs held by the Participant immediately prior to
the cessation of the Participant's employment or other service relationship for
reasons other than death and except as provided in (B) below, to the extent then
exercisable, will remain exercisable for the lesser of (i) a period of three
months or (ii) the

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period ending on the latest date on which such Stock Option or SAR could have
been exercised without regard to this Section 6.a.(5), and shall thereupon
terminate;

     (B) all Stock Options and SARs held by a Participant immediately prior to
his or her death, to the extent then exercisable, will remain exercisable by
such Participant's executor or administrator or the person or persons to whom
the Stock Option or SAR is transferred by will or the applicable laws of descent
and distribution, for the lesser of (i) a one year ending with the first
anniversary of the Participant's death period (or such longer or shorter period
as is determined by the Administrator) or (ii) the period ending on the latest
date on which such Stock Option or SAR could have been exercised without regard
to this Section 6.a.(5) and shall thereupon terminate; and

     (C) all Stock Options and SARs held by the Participant whose cessation of
employment or other service relationship is determined by the Administrator in
its sole discretion to result for reasons which cast such discredit on the
Participant as to justify immediate termination of the Award shall immediately
terminate upon such cessation.

Unless the Administrator expressly provides otherwise, a Participant's
"employment or other service relationship with the Company and its Affiliates"
will be deemed to have ceased, in the case of an employee Participant, upon
termination of the Participant's employment with the Company and its Affiliates
(whether or not the Participant continues in the service of the Company or its
Affiliates in some capacity other than that of an employee of the Company or its
Affiliates), and in the case of any other Participant, when the service
relationship in respect of which the Award was granted terminates (whether or
not the Participant continues in the service of the Company or its Affiliates in
some other capacity).

          (5) TAXES. The Administrator will make such provision for the
withholding of taxes as it deems necessary. The Administrator may, but need not,
hold back shares of Stock from an Award or permit a Participant to tender
previously owned shares of Stock in satisfaction of tax withholding
requirements.

          (6)  DIVIDEND EQUIVALENTS, ETC. The Administrator may provide for the
payment of amounts in lieu of cash dividends or other cash distributions with
respect to Stock subject to an Award.

          (7)  RIGHTS LIMITED. NOTHING IN THE PLAN SHALL BE CONSTRUED AS GIVING
ANY PERSON THE RIGHT TO CONTINUED EMPLOYMENT or service with the Company or its
Affiliates, or any rights as a shareholder except as to shares of Stock actually
issued under the Plan. The loss of existing or potential profit in Awards will
not constitute an element of damages in the event of termination of employment
or service for any reason, even if the termination is in violation of an
obligation of the Company or Affiliate to the Participant.

          (8)  SECTION 162(m). In the case of an Award intended to be eligible
for the performance-based compensation exception under Section 162(m), the Plan
and such Award shall be construed to the maximum extent permitted by law in a
manner consistent with qualifying the Award for such exception. In the case of a
Performance Award intended to qualify as performance-based for the purposes of
Section 162(m) (other than a Stock Option or SAR with an exercise price at least
equal to the fair market value of the underlying Stock on the date of grant),
the Committee shall in writing preestablish one or more specific Performance
Criteria no later than 90 days after the commencement of the period of service
to which the performance relates (or at such earlier time as is required to
qualify the Award as performance-based under Section 162(m)). Prior to payment
of any Performance Award (other than a Stock Option or SAR with an exercise
price at least equal to the fair market value of the underlying Stock on the
date of grant) intended to qualify as performance-based under Section 162(m),
the Committee shall certify whether the Performance Criteria have been attained
and such determination shall be final and conclusive. If the Performance
Criteria with respect to any such Award are not attained, no other Award shall
be provided in substitution of the Performance Award.

     b.   AWARDS REQUIRING EXERCISE

          (1) TIME AND MANNER OF EXERCISE. Unless the Administrator expressly
provides otherwise, (a) an Award requiring exercise by the holder will not be
deemed to have been exercised until the Administrator receives

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a written notice of exercise (in form acceptable to the Administrator) signed by
the appropriate person and accompanied by any payment required under the Award;
and (b) if the Award is exercised by any person other than the Participant, the
Administrator may require satisfactory evidence that the person exercising the
Award has the right to do so.

          (2) EXERCISE PRICE. The Administrator shall determine the exercise
price of each Stock Option provided that each Stock Option intended to qualify
for the performance-based exception under Section 162(m) of the Code and each
ISO must have an exercise price that is not less than the fair market value of
the Stock subject to the Stock Option, determined as of the date of grant. An
ISO granted to an Employee described in Section 422(b)(6) of the Code must have
an exercise price that is not less than 110% of such fair market value.

          (3) PAYMENT OF EXERCISE PRICE, IF ANY. Where the exercise of an Award
is to be accompanied by payment, the Administrator may determine the required or
permitted forms of payment, subject to the following: (a) all payments will be
by cash or check acceptable to the Administrator, or, if so permitted by the
Administrator (with the consent of the optionee of an ISO if permitted after the
grant), (i) through the delivery of shares of Stock which have been outstanding
for at least six months (unless the Administrator approves a shorter period) and
which have a fair market value equal to the exercise price, (ii) by delivery of
a promissory note of the person exercising the Award to the Company, payable on
such terms as are specified by the Administrator, (iii) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by any combination
of the foregoing permissible forms of payment; and (b) where shares of Stock
issued under an Award are part of an original issue of shares, the Award shall
require an exercise price equal to at least the par value of such shares.

          (4) ISOs. No ISO may be granted under the Plan after December 4, 2010,
but ISOs previously granted may extend beyond that date.

     c.   AWARDS NOT REQUIRING EXERCISE

     Awards of Restricted Stock and Unrestricted Stock may be made in return for
either (i) services determined by the Administrator to have a value not less
than the par value of the Awarded shares of Stock, or (ii) cash or other
property having a value not less than the par value of the Awarded shares of
Stock plus such additional amounts (if any) as the Administrator may determine
payable in such combination and type of cash, other property (of any kind) or
services as the Administrator may determine.

7.   EFFECT OF CERTAIN TRANSACTIONS

     a.   MERGERS, ETC.

     In the event of a consolidation or merger in which the Company is not the
surviving corporation or which results in the acquisition of substantially all
the Company's outstanding Stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all the Company's assets, all outstanding awards shall
thereupon terminate, provided that all outstanding awards shall become
exercisable immediately prior to consummation of such merger, consolidation or
sale of assets unless, if there is a surviving or acquiring corporation, the
Board has arranged, subject to consummation of the merger, consolidation or sale
of assets, for the assumption of the awards or the grant to participants of
replacement awards by the surviving or acquiring corporation or an affiliate of
that corporation, which awards in the case of incentive options shall satisfy
the requirements of section 424(a) of the Code.

     The Board may grant awards under the Plan in substitution for awards held
by directors, employees, consultants or advisers of another corporation who
concurrently become directors, employees, consultants or advisers of the Company
or a subsidiary of the Company as the result of a merger or consolidation of
that corporation with the Company or a subsidiary of the Company, or as the
result of the acquisition by the Company or a subsidiary of the Company of
property or stock of that corporation. The Company may direct that substitute
awards be granted on such terms and conditions as the Board considers
appropriate in the circumstances.

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     b.   CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK

          (1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock dividend,
stock split or combination of shares, recapitalization or other change in the
Company's capital structure, the Administrator will make appropriate adjustments
to the maximum number of shares that may be delivered under the Plan under
Section 4.a. and to the maximum share limits described in Section 4.c., and will
also make appropriate adjustments to the number and kind of shares of stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change.

          (2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also make
adjustments of the type described in paragraph (1) above to take into account
distributions to common stockholders other than those provided for in Section
7.a. and 7.b.(1), or any other event, if the Administrator determines that
adjustments are appropriate to avoid distortion in the operation of the Plan and
to preserve the value of Awards made hereunder; provided, that no such
adjustment shall be made to the maximum share limits described in Section 4.c.
or 4.d., or otherwise to an Award intended to be eligible for the
performance-based exception under Section 162(m), except to the extent
consistent with that exception, nor shall any change be made to ISOs except to
the extent consistent with their continued qualification under Section 422 of
the Code.

          (3) CONTINUING APPLICATION OF PLAN TERMS. References in the Plan to
shares of Stock shall be construed to include any stock or securities resulting
from an adjustment pursuant to Section 7.b.(1) or 7.b.(2) above.

6.   LEGAL CONDITIONS ON DELIVERY OF STOCK

     The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove any restriction from shares of Stock previously
delivered under the Plan until the Company's counsel has approved all legal
matters in connection with the issuance and delivery of such shares; if the
outstanding Stock is at the time of delivery listed on any stock exchange or
national market system, the shares to be delivered have been listed or
authorized to be listed on such exchange or system upon official notice of
issuance; and all conditions of the Award have been satisfied or waived. If the
sale of Stock has not been registered under the Securities Act of 1933, as
amended, the Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act. The Company may require that
certificates evidencing Stock issued under the Plan bear an appropriate legend
reflecting any restriction on transfer applicable to such Stock.

7.   AMENDMENT AND TERMINATION

     Subject to the last sentence of Section 3, the Administrator may at any
time or times amend the Plan or any outstanding Award for any purpose which may
at the time be permitted by law, or may at any time terminate the Plan as to any
further grants of Awards; provided, that (except to the extent expressly
required or permitted by the Plan) no such amendment will, without the approval
of the stockholders of the Company, effectuate a change for which stockholder
approval is required in order for the Plan to continue to qualify under Section
422 of the Code and for Awards to be eligible for the performance-based
exception under Section 162(m).

8.   NON-LIMITATION OF THE COMPANY'S RIGHTS

     The existence of the Plan or the grant of any Award shall not in any way
affect the Company's right to award a person bonuses or other compensation in
addition to Awards under the Plan.

9.   GOVERNING LAW

     The Plan shall be construed in accordance with the laws of The Commonwealth
of Massachusetts.

                                     II-19
<PAGE>   6

                                                                       EXHIBIT A

                               DEFINITION OF TERMS

     The following terms, when used in the Plan, shall have the meanings and be
subject to the provisions set forth below:

     "ADMINISTRATOR": The Board or, if one or more has been appointed, the
Committee.

     "AFFILIATE": Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock of the Company, or in which the
Company or any such corporation or other entity owns, directly or indirectly,
50% of the outstanding capital stock (determined by aggregate voting rights) or
other voting interests.

     "AWARD": Any or a combination of the following:
          (i) Stock Options.
          (ii) SARs.
          (iii) Restricted Stock.
          (iv) Unrestricted Stock.
          (v)  Deferred Stock.
          (vi) Securities (other than Stock Options) that are convertible into
     or exchangeable for Stock on such terms and conditions as the Administrator
     determines.
          (vii) Cash Performance Awards.
          (viii)  Performance Awards.
          (ix) Grants of cash, or loans, made in connection with other Awards in
     order to help defray in whole or in part the economic cost (including tax
     cost) of the Award to the Participant.

     "BOARD": The Board of Directors of the Company.

     "CASH PERFORMANCE AWARD": A Performance Award payable in cash. The right of
the Company under Section 6.a.(3) to extinguish an Award in exchange for cash or
the exercise by the Company of such right shall not make an Award otherwise not
payable in cash a Cash Performance Award.

     "CODE": The U.S. Internal Revenue Code of 1986 as from time to time amended
and in effect, or any successor statute as from time to time in effect.

     "COMMITTEE": One or more committees of the Board which in the case of
Awards granted to officers of the Company shall be comprised solely of two or
more outside directors within the meaning of Section 162(m). Any Committee may
delegate ministerial tasks to such persons (including Employees) as it deems
appropriate.

     "COMPANY": Genome Therapeutics Corp.

     "DEFERRED STOCK": A promise to deliver Stock or other securities in the
future on specified terms.

     "EMPLOYEE": Any person who is employed by the Company or an Affiliate.

     "ISO": A Stock Option intended to be an "incentive stock option" within the
meaning of Section 422 of the Code. No Stock Option Awarded under the Plan will
be an ISO unless the Administrator expressly provides for ISO treatment.

     "PARTICIPANT": An Employee, director or other person providing services to
the Company or its Affiliates who is granted an Award under the Plan.

                                     II-20
<PAGE>   7

     "PERFORMANCE AWARD": An Award subject to Performance Criteria. The
Committee in its discretion may grant Performance Awards that are intended to
qualify for the performance-based compensation exception under Section 162(m)
and Performance Awards that are not intended so to qualify.

     "PERFORMANCE CRITERIA": Specified criteria the satisfaction of which is a
condition for the exercisability, vesting or full enjoyment of an Award. For
purposes of Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion shall mean an objectively determinable measure of performance relating
to any of the following (determined either on a consolidated basis or, as the
context permits, on a divisional, subsidiary, line of business, project or
geographical basis or in combinations thereof): (i) sales; revenues; assets;
expenses; earnings before or after deduction for all or any portion of interest,
taxes, depreciation, amortization or other items, whether or not on a continuing
operations or an aggregate or per share basis; return on equity, investment,
capital or assets; one or more operating ratios; borrowing levels, leverage
ratios or credit rating; market share; capital expenditures; cash flow; stock
price; stockholder return; network deployment; sales of particular products or
services; customer acquisition, expansion and retention; or any combination of
the foregoing; or (ii) acquisitions and divestitures (in whole or in part);
joint ventures and strategic alliances; spin-offs, split-ups and the like;
reorganizations; recapitalizations, restructurings, financings (issuance of debt
or equity) and refinancings; transactions that would constitute a change of
control; or any combination of the foregoing. A Performance Criterion measure
and targets with respect thereto determined by the Administrator need not be
based upon an increase, a positive or improved result or avoidance of loss.

     "PLAN": The Genome Therapeutics Corp. 2001 Incentive Plan as from time to
time amended and in effect.

     "RESTRICTED STOCK": An Award of Stock subject to restrictions requiring
that such Stock be redelivered to the Company if specified conditions are not
satisfied.

     "SECTION 162(m)": Section 162(m) of the Code.

     "SARS": Rights entitling the holder upon exercise to receive cash or Stock,
as the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by which
the Stock has appreciated in value since the date of the Award.

     "STOCK": Common Stock of the Company, par value $ .10 per share.

     "STOCK OPTIONS": Options entitling the recipient to acquire shares of Stock
upon payment of the exercise price.

     "UNRESTRICTED STOCK": An Award of Stock not subject to any restrictions
under the Plan.

                                     II-21

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