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Exhibit 10.4  

 
 

NAPRO BIOTHERAPEUTICS, INC.
  1998 STOCK INCENTIVE PLAN
  (formerly, the 1998 Stock Option Plan of NaPro BioTherapeutics, Inc.)
  (Amended and Restated Effective January 1, 2001, and as further
amended effective
  December 16, 2000, June 21, 2001, September 25, 2001, and October 15, 2002)    
    

        1.     Introduction and Purpose. NaPro BioTherapeutics, Inc., a Delaware corporation (the "Company") previously adopted
the 1998 Stock Option Plan of NaPro BioTherapeutics, Inc., originally effective March 27, 1998 (the "Original Plan"). The Original Plan was amended and restated in its entirety,
generally effective as of January 1, 2001, and renamed the 1998 Stock Incentive Plan of NaPro BioTherapeutics, Inc. (the "Plan"). The purpose of the Plan is to advance the interests of
the Company and its stockholders by providing incentives to certain employees of the Company and to certain other individuals who perform services for the Company, including those who contribute
significantly to the strategic and long-term performance objectives and growth of the Company. 

        2.     Administration. The Plan shall be administered solely by the Board of Directors (the "Board") of the Company or, if the
Board shall so designate, by a committee of the Board that shall be comprised of not fewer than two directors (the "Committee"); provided that the Committee may delegate the administration of the Plan
in whole or in part, on such terms and conditions, to such other person or persons as it may determine in its discretion. References to the Committee hereunder shall include the Board where
appropriate. 

        The
Committee has all the powers vested in it by the terms of the Plan set forth herein, such powers to include exclusive authority (except as may be delegated as permitted herein)
(i) to select the employees and other individuals to be granted Awards under the Plan, (ii) to determine the type, size and terms of the Award to be made to each individual selected,
subject to the limitations set forth in Paragraph 4(b), (iii) to modify the terms of any Award that has been granted, (iv) to determine the time when Awards will be granted,
(v) to establish performance objectives, (vi) to make any adjustments necessary or desirable as a result of the granting of Awards to eligible individuals located outside the United
States and (vii) to prescribe the form of the instruments embodying Awards made under the Plan. The Committee is authorized (A) to interpret the Plan and the Awards granted under the
Plan, (B) to establish, amend and rescind any rules and regulations relating to the Plan, and (C) to make any other
determinations which it deems necessary or desirable for the administration of the Plan. The Committee (or its delegate as permitted herein) may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any Awards in the manner and to the extent the Committee deems necessary or desirable to carry it into effect. Any decision of the Committee (or its delegate as
permitted herein) in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties
concerned. The Committee may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their members or any officer of the Company to execute
and deliver documents or to take any other ministerial action on behalf of the Committee with respect to Awards made or to be made to Plan participants. No member of the Committee and no officer of
the Company shall be liable for anything done or omitted to be done by him, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the
Plan, except for his own willful misconduct or as expressly provided by statute. Determinations to be made by the Committee under the Plan may be made by its delegates as permitted herein. 

        3.     Eligibility. Consistent with the purposes of the Plan and subject to this Section 3, the Committee shall have
exclusive power (except as may be delegated as permitted herein) to select the employees and other individuals performing services for the Company and any of its subsidiaries who may participate in
the Plan and be granted Awards under the Plan. Awards under the Plan may not be granted to persons subject to the provisions of Section 16 of the Securities Exchange Act of 1934 (the

 
"34 Act") at the time of the grant, unless such Awards are made to officers of the Company not previously employed by the Company, as an inducement essential to such officers entering into employment
contracts with the Company. Eligible individuals may be selected individually or by groups or categories, as determined by the Committee in its discretion. 

        4.     Awards under the Plan.

        (a)   Types of Awards. Awards under the Plan may include, but need not be limited to, one or more of the following types,
either alone or in any combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights," (iii) "Restricted Stock," (iv) "Performance Grants" and (v) any
other type of Award deemed by the Committee in its discretion to be consistent with the purposes of the Plan (including, but not limited to, Awards of or options or similar rights granted with respect
to unbundled stock units or components thereof, and Awards to be made to participants who are foreign nationals or are employed or performing services outside the United States). Stock Options may be
granted under the Plan effective March 27, 1998. Restricted Stock may be granted under the Plan effective September 13, 2000. Stock Appreciation Rights, Performance Grants, and any other
type of Award permitted under the Plan may be granted effective January 1, 2001. Stock Options are rights to purchase common shares of the
Company having a par value of $.0075 per share and stock of any other class into which such shares may thereafter be changed (the "Common Shares"). Stock Options which may be granted under the Plan
include "Nonqualified Stock Options" (which may be awarded to participants or sold at a price determined by the Committee ("Purchased Options")), "Incentive Stock Options," or combinations thereof.
Nonqualified Stock Options and Incentive Stock Options are subject to the terms, conditions and restrictions specified in Paragraph 5. Stock Appreciation Rights are rights to receive (without
payment to the Company) cash, Common Shares, other Company securities (which may include, but need not be limited to, unbundled stock units or components thereof, debentures, preferred stock,
warrants, securities convertible into Common Shares or other property ("Other Company Securities")) or property, or other forms of payment, or any combination thereof, as determined by the Committee,
based on the increase in the value of the number of Common Shares specified in the Stock Appreciation Right. Stock Appreciation Rights are subject to the terms, conditions and restrictions specified
in Paragraph 6. Shares of Restricted Stock are Common Shares which are issued subject to certain restrictions pursuant to Paragraph 7. Performance Grants are contingent awards subject to
the terms, conditions and restrictions described in paragraph 8, pursuant to which the participant may become entitled to receive cash, Common Shares, Other Company Securities or property, or
other forms of payment, or any combination thereof, as determined by the Committee. 

        (b)   Maximum Number of Shares That May be Issued. There may be issued under the Plan (as Restricted Stock, in payment
of Performance Grants, pursuant to the exercise of Stock Options or Stock Appreciation Rights, or in payment of or pursuant to the exercise of such other Awards as the Committee, in its discretion,
may determine) an an aggregate of not more than 1,925,000 Common Shares, subject to adjustment as provided in Paragraph 14. The maximum number of underlying Common Shares which any participant
may be granted under Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Grants or any other Award in any one taxable year of the Company shall not exceed 200,000 Common Shares.
Common Shares issued pursuant to the Plan may be either authorized but unissued shares, treasury shares, reacquired shares, or any combination thereof. If any Common Shares issued as Restricted Stock
or otherwise subject to repurchase or forfeiture rights are reacquired by the Company pursuant to such rights, or if any Award is canceled, terminates or expires unexercised, any Common Shares that
would otherwise have been issuable pursuant thereto will be available for issuance under new Awards.

 

        (c)   Rights with respect to Common Shares and Other Securities.

        (i)    Unless
otherwise determined by the Committee in its discretion, a participant to whom an Award of Restricted Stock has been made (and any person succeeding to such a
participant's rights pursuant to the Plan) shall have, after issuance of a certificate for the number of Common Shares awarded and prior to the expiration of the Restricted Period (as hereinafter
defined), ownership of such Common Shares, including the right to vote the same and to receive dividends or other distributions made or paid with respect to such Common Shares (provided that such
Common Shares, and any new, additional or different shares, or Other Company Securities or property, or other forms of consideration which the participant may be entitled to receive with respect to
such Common Shares as a result of a stock split, stock dividend or any other change in the corporation or capital structure of
the Company, shall be subject to the restrictions hereinafter described as determined by the Committee in its discretion), subject, however, to the options, restrictions and limitations imposed
thereon pursuant to the Plan. Notwithstanding the foregoing, a participant with whom an Award agreement is made to issue Common Shares in the future, shall have no rights as a stockholder with respect
to Commons Shares related to such agreement until issuance of a certificate to him. 

        (ii)   Unless
otherwise determined by the Committee in its discretion, a participant to whom a grant of Stock Options, Stock Appreciation Rights, Performance Grants or any
other Award is made (and any person succeeding to such a participant's rights pursuant to the Plan) shall have no rights as a stockholder with respect to any Common Shares or as a holder with respect
to other securities, if any, issuable pursuant to any such Award until the date of the issuance of a stock certificate to him for such Common Shares or other instrument of ownership, if any. Except as
provided in Paragraph 14, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities, other property or other
forms of consideration, or any combination thereof) for which the record date is prior to the date such stock certificate or other instrument of ownership, if any, is issued. 

        5.     Stock Options. The Committee may grant or sell Stock Options either alone, or in conjunction with Stock Appreciation
Rights, Performance Grants or other Awards, either at the time of grant or by amendment thereafter, provided that an Incentive Stock Option may be granted only to an eligible employee of the Company
or any parent or subsidiary corporation. No Incentive Stock Option shall be granted under the Plan unless the Plan is approved by the Company's stockholders within twelve months after the date
of the Plan's adoption. Each Stock Option (referred to herein as an "Option") granted or sold under the Plan shall be evidenced by an instrument in such form as the Committee shall prescribe from time
to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions, including, but not limited to, restrictions upon the Option or
the Common Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish: 

        (a)   Notwithstanding
anything in the Plan to the contrary, effective December 16, 2000, unless approved by the holders of a majority of the shares present and entitled
to vote at a duly convened meeting of the Company's shareholders, neither the Company nor the committee shall grant an Option with an option price that is less than 100% of the fair market value of
the Common Shares subject to such Option at the time the Option is granted, as determined by the Committee, nor reduce the exercise price of any Option granted under the Plan. 

        (b)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the number of Common Shares to be subject to each Option. The
number of Common Shares subject to an outstanding Option may be reduced on a share-for-share or other appropriate

 
basis, as determined by the Committee, to the extent that Common Shares under such Option are used to calculate the cash, Common Shares, Other Company Securities or property, or other forms of
payment, or any combination thereof, received pursuant to exercise of a Stock Appreciation Right attached to such Option, or to the extent that any other Award granted in conjunction with such option
is paid. 

        (c)   The
Option may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, and shall be
exercisable during the grantee's lifetime only by him. Unless the Committee determines otherwise, the Option shall not be exercisable for at least six months after the date of grant, unless the
grantee ceases employment or performance of services before the expiration of such six-month period by reason of his disability as defined in Paragraph 12 or his death. 

        (d)   The
Option shall not be exercisable: 

        (i)    after
the expiration of ten years from the date it is granted. Any Option may be exercised during such period only at such time or times and in such installments
as the Committee may establish; 

        (ii)   unless
payment in full is made for the shares being acquired thereunder at the time of exercise; such payment shall be made in such form (including, but not limited to,
cash, Common Shares, or the surrender of another outstanding Award under the Plan, or any combination thereof) as the Committee may determine in its discretion; and 

        (iii)  unless
the person exercising the Option has been, at all times during the period beginning with the date of the grant of the Option and ending on the date of such
exercise, employed by or otherwise performing services for the Company, or a corporation, or a parent or subsidiary of a corporation, substituting or assuming the Option in a transaction to which
Section 424(a) of the Internal Revenue Code of 1986, as amended (the "Code") is applicable, except that 

        (A)  if
an employee of the Company or a person performing services for the Company shall cease such employment or performance of services (other than by a termination or
removal for cause) while holding an Option which has not expired and has not been fully exercised, such person, at any time within 90 days (or such period determined by the Committee) after the
date he ceased such
employment or performance of services (but in no event after the Option has expired), may exercise the Option with respect to any shares as to which he could have exercised the Option on the date he
ceased such employment or performance of services, or with respect to such greater number of shares as determined by the Committee; or 

        (B)  if
such person shall cease such employment or performance of services by reason of his disability as defined in Paragraph 12 or early, normal or deferred
retirement under an approved retirement program of the Company (or such other plan or arrangement as may be approved by the Committee, in its discretion, for this purpose) while holding an Option
which has not expired and has not been fully exercised, such person, at any time within three years (or such period determined by the Committee) after the date he ceased such employment or
performance of services (but in no event after the Option has expired), may exercise the Option with respect to any shares as to which he could have exercised the Option on the date he ceased such
employment or performance of services, or with respect to such greater number of shares as determined by the Committee; in the event that such a disabled person, within three years following
termination of employment, resumes his employment or performance of services for the Company: (i) such person may exercise such Option with respect to all shares underlying such

 
Option as originally granted; provided that, to the extent that any of such shares were not exercisable at the time of such person's termination of employment or performance of services by reason of
disability, such person may exercise such Option with respect to such unexercisable shares only in accordance with a revised vesting schedule as determined by the Committee and (ii) the
expiration date of such Option shall be automatically extended by a period of time equal to the period commencing on the date that such person's employment or performance of services for the Company
was terminated by reason of disability and ending on the date such person resumed employment or performance of services for the Company; provided that, notwithstanding the foregoing, the expiration
date of any Incentive Stock Option shall not in any case be so extended; or 

        (C)  if
any person to whom an Option has been granted shall die holding an Option which has not expired and has not been fully exercised, his executors, administrators,
heirs, or distributees, as the case may be, may, at any time within one year (or such other period determined by the Committee) after the date of death (but in no event after the Option has expired),
exercise the Option with respect to any shares as to which the decedent could have exercised the Option at the time of his death, or with respect to such greater number of shares as determined by the
Committee. 

        (e)   In
the case of an Incentive Stock Option, the amount of the aggregate fair market value of Common Shares (determined at the time of grant of the Option pursuant to
subparagraph 5(a) of the Plan) with respect to which Incentive Award are exercisable for the first time by an employee during any calendar year (under all such plans of his employer corporation
and its parent and subsidiary corporations) shall not exceed $100,000. 

        (f)    It
is the intent of the Company that Nonqualified Award granted under the Plan not be classified as Incentive Award, that the Incentive Award granted under the Plan be
consistent with and contain or be deemed to contain all provisions required under Section 422 and the other appropriate provisions of the Code and any implementing regulations (and any
successor provisions thereof), and that any ambiguities in construction shall be interpreted in order to effectuate such intent. 

        (g)   A
Purchased Option may contain such additional terms not inconsistent with this Plan, including but not limited to the circumstances under which the purchase price of
such Purchased Option may be returned to the optionee, as the Committee may determine in its sole discretion. 

        6.     Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights either alone, or in conjunction with Stock
Options, Performance Grants or other Awards, either at the time of grant or by amendment thereafter. Each Award of Stock Appreciation Rights granted under the Plan shall be evidenced by an instrument
in such form as the Committee shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions,
including, but not limited to, restrictions upon the Award of Stock Appreciation Rights or the Common Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish: 

        (a)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the number of Common Shares to be subject to each Award of
Stock Appreciation Rights. The number of Common Shares subject to an outstanding Award of Stock Appreciation Rights may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares under such Award of Stock Appreciation Rights are used to calculate the cash, Common Shares, Other Company Securities or
property, or other forms of payment, or any combination thereof, received pursuant to the exercise of an Option attached to such Award of Stock Appreciation Rights, or to the extent that any other
Award granted in conjunction with such Award of Stock Appreciation Rights is paid. 

 

        (b)   The
Award of Stock Appreciation Rights may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution, and shall be exercisable during the grantee's lifetime only by him. Unless the Committee determines otherwise, the Award of Stock Appreciation Rights shall not be exercisable for at
least six months after the date of grant, unless the grantee ceases employment or performance of services before the expiration of such six-month period by reason of his disability
as defined in Paragraph 12 or his death. 

        (c)   The
Award of Stock Appreciation Rights shall not be exercisable: 

        (i)    after
the expiration of ten years from the date it is granted. Any Award of Stock Appreciation Rights may be exercised during such period only at such time or
times and in such installments as the Committee may establish; 

        (ii)   unless
the Option or other Award to which the Award of Stock Appreciation Rights is attached is at the time exercisable; and 

        (iii)  Unless
the person exercising the Award of Stock Appreciation Rights has been, at all times during the period beginning with the date of the grant thereof and ending on
the date of such exercise, employed by or otherwise performing services for the Company, except that 

        (A)  if
an employee of the Company or a person performing services for the Company shall cease such employment or performance of services (other than by a termination or
removal for cause) while holding an Award of Stock Appreciation Rights which has not expired and has not been fully exercised, such person, at any time within 90 days (or such period determined
by the Committee) after the date he ceased such employment or performance of services (but in no event after the Award of stock Appreciation Rights has expired), may exercise the Award of Stock
Appreciation Rights with respect to any shares as to which he could have exercised the Award of Stock Appreciation Rights on the date he ceased such employment or performance of services, or with
respect to such greater number of shares as determined by the Committee; or 

        (B)  if
such person shall cease such employment or performance of services by reason of his disability as defined in Paragraph 12 or early, normal or deferred
retirement under an approved retirement program of the Company (or such other plan or arrangement as may be approved by the Committee, in its discretion, for this purpose) while holding an Award of
Stock Appreciation Rights which has not expired and has not been fully exercised, such person may, at any time within three years (or such other period determined by the committee) after the
date he ceased such employment or performance of service (but in no event after the Award of Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation Rights with respect to any
shares as to which he could have exercised the Award of Stock Appreciation Rights on the date he ceased such employment or performance of services, or with respect to such greater number of shares as
determined by the Committee; or 

        (C)  If
any person to whom an Award of Stock Appreciation Rights has been granted shall die holding an Award of Stock Appreciation Rights which has not expired and has not
been fully exercised, his executors, administrators, heirs or distributees, as the case may be, may at any time within one year (or such other period determined by the Committee) after the date of
death (but in no event after the Award of Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation Rights with respect to any shares as to which the decedent could have
exercised the Award of Stock Appreciation Rights at the time of his death, or with respect to such greater number of shares as determined by the Committee.

 

        (d)   An
Award of Stock Appreciation Rights shall entitled the holder (or any person entitled to act under the provisions of subparagraph 6(c)(iii)(C) hereof) to exercise such
Award or to surrender unexercised the Option (or other Award) to which the Stock Appreciation Right is attached (or any portion of such Option or other Award) to the Company and to receive from the
Company in exchange thereof, without payment to the Company, that number of Common Shares having an aggregate value equal to (or, in the discretion of the Committee, less than) the excess of the fair
market value of one share, at the time of such exercise, over the exercise price (or Option Price, as the case may be), times the number of shares subject to the Award or the Option (or other Award),
or portion thereof, which is so exercised or surrendered, as the case may be. The Committee shall be entitled in its discretion to elect to settle the obligation arising out of the exercise of a Stock
Appreciation Right by the payment of cash or Other Company Securities or property, or other forms of payment, or any combination thereof, as determined by the Committee, equal to the aggregate value
of the Common Shares it would otherwise be obligated to deliver. Any such election by the Committee shall be made as soon as practicable after the receipt by the Committee of written notice of the
exercise of the Stock Appreciation Right. The value of a Common Share, Other Company Securities or property, or other forms of payment determined by the Committee for this purpose shall be the fair
market value thereof on the last business day next preceding the date of the election to exercise the Stock Appreciation Right, unless the Committee, in its discretion, determines otherwise. 

        (e)   A
Stock Appreciation Right may provide that it shall be deemed to have been exercised at the close of business on the business day preceding the expiration date of the
stock Appreciation Right or of the related Option (or other Award), or such other date as specified by the Committee, if at such time such Stock Appreciation Right has a positive value. Such deemed
exercise shall be settled or paid in the same manner as a regular exercise thereof as provided in subparagraph 6(d) hereof. 

        (f)    No
fractional shares may be delivered under this Paragraph 6, but in lieu thereof a cash or other adjustment shall be made as determined by the Committee in its
discretion. 

        7.     Restricted Stock. Each Award of Restricted Stock under the Plan shall be evidenced by an instrument in such form as the
Committee shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions as the Committee, in its
discretion, shall establish: 

        (a)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the number of Common Shares to be issued to a participant
pursuant to the Award, and the extent, if any, to which they shall be issued in exchange for cash, other consideration, or both. 

        (b)   Restricted
Stock awarded to a participant in accordance with the Award shall be subject to the following restrictions until the expiration of such period as the
Committee shall determine, from the date on which the Award is granted (the "Restricted Period"): (i) a participant to whom an Award of Restricted Stock is made shall be issued, but shall not
be entitled to, the delivery of a stock certificate, (ii) the Restricted Stock shall not be transferable prior to the end of the Restricted Period, (iii) the Restricted Stock shall be
forfeited and the stock certificate shall be returned to the Company and all rights of the holder of such Restricted Stock to such shares and as a shareholder shall terminate without further
obligation on the part of the Company if the participant's continuous employment or performance of services for the Company shall terminate for any reason prior to the end of the Restricted Period,
except as otherwise provided in subparagraph 7(c), and (iv) such other restrictions as determined by the Committee in its discretion.

 

        (c)   If
a participant who has been in continuous employment or performance of services for the Company since the date on which a Restricted Stock Award was granted to him
shall, while in such employment or performance of services, die, or terminate such employment or performance of services by reason of disability as defined in Paragraph 12 or by reason of
early, normal or deferred retirement under an approved retirement program of the Company (or such other plan or arrangement as may be approved by the Committee in its discretion, for this purpose) and
any of such events shall occur after the date on which the Award was granted to him and prior to the end of the Restricted Period of such Award, the Committee may determine to cancel any and all
restrictions on any or all of the Common Shares subject to such Award. 

        8.     Performance Grants. The Award of a Performance Grant ("Performance Grant") to a participant will entitle him to receive a
specified amount determined by the Committee (the "Actual Value"), if the terms and conditions specified herein and in the Award are satisfied. Each Award of a Performance Grant shall be subject to
the following terms and conditions, and to such other terms and conditions, including but not limited to, restrictions upon any cash, Common Shares, Other Company Securities or property, or other
forms of payment, or any combination thereof, issued in respect of the Performance Grant, as the Committee, in its discretion, shall establish, and shall be embodied in an instrument in such form and
substance as is determined by the Committee: 

        (a)   Subject
to the per participant limitation set forth in Paragraph 4(b), the Committee shall determine the value or range of values of a Performance Grant to be
awarded to each participant selected for an Award and whether or not such a Performance Grant is granted in conjunction with an Award of Options, Stock Appreciation Rights, Restricted Stock or other
Award, or any combination thereof, under the Plan (which may include, but need not be limited to, deferred Awards) concurrently or subsequently granted to the participant (the "Associated Award"). As
determined by the Committee, the maximum value of each Performance Grant (the "Maximum Value") shall be: (i) an amount fixed by the Committee at the time the Award is made or amended
thereafter, (ii) an amount which varies from time to time based in whole or in part on the then current value of the Common Shares, Other Company Securities or property, or other securities or
property, or any combination thereof or (iii) an amount that is determinable from criteria specified by the Committee. Performance Grants may be issued in different classes or series having
different names, terms and conditions. In the case of a Performance Grant awarded in conjunction with an Associated Award, the Performance Grant may be reduced on an appropriate basis to the extent
that the Associated Award has been exercised, paid to or otherwise received by the participant, as determined by the Committee. 

        (b)   The
award period ("Award Period") related to any Performance Grant shall be a period determined by the Committee. At the time each Award is made, the Committee shall
establish performance objectives to be attained within the Award Period as the means of determining the Actual Value of such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be limited to, the performance of the participant, the Company, one or more of its subsidiaries or one or more of their divisions or
units, or any combination of the foregoing, as the Committee shall determine, and may be applied on an absolute basis or be relative to industry or other indices, or any combination thereof. The
Actual Value of a Performance Grant shall be equal to its Maximum Value only if the performance objectives are attained in full, but the Committee shall specify the manner in which the Actual Value of
Performance Grants shall be determined if the performance objectives are met in part. Such performance measures, the Actual Value or the Maximum Value, or any combination thereof, may be adjusted in
any manner by the Committee in its discretion at any time and from time to time during or as soon as practicable after the Award Period, if it determines that such performance measures, the Actual
Value or the Maximum Value, or any combination thereof, are not appropriate under the circumstances.

 

        (c)   The
rights of a participant in Performance Grants awarded to him shall be provisional and may be canceled or paid in whole or in part, all as determined by the
Committee, if the participant's continuous employment or performance of services for the Company shall terminate for any reason prior to the end of the Award Period. 

        (d)   The
Committee shall determine whether the conditions of subparagraph 8(b) or 8(c) hereof have been met and, if so, shall ascertain the Actual Value of the
Performance Grants. If the Performance Grants have no Actual Value, the Award and such Performance grants shall be deemed to have been
canceled and the Associated Award, if any, may be canceled or permitted to continue in effect in accordance with its terms. If the Performance Grants have any Actual Value and: 

        (i)    were
not awarded in conjunction with an Associated Award, the Committee shall cause an amount equal to the Actual Value of the Performance Grants earned by the
participant to be paid to him or his beneficiary as provided below; or 

        (ii)   were
awarded in conjunction with an Associated Award, the Committee shall determine, in accordance with criteria specified by the Committee (a) to cancel the
Performance Grants, in which event no amount in respect thereof shall be paid to the participant or his beneficiary, and the Associated Award may be permitted to continue in effect in accordance with
its terms, (B) to pay the Actual Value of the Performance Grants to the participant or his beneficiary as provided below, in which event the Associated Award may be canceled or (C) to
pay to the participant or his beneficiary as provided below, the Actual Value of only a portion of the Performance Grants, in which event all or a portion of the Associated Award may be permitted to
continue in effect in accordance with its terms or be canceled, as determined by the Committee. 

        Such
determination by the Committee shall be made as promptly as practicable following the end of the Award Period or upon the earlier termination of employment or performance of
services, or at such other time or times as the Committee shall determine, and shall be made pursuant to criteria specified by the Committee. 

        Payment
of any amount in respect of the Performance Grants which the Committee determines to pay as provided above shall be made by the Company as promptly as practicable after the end
of the Award Period or at such other time or times as the Committee shall determine, and may be made in cash, Common Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such manner, as determined by the Committee in its discretion. Notwithstanding anything in this Paragraph 8 to the contrary, the Committee may, in its discretion,
determine and pay out the Actual Value of the Performance Grants at any time during the Award Period. 

        9.     Deferral of Compensation. The Committee shall determine whether or not an Award shall be made in conjunction with deferral
of the participant's salary, bonus or other compensation, or any combination thereof, and whether or not such deferred amounts may be 

        (i)    forfeited
to the Company or to other participants or any combination thereof, under certain circumstances (which may include, but need not be limited to, certain types
of termination of employment or performance of services for the Company), 

        (ii)   subject
to increase or decrease in value based upon the attainment of or failure to attain, respectively, certain performance measures and/or 

        (iii)  credited
with income equivalents (which may include, but need not be limited to, interest, dividends or other rates of return) until the date or dates of payment of
the award, if any. 

   
        10.   Deferred Payment of Awards. The Committee may specify that the payment of all or any portion of cash, Common Shares,
Other Company Securities or property, or any other form of payment, or any combination thereof, under an Award shall be deferred until a later date. Deferrals shall be for such periods or until the
occurrence of such events, and upon such terms, as the Committee shall determine in its discretion. Deferred payments of Awards may be made by undertaking to make payment in the future based upon the
performance of certain investment equivalents (which may include, but need not be limited to, government securities, Common Shares, other securities, property or consideration, or any combination
thereof), together with such additional amounts of income equivalents (which may be compounded and may include, but need not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment, such investment equivalents and such additional amounts of income equivalents to be determined by the Committee in its
discretion. 

        11.   Amendment or Substitution of Awards under the Plan. The terms of any outstanding Award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems appropriate (including, but not limited to, acceleration of the date of exercise of any Award and/or payments thereunder);
provided that no such amendment shall adversely affect in a material manner any right of a participant under the Award without his written consent, unless the Committee determines in its discretion
that there have occurred or are about to occur significant changes in the participant's position, duties or responsibilities, or significant changes in economic, legislative, regulatory, tax,
accounting or cost/benefit conditions which are determined by the Committee in its discretion to have or to be expected to have a substantial effect on the performance of the Company, or any
subsidiary, affiliate, division or department thereof, on the Plan or on any Award under the Plan. The Committee may, in its discretion, permit holders of Awards under the Plan to surrender
outstanding Awards in order to exercise or realize rights under other Awards, or in exchange for the grant of new Awards, or require holders of Awards to surrender outstanding Awards as a condition
precedent to the grant of new Awards under the Plan. 

        12.   Disability. For the purposes of this Plan, a participant shall be deemed to have terminated his employment or performance
of services for the Company and any of its subsidiaries by reason of disability, if the Committee shall determine that the physical or mental condition of the participant by reason of which such
employment or performance of services terminated was such at that time as would entitle him to payment of monthly disability benefits under any Company disability plan. If the participant is not
eligible for benefits under any disability plan of the Company, he shall be deemed to have terminated such employment or performance of services by reason of disability if the Committee shall
determine that his physical or mental condition would entitle him to benefits under any Company disability plan if he were eligible therefor. 

        13.   Termination of a Participant. For all purposes under the Plan, the Committee shall determine whether a participant has
terminated employment with, or the performance of services for, the Company. 

        14.   Dilution and Other Adjustments. In the event of any change in the outstanding Common Shares of the Company by reason of
any stock split, dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination or exchange of
shares, a sale by the Company of all of its assets, any distribution to stockholders other than a normal cash dividend, or other extraordinary or unusual event, if the Committee shall determine, in
its discretion, that such change equitably requires an adjustment in the terms of any Award or the number of Common Shares available for Awards, such adjustment may be made by the Committee and shall
be final, conclusive and binding for all purposes of the Plan. In the event of the proposed dissolution or liquidation of the Company, all outstanding Awards shall terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Committee.

 

        15.   Change in Control Provisions.

        (a)   Impact of Event. In the event of a "Change in Control" as defined in Paragraph 15(b) hereof the following
acceleration and valuation provisions shall apply: 

        (i)    Any
Stock Appreciation Rights and any Stock Options awarded under the Plan not previously exercisable shall become fully exercisable. 

        (ii)   The
restrictions and deferral limitations applicable to any Restricted Stock and other Awards payable in the form of Common Shares, shall lapse and such shares and
awards shall be deemed fully vested. 

        (iii)  Any
outstanding Performance Grants shall be vested and paid out based on the prorated target results for the Award Periods in question, unless the Committee provides
prior to any Change in Control for a different payment. 

        (iv)  The
value of all outstanding Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Grants and any other type of Award payable in the form of Common
Shares, in each case to the extent vested, shall, unless otherwise determined by the Committee in its sole discretion at or
after grant but prior to any Change in Control, be cashed out on the basis of the "Change in Control Price" as defined in Paragraph 15(c) hereof as of the date such Change in Control is
determined to have occurred or such other date as the Committee may determine prior to the Change of Control. 

        (b)   Definition of "Change in Control". For purposes of Paragraph 15(a), a "Change in Control" means the happening of
any of the following: 

        (i)    When
any "person" as defined in Section 3(a)(9) of the 34 Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as
defined in Section 13(d) of the 34 Act but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any
trustee of such plan acting as trustee), directly or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3 under the 34 Act, as amended from time to time), of
securities of the Company representing twenty-five percent or more of the combined voting power of the Company's then outstanding securities; 

        (ii)   When,
during any period of 12 consecutive months during the existence of the Plan, the individuals who, at the beginning of such period, constitute the Board
(the "Incumbent Directors") cease for any reason other than death to constitute at least a majority thereof, provided, however, that a director who was not a director at the beginning of such
12-month period shall be deemed to have satisfied such 12-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 12-month
period) or by prior operation of this Paragraph 15(b)(ii); or 

        (iii)  The
approval by the stockholders of the Company of a transaction involving the acquisition of the Company by an entity other than the Company or any subsidiary through
purchase of assets, by merger, or otherwise. 

        (c)   Change in Control Price. For purposes of this Paragraph 11, "Change in Control Price" means the highest price per
share paid in any transaction reported on any national securities exchange on which the Company's Common Shares are listed, or paid or offered in any bona fide transaction related to a Change in
Control of the Company at any time during the sixty-day period immediately preceding the occurrence of the Change in Control, in each case as determined by the Committee except that, in
the case of Incentive Stock Options and Stock Appreciation Rights

 
relating to Incentive Stock Options, such price shall be based only on transactions reported for the date on which the optionee exercises such Incentive Award or, where applicable, the date on which a
cashout occurs under Paragraph 15(a)(iv). 

        16.   Designation of Beneficiary by Participant. A participant may name a beneficiary to receive any payment to which he may be
entitled in respect of any Award under the Plan in the event of his death, on a written form to be provided by and filed with the Committee, and in a manner determined by the Committee in its
discretion. The Committee reserves the right to review and approve beneficiary designations. A participant may change his beneficiary from time to time in the same manner, unless such participant has
made an irrevocable designation. Any designation of beneficiary under the Plan (to the extent it is valid and enforceable under applicable law) shall be controlling over any other disposition,
testamentary or otherwise, as determined by the Committee in its discretion. If no designated beneficiary survives the participant and is living on the date on which any amount becomes payable to such
a participant's beneficiary, such payment will be made to the legal representatives of the participant's estate, and the term "beneficiary" as used in the Plan shall be deemed to include such person
or persons. If there are any questions as to the legal right of any beneficiary to receive a distribution under the Plan, the Committee in its discretion may determine that the amount in question be
paid to the legal representatives of the estate of the participant, in which event the Company, the Board and the Committee and the members thereof, will have no further liability to anyone with
respect to such amount. 

        17.   Financial Assistance. If the Committee determines that such action is advisable, the Company may assist any person to
whom a Award has been granted in obtaining financing from the Company (or under any program of the Company approved pursuant to applicable law), or from a bank or other third party, on such terms as
are determined by the Committee, and in such amount as is required to accomplish the purposes of the Plan, including, but not limited to, to permit the exercise of an Award, the participation therein,
and/or the payment of any taxes in respect thereof. Such assistance may take any form that the Committee deems appropriate, including, but not limited to, a direct loan from the Company, a guarantee
of the obligation by the Company, or the maintenance by the Company of deposits with such bank or third party. 

        18.   Miscellaneous Provisions.

        (a)   No
employee or other person shall have any claim or right to be granted a Award under the Plan. Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among eligible individuals under the Plan, whether or not such eligible individuals are similarly situated. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee or other person any right to continue to be employed by or perform services for the Company, and the right to terminate the employment of or performance of services by
any participants at any time and for any reason is specifically reserved. 

        (b)   No
participant or other person shall have any right with respect to the Plan, the Common Shares reserved for issuance under the Plan or in any Award, contingent or
otherwise, until written evidence of the Award shall have been delivered to the recipient and all the terms, conditions and provisions of the Plan and the Award applicable to such recipient (and each
person claiming under or through him) have been met. 

        (c)   Except
as may be approved by the Committee, a participant's rights and interest under the Plan may not be assigned or transferred, hypothecated or encumbered in whole or
in part either directly or by operation of law or otherwise (except in the event of a participant's death) including, but not by way of limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner; provided, however, that any Option or similar right (including, but not limited to, a Stock Appreciation Right) offered pursuant to the Plan shall not be

 
transferable other than by will or the laws of descent and distribution and shall be exercisable during the participant's lifetime only by him. 

        (d)   No
Common Shares, Other Company Securities or property, other securities or property, or other forms of payment shall be issued hereunder with respect to any Award
unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state, local and foreign legal, securities exchange and other applicable
requirements. 

        (e)   The
Company shall have the right to deduct from any payment made under the Plan any federal, state, local or foreign income or other taxes required by law to be withheld
with respect to such payment. It shall be a condition to the obligation of the Company to issue Common Shares, Other Company Securities or property, other securities or property, or other forms of
payment, or any combination thereof, upon exercise, settlement or payment of any Award under the Plan, that the participant (or any beneficiary or person entitled to act) pay to the Company, upon its
demand, such amount as may be required by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not
paid, the Company may refuse to issue Common Shares, Other Company Securities or property, other securities or property, or other forms of payment, or any combination thereof. Notwithstanding anything
in the Plan to the contrary, the Committee may, in its discretion, permit an eligible participant (or any beneficiary or person entitled to act) to elect to pay a portion or all of the amount
requested by the Company for such taxes with respect to such Award, at such time and in such manner as the Committee shall deem to be appropriate (including, but not limited to, by authorizing the
Company to withhold, or agreeing to surrender to the Company on or about the date such tax liability is determinable, Common Shares, Other Company Securities or property, other securities or property,
or other forms of payment, or any combination thereof, owned by such person or a portion of such forms of payment that would otherwise be distributed, or have been distributed, as the case may be,
pursuant to such Award to such person, having a fair market value equal to the amount of such taxes). 

        (f)    The
expense of the Plan shall be borne by the Company. 

        (g)   The
Platt shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment
of any Award under the Plan, and rights to the payment of Awards shall be no greater than the rights of the Company's general creditors. 

        (h)   By
accepting any Award or other benefit under the Plan, each participant and each person claiming under or through him shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee or its delegates. 

        (i)    Fair
market value in relation to Common Shares, Other Company Securities or property, other securities or property or other forms of payment of Awards under the Plan, or
any combination thereof, as of any specific time shall mean such value as determined by the Committee in accordance with applicable law. 

        (j)    The
masculine pronoun includes the feminine and the singular includes the plural wherever appropriate. 

        (k)   The
appropriate officers of the Company shall cause to be filed any reports, returns or other information regarding Awards hereunder of any Common Shares issued pursuant
hereto as may be required by Section 13 or 15(d) of the 34 Act (or any successor provision) or any other applicable statute, rule or regulation.

 

        (l)    The
validity, construction, interpretation, administration and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and to Awards
granted under the Plan, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware. 

        19.   Plan Amendment or Suspension. The Plan may be amended or suspended in whole or in part at any time from time to time by
the Board. No amendment of the Plan shall adversely affect in a material manner any right of any participant with respect to any Award theretofore granted without such participant's written consent,
except as permitted under Paragraph 11. 

        20.   Plan Termination. This Plan shall terminate upon the adoption of a resolution of the Board terminating the Plan. No
termination of the Plan shall materially alter or impair any of the rights or obligations of any person, without his consent, under any Award theretofore granted under the Plan, except that subsequent
to termination of the Plan, the Committee may make amendments permitted under Paragraph 11. 

        IN
WITNESS WHEREOF, the Company has executed this Plan effective January 1, 2001. 

	

 	
 	

NAPRO BIOTHERAPEUTICS, INC.
	

Attest:	
 	

 	
 	

 
	

/s/  JOHN VAUGHAN      
	
 	

By:	
 	

/s/  GORDON LINK      

	 	 	Title:	 	VP, Chief Financial Officer

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NAPRO BIOTHERAPEUTICS, INC. 1998 STOCK INCENTIVE PLAN (formerly, the 1998 Stock Option Plan of NaPro BioTherapeutics, Inc.) (Amended and Restated Effective January 1, 2001, and as further amended effective
December 16, 2000, June 21, 2001, September 25, 2001, and October 15, 2002)QuickLinks
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Exhibit 10.6  

 
 

EMPLOYMENT AGREEMENT    
    

        THIS AGREEMENT (the "Agreement") is entered into this 7th day of November, 2003 by and between NaPro BioTherapeutics, Inc., a Delaware corporation (the
"Company"), and Sterling K. Ainsworth, Ph.D. ("Employee"). Certain capitalized terms used in this Agreement have the meaning set forth in Paragraph 17 of this Agreement. 

RECITALS  

        A.    WHEREAS,
Employee is currently employed by the Company pursuant to an employment agreement effective as of October 1, 2001 by and between the Company and the
Employee (the "2001 Employment Agreement"); 

        B.    WHEREAS,
the Company has entered into an agreement to sell the Company's worldwide polyethoxylated castor oil formulated injectable paclitaxel business (the "Sale") to
Faulding Pharmaceutical Co. ("Faulding"); 

        C.    WHEREAS,
in settlement of certain disputed claims under the 2001 Employment Agreement, Employee and the Company have determined that the 2001 Employment Agreement will be
terminated by mutual agreement and the terms of Employee's employment with the Company and its subsidiaries will be changed as provided in this Agreement; and 

        D.    WHEREAS,
the Company desires to secure the continued services of Employee as an employee of the Company after the Sale, and to provide for certain compensation and
benefit arrangements for Employee in the event of Employee's termination of employment under certain circumstances, and Employee is willing to enter into this Agreement and perform such services. 

TERMS AND CONDITIONS  

        In consideration of the respective covenants and agreements of the parties contained in this Agreement, the parties agree as follows: 

1.    Employment Services; Effective Date.    

        (a)   The
Company hereby agrees to engage Employee, and Employee hereby agrees to perform services for the Company, on the terms and conditions set forth in this Agreement.
During the Employment Period (as defined below), the Company and Employee agree that Employee will serve as an employee of the Company. Employee's duties are to identify, evaluate, and present at
least three peptides, or other targeting moieties, appropriate for use in the Company's targeted oncology business, and such other duties, responsibilities and authority as Employee and the Company
may agree upon from time to time, and Employee will perform these services for the Company and its present or future Subsidiaries as the Company's Board of Directors (the "Board") acting through the
Company's Chief Executive Officer may from time to time direct (the "Employment Services"). 

        (b)   The
Employment Services shall commence as of the later to occur of (i) January 1, 2004 and (ii) the date that the Sale to Faulding is consummated
(such later date, the "Effective Date") and terminate as provided in Paragraph 6 (the "Employment Period"). Employee shall resign, without any further action by Employee or any other person,
from all positions he holds with the Company as an executive officer or member of the Company's Board of Directors as of the Effective Date. Following the Effective Date and for the Employment Period,
Employee's title shall be "Founder, Senior Scientist." Notwithstanding anything in this Agreement to the contrary, in the event the Sale does not occur by January 30, 2004 or is abandoned by
the mutual agreement of the Company and Faulding (or does not close for any other reason), then this Agreement shall

 
have no effect whatsoever, and the existing 2001 Employment Agreement between the Employee and the Company shall remain in effect. 

        (c)   Employee
and Company acknowledge and agree that neither Party will take any action terminating Employee's employment (including resignation by Employee) under the 2001
Employment Agreement until the earlier to occur of: (i) the Effective Date, or (ii) January 30, 2004. Upon the Effective Date of this Agreement, Employee shall not be entitled
to any payments under the 2001 Employment Agreement. 

2.    Performance.    

        (a)   Employee
shall report to the Company's Chief Executive Officer, or such other officer appointed by the Board of Directors, and Employee shall devote his reasonable
business efforts to the business and affairs of the Company and its Subsidiaries consistent with the terms and conditions of this Agreement. Subject to the provisions of Paragraphs 10, 11, and 13,
Employee may engage in independent activities, provided that no such independent activities shall materially detract from the commitment of Employee to fulfill the duties and responsibilities as
contemplated in Paragraph 1 of this Agreement. Employee shall perform his duties and responsibilities to the best of his abilities in a diligent, trustworthy, businesslike and professional
manner. During the Employment Period, Employee shall be available to perform Employment Services for the Company for up to twenty-four (24) hours per week upon such schedule as the
Company and Employee shall mutually agree. 

        (b)   Unless
the Company and Employee otherwise agree, Employee shall perform the Employment Services at Employee's home office and while traveling on such business as
Employee and the Company shall reasonably deem necessary. As of the Effective Date, the Company shall have no obligation to provide Employee with any office space, administrative staff, or other
office support other than the obligation to reimburse Employee for certain expenses as described in Paragraph 4. 

3.    Compensation.    

        (a)   During
the Employment Period, the Company will pay Employee for the Employment Services a base salary (the "Base Salary") at the annual rate of: 

	(i)
	Two
Hundred and Sixty Thousand Dollars ($260,000), during the fiscal years ended December 31, 2004 and 2005; and

	(ii)
	Fifty
Thousand Dollars ($50,000), during the fiscal years ended December 31, 2006, 2007 and 2008; 

provided,
however, that the payment of the amounts specified in paragraph 3(a)(ii) shall (at Employee's option and upon his resignation from employment) be accelerated and paid on
December 31, 2005 in a lump sum of One Hundred Fifty Thousand Dollars ($150,000) if Employee has identified, evaluated, and presented at least three peptides or other targeting moieties
appropriate for use in the Company's targeted oncology business by December 31, 2005 pursuant to a development plan mutually agreed upon by the Company and the Employee. Subject to the
immediately proceeding proviso, the Base Salary to be paid pursuant to paragraphs 3(a)(i) and 3(a)(ii) above shall be paid at such periods as salary is paid to other employees of the
Company. Payment of the Base Salary shall be subject to the customary withholding tax and other employment taxes as required with respect to compensation paid by a corporation to an employee. 

        (b)   No
later than January 31, 2004, the Company shall pay Employee a bonus (the "2003 Bonus") based upon Employee's and the Company's performance during the year
ended December 31, 2003 and the 2003 Bonus shall not be less than Sixty Five Thousand Dollars ($65,000) nor exceed One Hundred Thousand Dollars ($100,000) and, provided further, that any

 
amount above Sixty Five Thousand Dollars ($65,000) shall be in the sole discretion of the Compensation Committee of the Board of Directors (or if the Board has no Compensation Committee at the time,
then the Board). The Company shall have no other obligation to pay Employee any bonus, other than the 2003 Bonus, during the Employment Period. 

4.    Reimbursement for Expenses.    The Company shall reimburse Employee for reasonable documented direct
costs of maintaining a home office in Employee's home necessary for Employee to provide the Employment Services up to a maximum of $500.00 per calendar month, including electricity, cellular
telephone, separate business telephone, long distance telephone charges, dedicated Internet access and electronic mail, office supplies and any other expense, so long as directly related to the
performance of Employment Services. In addition, the Company shall reimburse those other reasonable documented out-of-pocket expenses incurred by Employee in the course of his
fulfilling his Employment Services, including dues and fees for attending professional meetings and institutes, costs of professional books and periodicals, and travel expenses reasonably related to
the Employment Services, provided that the Company shall not reimburse any expenses exceeding $500.00 in any calendar month as provided in the first sentence of this paragraph 4 unless Employee
has obtained the Company's approval in writing prior to incurring such expenses. Employee agrees to invoice the Company for such expenses within 30 days after they were incurred and provide
supporting documentation reflecting the amount of the expense, the date incurred and the reason for the expense. 

5.    Benefits.    During the Employment Period, Employee shall be entitled to all fringe benefits offered
by the Company and to participate in all of the Company's employee benefit programs both on the same basis as available to employees of the Company, and shall be entitled to such other benefits as may
from time to time be made available to Employee. Employee shall be entitled to indemnification in accordance with the terms and conditions of Article Six, Section (e) of the Amended and
Restated Certificate of Incorporation of the Company, as in effect on the date this Agreement is executed, and the Director and Officer Indemnification Agreement dated April 21, 1994, with
respect to all claims brought against Employee based upon or arising out of his actions or inactions as an officer and/or director of the Company or its affiliates occurring prior to the Effective
Date. Even if Article Six, Section (e) of the Amended and Restated Certificate of Incorporation of the Company is hereafter amended or modified, the Company shall provide indemnification to
Employee in accordance with the terms and conditions of Article Six, Section (e) as they existed on the date this Agreement is executed with respect to any claims, demands or causes of action
brought by third parties against Employee based upon or arising out of his actions or inactions as an officer and/or director of the Company or its affiliates occurring prior to the Effective Date.
Moreover, for a period of three years following the Effective Date, the Company shall use commercially reasonable efforts to maintain directors' and officers' liability insurance, which provides
coverage to Employee as a former officer and director of the Company and its subsidiaries and affiliates in substantially the same magnitude and coverage as is available to current officers and
directors. Employee and the Company acknowledge that the Company is the beneficiary under a $3 million key man life insurance policy (Transamerica Occidental Life Insurance Company, policy
number 41792293) with Employee as the named insured. Within 60 days after the Effective Date, the Company shall deliver such policy to Employee and shall execute any necessary instruments in
order to effect the transfer of such policy, including the sole right to name the beneficiary of such policy, to Employee. Employee shall be responsible for and shall pay all premiums required to keep
this life insurance policy effective after the effective date of such transfer.

 

6.    Term and Termination.    

        (a)   Except
as otherwise provided in this Agreement, the Employment Period shall terminate upon the earlier of: 

	(i)
	five
years from the Effective Date hereof (the "Initial Term"); provided that the parties may extend the Employment Period upon mutual agreement for successive
one-year terms;

	(ii)
	Employee's
incapacity or permanent disability (which in either case shall be deemed to occur only in the event Employee is unable to perform the Employment Services for
180 days in any 12-month period) or death;

	(iii)
	termination
by Employee voluntarily or for Good Reason (as defined below);

	(iv)
	termination
by the Company with Cause (as defined below) at any time;

	(v)
	termination
by the Company after December 31, 2005 for Good Reason; or

	(vi)
	termination
by the Company after December 31, 2005 without Cause or Good Reason, which termination may be made if but only if Employee shall not have identified,
evaluated, and presented, three peptides, or other targeting moieties appropriate for use in the Company's targeted oncology program by December 31, 2005 nor presented, prior to
December 31, 2005, a written plan reasonably satisfactory to the Company do so. 

Employee
shall be deemed to have terminated the Employment Period voluntarily only if the Employee provides the Company 30 days' prior written notice of termination, which notice references
this Paragraph 6(a) and states that the Employee wishes to effect a voluntary termination of the Employment Period. Until December 31, 2005, the Company shall have no right to terminate
the Employment Period without Cause but will have the right to do so thereafter (i) with Cause, or (ii) for Good Reason, or (iii) without Cause or Good Reason if but only if
Employee shall not have identified, evaluated, and presented, three peptides, or other targeting moieties appropriate for use in the Company's targeted oncology program by December 31, 2005 nor
presented, prior to December 31, 2005, a written plan reasonably satisfactory to the Company do so. 

        (b)   If
the Employment Period is terminated by the Company following Employee's incapacity or permanent disability or death; or if the Employee resigns for Good Reason at any
time; then the Company shall make the following payments to Employee within 15 days after the Termination Effective Date (as defined below), subject in each case to any applicable payroll or
other taxes required to be withheld: a lump sum amount equal to (A) the unpaid portion of the 2003 Bonus, if any, plus (B) the full remaining amount of Employee's Base Salary that would
otherwise be payable over the remaining term of the Employment Period. Any amounts payable under this Agreement following the Employee's death shall be paid to the beneficiary named in writing by the
Employee, or if no such beneficiary is named, to the executors and administrators of the Employee's estate. At the election of Employee or, following Employee's death, Employee's dependents, the
Company shall continue to provide Employee and his dependents medical, dental and any other health insurance, life insurance, accidental death and dismemberment insurance and disability protection no
less favorable to Employee and Employee's dependents covered thereby (including that Employee shall remain obligated to continue to pay any costs or expenses which Employee would otherwise be
obligated to pay pursuant to such insurance or other protections provided pursuant to Paragraph 5 as in existence on the Termination Effective Date) until the first to occur of (i) the
date of Employee's re-employment and subsequent opportunity to participate in any health insurance program with comparable coverage provided by such new employer, including

 
without limitation, coverage with respect to any pre-existing conditions or (ii) eighteen months after such Termination Effective Date. 

        (c)   Upon
termination of employment by the Company for Cause, or termination of employment by the Company for Good Reason after December 31, 2005, or termination of
employment by the Company without Cause or Good Reason after December 31, 2005 in accordance with Paragraph 6(a)(vi), Employee shall be entitled to receive only accrued but unpaid Base
Salary through the date of such termination. Likewise, except as provided in Paragraph 6(b), upon termination of the Employment Period, Employee shall be entitled to receive only accrued but
unpaid Base Salary through the date of such termination. 

        (d)   For
purposes of this Agreement, "Cause" shall mean (i) the conviction (or plea of nolo contendere) of a felony, or a crime involving moral turpitude which (in
either such case) has an adverse effect on the Company and involves dishonesty, disloyalty or fraud with respect to the Company or any of its Subsidiaries, (ii) willful misconduct bringing the
Company, any of its officers or directors, or any of its Subsidiaries into substantial public disgrace or disrepute, which continues following Employee's receipt of written notice thereof from the
Company; (iii) gross negligence or willful misconduct not in good faith with respect to the Company or any of its Subsidiaries that materially and adversely affects the Company and which
continues following Employee's receipt of written notice thereof from the Company, (iv) any material breach of paragraphs 9, 10, 12, or 13 of this Agreement which is continuing after
15 days of receiving notice from the Company of such breach, or (v) willful provision of false information to a regulatory authority that materially and adversely affects the Company. 

Failure
by Employee to make himself available or work a minimum number of hours shall not constitute Cause under this Agreement or otherwise entitle the Company to terminate Employee's employment for
Cause. 

        (e)   For
purposes of this Agreement, termination of the Employment Period by Employee for "Good Reason" shall mean termination by Employee (i) within 30 days
after Employee has been assigned, without Employee's consent, to any duties substantially inconsistent with Employee's position, duties, responsibilities or status with the Company as contemplated in
Paragraph 1 of this Agreement, or (ii) upon a material breach of this Agreement by the Company which is not cured within 30 days after the Company's receipt of written notice
thereof. Employee shall provide written notice to the Company of any and all grounds that Employee alleges constitute "Good Reason" and the Company shall have 30 days after receipt of such
written notice to cure any such alleged grounds for "Good Reason." If, following the expiration of such 30 day period, Employee still believes that "Good Reason" exists for Employee's
termination of Employment, the provisions of Paragraph 7 shall apply. 

        (f)    For
purposes of this Agreement, termination of the Employment Period by Company for "Good Reason" shall mean termination by Company (i) for Cause,
(ii) continued failure by Employee to substantially perform his duties which are set forth in this Agreement for a period of 15 days after a written demand for substantial performance
which specifically identifies the manner in which the Company believes that Employee has not substantially performed his duties, or (iii) any other material breach of this Agreement which is
not cured within 15 days. 

7.    Notice of Certain Termination.    In the event that either (i) the Company shall terminate
Employee for Cause or for Good Reason or (ii) Employee shall terminate for Good Reason, then any such termination shall be communicated by written notice to the other party hereto. Any such
notice shall specify (x) the effective date of termination of the Employment Period, which, except as otherwise provided in Paragraph 6(e), shall not be more than 30 days after
the date the notice is delivered (the "Termination Effective Date") and (y) in reasonable detail the facts and circumstances underlying a determination that the termination is for Cause or for
Good Reason, as the case may be. If within

 
15 days after any notice of termination of Employee for Cause or Good Reason by the Company is given, or if within 15 days after the Company's 30 day cure period under
Paragraph 6(e) has expired, the party receiving such notice notifies the other party that a good faith dispute exists concerning the characterization of the termination, the Termination
Effective Date shall be the date on which such dispute is finally resolved either by written agreement of the parties or by binding arbitration conducted pursuant to the rules of the American
Arbitration Association. Notwithstanding the pendency of any such dispute, the Company shall continue Employee and Employee's dependents as participants in all medical, dental and any other health
insurance, life insurance, accidental death and dismemberment insurance and disability protection plans of the Company in which Employee and Employee's dependents were participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved. Benefits provided under this Paragraph 7 are in addition to all other amounts due under this Agreement and shall not
be offset against, or reduce any other amounts due under, this Agreement. In any case other than a termination by the Company for Cause or for Good Reason or by the Employee for Good Reason, the
Termination Effective Date shall be the date on which the termination takes effect. 

8.    Insurance.    The Company may, at its election and for its benefit, insure Employee against accidental
death, and Employee shall submit to such physical examination and supply such information as may be required in connection therewith. 

9.    Non-disclosure of Confidential Information.    Unless Employee first secures written
consent from the Company pursuant to procedures implemented by Company after the date hereof, Employee shall not disclose or use at any time, either during the Employment Period or thereafter, any
Confidential Information (as defined in Paragraph 17) except to the extent Employee reasonably believes it is necessary to disclose or use such Confidential Information in performing the
Employment Services. Employee further agrees that Employee will use Employee's reasonable efforts to safeguard the Confidential Information and protect it against disclosure, misuse, espionage, loss
and theft, including, without limitation, causing recipients of Confidential Information to enter into non-disclosure agreements with the Company. Subject to the provisions of Paragraphs
10 and 13, nothing herein shall be construed to prevent Employee from using Employee's general knowledge and skill after termination of this Agreement, whether Employee acquired such knowledge or
skill before or during the Employment Period. Notwithstanding anything in this Agreement to the contrary, disclosure of Confidential Information shall not be prohibited if such disclosure is in
response to court order or is otherwise required by law; provided, however, that Employee shall make reasonable efforts to (i) give written notice to the Company of such required disclosure as
soon as reasonably practicable, (ii) obtain a protective order for the Confidential Information so disclosed, and (ii) disclose only such Confidential Information as is required to be
disclosed. 

10.    Company Ownership of Intellectual Property.    Subject to the limitations of Paragraph 11,
Employee hereby assigns to the Company all right, title and interest in and to all Intellectual Property (as defined in Paragraph 17) contributed to or conceived or made by Employee during the
Employment Period and prior to the Employment Period during the period Employee was employed by or engaged in research or development activities for or with the Company or its predecessors and
Affiliates (whether alone or jointly with others) to the extent such Intellectual Property is not owned by the Company as a matter of law. Employee shall promptly and fully communicate to the Company
all Intellectual Property conceived, contributed to or made by Employee and shall cooperate with the Company to protect the Company's interests in such Intellectual Property including, without
limitation, providing assistance in securing patent protection and copyright registrations and signing all documents reasonably requested by the Company, even if such request occurs after the
Employment Period. The Company shall pay Employee's reasonable expenses of cooperating with the Company in protecting the Company's interests in such Intellectual Property unless the subject matter of
the requested cooperation is related to actions taken or failed to be taken by Employee wrongfully or otherwise not in good faith.

 

11.    Employee's Rights.    Paragraph 10 of this Agreement does not apply to an invention for which
no equipment, supplies, facilities or trade secret information of the Company was used and which was developed entirely on Employee's own time, unless (a) the invention relates (i) to
the business of the Company, or (ii) to the Company's actual or demonstrably anticipated material research or development, or (b) the invention results from any work performed by
Employee for the Company. Paragraph 10 of this Agreement also does not apply to an invention in a field for which Employee has received a confirmation of no interest from the Company pursuant
to paragraph 11(a). 

11(a).
In the event that Employee has a bonafide opportunity to engage in a business which the Company is not engaged in, then Employee may provide the Company with a written description of such
opportunity. Such written description shall be adequate to describe the opportunity, but need not contain confidential information. Upon receipt of such notice, the Company will provide Employee,
within 30 calendar days, with a statement that either (1) the Company has an bonafide interest in entering such field of business, or (2) the Company has no interest in entering such
field of business. If no such notice is given within 30 calendar days, then the Company will have been deemed to have no interest. Employee shall not submit more than two such notices in any calendar
quarter. 

12.    Return of Materials.    Upon Termination of the Employment Period, or at any time reasonably
requested by the Company, Employee shall promptly deliver to the Company all copies of Confidential Information in Employee's possession and control, including written records, manuals, lab notebooks,
customer and supplier lists and all other materials containing any Confidential Information. If the Company requests, Employee shall provide written confirmation that Employee has returned all such
materials. Subject to the provisions of this Agreement, including, without limitation, Paragraph 11, notwithstanding anything in this Agreement to the contrary, upon termination of the
Employment Period, the Company, at Employee's request, shall promptly return to Employee any equipment or other materials owned by Employee then being used by or then in the possession of the Company. 

13.    Non-Competition.    Employee acknowledges and agrees that, in the course of his duties to
the Company, Employee is permitted access to Intellectual Property, which includes, among other things, trade secrets of the Company that the Company seeks to protect from dissemination and
disclosure. Employee acknowledges and agrees that during the Employment Period and for a period of 12 months thereafter (the "Non-Compete Period"), Employee will not, without the
prior written consent of the Company, directly or indirectly, as an employee, agent, independent contractor, consultant, owner, stockholder, partner, officer, director or otherwise, enter into or in
any manner take part in any business or entity that provides or offers or demonstrably plans to provide or offer, products or services that relate to (i) paclitaxel and taxane compounds, either
as single agents or as targeted agents; (ii) quassinoids and epothilone compounds, either as single agents or as targeted compounds; (iii) the use of gene editing in diagnostics,
services or therapeutics; or (iv) relate to any subject matter of the Company's actual or demonstrably anticipated material research and development during the Employment Period, including
without limitation, taxol, taxanes and any other compounds, within any geographical area in which the Company or any of its subsidiaries provide or plan to provide such products or services; provided,
however, that Employee may purchase or otherwise acquire up to (but not more than) one percent (1%) of any class of securities of any such business or entity the securities of which are publicly
traded on an exchange or automated quotation system (but without otherwise participating in the activities of such business or entity). Notwithstanding the foregoing, Employee may continue in any
activity in which the Company has expressed no interest pursuant to paragraph 11(a). 

14.    Non-Solicitation.    Employee acknowledges and agrees that during the
Non-Compete Period, Employee will not (a) solicit, induce or attempt to induce, directly or indirectly, any employee of the Company to leave the employment of the Company to work
for Employee or for any other person, firm or corporation or (b) hire any employee of the Company. Notwithstanding anything herein to the contrary, this Paragraph 14 shall not apply with
respect to Patricia A. Pilia.

 

15.    Acknowledgment of Reasonableness.    Employee acknowledges and agrees that the limitations set forth
in Paragraphs 13 and 14 are reasonable with respect to scope, duration and geographic area and are properly required for the protection of the legitimate business interest of the Company. 

16.    Further Assistance.    During the Non-Compete Period, Employee will not make any
disclosure or other communication to any person, issue any public statements or otherwise cause to be disclosed any information which is designed, intended or might reasonably be anticipated to
discourage any persons from doing business with the Company or otherwise have a negative impact or adverse effect on the Company, except to the extent such disclosure is required by law. During the
Non-Compete Period, Employee will provide assistance reasonably requested by the Company in connection with actions taken by Employee during the Employment Period, including but not
limited to assistance in connection with any lawsuits or other claims against the Company arising from events during the Employment Period, provided that the Company shall reimburse all reasonable
expenses (including without limitation, reasonable loss of compensation from other sources resulting from such assistance during normal business hours). 

17.    Certain Definitions.    An "Affiliate" of, or a
person "Affiliated" with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, the persons specified. 

        "Beneficial Ownership" has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on the date of this Agreement (the "Exchange Act Rules"). 

        "Confidential Information" means all information (whether or not specifically labeled or identified as confidential), in any form or
medium, that is disclosed to, or developed or learned by Employee during the Employment Period and prior to the Employment Period during the period Employee was employed by or engaged in research or
development activities for or with the Company or its predecessors and Affiliates that relates to the business, products, services, customers, business opportunities, business contacts, research or
development of the Company, its Subsidiaries, its Affiliates, or third parties with whom the Company, its Subsidiaries or its Affiliates does business or from whom the Company or its Affiliates
receives information. Confidential Information shall not include any information that (i) has become publicly known through no wrongful act or breach of any obligation of confidentiality, as
evidenced by written records or documents; (ii) was rightfully received by Employee on a non-confidential basis from a third party (provided that such third party is not known to
Employee to be bound by a confidentiality agreement with the Company or another party), as evidenced by written records or documents; or (iii) was developed or obtained by Employee through
activities for which Employee has received a confirmation of no interest from the Company pursuant to paragraph 11(a) as evidenced by written records or documents. 

        "Intellectual Property" means any idea, invention, design, development, device, method or process (whether or not patentable or reduced to
practice or including Confidential Information) and all related patents and patent applications, any copyrightable work or mask work (whether or not including Confidential Information) and all related
registrations and applications for registration, and all other proprietary rights. 

        "Subsidiaries" means any corporation of which the securities having a majority of the voting power in electing directors are, at the time
of determination, owned by the Company, directly or through one of more Subsidiaries. 

18.    Employee Representations.    Employee hereby represents and warrants to the Company that
(a) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Employee is a party or by which he is bound, and (b) upon the execution and delivery

 
of this Agreement by the Company, this Agreement shall be the valid and binding obligation of Employee, enforceable in accordance with its terms. 

19.    Company Representations.    The Company hereby represents and warrants to Employee that
(a) the execution, delivery and performance of this Agreement by the Company does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Company is a party or by which it is bound, and (b) upon the execution and delivery of this Agreement by Employee, this Agreement shall be the valid and
binding obligation of the Company, enforceable in accordance with its terms. 

20.    Severability and Modification.    If any provision of this Agreement shall be held or declared to be
illegal, invalid or unenforceable, such illegal, invalid or unenforceable provision shall not affect any other provision of this Agreement, and the remainder of this Agreement shall continue in full
force and effect as though such provision had not been contained in this Agreement. If the scope of any provision in this Agreement is found to be too broad to permit enforcement of such provision to
its full extent, each of the parties consents to judicial modification of such provision and enforcement to the maximum extent permitted by law. 

21.    Notices.    Except as otherwise expressly set forth in this Agreement, all notices, requests and
other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be given (and, except as otherwise provided in this Agreement, shall
be deemed to have been duly given if so given) when delivered if given in person or by telegram, three days after being mailed by first class registered or certified mail, return receipt requested,
postage prepaid, or one business day after being sent prepaid via reputable overnight courier to the parties at the following addresses (or such other address as shall be furnished in writing by like
notice; provided, however, that notice of change of address shall be effective only upon receipt): 

 Notices to Employee  

        His
last known address as shown in the records of the Company 

 Notices to Company  

NaPro
BioTherapeutics, Inc.

4840 Pearl East Circle, Suite 300W

Boulder, Colorado 80301

Attn Vice President and General Counsel 

22.    Entire Agreement.    This Agreement contains the entire agreement between parties with respect to the
subject matter hereof and supersedes any previous understandings or agreements, whether written or oral, regarding such subject matter. Except as otherwise provided in Paragraph 1 of this
Agreement, the 2001 Employment Agreement shall terminate upon the Effective Date. 

23.    Governing Law.    All questions concerning the construction, validity and interpretations of this
Agreement will be governed by the internal law, and not the law of conflicts, of the State of Colorado. 

24.    Survival.    Paragraphs 6, 9, 10, 11, 12, 13, 14 and 16 and any other provision of this Agreement
which by its terms could survive termination of the Employment Period shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period. 

25.    Counterparts.    This Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same agreement. 

26.    Successors and Assigns.    This Agreement is intended to bind and inure to the benefit of and be
enforceable by Employee, the Company and their respective successors and assigns; provided that in no event shall Employee's obligations under this Agreement be delegated or transferred by Employee,
nor

 
shall Employee's rights be subject to encumbrance or to the claims of Employee's creditors. This Agreement is for the sole benefit of the parties hereto and shall not create any rights in third
parties other than Employee's spouse or beneficiary as expressly set forth herein. 

27.    Remedies.    Except as otherwise provided in this Agreement, (i) each of the parties to this
Agreement will be entitled to enforce its rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights to
which it may be entitled and (ii) disputes under this Agreement not finally resolved in writing by the parties within sixty days after one party gives notice in good faith to the other party
that a bona fide dispute exists shall be resolved pursuant to binding arbitration conducted in Denver, Colorado in accordance with the rules of the American Arbitration Association. The prevailing
party in any such arbitration shall be entitled to have its costs and expenses (including reasonable attorney's fees and expenses) relating to such arbitration paid by the other party if the
arbitrator(s) conducting such arbitration so determine. Notwithstanding the foregoing, the parties agree and acknowledge that money damages may not be an adequate remedy for breach of the provisions
of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement. The prevailing party in any suit shall be entitled to recover reasonable attorneys fees and costs from the other party. 

28.    Modifications and Waivers.    No provision of this Agreement may be modified, altered or amended
except by an instrument in writing executed by the parties hereto. No waiver by either party hereto of any breach by the other party hereto of any term or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar terms or provisions at the time or at any prior or subsequent time. 

29.    Headings.    The headings contained herein are solely for the purpose of reference, are not part of
this Agreement and shall not in any way affect the meaning or interpretation of this Agreement. 

30.    Notification of Subsequent Employer.    Employee agrees that the Company may present a copy of this
Agreement to any third party. 

31.    UNDERSTAND AGREEMENT.    EMPLOYEE REPRESENTS AND WARRANTS THAT (a) EMPLOYEE HAS READ AND
UNDERSTOOD EACH AND EVERY PROVISION OF THIS AGREEMENT, (b) EMPLOYEE HAS HAD THE OPPORTUNITY TO OBTAIN ADVICE FROM LEGAL COUNSEL OF EMPLOYEE'S CHOICE, OTHER THAN COUNSEL TO THE COMPANY (WHO IS
NOT REPRESENTING THE EMPLOYEE), IN ORDER TO INTERPRET ANY AND ALL PROVISIONS OF THIS AGREEMENT, (c) EMPLOYEE HAS HAD THE OPPORTUNITY TO ASK THE COMPANY QUESTIONS ABOUT THIS AGREEMENT AND ANY OF
SUCH QUESTIONS EMPLOYEE HAS ASKED HAVE BEEN ANSWERED TO EMPLOYEE'S SATISFACTION, AND (d) EMPLOYEE HAS BEEN GIVEN A COPY OF THIS AGREEMENT. 

[Signature page follows]

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written. 

	 EMPLOYEE:	 
	
/s/  STERLING K. AINSWORTH, PH.D.      
 Sterling K. Ainsworth, Ph.D.	

 
	
 THE COMPANY:	

 
	
 NaPro BioTherapeutics, Inc.	

 
	

By:	
 	

/s/  KAI P. LARSON      
	

 
	Kai P. Larson, Vice President, General Counsel	 

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