Document:

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                                  EXHIBIT 10.3

                             ADVANCED MEDICINE, INC.

                           2000 EQUITY INCENTIVE PLAN

                         (AS ADOPTED FEBRUARY 26, 2000)

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                                TABLE OF CONTENTS

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ARTICLE I.  INTRODUCTION..........................................................................................1

ARTICLE II.  ADMINISTRATION.......................................................................................1
         2.1  Committee Composition...............................................................................1
         2.2  Committee Responsibilities..........................................................................1
         2.3  Committee for Non-Officer Grants....................................................................1

ARTICLE III.  SHARES AVAILABLE FOR GRANTS.........................................................................2
         3.1  Basic Limitation....................................................................................2
         3.2  Additional Shares...................................................................................2
         3.3  Dividend Equivalents................................................................................2

ARTICLE IV.  ELIGIBILITY..........................................................................................2
         4.1  Incentive Stock Options.............................................................................2
         4.2  Other Grants........................................................................................3

ARTICLE V.  OPTIONS...............................................................................................3
         5.1  Stock Option Agreement..............................................................................3
         5.2  Number of Shares....................................................................................3
         5.3  Exercise Price......................................................................................3
         5.4  Exercisability and Term.............................................................................3
         5.5  Modification or Assumption of Options...............................................................4
         5.6  Buyout Provisions...................................................................................4

ARTICLE VI.  PAYMENT FOR OPTION SHARES............................................................................4
         6.1  General Rule........................................................................................4
         6.2  Surrender of Stock..................................................................................4
         6.3  Exercise/Sale.......................................................................................4
         6.4  Exercise/Pledge.....................................................................................4
         6.5  Promissory Note.....................................................................................5
         6.6  Other Forms of Payment..............................................................................5

ARTICLE VII.  STOCK APPRECIATION RIGHTS...........................................................................5
         7.1  SAR Agreement.......................................................................................5
         7.2  Number of Shares....................................................................................5
         7.3  Exercise Price......................................................................................5
         7.4  Exercisability and Term.............................................................................5
         7.5  Exercise of SARs....................................................................................6
         7.6  Modification or Assumption of SARs..................................................................6

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ARTICLE VIII.  RESTRICTED SHARES..................................................................................6
         8.1  Restricted Stock Agreement..........................................................................6
         8.2  Payment for Awards..................................................................................6
         8.3  Vesting Conditions..................................................................................6
         8.4  Voting and Dividend Rights..........................................................................6

ARTICLE IX.  STOCK UNITS..........................................................................................7
         9.1  Stock Unit Agreement................................................................................7
         9.2  Payment for Awards..................................................................................7
         9.3  Vesting Conditions..................................................................................7
         9.4  Voting and Dividend Rights..........................................................................7
         9.5  Form and Time of Settlement of Stock Units..........................................................7
         9.6  Death of Recipient..................................................................................8
         9.7  Creditors' Rights...................................................................................8

ARTICLE X.  CHANGE IN CONTROL.....................................................................................8
         10.1  Effect of Change in Control........................................................................8
         10.2  Acceleration.......................................................................................8

ARTICLE XI.  PROTECTION AGAINST DILUTION..........................................................................9
         11.1  Adjustments........................................................................................9
         11.2  Dissolution or Liquidation.........................................................................9
         11.3  Reorganizations....................................................................................9

ARTICLE XII.  DEFERRAL OF AWARDS..................................................................................9

ARTICLE XIII.  AWARDS UNDER OTHER PLANS..........................................................................10

ARTICLE XIV.  PAYMENT OF FEES IN SECURITIES......................................................................10
         14.1  Effective Date....................................................................................10
         14.2  Elections to Receive NSOs, Restricted Shares or Stock Units.......................................10
         14.3  Number and Terms of NSOs, Restricted Shares or Stock Units........................................11

ARTICLE XV.  LIMITATION ON RIGHTS................................................................................11
         15.1  Retention Rights..................................................................................11
         15.2  Stockholders' Rights..............................................................................11
         15.3  Regulatory Requirements...........................................................................11

ARTICLE XVI.  WITHHOLDING TAXES..................................................................................12
         16.1  General...........................................................................................12
         16.2  Share Withholding.................................................................................12

ARTICLE XVII.  FUTURE OF THE PLAN................................................................................12
         17.1  Term of the Plan..................................................................................12
         17.2  Amendment or Termination..........................................................................12

ARTICLE XVIII.  LIMITATION ON PAYMENTS...........................................................................13
         18.1  Scope of Limitation...............................................................................13

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         18.2  Application to Award..............................................................................13
         18.3  Basic Rule........................................................................................13
         18.4  Reduction of Payments.............................................................................13
         18.5  Overpayments and Underpayments....................................................................14
         18.6  Related Corporations..............................................................................14

ARTICLE XIX.  DEFINITIONS........................................................................................14
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                             ADVANCED MEDICINE, INC.
                           2000 EQUITY INCENTIVE PLAN

ARTICLE I.            INTRODUCTION.

                  The Plan was adopted by the Board to be effective at the
IPO. The purpose of the Plan is to promote the long-term success of the
Corporation and the creation of stockholder value by (a) encouraging
Employees, Outside Directors and Consultants to focus on critical long-range
objectives, (b) encouraging the attraction and retention of Employees,
Outside Directors and Consultants with exceptional qualifications, and (c)
linking Employees, Outside Directors and Consultants directly to stockholder
interests through increased stock ownership. The Plan seeks to achieve this
purpose by providing for Awards in the form of Restricted Shares, Stock
Units, Options (which may constitute incentive stock options or nonstatutory
stock options) or stock appreciation rights.

                  The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware (except their choice-of-law
provisions).

ARTICLE II.           ADMINISTRATION.

                  2.1 COMMITTEE COMPOSITION. The Plan shall be administered
by the Committee. The Committee shall consist exclusively of two or more
directors of the Corporation, who shall be appointed by the Board. In
addition, the composition of the Committee shall satisfy:

                           (a) Such requirements as the Securities and
Exchange Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its successor) under
the Exchange Act; and

                           (b) Such requirements as the Internal Revenue
Service may establish for outside directors acting under plans intended to
qualify for exemption under section 162(m)(4)(C) of the Code.

                  2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a)
select the Employees, Outside Directors and Consultants who are to receive
Awards under the Plan, (b) determine the type, number, vesting requirements
and other features and conditions of such Awards, (c) interpret the Plan and
(d) make all other decisions relating to the operation of the Plan. The
Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be
final and binding on all persons.

                  2.3 COMMITTEE FOR NON-OFFICER GRANTS. The Board may also
appoint a secondary committee of the Board, which shall be composed of one or
more directors of the Corporation who need not satisfy the requirements of
Section 2.1. Such secondary committee may administer the Plan with respect to
Employees and Consultants who are not considered officers or directors of the
Corporation under section 16 of the Exchange Act, may grant Awards

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under the Plan to such Employees and Consultants and may determine all
features and conditions of such Awards. Within the limitations of this
Section 2.3, any reference in the Plan to the Committee shall include such
secondary committee.

ARTICLE III.          SHARES AVAILABLE FOR GRANTS.

                  3.1 BASIC LIMITATION. Shares of Common Stock issued
pursuant to the Plan may be authorized but unissued shares or treasury
shares. The aggregate number of Options, SARs, Stock Units and Restricted
Shares awarded under the Plan shall not exceed (a) that number equal to the
difference between (i) 12% of the number of shares of Common Stock
outstanding or the effective date of the Plan (including shares issued in the
IPO) and (ii) 500,000, rounded up to the nearest 1,000, plus (b) the
additional shares of Common Stock described in Section 3.2. The limitations
of this Section 3.1 shall be subject to adjustment pursuant to Article 11.

                  3.2 ADDITIONAL SHARES. If Restricted Shares or shares of
Common Stock issued upon the exercise of Options are forfeited, then such
shares of Common Stock shall again become available for Awards under the
Plan. If Stock Units, Options or SARs are forfeited or terminate for any
other reason before being exercised, then the corresponding shares of Common
Stock shall again become available for Awards under the Plan. If Stock Units
are settled, then only the number of shares of Common Stock (if any) actually
issued in settlement of such Stock Units shall reduce the number available
under Section 3.1 and the balance shall again become available for Awards
under the Plan. If SARs are exercised, then only the number of shares of
Common Stock (if any) actually issued in settlement of such SARs shall reduce
the number available under Section 3.1 and the balance shall again become
available for Awards under the Plan. The foregoing notwithstanding, the
aggregate number of shares of Common Stock that may be issued under the Plan
upon the exercise of ISOs shall not be increased when Restricted Shares or
other shares of Common Stock are forfeited.

                  3.3 DIVIDEND EQUIVALENTS. Any dividend equivalents paid or
credited under the Plan shall not be applied against the number of Restricted
Shares, Stock Units, Options or SARs available for Awards, whether or not
such dividend equivalents are converted into Stock Units.

ARTICLE IV.           ELIGIBILITY.

                  4.1 INCENTIVE STOCK OPTIONS. Only Employees who are
common-law employees of the Corporation, a Parent or a Subsidiary shall be
eligible for the grant of ISOs. In addition, an Employee who owns more than
10% of the total combined voting power of all classes of outstanding stock of
the Corporation or any of its Parents or Subsidiaries shall not be eligible
for the grant of an ISO unless the requirements set forth in section
422(c)(6) of the Code are satisfied.

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                  4.2 OTHER GRANTS. Only Employees, Outside Directors and
Consultants shall be eligible for the grant of Restricted Shares, Stock
Units, NSOs or SARs.

ARTICLE V.            OPTIONS.

                  5.1 STOCK OPTION AGREEMENT. Each grant of an Option under
the Plan shall be evidenced by a Stock Option Agreement between the Optionee
and the Corporation. Such Option shall be subject to all applicable terms of
the Plan and may be subject to any other terms that are not inconsistent with
the Plan. The Stock Option Agreement shall specify whether the Option is an
ISO or an NSO. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical. Options may be granted in
consideration of a reduction in the Optionee's other compensation. A Stock
Option Agreement may provide that a new Option will be granted automatically
to the Optionee when he or she exercises a prior Option and pays the Exercise
Price in the form described in Section 6.2.

                  5.2 NUMBER OF SHARES. Each Stock Option Agreement shall
specify the number of shares of Common Stock subject to the Option and shall
provide for the adjustment of such number in accordance with Article 10.
Options granted to any Optionee in a single fiscal year of the Corporation
shall not cover more than 1,500,000 shares of Common Stock, except that
Options granted to a new Employee in the fiscal year of the Corporation in
which his or her service as an Employee first commences shall not cover more
than 2,000,000 shares of Common Stock. The limitations set forth in the
preceding sentence shall be subject to adjustment in accordance with Article
11.

                  5.3 EXERCISE PRICE. Each Stock Option Agreement shall
specify the Exercise Price; provided that the Exercise Price under an ISO
shall in no event be less than 100% of the Fair Market Value of a Common
Share on the date of grant and the Exercise Price under an NSO shall in no
event be less than 75% of the Fair Market Value of a Common Share on the date
of grant. In the case of an NSO, a Stock Option Agreement may specify an
Exercise Price that varies in accordance with a predetermined formula while
the NSO is outstanding.

                  5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement
shall specify the date or event when all or any installment of the Option is
to become exercisable. The Stock Option Agreement shall also specify the term
of the Option; provided that the term of an ISO shall in no event exceed 10
years from the date of grant. A Stock Option Agreement may provide for
accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end
of its term in the event of the termination of the Optionee's service.
Options may be awarded in combination with SARs, and such an Award may
provide that the Options will not be exercisable unless the related SARs are
forfeited.

                  5.5 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or assume
outstanding options or may accept the cancellation of outstanding options
(whether granted by the Corporation or by another issuer) in return for the
grant of new options for the same or a different number of shares and at the
same or a different exercise price. The foregoing notwithstanding, no
modification of an Option shall,

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without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option.

                  5.6 BUYOUT PROVISIONS. The Committee may at any time (a)
offer to buy out for a payment in cash or cash equivalents an Option
previously granted or (b) authorize an Optionee to elect to cash out an
Option previously granted, in either case at such time and based upon such
terms and conditions as the Committee shall establish.

ARTICLE VI.           PAYMENT FOR OPTION SHARES.

                  6.1 GENERAL RULE. The entire Exercise Price of shares of
Common Stock issued upon exercise of Options shall be payable in cash or cash
equivalents at the time when such shares of Common Stock are purchased,
except as follows:

                           (a) In the case of an ISO granted under the Plan,
payment shall be made only pursuant to the express provisions of the
applicable Stock Option Agreement. The Stock Option Agreement may specify
that payment may be made in any form(s) described in this Article 6.

                           (b) In the case of an NSO, the Committee may at
any time accept payment in any form(s) described in this Article 6.

                  6.2 SURRENDER OF STOCK. To the extent that this Section 6.2
is applicable, all or any part of the Exercise Price may be paid by
surrendering, or attesting to the ownership of, shares of Common Stock that
are already owned by the Optionee. Such shares of Common Stock shall be
valued at their Fair Market Value on the date when the new shares of Common
Stock are purchased under the Plan. The Optionee shall not surrender, or
attest to the ownership of, shares of Common Stock in payment of the Exercise
Price if such action would cause the Corporation to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.

                  6.3 EXERCISE/SALE. To the extent that this Section 6.3 is
applicable, all or any part of the Exercise Price and any withholding taxes
may be paid by delivering (on a form prescribed by the Corporation) an
irrevocable direction to a securities broker approved by the Corporation to
sell all or part of the shares of Common Stock being purchased under the Plan
and to deliver all or part of the sales proceeds to the Corporation.

                  6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is
applicable, all or any part of the Exercise Price and any withholding taxes
may be paid by delivering (on a form prescribed by the Corporation) an
irrevocable direction to pledge all or part of the shares of Common Stock
being purchased under the Plan to a securities broker or lender approved by
the Corporation, as security for a loan, and to deliver all or part of the
loan proceeds to the Corporation.

                  6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is
applicable, all or any part of the Exercise Price and any withholding taxes
may be paid by delivering (on a form prescribed by the Corporation) a
full-recourse promissory note. However, the par value of the

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shares of Common Stock being purchased under the Plan, if newly issued, shall
be paid in cash or cash equivalents.

                  6.6 OTHER FORMS OF PAYMENT. To the extent that this Section
6.6 is applicable, all or any part of the Exercise Price and any withholding
taxes may be paid in any other form that is consistent with applicable laws,
regulations and rules.

ARTICLE VII.          STOCK APPRECIATION RIGHTS.

                  7.1 SAR AGREEMENT. Each grant of an SAR under the Plan
shall be evidenced by an SAR Agreement between the Optionee and the
Corporation. Such SAR shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the
Plan. The provisions of the various SAR Agreements entered into under the
Plan need not be identical. SARs may be granted in consideration of a
reduction in the Optionee's other compensation.

                  7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the
number of shares of Common Stock to which the SAR pertains and shall provide
for the adjustment of such number in accordance with Article 11. SARs granted
to any Optionee in a single calendar year shall in no event pertain to more
than 1,500,000 shares of Common Stock, except that SARs granted to a new
Employee in the fiscal year of the Corporation in which his or her service as
an Employee first commences shall not pertain to more than 2,000,000 shares
of Common Stock. The limitations set forth in the preceding sentence shall be
subject to adjustment in accordance with Article 11.

                  7.3 EXERCISE PRICE. Each SAR Agreement shall specify the
Exercise Price. An SAR Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the SAR is outstanding.

                  7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall
specify the date when all or any installment of the SAR is to become
exercisable. The SAR Agreement shall also specify the term of the SAR. An SAR
Agreement may provide for accelerated exercisability in the event of the
Optionee's death, disability or retirement or other events and may provide
for expiration prior to the end of its term in the event of the termination
of the Optionee's service. SARs may be awarded in combination with Options,
and such an Award may provide that the SARs will not be exercisable unless
the related Options are forfeited. An SAR may be included in an ISO only at
the time of grant but may be included in an NSO at the time of grant or
thereafter. An SAR granted under the Plan may provide that it will be
exercisable only in the event of a Change in Control.

                  7.5 EXERCISE OF SARS. Upon exercise of an SAR, the Optionee
(or any person having the right to exercise the SAR after his or her death)
shall receive from the Corporation (a) shares of Common Stock, (b) cash or
(c) a combination of shares of Common Stock and cash, as the Committee shall
determine. The amount of cash and/or the Fair Market Value of shares of
Common Stock received upon exercise of SARs shall, in the aggregate, be equal
to the amount by which the Fair Market Value (on the date of surrender) of
the shares of Common Stock subject to the SARs exceeds the Exercise Price.
If, on the date when an SAR expires, the

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Exercise Price under such SAR is less than the Fair Market Value on such date
but any portion of such SAR has not been exercised or surrendered, then such
SAR shall automatically be deemed to be exercised as of such date with
respect to such portion.

                  7.6 MODIFICATION OR ASSUMPTION OF SARS. Within the
limitations of the Plan, the Committee may modify, extend or assume
outstanding SARs or may accept the cancellation of outstanding SARs (whether
granted by the Corporation or by another issuer) in return for the grant of
new SARs for the same or a different number of shares and at the same or a
different exercise price. The foregoing notwithstanding, no modification of
an SAR shall, without the consent of the Optionee, alter or impair his or her
rights or obligations under such SAR.

ARTICLE VIII.         RESTRICTED SHARES.

                  8.1 RESTRICTED STOCK AGREEMENT. Each grant of Restricted
Shares under the Plan shall be evidenced by a Restricted Stock Agreement
between the recipient and the Corporation. Such Restricted Shares shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various
Restricted Stock Agreements entered into under the Plan need not be identical.

                  8.2 PAYMENT FOR AWARDS. Subject to the following sentence,
Restricted Shares may be sold or awarded under the Plan for such
consideration as the Committee may determine, including (without limitation)
cash, cash equivalents, full-recourse promissory notes, past services and
future services. To the extent that an Award consists of newly issued
Restricted Shares, the consideration shall consist exclusively of cash, cash
equivalents or past services rendered to the Corporation (or a Parent or
Subsidiary) or, for the amount in excess of the par value of such newly
issued Restricted Shares, full-recourse promissory notes, as the Committee
may determine.

                  8.3 VESTING CONDITIONS. Each Award of Restricted Shares may
or may not be subject to vesting. Vesting shall occur, in full or in
installments, upon satisfaction of the conditions specified in the Restricted
Stock Agreement. A Restricted Stock Agreement may provide for accelerated
vesting in the event of the Participant's death, disability or retirement or
other events.

                  8.4 VOTING AND DIVIDEND RIGHTS. The holders of Restricted
Shares awarded under the Plan shall have the same voting, dividend and other
rights as the Corporation's other stockholders. A Restricted Stock Agreement,
however, may require that the holders of Restricted Shares invest any cash
dividends received in additional Restricted Shares. Such additional
Restricted Shares shall be subject to the same conditions and restrictions as
the Award with respect to which the dividends were paid.

ARTICLE IX.           STOCK UNITS.

                  9.1 STOCK UNIT AGREEMENT. Each grant of Stock Units under
the Plan shall be evidenced by a Stock Unit Agreement between the recipient
and the Corporation. Such Stock Units shall be subject to all applicable
terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Stock Unit
Agreements

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entered into under the Plan need not be identical. Stock Units may be granted
in consideration of a reduction in the recipient's other compensation.

                  9.2 PAYMENT FOR AWARDS. To the extent that an Award is
granted in the form of Stock Units, no cash consideration shall be required
of the Award recipients.

                  9.3 VESTING CONDITIONS. Each Award of Stock Units may or
may not be subject to vesting. Vesting shall occur, in full or in
installments, upon satisfaction of the conditions specified in the Stock Unit
Agreement. A Stock Unit Agreement may provide for accelerated vesting in the
event of the Participant's death, disability or retirement or other events.

                  9.4 VOTING AND DIVIDEND RIGHTS. The holders of Stock Units
shall have no voting rights. Prior to settlement or forfeiture, any Stock
Unit awarded under the Plan may, at the Committee's discretion, carry with it
a right to dividend equivalents. Such right entitles the holder to be
credited with an amount equal to all cash dividends paid on one Common Share
while the Stock Unit is outstanding. Dividend equivalents may be converted
into additional Stock Units. Settlement of dividend equivalents may be made
in the form of cash, in the form of shares of Common Stock, or in a
combination of both. Prior to distribution, any dividend equivalents which
are not paid shall be subject to the same conditions and restrictions as the
Stock Units to which they attach.

                  9.5 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement
of vested Stock Units may be made in the form of (a) cash, (b) shares of
Common Stock or (c) any combination of both, as determined by the Committee.
The actual number of Stock Units eligible for settlement may be larger or
smaller than the number included in the original Award, based on
predetermined performance factors. Methods of converting Stock Units into
cash may include (without limitation) a method based on the average Fair
Market Value of shares of Common Stock over a series of trading days. Vested
Stock Units may be settled in a lump sum or in installments. The distribution
may occur or commence when all vesting conditions applicable to the Stock
Units have been satisfied or have lapsed, or it may be deferred to any later
date. The amount of a deferred distribution may be increased by an interest
factor or by dividend equivalents. Until an Award of Stock Units is settled,
the number of such Stock Units shall be subject to adjustment pursuant to
Article 11.

                  9.6 DEATH OF RECIPIENT. Any Stock Units Award that becomes
payable after the recipient's death shall be distributed to the recipient's
beneficiary or beneficiaries. Each recipient of a Stock Units Award under the
Plan shall designate one or more beneficiaries for this purpose by filing the
prescribed form with the Corporation. A beneficiary designation may be
changed by filing the prescribed form with the Corporation at any time before
the Award recipient's death. If no beneficiary was designated or if no
designated beneficiary survives the Award recipient, then any Stock Units
Award that becomes payable after the recipient's death shall be distributed
to the recipient's estate.

                  9.7 CREDITORS' RIGHTS. A holder of Stock Units shall have
no rights other than those of a general creditor of the Corporation. Stock
Units represent an unfunded and unsecured obligation of the Corporation,
subject to the terms and conditions of the applicable Stock Unit Agreement.

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ARTICLE X.            CHANGE IN CONTROL.

                  10.1 EFFECT OF CHANGE IN CONTROL. In the event of any
Change in Control, each outstanding Award shall automatically accelerate so
that each such Award shall, immediately prior to the effective date of the
Change in Control, become fully exercisable for all of the shares of Common
Stock at the time subject to such Award and may be exercised for any or all
of those shares as fully-vested shares of Common Stock. However, an
outstanding Award shall NOT so accelerate if and to the extent such Award is,
in connection with the Change in Control, either to be assumed by the
successor corporation (or parent thereof) or to be replaced with a comparable
Award for shares of the capital stock of the successor corporation (or parent
thereof). The determination of Award comparability shall be made by the Plan
Administrator, and its determination shall be final, binding and conclusive.

                  10.2 ACCELERATION. In the event of any Change in Control,
each outstanding Award that is assumed by the successor corporation (or
parent thereof) shall automatically accelerate so that each such Award shall,
immediately prior to the effective date of the Change in Control, become
exercisable for such additional number of shares of Common Stock at the time
subject to such Award as would result in vesting the balance of such Award
over a period equal to the lesser of 24 months (in equal monthly
installments) or over the remainder of the original vesting schedule in
effect for such Award.. In addition, in the event that the Award is assumed
by the successor corporation (or parent thereof) and the Participant
experiences an Involuntary Termination within twenty-four months following a
Change in Control, each outstanding Award shall automatically accelerate so
that each such Award shall, immediately prior to the effective date of the
Involuntary Termination, become fully exercisable for all of the shares of
Common Stock at the time subject to such Award and may be exercised for any
or all of those shares as fully-vested shares of Common Stock.

ARTICLE XI.           PROTECTION AGAINST DILUTION.

                  11.1 ADJUSTMENTS. In the event of a subdivision of the
outstanding shares of Common Stock, a declaration of a dividend payable in
shares of Common Stock, a declaration of a dividend payable in a form other
than shares of Common Stock in an amount that has a material affect on the
price of shares of Common Stock, a combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
lesser number of shares of Common Stock, a recapitalization, a spin-off or a
similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of:

                           (a) The number of Options, SARs, Restricted Shares
and Stock Units available for future Awards under Article 3;

                           (b) The limitations set forth in Sections 5.2 and
7.2;

                           (c) The number of shares of Common Stock covered
by each outstanding Option and SAR;

                           (d) The Exercise Price under each outstanding
Option and SAR; or

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                           (e) The number of Stock Units included in any
prior Award which has not yet been settled.

Except as provided in this Article 11, a Participant shall have no rights by
reason of any issue by the Corporation of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class.

                  11.2 DISSOLUTION OR LIQUIDATION. To the extent not
previously exercised or settled, Options, SARs and Stock Units shall
terminate immediately prior to the dissolution or liquidation of the
Corporation.

                  11.3 REORGANIZATIONS. In the event that the Corporation is
a party to a merger or other reorganization, outstanding Awards shall be
subject to the agreement of merger or reorganization. Such agreement shall
provide for (a) the continuation of the outstanding Awards by the
Corporation, if the Corporation is a surviving corporation, (b) the
assumption of the outstanding Awards by the surviving corporation or its
parent or subsidiary, (c) the substitution by the surviving corporation or
its parent or subsidiary of its own awards for the outstanding Awards, (d)
full exercisability or vesting and accelerated expiration of the outstanding
Awards or (e) settlement of the full value of the outstanding Awards in cash
or cash equivalents followed by cancellation of such Awards.

ARTICLE XII.          DEFERRAL OF AWARDS.

                  The Committee (in its sole discretion) may permit or
require a Participant to:

                           (a) Have cash that otherwise would be paid to such
Participant as a result of the exercise of an SAR or the settlement of Stock
Units credited to a deferred compensation account established for such
Participant by the Committee as an entry on the Corporation's books;

                           (b) Have shares of Common Stock that otherwise
would be delivered to such Participant as a result of the exercise of an
Option or SAR converted into an equal number of Stock Units; or

                           (c) Have shares of Common Stock that otherwise
would be delivered to such Participant as a result of the exercise of an
Option or SAR or the settlement of Stock Units converted into amounts
credited to a deferred compensation account established for such Participant
by the Committee as an entry on the Corporation's books. Such amounts shall
be determined by reference to the Fair Market Value of such shares of Common
Stock as of the date when they otherwise would have been delivered to such
Participant.

A deferred compensation account established under this Article 12 may be
credited with interest or other forms of investment return, as determined by
the Committee. A Participant for whom such an account is established shall
have no rights other than those of a general creditor of the Corporation.
Such an account shall represent an unfunded and unsecured obligation of the
Corporation and shall be subject to the terms and conditions of the
applicable agreement between such Participant and the Corporation. If the
deferral or conversion of Awards is permitted or

                                       9
<PAGE>

required, the Committee (in its sole discretion) may establish rules,
procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established
under this Article 12.

ARTICLE XIII.         AWARDS UNDER OTHER PLANS.

                  The Corporation may grant awards under other plans or
programs. Such awards may be settled in the form of shares of Common Stock
issued under this Plan. Such shares of Common Stock shall be treated for all
purposes under the Plan like shares of Common Stock issued in settlement of
Stock Units and shall, when issued, reduce the number of shares of Common
Stock available under Article 3.

ARTICLE XIV.          PAYMENT OF FEES IN SECURITIES.

                  14.1 EFFECTIVE DATE. No provision of this Article 14 shall
be effective unless and until the Board has determined to implement such
provision.

                  14.2 ELECTIONS TO RECEIVE NSOS, RESTRICTED SHARES OR STOCK
UNITS. An Outside Director may elect to receive his or her annual retainer
payments or meeting fees from the Corporation in the form of cash, NSOs,
Restricted Shares or Stock Units, or a combination thereof, as determined by
the Board. Such NSOs, Restricted Shares and Stock Units shall be issued under
the Plan. An election under this Article 14 shall be filed with the
Corporation on the prescribed form.

                  14.3 NUMBER AND TERMS OF NSOS, RESTRICTED SHARES OR STOCK
UNITS. The number of NSOs, Restricted Shares or Stock Units to be granted to
Outside Directors in lieu of annual retainers or meeting fees that would
otherwise be paid in cash shall be calculated in a manner determined by the
Board. The Board shall also determine the terms of such NSOs, Restricted
Shares or Stock Units.

ARTICLE XV.           LIMITATION ON RIGHTS.

                  15.1 RETENTION RIGHTS. Neither the Plan nor any Award
granted under the Plan shall be deemed to give any individual a right to
remain an Employee, Outside Director or Consultant. The Corporation and its
Parents, Subsidiaries and Affiliates reserve the right to terminate the
service of any Employee, Outside Director or Consultant at any time, with or
without cause, subject to applicable laws, the Corporation's certificate of
incorporation and by-laws and a written employment agreement (if any).

                  15.2 STOCKHOLDERS' RIGHTS. A Participant shall have no
dividend rights, voting rights or other rights as a stockholder with respect
to any shares of Common Stock covered by his or her Award prior to the time
when a stock certificate for such shares of Common Stock is issued or, if
applicable, the time when he or she becomes entitled to receive such shares
of Common Stock by filing any required notice of exercise and paying any
required Exercise Price. No adjustment shall be made for cash dividends or
other rights for which the record date is prior to such time, except as
expressly provided in the Plan.

                                       10
<PAGE>

                  15.3 REGULATORY REQUIREMENTS. Any other provision of the
Plan notwithstanding, the obligation of the Corporation to issue shares of
Common Stock under the Plan shall be subject to all applicable laws, rules
and regulations and such approval by any regulatory body as may be required.
The Corporation reserves the right to restrict, in whole or in part, the
delivery of shares of Common Stock pursuant to any Award prior to the
satisfaction of all legal requirements relating to the issuance of such
shares of Common Stock, to their registration, qualification or listing or to
an exemption from registration, qualification or listing.

ARTICLE XVI.          WITHHOLDING TAXES.

                  16.1 GENERAL. To the extent required by applicable federal,
state, local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Corporation for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The
Corporation shall not be required to issue any shares of Common Stock or make
any cash payment under the Plan until such obligations are satisfied.

                  16.2 SHARE WITHHOLDING. The Committee may permit a
Participant to satisfy all or part of his or her withholding or income tax
obligations by having the Corporation withhold all or a portion of any shares
of Common Stock that otherwise would be issued to him or her or by
surrendering all or a portion of any shares of Common Stock that he or she
previously acquired. Such shares of Common Stock shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.

ARTICLE XVII.         FUTURE OF THE PLAN.

                  17.1 TERM OF THE PLAN. The Plan, as set forth herein, shall
become effective the date of effectiveness of the IPO. The Plan shall remain
in effect until it is terminated under Section 17.2, except that no ISOs
shall be granted on or after the 10th anniversary of the later of (a) the
date when the Board adopted the Plan or (b) the date when the Board adopted
the most recent increase in the number of shares of Common Stock available
under Article 3 which was approved by the Corporation's stockholders. The
Plan shall serve as the successor to the Predecessor Plans, and no further
option grants shall be made under the Predecessor Plans after the Plan
effective date. All options outstanding under the Predecessor Plans as of
such date shall, immediately upon effectiveness of the Plan, remain
outstanding in accordance with their terms. Each outstanding option under the
Predecessor Plans shall continue to be governed solely by the terms of the
documents evidencing such option, and no provision of the Plan shall be
deemed to affect or otherwise modify the rights or obligations of the holders
of such options with respect to their acquisition of shares of Common Stock,
except that the vesting acceleration provisions of Article 10 relating to
Change in Control shall be extended to the options outstanding under the
Predecessor Plans.

                  17.2 AMENDMENT OR TERMINATION. The Board may, at any time
and for any reason, amend or terminate the Plan. An amendment of the Plan
shall be subject to the approval of the Corporation's stockholders only to
the extent required by applicable laws, regulations or rules. No Awards shall
be granted under the Plan after the termination thereof. The termination of
the Plan, or any amendment thereof, shall not affect any Award previously
granted under the Plan.

                                       11
<PAGE>

ARTICLE XVIII.        LIMITATION ON PAYMENTS.

                  18.1 SCOPE OF LIMITATION. This Article 18 shall apply to an
Award only if:

                           (a) The independent auditors most recently
selected by the Board (the "Auditors") determine that the after-tax value of
such Award to the Participant, taking into account the effect of all federal,
state and local income taxes, employment taxes and excise taxes applicable to
the Participant (including the excise tax under section 4999 of the Code),
will be greater after the application of this Article 18 than it was before
the application of this Article 18; or

                           (b) The Committee, at the time of making an Award
under the Plan or at any time thereafter, specifies in writing that such
Award shall be subject to this Article 18 (regardless of the after-tax value
of such Award to the Participant).

                  18.2 APPLICATION TO AWARD. If this Article 18 applies to an
Award, it shall supersede any contrary provision of the Plan or of any Award
granted under the Plan.

                  18.3 BASIC RULE. In the event that the Auditors determine
that any payment or transfer by the Corporation under the Plan to or for the
benefit of a Participant (a "Payment") would be nondeductible by the
Corporation for federal income tax purposes because of the provisions
concerning "excess parachute payments" in section 280G of the Code, then the
aggregate present value of all Payments shall be reduced (but not below zero)
to the Reduced Amount. For purposes of this Article 18, the "Reduced Amount"
shall be the amount, expressed as a present value, which maximizes the
aggregate present value of the Payments without causing any Payment to be
nondeductible by the Corporation because of section 280G of the Code.

                  18.4 REDUCTION OF PAYMENTS. If the Auditors determine that
any Payment would be nondeductible by the Corporation because of section 280G
of the Code, then the Corporation shall promptly give the Participant notice
to that effect and a copy of the detailed calculation thereof and of the
Reduced Amount, and the Participant may then elect, in his or her sole
discretion, which and how much of the Payments shall be eliminated or reduced
(as long as after such election the aggregate present value of the Payments
equals the Reduced Amount) and shall advise the Corporation in writing of his
or her election within 10 days of receipt of notice. If no such election is
made by the Participant within such 10-day period, then the Corporation may
elect which and how much of the Payments shall be eliminated or reduced (as
long as after such election the aggregate present value of the Payments
equals the Reduced Amount) and shall notify the Participant promptly of such
election. For purposes of this Article 18, present value shall be determined
in accordance with section 280G(d)(4) of the Code. All determinations made by
the Auditors under this Article 18 shall be binding upon the Corporation and
the Participant and shall be made within 60 days of the date when a Payment
becomes payable or transferable. As promptly as practicable following such
determination and the elections hereunder, the Corporation shall pay or
transfer to or for the benefit of the Participant such amounts as are then
due to him or her under the Plan and shall promptly pay or transfer to or for
the benefit of the Participant in the future such amounts as become due to
him or her under the Plan.

                                       12
<PAGE>

                  18.5 OVERPAYMENTS AND UNDERPAYMENTS. As a result of
uncertainty in the application of section 280G of the Code at the time of an
initial determination by the Auditors hereunder, it is possible that Payments
will have been made by the Corporation which should not have been made (an
"Overpayment") or that additional Payments which will not have been made by
the Corporation could have been made (an "Underpayment"), consistent in each
case with the calculation of the Reduced Amount hereunder. In the event that
the Auditors, based upon the assertion of a deficiency by the Internal
Revenue Service against the Corporation or the Participant which the Auditors
believe has a high probability of success, determine that an Overpayment has
been made, such Overpayment shall be treated for all purposes as a loan to
the Participant which he or she shall repay to the Corporation, together with
interest at the applicable federal rate provided in section 7872(f)(2) of the
Code; provided, however, that no amount shall be payable by the Participant
to the Corporation if and to the extent that such payment would not reduce
the amount which is subject to taxation under section 4999 of the Code. In
the event that the Auditors determine that an Underpayment has occurred, such
Underpayment shall promptly be paid or transferred by the Corporation to or
for the benefit of the Participant, together with interest at the applicable
federal rate provided in section 7872(f)(2) of the Code.

                  18.6 RELATED CORPORATIONS. For purposes of this Article 18,
the term "Corporation" shall include affiliated corporations to the extent
determined by the Auditors in accordance with section 280G(d)(5) of the Code.

ARTICLE XIX.          DEFINITIONS.

                  19.1 "AFFILIATE" means any entity other than a Subsidiary,
if the Corporation and/or one or more Subsidiaries own not less than 50% of
such entity.

                  19.2 "AWARD" means any award of an Option, an SAR, a
Restricted Share or a Stock Unit under the Plan.

                  19.3 "BOARD" means the Corporation's Board of Directors, as
constituted from time to time.

                  19.4 "CHANGE IN CONTROL" shall mean:

                           (a) The consummation of a merger or consolidation
of the Corporation with or into another entity or any other corporate
reorganization, if persons who were not stockholders of the Corporation
immediately prior to such merger, consolidation or other reorganization own
immediately after such merger, consolidation or other reorganization 50% or
more of the voting power of the outstanding securities of each of (i) the
continuing or surviving entity and (ii) any direct or indirect parent
corporation of such continuing or surviving entity;

                           (b) The sale, transfer or other disposition of all
or substantially all of the Corporation's assets;

                           (c) A change in the composition of the Board, as a
result of which fewer than 50% of the incumbent directors are directors who
either (i) had been directors of the Corporation on the date 24 months prior
to the date of the event that may constitute a Change in Control (the
"original directors") or (ii) were elected, or nominated for election, to the
Board

                                       13
<PAGE>

with the affirmative votes of at least a majority of the aggregate of the
original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so
approved; or

                           (d) Any transaction as a result of which any
person is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
at least 50% of the total voting power represented by the Corporation's then
outstanding voting securities. For purposes of this Paragraph (d), the term
"person" shall have the same meaning as when used in sections 13(d) and 14(d)
of the Exchange Act but shall exclude(i) a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation or of a Parent
or Subsidiary and (ii) a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportions as
their ownership of the common stock of the Corporation.

A transaction shall not constitute a Change in Control if its sole purpose is
to change the state of the Corporation's incorporation or to create a holding
company that will be owned in substantially the same proportions by the
persons who held the Corporation's securities immediately before such
transaction.

                  19.5 "CODE" means the Internal Revenue Code of 1986, as
amended.

                  19.6 "COMMITTEE" means a committee of the Board, as
described in Article 2.

                  19.7 "COMMON STOCK" means the common stock of the
Corporation.

                  19.8 "CORPORATION" means Advanced Medicine, Inc., a
Delaware corporation.

                  19.9 "CONSULTANT" means a consultant or adviser who
provides bona fide services to the Corporation, a Parent, a Subsidiary or an
Affiliate as an independent contractor. Service as a Consultant shall be
considered employment for all purposes of the Plan, except as provided in
Section 4.1.

                  19.10 "EMPLOYEE" means a common-law employee of the
Corporation, a Parent, a Subsidiary or an Affiliate.

                  19.11 "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                  19.12 "EXERCISE PRICE," in the case of an Option, means the
amount for which one Common Share may be purchased upon exercise of such
Option, as specified in the applicable Stock Option Agreement. "Exercise
Price," in the case of an SAR, means an amount, as specified in the
applicable SAR Agreement, which is subtracted from the Fair Market Value of
one Common Share in determining the amount payable upon exercise of such SAR.

                  19.13 "FAIR MARKET VALUE" means the market price of one
share of Common Stock, determined by the Committee in good faith on such
basis as it deems appropriate. Whenever possible, the determination of Fair
Market Value by the Committee shall be based on the prices reported in THE
WALL STREET JOURNAL. Such determination shall be conclusive and binding on
all persons.

                                       14
<PAGE>

                  19.14 "INVOLUNTARY TERMINATION" means the termination of
the Service of any individual which occurs by reason of:

                           (a) such individual's involuntary dismissal or
discharge by the Corporation for reasons other than Misconduct, or

                           (b) such individual's voluntary resignation
following (A) a change in his or her position with the Corporation which
materially reduces his or her level of responsibility, (B) a reduction in his
or her level of compensation (including base salary, fringe benefits and
participation in bonus or incentive programs) or (C) a relocation of such
individual's place of employment by more than fifty (50) miles, provided and
only if such change, reduction or relocation is effected by the Corporation
without the individual's consent.

                  19.15 "ISO" means an incentive stock option described in
section 422(b) of the Code.

                  19.16 "MISCONDUCT" means the commission of any act of
fraud, embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential information or
trade secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by such person adversely affecting the business or
affairs of the Corporation (or any Parent or Subsidiary) in a material
manner. The foregoing definition shall not be deemed to be inclusive of all
the acts or omissions which the Corporation (or any Parent or Subsidiary) may
consider as grounds for the dismissal or discharge of any Optionee or
Participant or other person in the Service of the Corporation (or any Parent
or Subsidiary).

                  19.17 "NSO" means a stock option not described in sections
422 or 423 of the Code.

                  19.18 "OPTION" means an ISO or NSO granted under the Plan
and entitling the holder to purchase shares of Common Stock.

                  19.19 "OPTIONEE" means an individual or estate who holds an
Option or SAR.

                  19.20 "OUTSIDE DIRECTOR" shall mean a member of the Board
who is not an Employee. Service as an Outside Director shall be considered
employment for all purposes of the Plan, except as provided in Section 4.1.

                  19.21 "PARENT" means any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, if each of the corporations other than the Corporation owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption
of the Plan shall be considered a Parent commencing as of such date.

                  19.22 "PARTICIPANT" means an individual or estate who holds
an Award.

                  19.23 "PLAN" means this Advanced Medicine, Inc. 2000 Equity
Incentive Plan, as amended from time to time.

                                       15
<PAGE>

                  19.24 "PREDECESSOR PLANS" means the Corporation's existing
1997 Stock Plan and Long-Term Stock Option Plan.

                  19.25 "RESTRICTED SHARE" means a Common Share awarded under
the Plan.

                  19.26 "RESTRICTED STOCK AGREEMENT" means the agreement
between the Corporation and the recipient of a Restricted Share which
contains the terms, conditions and restrictions pertaining to such Restricted
Share.

                  19.27 "SAR" means a stock appreciation right granted under
the Plan.

                  19.28 "SAR AGREEMENT" means the agreement between the
Corporation and an Optionee which contains the terms, conditions and
restrictions pertaining to his or her SAR.

                  19.29 "STOCK OPTION AGREEMENT" means the agreement between
the Corporation and an Optionee that contains the terms, conditions and
restrictions pertaining to his or her Option.

                  19.30 "STOCK UNIT" means a bookkeeping entry representing
the equivalent of one Common Share, as awarded under the Plan.

                  19.31 "STOCK UNIT AGREEMENT" means the agreement between
the Corporation and the recipient of a Stock Unit which contains the terms,
conditions and restrictions pertaining to such Stock Unit.

                  19.32 "SUBSIDIARY" means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, if each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain. A corporation that attains the status of a Subsidiary on a date after
the adoption of the Plan shall be considered a Subsidiary commencing as of
such date.

                                       16<PAGE>

                                  EXHIBIT 10.4

                             ADVANCED MEDICINE, INC.

                            2000 DIRECTOR OPTION PLAN

                         (AS ADOPTED FEBRUARY 26, 2000)

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                            <C>
ARTICLE 1.  INTRODUCTION..........................................................................................1

ARTICLE 2.  ADMINISTRATION........................................................................................1
         2.1  Committee Composition...............................................................................1
         2.2  Committee Responsibilities..........................................................................1

ARTICLE 3.  SHARES AVAILABLE FOR GRANTS...........................................................................1
         3.1  Basic Limitation....................................................................................1
         3.2  Additional Shares...................................................................................2

ARTICLE 4.  AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.....................................................2
         4.1  Eligibility.........................................................................................2
         4.2  Initial Grants......................................................................................2
         4.3  Annual Grants.......................................................................................2
         4.4  Accelerated Exercisability..........................................................................2
         4.5  Exercise Price......................................................................................2
         4.6  Term................................................................................................3
         4.7  Affiliates of Non-Employee Directors................................................................3
         4.8  Stock Option Agreement..............................................................................3

ARTICLE 5.  PAYMENT FOR OPTION SHARES.............................................................................3
         5.1  Cash................................................................................................3
         5.2  Surrender of Stock..................................................................................3
         5.3  Exercise/Sale.......................................................................................3
         5.4  Other Forms of Payment..............................................................................3

ARTICLE 6.  PROTECTION AGAINST DILUTION...........................................................................4
         6.1  Adjustments.........................................................................................4
         6.2  Dissolution or Liquidation..........................................................................4
         6.3  Reorganizations.....................................................................................4

ARTICLE 7.  LIMITATION ON RIGHTS..................................................................................4
         7.1  Stockholders' Rights................................................................................4
         7.2  Regulatory Requirements.............................................................................4
         7.3  Withholding Taxes...................................................................................5

ARTICLE 8.  FUTURE OF THE PLAN....................................................................................5
         8.1  Term of the Plan....................................................................................5
         8.2  Amendment or Termination............................................................................5

ARTICLE 9.  DEFINITIONS...........................................................................................5

</TABLE>
                                       i
<PAGE>

                             ADVANCED MEDICINE, INC.

                            2000 DIRECTOR OPTION PLAN

         ARTICLE 1.            INTRODUCTION.

                  The Plan was adopted by the Board on February 26, 2000 to be
effective at the effectiveness of the IPO. The purpose of the Plan is to promote
the long-term success of the Corporation and the creation of stockholder value
by (a) encouraging Non-Employee Directors to focus on critical long-range
objectives, (b) encouraging the attraction and retention of Non-Employee
Directors with exceptional qualifications and (c) linking Non-Employee Directors
directly to stockholder interests through increased stock ownership. The Plan
seeks to achieve this purpose by providing for automatic and non-discretionary
grants of Options to Non-Employee Directors.

                  The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware (except their choice-of-law provisions).

         ARTICLE 2.            ADMINISTRATION.

         2.1      COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Corporation, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy such requirements as the Securities
and Exchange Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its successor) under the
Exchange Act.

         2.2      COMMITTEE RESPONSIBILITIES. The Committee shall interpret the
Plan and make all decisions relating to the operation of the Plan. The Committee
may adopt such rules or guidelines as it deems appropriate to implement the
Plan. The Committee's determinations under the Plan shall be final and binding
on all persons.

         ARTICLE 3.            SHARES AVAILABLE FOR GRANTS.

         3.1      BASIC LIMITATION. Common Shares issued pursuant to the Plan
may be authorized but unissued shares or treasury shares. The aggregate number
of Common Shares subject to Options granted under the Plan shall not exceed (a)
500,000 plus (b) the additional Common Shares described in Section 3.2. The
limitations of this Section 3.1 shall be subject to adjustment pursuant to
Article 6.

         3.2      ADDITIONAL SHARES. If Options are forfeited or terminate for
any other reason before being exercised, then the Common Shares subject to such
Options shall again become available for the grant of Options under the Plan.

<PAGE>

         ARTICLE 4.            AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE
                               DIRECTORS.

         4.1      ELIGIBILITY.  Only Non-Employee Directors shall be eligible
for the grant of Options under the Plan.

         4.2      INITIAL GRANTS. Each Non-Employee Director who first becomes a
member of the Board after the date of the IPO shall receive a one-time grant of
an Option covering 50,000 Common Shares (subject to adjustment under Article 6).
Such Option shall be granted on the date when such Non-Employee Director first
joins the Board and shall become exercisable for 33% of the shares upon the
optionee's completion of one year of service from the date of grant, 33% of the
shares upon the optionee's completion of two years of service from the date of
grant and as to the balance of the shares upon the optionee's completion of
three years of service from the date of grant. A Non-Employee Director who
previously was an Employee shall not receive a grant under this Section 4.2.

         4.3      ANNUAL GRANTS. Upon the conclusion of each regular annual
meeting of the Corporation's stockholders held in the year 2001 or thereafter,
each Non-Employee Director who will continue serving as a member of the Board
thereafter shall receive an Option covering 10,000 Common Shares (subject to
adjustment under Article 6), except that such Option shall not be granted in the
calendar year in which the same Non-Employee Director received the Option
described in Section 4.2. Options granted under this Section 4.3 shall become
exercisable in full at the date of grant. A Non-Employee Director who previously
was an Employee shall be eligible to receive grants under this Section 4.3.

         4.4      ACCELERATED EXERCISABILITY. All Options granted to a
Non-Employee Director under this Article 4 shall also become exercisable in full
in the event of a Change in Control with respect to the Corporation.

         4.5      EXERCISE PRICE. The Exercise Price under all Options granted
to a Non-Employee Director under this Article 4 shall be equal to 100% of the
Fair Market Value of a Common Share on the date of grant, payable in one of the
forms described in Article 5.

         4.6      TERM. All Options granted to a Non-Employee Director under
this Article 4 shall terminate on the earliest of (a) the 10th anniversary of
the date of grant, or (b) the date 12 months after the termination of such
Non-Employee Director's service for any reason.

         4.7      AFFILIATES OF NON-EMPLOYEE DIRECTORS. The Committee may
provide that the Options that otherwise would be granted to a Non-Employee
Director under this Article 4 shall instead be granted to an affiliate of such
Non-Employee Director. Such affiliate shall then be deemed to be a Non-Employee
Director for purposes of the Plan, provided that the service-related vesting and
termination provisions pertaining to the Options shall be applied with regard to
the service of the Non-Employee Director.

                                       2
<PAGE>

         4.8      STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Corporation. Such Option shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan.

         ARTICLE 5.            PAYMENT FOR OPTION SHARES.

         5.1      CASH. All or any part of the Exercise Price may be paid in
cash or cash equivalents.

         5.2      SURRENDER OF STOCK. All or any part of the Exercise Price may
be paid by surrendering, or attesting to the ownership of, Common Shares that
are already owned by the Optionee. Such Common Shares shall be valued at their
Fair Market Value on the date when the new Common Shares are purchased under the
Plan. The Optionee shall not surrender, or attest to the ownership of, Common
Shares in payment of the Exercise Price if such action would cause the
Corporation to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.

         5.3      EXERCISE/SALE. All or any part of the Exercise Price and any
withholding taxes may be paid by delivering (on a form prescribed by the
Corporation) an irrevocable direction to a securities broker approved by the
Corporation to sell all or part of the Common Shares being purchased under the
Plan and to deliver all or part of the sales proceeds to the Corporation.

         5.4      OTHER FORMS OF PAYMENT. At the sole discretion of the
Committee, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.

         ARTICLE 6.            PROTECTION AGAINST DILUTION.

         6.1      ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of (a) the number of Common
Shares available for future grants under Article 3, (b) the number of Options to
be granted to Non-Employee Directors under Article 4, (c) the number of Common
Shares covered by each outstanding Option or (d) the Exercise Price under each
outstanding Option. Except as provided in this Article 6, an Optionee shall have
no rights by reason of any issue by the Corporation of stock of any class or
securities convertible into stock of any class, any subdivision or consolidation
of shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class.

         6.2      DISSOLUTION OR LIQUIDATION. To the extent not previously
exercised, Options shall terminate immediately prior to the dissolution or
liquidation of the Corporation.

                                       3
<PAGE>

         6.3      REORGANIZATIONS. In the event that the Corporation is a party
to a merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the
continuation of the outstanding Options by the Corporation, if the Corporation
is a surviving corporation, (b) the assumption of the outstanding Options by the
surviving corporation or its parent or subsidiary, (c) the substitution by the
surviving corporation or its parent or subsidiary of its own options for the
outstanding Options, or (d) settlement of the full value of the outstanding
Options in cash or cash equivalents followed by cancellation of such Options.

         ARTICLE 7.            LIMITATION ON RIGHTS.

         7.1      STOCKHOLDERS' RIGHTS. An Optionee shall have no dividend
rights, voting rights or other rights as a stockholder with respect to any
Common Shares covered by his or her Option prior to the time he or she becomes
entitled to receive such Common Shares by filing a notice of exercise and paying
the Exercise Price. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to such time, except as expressly
provided in the Plan.

         7.2      REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Corporation to issue Common Shares under
the Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Corporation reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Option prior to the satisfaction of all legal requirements relating to
the issuance of such Common Shares, to their registration, qualification or
listing or to an exemption from registration, qualification or listing.

         7.3      WITHHOLDING TAXES. To the extent required by applicable
federal, state, local or foreign law, an Optionee or his or her successor shall
make arrangements satisfactory to the Corporation for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The
Corporation shall not be required to issue any Common Shares or make any cash
payment under the Plan until such obligations are satisfied.

         ARTICLE 8.            FUTURE OF THE PLAN.

         8.1      TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on effectiveness of the IPO. The Plan shall remain in effect until it
is terminated under Section 8.2.

         8.2      AMENDMENT OR TERMINATION. The Board may, at any time and for
any reason, amend or terminate the Plan. An amendment of the Plan shall be
subject to the approval of the Corporation's stockholders only to the extent
required by applicable laws, regulations or rules. No Options shall be granted
under the Plan after the termination thereof. The termination of the Plan, or
any amendment thereof, shall not affect any Option previously granted under the
Plan.

         ARTICLE 9.            DEFINITIONS.

         9.1      "BOARD" means the Corporation's Board of Directors, as
constituted from time to time.

                                       4
<PAGE>

         9.2      "CHANGE IN CONTROL" means:

                  (a) The consummation of a merger or consolidation of the
Corporation with or into another entity or any other corporate reorganization,
if persons who were not stockholders of the Corporation immediately prior to
such merger, consolidation or other reorganization own immediately after such
merger, consolidation or other reorganization 50% or more of the voting power of
the outstanding securities of each of (i) the continuing or surviving entity and
(ii) any direct or indirect parent corporation of such continuing or surviving
entity;

                  (b) The sale, transfer or other disposition of all or
substantially all of the Corporation's assets;

                  (c) A change in the composition of the Board, as a result of
which fewer than 50% of the incumbent directors are directors who either (i) had
been directors of the Corporation on the date 24 months prior to the date of the
event that may constitute a Change in Control (the "original directors") or (ii)
were elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the aggregate of the original directors who were still
in office at the time of the election or nomination and the directors whose
election or nomination was previously so approved; or

                  (d) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing at least 50% of the
total voting power represented by the Corporation's then outstanding voting
securities. For purposes of this Subsection (d), the term "person" shall have
the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act
but shall exclude (i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or of a Parent or Subsidiary and (ii) a
corporation owned directly or indirectly by the stockholders of the Corporation
in substantially the same proportions as their ownership of the common stock of
the Corporation.

         A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Corporation's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Corporation's securities immediately before such
transaction.

         9.3      "CODE" means the Internal Revenue Code of 1986, as amended.

         9.4      "COMMITTEE" means a committee of the Board, as described in
Article 2.

         9.5      "COMMON SHARE" means one share of the common stock of the
Corporation.

         9.6      "CORPORATION" means Advanced Medicine, Inc., a Delaware
corporation.

         9.7      "EMPLOYEE" means a common-law employee of the Corporation, a
Parent or a Subsidiary.

         9.8      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

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         9.9      "EXERCISE PRICE" means the amount for which one Common Share
may be purchased upon exercise of such Option, as specified in the applicable
Stock Option Agreement.

         9.10      "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in THE WALL STREET JOURNAL. Such determination
shall be conclusive and binding on all persons.

         9.11      "IPO" means the initial offering of common stock of the
Corporation to the public pursuant to a registration statement filed by the
Corporation with the Securities and Exchange Commission.

         9.12     "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not
an Employee.

         9.13      "OPTION" means an option granted under the Plan and entitling
the holder to purchase Common Shares. Options do not qualify as incentive stock
options described in section 422(b) of the Code.

         9.14      "OPTIONEE" means an individual or estate who holds an Option.

         9.15      "PARENT" means any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, if each of the corporations other than the Corporation owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption
of the Plan shall be considered a Parent commencing as of such date.

         9.16     "PLAN" means this Advanced Medicine, Inc. 2000 Director Option
Plan, as amended from time to time.

         9.17      "STOCK OPTION AGREEMENT" means the agreement between the
Corporation and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.

         9.18      "SUBSIDIARY" means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

                                       6

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