Document:

Exhibit 10.2

 

NEKTAR THERAPEUTICS

(formerly known as Inhale Therapeutic Systems, Inc.)

 

2000 NON-OFFICER EQUITY INCENTIVE
PLAN

 

Adopted August 18, 1998

Amended February 23, 1999

Amended December 14, 1999

Amended and Restated June 6,
2000

Adjusted for 2-for-1 Stock Split on
August 22, 2000

Amended August 22, 2000

Amended January 16, 2001

Amended April 25, 2001

Amended June 28, 2001

Amended September 6, 2001

Amended November 12, 2002

Amended April 23, 2004

Stockholder Approval Not Required

Termination Date: None

 

1.              PURPOSES.

 

(a)          Amendment and Restatement. 
The 1998
Non-Officer Equity Incentive Plan initially was adopted on August 18, 1998
(the “1998 Plan”).  The 1998 Plan hereby
is amended and restated in its entirety, effective upon adoption by the Board,
and renamed the “2000 Non-Officer Equity Incentive Plan.”  The terms of the Plan shall apply to all
Stock Awards granted pursuant to the Initial Plan.

 

(b)          Eligible Stock Award Recipients. 
The persons eligible to receive Stock Awards are the Employees and Consultants
of the Company and its Affiliates who are neither Officers nor Directors.

 

(c)          Available Stock Awards.  The purpose
of the Plan is to provide a means by which eligible recipients of Stock Awards
may be given an opportunity to benefit from increases in value of the Common
Stock through the granting of the following Stock Awards: (i) Nonstatutory
Stock Options, (ii) stock bonuses and (iii) rights to acquire restricted stock.

 

(d)          General Purpose.  The Company,
by means of the Plan, seeks to retain the services of the group of persons
eligible to receive Stock Awards, to secure and retain the services of new
members of this group and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.

 

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2.              DEFINITIONS.

 

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

 

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

 

(c)          “Code” means the Internal Revenue Code of 1986, as
amended.

 

(d)          “Committee” means a Committee appointed by the Board in
accordance with subsection 3(c).

 

(e)          “Common Stock” means the common stock of the Company.

 

(f)            “Company” means Nektar Therapeutics, a Delaware
corporation.

 

(g)         “Consultant” means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or advisory
services and who is compensated for such services or (ii) who is a member of
the Board of Directors of an Affiliate. 
However, the term “Consultant” shall not include Directors of the
Company

 

(h)         “Continuous Service” means that the Participant’s service
with the Company or an Affiliate, whether as an Employee or Consultant, is not
interrupted or terminated.  The
Participant’s Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders service to
the Company or an Affiliate as an Employee, Consultant or Director or a change
in the entity for which the Participant renders such service, provided that
there is no interruption or termination of the Participant’s Continuous
Service.  For example, a change in
status from an Employee of the Company to a Consultant of an Affiliate or a
Director of the Company will not constitute an interruption of Continuous
Service.  The Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave
or any other personal leave.

 

(i)            “Director” means a member of the Board of
Directors of the Company.

 

(j)            “Disability” means the permanent and total disability of
a person within the meaning of Section 22(e)(3) of the Code.

 

(k)        “Employee” means any person employed by the Company or an
Affiliate.  Mere service as a Director
or payment of a director’s fee by the Company or an Affiliate shall not be
sufficient to constitute “employment” by the Company or an Affiliate.

 

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

 

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(m)      “Fair Market Value” means, as of any date, the value of
the Common Stock determined as follows:

 

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

 

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

 

(n)         “Nonstatutory Stock Option” means an option not intended
to qualify as an Incentive Stock Option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.

 

(o)          “Officer” means (i) a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder and (ii) any other person designated by
the Company as an officer.

 

(p)          “Option” means a Nonstatutory Stock Option granted
pursuant to the Plan.

 

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

 

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

 

(s)          “Participant” means a person to whom a Stock Award is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

 

(t)            “Plan” means this Nektar Therapeutics 2000 Non-Officer
Equity Incentive Plan.

 

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

 

(v)           “Securities Act” means the Securities Act of 1933, as
amended.

 

(w)        “Stock Award” means any right granted under the Plan,
including an Option, a stock bonus and a right to acquire restricted stock.

 

(x)          “Stock Award Agreement” means a written agreement between
the Company and a holder of a Stock Award evidencing the terms and conditions
of an individual Stock Award grant. 
Each Stock Award Agreement shall be subject to the terms and conditions
of the Plan.

 

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3.              ADMINISTRATION.

 

(a)          Administration by Board.  The Board
will administer the Plan unless and until the Board delegates administration to
a Committee, as provided in subsection 3(c).

 

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

 

(i)            To determine from time to time which of
the persons eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; what type or combination of types of Stock
Award shall be granted; the provisions of each Stock Award granted (which need
not be identical), including the time or times when a person shall be permitted
to receive stock pursuant to a Stock Award; and the number of shares with
respect to which a Stock Award shall be granted to each such person.

 

(ii)        To construe and interpret the Plan and
Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration.  The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

 

(iii)    To amend the Plan or a Stock Award as
provided in Section 12.

 

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

 

(c)          Delegation to Committee.  The Board
may delegate administration of the Plan to a Committee or Committees of one (1)
or more members of the Board, and the term “Committee” shall apply to any
person or persons to whom such authority has been delegated.  If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. 
The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.

 

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

 

4.              SHARES SUBJECT TO THE PLAN.

 

(a)          Share Reserve.  Subject to
the provisions of Section 11 relating to adjustments upon changes in
stock, the stock that may be issued pursuant to Stock Awards shall not exceed
in the

 

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aggregate twelve
million seven hundred fifty thousand (12,750,000)(1) shares of
Common Stock.  Subject to
Section 4(b), the number of shares available for issuance under the Plan
shall be reduced by (i) one (1) share for each share of stock issued pursuant
to an Option granted under Section 6, and (ii) one and one-half (1.5)
shares for each share that is issued pursuant to a stock bonus award or restricted
stock award under Section 7.

 

(b)          Reversion of Shares to the Share Reserve. 
If any Stock Award shall for any reason expire or otherwise terminate,
in whole or in part, without having been exercised in full or if any shares of
Common Stock issued to a Participant pursuant to a Stock Award are forfeited to
or reacquired or repurchased by the Company, including, but not limited to, any
forfeiture, reacquisition or repurchase caused by the failure to meet a
contingency or condition required for the vesting of such shares, the stock not
acquired under such Stock Award shall revert to and again become available for
issuance under the Plan at the rate of (i) one (1) share for each share of
stock that had been issued pursuant to an Option granted under Section 6,
and (ii) one and one-half (1.5) shares for each share that had been issued
pursuant to a stock bonus award or restricted stock award under Section 7.

 

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

 

5.              ELIGIBILITY.

 

(a)          Eligibility.  Stock Awards may be granted only to
Employees and Consultants who are neither Officers nor Directors.

 

(b)          Consultants.  A Consultant shall not be eligible for
the grant of a Stock Award if, at the time of grant, a Form S-8 Registration
Statement under the Securities Act (“Form S-8”) is not available to register
either the offer or the sale of the Company’s securities to such Consultant
because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the Company
determines both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration
Statement) or (B) does not require registration under the Securities Act in
order to comply with the requirements of the Securities Act, if applicable, and
(ii) that such grant complies with the securities laws of all other relevant
jurisdictions.(2)

 

(1)          The 3,525,000 shares in the share reserve
automatically were adjusted to 7,050,000 shares pursuant to the 2-for-1 stock
split on August 22, 2000.  The
Board of Directors amended the Plan on August 22, 2000 and increased this
number by 1,500,000 shares (post stock split) to a total of 8,550,000 shares.
The Board of Directors amended the Plan on January 16, 2001 and increased
this number by 800,000 shares to a total of 9,350,000 shares.  The Board of Directors amended the Plan on
June 28, 2001 and increased this number by 900,000 to a total of
10,250,000 shares.  The Board of
Directors amended the Plan on September 6, 2001 and increased this number
by 1,000,000 to a total of 11,250,000 shares. 
The Board of Directors amended the Plan on November 12, 2002 and
increased this number by 1,500,000 to a total of 12,750,000 shares.

(2)          Form S-8 generally is available to consultants and
advisors only if (i) they are natural persons; (ii) they provide bona fide services
to the issuer, its parents, its majority-owned subsidiaries or majority-owned
subsidiaries of the issuer’s parent; and (iii) the services are not in
connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer’s securities.

 

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6.              OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate.  The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of
each of the following provisions:

 

(a)          Exercise Price.  The Board shall determine the exercise
price of each Option, provided, however,
that the exercise price of each Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the stock subject to the Option on
the date the Option is granted.

 

(b)          Consideration.

 

(i)            The purchase price of stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (A) in cash at the time the Option is
exercised or (B) at the discretion of the Board at the time of the grant of the
Option (or subsequently) by delivery to the Company of other Common Stock,
according to a deferred payment or other similar arrangement (which may
include, without limiting the generality of the foregoing, the use of other
Common Stock) with the Participant or in any other form of legal consideration
that may be acceptable to the Board; provided, however, that at any time that
the Company is incorporated in Delaware, payment of the Common Stock’s “par
value,” as defined in the Delaware General Corporation Law, shall not be made
by deferred payment.

 

(ii)        Unless otherwise specifically provided in
the Option, the purchase price of Common Stock acquired pursuant to an Option
that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the
Common Stock of the Company that have been held for more than six (6) months
(or such longer or shorter period of time required to avoid a charge to earnings
for financial accounting purposes).

 

(iii)    In the case of any deferred payment
arrangement, interest shall be compounded at least annually and shall be
charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other
than amounts stated to be interest under the deferred payment arrangement.

 

(c)          Transferability. An Option shall be transferable to the extent
provided in the Option Agreement.  If
the Option does not provide for transferability, then the Option shall not be
transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Optionholder only by the
Optionholder.  Notwithstanding the
foregoing provisions of this subsection 6(c), the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

 

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(d)          Vesting Generally.  The total
number of shares of Common Stock subject to an Option may, but need not, vest
and therefore become exercisable in periodic installments that may, but need
not, be equal.  The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board
may deem appropriate.  The vesting
provisions of individual Options may vary. 
The provisions of this subsection 6(d) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.

 

(e)          Termination of Continuous Service. 
In the event an Optionholder’s Continuous Service terminates (other than
upon the Optionholder’s death or Disability), the Optionholder may exercise his
or her Option (to the extent that the Optionholder was entitled to exercise it
as of the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionholder’s Continuous Service (or such longer or shorter period specified
in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement.  If,
after termination, the Optionholder does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall terminate.

 

(f)            Extension of Termination Date.  An
Optionholder’s Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at
any time solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in
subsection 6(a) or (ii) the expiration of three months (or such longer or
shorter period specified in the Option Agreement) after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.

 

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

 

(h)         Death of Optionholder.  In the event
an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s death, then, subject to any restrictions in the Option
Agreement, the Option shall become fully vested and exercisable as of the date
of termination.  In the event (i) an
Optionholder’s Continuous Service terminates as a result of the Optionholder’s
death or (ii) the Optionholder dies within the period (if any) specified in the
Option Agreement after the termination of the Optionholder’s Continuous Service
for a reason other than death, then the Option may be exercised (to the extent
the Optionholder was entitled to exercise the Option as of the date of death)
by the Optionholder’s estate, by a person who acquired the right to exercise
the Option by bequest or inheritance or by a person designated to

 

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exercise the
Option upon the Optionholder’s death pursuant to subsection 6(c), but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement) or (2) the expiration of the term of such Option as set forth
in the Option Agreement.  If, after
death, the Option is not exercised within the time specified herein, the Option
shall terminate.

 

(i)            Early Exercise.  The Option
may, but need not, include a provision whereby the Optionholder may elect at
any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares subject to the Option prior to
the full vesting of the Option.  Any
unvested shares so purchased may be subject to an unvested share repurchase
option in favor of the Company or to any other restriction the Board determines
to be appropriate.

 

(j)            Term. 
No Option shall be exercisable after the expiration of eight (8) years
from the date it was granted.

 

7.              PROVISIONS OF STOCK AWARDS OTHER THAN
OPTIONS.

 

(a)          Stock Bonus Awards.  Each stock
bonus agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  The terms and conditions of stock bonus agreements may change
from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each stock bonus agreement shall include
(through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:

 

(i)            Consideration.  A stock
bonus shall be awarded in consideration for past services actually rendered to
the Company or an Affiliate for its benefit.

 

(ii)        Vesting.  Shares of Common Stock
awarded under the stock bonus agreement may, but need not, be subject to a
share repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.

 

(iii)    Termination of Participant’s Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may reacquire any or all of the shares of
Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the stock bonus agreement; provided, however,
that in the event a Participant’s Continuous Service terminates as a result of
the Participant’s death, then, subject to any restrictions in the stock bonus
agreement, the shares acquired pursuant to the stock bonus agreement shall
become fully vested as of the date of termination.

 

(iv)       Transferability.  Rights to
acquire shares under the stock bonus agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in the stock
bonus agreement, as the Board shall determine in its discretion, so long as
stock awarded under the stock bonus agreement remains subject to the terms of
the stock bonus agreement.

 

(b)          Restricted Stock Awards.  Each
restricted stock purchase agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate.  The

 

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terms and
conditions of the restricted stock purchase agreements may change from time to
time, and the terms and conditions of separate restricted stock purchase
agreements need not be identical, but each restricted stock purchase agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

 

(i)            Purchase Price.  The purchase
price under each restricted stock purchase agreement shall be such amount as
the Board shall determine and designate in such restricted stock purchase
agreement.

 

(ii)        Consideration.  The purchase
price of stock acquired pursuant to the restricted stock purchase agreement
shall be paid either:  (1) in cash at
the time of purchase; (2) at the discretion of the Board, according to a
deferred payment or other similar arrangement with the Participant; or (3) in
any other form of legal consideration that may be acceptable to the Board in
its discretion; provided, however, that at any time that the Company is
incorporated in Delaware, payment of the Common Stock’s “par value,” as defined
in the Delaware General Corporation Law, shall not be made by deferred payment.

 

(iii)    Vesting.  Shares of Common Stock
acquired under the restricted stock purchase agreement may, but need not, be
subject to a share repurchase option in favor of the Company in accordance with
a vesting schedule to be determined by the Board.

 

(iv)       Termination of Participant’s Continuous Service. 
In the event a Participant’s Continuous Service terminates, the Company
may repurchase or otherwise reacquire any or all of the shares of Common Stock
held by the Participant that have not vested as of the date of termination
under the terms of the restricted stock purchase agreement; provided, however,
that in the event a Participant’s Continuous Service terminates as a result of
the Participant’s death, then, subject to any restrictions in the restricted
stock purchase agreement, the shares acquired pursuant to the restricted stock
purchase agreement shall become fully vested as of the date of termination.

 

(v)           Transferability.  Rights to
acquire shares under the restricted stock purchase agreement shall be
transferable by the Participant only upon such terms and conditions as are set
forth in the restricted stock purchase agreement, as the Board shall determine
in its discretion, so long as stock awarded under the restricted stock purchase
agreement remains subject to the terms of the restricted stock purchase
agreement.

 

8.              COVENANTS OF THE COMPANY.

 

(a)          Availability of Shares.  During the
terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Stock Awards.

 

(b)          Securities Law Compliance.  The Company
shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock
Awards and to issue and sell shares of Common Stock upon exercise of

 

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the Stock Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Stock Award or any stock issued
or issuable pursuant to any such Stock Award. 
If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell
stock upon exercise of such Stock Awards unless and until such authority is
obtained.

 

9.              USE OF PROCEEDS FROM STOCK.

 

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

 

10.       MISCELLANEOUS.

 

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

 

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

 

(c)          No Employment or other Service Rights. 
Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant or other holder of Stock
Awards any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause or (ii) the service
of a Consultant pursuant to the terms of such Consultant’s agreement with the
Company or an Affiliate.

 

(d)          Investment Assurances.  The Company
may require a Participant, as a condition of exercising or acquiring stock
under any Stock Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Stock Award; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring the stock subject to the
Stock Award for the Participant’s own account and not with any present
intention of selling or otherwise distributing the stock.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (1) the
issuance of the shares upon the exercise or acquisition of stock under the
Stock Award has been registered under a then currently effective registration
statement under the

 

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Securities Act or
(2) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under
the then applicable securities laws. 
The Company may, upon advice of counsel to the Company, place legends on
stock certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.

 

(e)          Withholding Obligations.  To the
extent provided by the terms of a Stock Award Agreement, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of stock under a Stock Award by any of the following
means (in addition to the Company’s right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means:  (i) tendering a cash payment; (ii) authorizing
the Company to withhold shares from the shares of the Common Stock otherwise
issuable to the Participant as a result of the exercise or acquisition of stock
under the Stock Award, provided, however, that no shares of Common Stock are
withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock.

 

11.       ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a)          Capitalization Adjustments.  If any
change is made in the stock subject to the Plan, or subject to any Stock Award,
without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by
the Company), the Plan will be appropriately adjusted in the class(es) and
maximum number of securities subject to the Plan pursuant to
subsection 4(a), and the outstanding Stock Awards will be appropriately
adjusted in the class(es) and number of securities and price per share of stock
subject to such outstanding Stock Awards. 
Such adjustments shall be made by the Board, the determination of which
shall be final, binding and conclusive. 
(The conversion of any convertible securities of the Company shall not
be treated as a transaction “without receipt of consideration” by the Company.)

 

(b)          Dissolution or Liquidation.  In the event
of a dissolution or liquidation of the Company, then such Stock Awards shall be
terminated if not exercised (if applicable) prior to such event.

 

(c)          Corporate Transaction.  In the event
of (1) a sale, lease or other disposition of all or substantially all of the
assets of the Company, (2) a merger or consolidation in which the Company is
not the surviving corporation or (3) a reverse merger in which the Company is
the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise (a
“Corporate Transaction”), then any surviving corporation or acquiring
corporation shall assume any Stock Awards outstanding under the Plan or shall
substitute similar stock awards (including an award to acquire the same
consideration paid to the stockholders in the Corporate Transaction) for those
outstanding under the Plan. In the event any

 

11

 

surviving
corporation or acquiring corporation refuses to assume such Stock Awards or to
substitute similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by Participants whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated in full,
and the Stock Awards shall terminate if not exercised (if applicable) at or
prior to such Corporate Transaction. With respect to any other Stock Awards
outstanding under the Plan, such Stock Awards shall terminate if not exercised
(if applicable) prior to such Corporate Transaction.

 

(d)          Securities Acquisition.  In the event
of an acquisition by any person, entity or group within the meaning of
Section 13(d) or 14(d) of the Exchange Act, or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or an Affiliate) of the beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty
percent (50%) of the combined voting power entitled to vote in the election of
Directors and provided that such acquisition is not a result of, and does not
constitute, a Corporate Transaction described in subsection 11(c) hereof,
then with respect to Stock Awards held by Participants whose Continuous Service
has not terminated, the vesting of such Stock Awards (and, if applicable, the
time during which such Stock Awards may be exercised) shall be accelerated in
full.

 

12.       AMENDMENT OF THE PLAN AND STOCK
AWARDS.

 

(a)          Amendment of Plan.  The Board at
any time, and from time to time, may amend the Plan; provided however, that the
rights under any Stock Award shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.

 

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

 

13.       TERMINATION OR SUSPENSION OF THE PLAN.

 

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

 

(b)          No Impairment of Rights.  Rights and
obligations under any Stock Award granted while the Plan is in effect shall not
be impaired by suspension or termination of the Plan, except with the written
consent of the Participant.

 

14.       EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective upon adoption by the
Board.

 

12

 

15.       CHOICE OF LAW.

 

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

 

13

 

Nektar Therapeutics 2000 Non-Officer
Equity Incentive Plan (“the Plan”)

 

This section of the Plan will be known as the Approved
Section of the Nektar Therapeutics 2000 Non-Officer Equity Incentive Plan
(the “Approved Section”).  The Approved
Section has been adopted by way of amendment to the Plan for the sole
purpose of providing for the grant of options to United Kingdom-based employees
of Nektar Therapeutics and its Subsidiaries and to directors of the
Subsidiaries under Section 6 of the Plan where the Committee wishes to
grant the employees of Nektar Therapeutics and its Subsidiaries and to
directors of the Subsidiaries options under a plan approved by the Board of the
Inland Revenue under Schedule 9 of the Income and Corporation Taxes Act
1988 in addition to or as an alternative to the grant of Options and other
Stock Awards under the Plan.  The
Approved Section shall only be used in connection with option grants to
United Kingdom-based employees of Nektar Therapeutics and its Subsidiaries and
United Kingdom-based directors of the Subsidiaries.  All other Stock Awards made under the Plan shall be governed by
the Plan without reference to the Approved Section.

 

For the purposes of the Approved Section, the Sections set forth in the
Plan shall apply subject to the amendments provided for below and any provision
in the Plan that is inconsistent with the following provisions shall not form
part of the Approved Section shall be governed by the Plan subject to the
amendments provided for below:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               The following words and expressions shall
have the following meanings for the purposes of the Approved Section, unless
the context otherwise requires:

 

“the Adoption
Date” means the date on which the Approved Section is approved
by the Inland Revenue;

 

“the Appropriate
Period” has the same meaning as in paragraph 15(2) of
Schedule 9 to the Taxes Act;

 

“Approved
Option” means an Option to acquire Section Shares which is
granted under Section 6 and satisfies the conditions of the Approved
section;

 

“Approved
Section” means the Approved Section of the Nektar Therapeutics
200 Non-Officer Equity Incentive Plan constituted and governed by the Plan
subject to the amendments set out herein;

 

“Associated
Company” has the same meaning as in Section 187(2) of the Taxes
Act;

 

“the Company”
means Nektar Therapeutics, a Delaware corporation with business address 150
Industrial Road, San Carlos, California 94070-6256;

 

“Control”
has the same meaning as in section 840 of the Taxes Act and “controlled”
shall be construed accordingly;

 

14

 

“Date of
Grant” means the date on which an Approved Option is, was, or is to
be granted under the Approved Section;

 

“Eligible
Employee” means a person who is at the relevant Date of Grant:

 

(A)                               a Full-time Director or a qualifying
Employee selected by the Committee to participate in the Approved Section; and

 

(B)                               not precluded by paragraph 8 of
Schedule 9 (material interest I close company) to the Taxes act from
participating in the Approved Section;

 

“Full-Time
Director” means a director of a Subsidiary whose terms of office or
employment require such director to work for at least twenty-five hours per
week (excluding meal breaks);

 

“Qualifying
Employee” means an employee of the Company or a Subsidiary who is
not a director of the Company or Subsidiary;

 

“Qualifying
Employment” means office or employment either as a Full-Time
Director or as a Qualifying Employee as the case may be;

 

“Section Shares”
means Shares which satisfy the conditions specified in Paragraphs 10 to 14 of
Schedule 9 to the Taxes Act (fully paid up, unrestricted, ordinary share
capital) to be acquired by a Participant on the exercise by such participant of
an Approved Option which Shares shall as to voting, dividend, transfer and
other rights including those arising in the liquidation of the Company rank
pari passu in all respects and as to one class with the Shares of the Company
in issue at that time;

 

“Subsidiary”
means a body corporate of which the Company is for the time being to be taken
to have Control and which is a subsidiary of the Company within section 736
of the Companies Act 1985;

 

“Subsisting
Option” means an Approved Option which has neither lapsed nor been
exercised;

 

“Taxes Act”
means the Income and Corporation Taxes Act 1988;

 

Where the context so
permits the singular shall include the plural and vice versa and the masculine
shall include the feminine.

 

Reference to any Act
shall include any statutory modification, amendment or re-enactment thereof;

 

2.                                      ELIGIBILITY

 

2.1                               Notwithstanding Section 5 of the
Plan, Approved Options shall only be granted to Eligible Employees.

 

15

 

3.                                      OPTION PROVISIONS

 

Section 6 of the Plan shall apply provided that the grant of each
Approved Option shall comply with the following conditions:

 

3.1                               An Approved Option may not be exercised
later than the day before the tenth anniversary of the Date of Grant on which
day the same (if it has not already ceased to be exercisable) shall lapse.

 

The exercise price
payable for each Section Share in the event of an Approved Option being
exercised shall be:

 

(A)                               Where Approved Options are granted when
the Shares are not quoted on the New York Stock Exchange, the greater of:

 

(1)                                 the par value of a Share; and

 

(2)                                 the amount determined to be the market
value of a share on the Date of grant in accordance with the provisions of part
VIII of the Taxation of Chargeable Gains Act of 1992 and agreed for the
purposes of the Approved Section with the Inland Revenue Share Valuation
Division prior to the date on which an Approved Option is granted to a
Participant;

 

(B)                               where Approved options are granted when
the Shares are quoted on the New York Stock Exchange, the greater of:

 

(1)                                 the par value of a Share; and

 

(2)                                 on any Date of Grant, the closing sales
price for a Share on the New York Stock Exchange on the immediately preceding
day on which Shares were traded on the New York Stock Exchange as published in
the Wall Street Journal;

 

3.2                               The form of grant of an Approved Option
shall be executed by the Company as a deed, and shall state the exercise price,
the number of Shares, the Date of Grant and any performance conditions
applicable to the exercise of the approved Option.

 

3.3                               Any Approved Option granted to an
Eligible Employee shall be limited and take effect so that at the Date of Grant
of such Approved Option the aggregate of:

 

(A)       the market value of shares comprised in such Approved
Option; and

 

(B)       the market value of shares comprised in any Subsisting
Options which have been granted to that Eligible Employee; and

 

16

 

(C)       the market value of any Shares the Eligible Employee
may acquire in pursuance of options granted to such Eligible Employee (and not
exercised) under any other scheme approved under Schedule 9 to the Taxes
Act and established by the Company or any Associated Company of the Company
providing for the grant of options to acquire Shares (other than a savings
related share option scheme)

 

shall not exceed
£30,000 (or such other amount as may be prescribed by Paragraph 28 of
Schedule 9 to the Taxes Act from time to time).

 

For the purposes
of this paragraph “market value” shall be calculated in accordance with
Paragraph 28 of Schedule 9 to the Taxes Act at the respective Dates
of Grant.

 

3.4                               The type of consideration in which the
exercise price of an Approved Option is to be paid shall be in monetary form.

 

3.5                               An Approved Option shall be personal to
the Eligible Employee to whom it is granted and shall not be capable of
assignment.  Any purported sale, pledge,
assignment, hypothecation, transfer or disposal of or dealing with an Approved
Option shall cause the Approved Option to lapse forthwith.

 

3.6                               No Approved Option may be exercised at
any time when the Shares which may be thereby acquired are not
Section Shares.

 

3.7                               Upon the exercise of an Approved Option
in accordance with the Plan, the Company shall promptly and in any event not
later than 30 days after the exercise of an Approved Option issue or cause to
be issued a stock certificate to the Participant or a book-entry crediting the
Participant’s account with the appropriate number of Section Shares.

 

3.8                               No Approved Option may be exercised when
the Participant to who it was granted is precluded from participating in the
Approved Section by virtue of paragraph 8 of Schedule 9 to the
Taxes act (material interest in close company).

 

4.                                      TERMINATION OF EMPLOYMENT

 

4.1                               Except as provided in Section 6
paragraph (e) (Termination of continuous Service), Section paragraph (g)
(Disability of the Optionholder) and Section 6 paragraph (h) (Death
of the Optionholder) of the Plan no Approved Option may be exercised unless the
Participant shall have been in Qualifying Employment since the date of the
grant of such Approved Option.

 

4.2                               Section 6 paragraph (h) (Death of
the Optionholder) of the Plan shall apply for the purposes of the Approved
Section provided that no Approve Option may be exercised more than one
year later the death of a Participant and following the death of a Participant
an Approved Option may only be exercised by the personal representatives of
that Participant.

 

17

 

4.3                               A female Participant whose employment has
been terminated in circumstances such that, pursuant to the Employment Rights
Act 1996, she has a right to return to work shall be deemed for the purposes of
the Approved Section not to have eased to be in Qualifying Employment
until such time as she is no longer capable, pursuant to the said Act, of
exercising a right to return to work and has not exercised such right.

 

5.                                      PROVISIONS OF THE PLAN NOT TO APPLY TO APPROVED OPTIONS

 

5.1                               Section 6 paragraphs 6 (b)(I)(B),
(ii) and (iii) Consideration) and (i) (Early Exercise), 7 (Provisions of
Stock Awards other than Options) and 10 paragraphs 9a) (Acceleration of
Exercisability and Vesting) and (d) (Investment Assurances) of the Plan shall
not apply for the purposes of the Approved Section.

 

6.                                      NO OBLIGATION TO EMPLOY

 

Section 10
paragraph © (No Employment or other Service Rights) of the Plan shall apply
subject to the following further condition for the purposes of the Approved
Section:

 

6.1                               Participation in the Approved
Section by a participant is a matter entirely separate from, and shall not
affect, the Participant’s pension rights and terms of employment and, in
particular (but without prejudice to the foregoing), if a Participant shall
cease for any reason (including wrongful dismissal) to be employed by or hold
office with the Company or a Subsidiary the Participant shall not be entitled
by way of compensation for loss or otherwise howsoever, of any sum or benefit
to compensate the Participant for the loss of any right or benefit under the
Approved Section.

 

7.                                      WITHHOLDING OBLIGATIONS

 

The following
provision shall be substituted for Section 10 paragraph (e) (Withholding
Obligations) of the Plan for the purposes of the Approve Section:

 

7.1                               If a Participant is liable to tax, duties
and social security contributions on the exercise of an Approved Option and the
Company or the Participant’s employing company or former employing company is
liable to make payment to appropriate authorities on account of that liability,
then the Participant will enter into such arrangements as necessary for
ensuring that that company is put in sufficient funds to enable t to discharge
its liability to make the payment to the appropriate authority, or is
reimbursed for any payment made.

 

8.                                      ADJUSTMENT UPON CHANGES IN STOCK

 

8.1                               The provisions of Section 11
paragraphs (c) (Corporate Transaction) and (d) (Securities Acquisition) of the
Plan shall be modified for the purposes of the Approved Section so that
they applies only where a company (“the Acquiring Company”)

 

18

 

(A)                               obtains Control of the Company as a
result of:

 

(1)                                 a general offer to acquire the whole of
the issued share capital of the Company (other than that which is already owned
by it) made on a condition such that if satisfied the Acquiring Company will
have Control of the Company; or

 

(2)                                 a general offer to acquire all the
Ordinary Shares (or such Ordinary Shares as are not already owned by the
Acquiring Company); or

 

(B)                               obtains Control of the Company in
pursuance of a compromise or arrangement sanctioned by the Court under
Section 425 of the Companies Act 1985;

 

(C)                               becomes bound or entitled to acquire
Ordinary Shares under sections 428 to 430 of the Companies Act 1985.

 

8.2                               Where Rule 8.1 applies any Option
subsisting at the date of the Corporate Transaction or Securities Acquisition
(as defined in the Plan) may be released by the Participant at any time during
the Appropriate period, at the option of the Committee and with the agreement
of the Acquiring Company, for an equivalent option over shares of the Acquiring
Company which satisfies the conditions that it:

 

(A)       is over shares in the acquiring company or a company
which has Control of the acquiring company which satisfy the conditions
specified in paragraphs 10 to 14 of Schedule 9 to the Taxes Act (and
the terms “Ordinary Shares” and “Scheme Shares” in this Scheme shall thereafter
be construed accordingly);

 

(B)       is the right to acquire such number of Scheme Shares
as has on acquisition of the new Option as aggregate market value equal to the
aggregate market value of the Scheme Shares subject to the old Option
immediately before its release;

 

(C)       has an Option Price per Scheme Share such that the
total amount payable on exercise is equal to the total amount payable on
exercise of the old Option; and

 

(D)       is otherwise in identical terms to the old Option and
for this purpose references to “the Company” in the Plan other than
Section 6) shall, unless the context otherwise requires, be deemed to
refer to the acquiring company or, as the case may be, to the other company
over whose shares the new Option is granted.

 

The new Option
shall for all other purposes of the Scheme be treated as having been acquired
at the same time as the old Option is respect of which it is granted.

 

19

 

8.3                               Every alteration or variation made
pursuant to Section 11 for the purposes of the Approved Section shall
be subject to the prior approval of the Board of Inland Revenue.

 

8.4                               Following the adjustment, the Shares
continue to be Section Shares.

 

9.                                      AMENDMENT OF THE PLAN AND STOCK AWARDS

 

Section 12 of the Plan shall operate for the
purposes of the Approved Section of the Plan subject to the following
condition:

 

9.1                               Following the approval of the Approved
Section under Schedule 9 to the Taxes Act, no alteration of the
Approved Section shall have effect until approved by the Board of Inland
Revenue.

 

10.                               CHOICE OF LAW

 

10.1                        Notwithstanding Section 15 of the
Plan, the Approved Section shall be governed by and construed in
accordance with the laws of England, except that any matters relating to the
internal governance of the Company shall be governed by Delaware law.

 

20Exhibit
10.3

 

NEKTAR THERAPEUTICS

(formerly known as Inhale Therapeutic Systems, Inc.)

 

2000 EQUITY INCENTIVE PLAN

 

Adopted February 10, 1994

Approved By Shareholders
February 18, 1994

Amended March 27, 1996

Amended and Restated by Board
April 24, 1998

Approved By Shareholders
June 23, 1998

Amended and Restated by Board
April 19, 2000

Approved By Shareholders June 6,
2000

Adjusted for 2-for-1 Stock Split on
August 22, 2000

Amended and Restated by Board
April 23, 2004

Approved By Shareholders
June 17, 2004

Termination Date: February 9,
2010

 

1.             PURPOSES.

 

(a)           Amendment and
Restatement.  The 1994 Equity Incentive Plan
initially was adopted on February 10, 1994 and amended and restated on
April 24, 1998 (the “1994 Plan”). 
The 1994 Plan hereby is amended and restated in its entirety, effective
upon adoption by the Board, and renamed the “2000 Equity Incentive Plan.”  The terms of the Plan shall apply to all
Stock Awards granted pursuant to the Initial Plan.

 

(b)           Eligible Stock Award
Recipients.  The persons eligible to
receive Stock Awards are the Employees, Directors and Consultants of the
Company and its Affiliates.

 

(c)           Available Stock Awards.  The purpose of the Plan is to provide a
means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

 

(d)           General  Purpose.  The Company, by means of the Plan, seeks to
retain the services of the group of persons eligible to receive Stock Awards,
to secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.

 

1

 

2.             DEFINITIONS.

 

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

 

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

 

(c)           “Code” means the
Internal Revenue Code of 1986, as amended.

 

(d)           “Committee” means a
Committee appointed by the Board in accordance with subsection 3(c).

 

(e)           “Common  Stock” means the
common stock of the Company.

 

(f)            “Company” means Nektar
Therapeutics, a Delaware corporation.

 

(g)           “Consultant” means any
person, including an advisor, (1) engaged by the Company or an Affiliate to
render consulting or advisory services and who is compensated for such services
or (2) who is a member of the Board of Directors of an Affiliate. However, the
term “Consultant” shall not include either Directors of the Company who are not
compensated by the Company for their services as Directors or Directors of the
Company who are merely paid a director’s fee by the Company for their services
as Directors.

 

(h)           “Continuous  Service” means that
the Participant’s service with the Company or an Affiliate, whether as an
Employee, Director or Consultant, is not interrupted or terminated. The
Participant’s Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders service to
the Company or an Affiliate as an Employee, Consultant or Director or a change
in the entity for which the Participant renders such service, provided that
there is no interruption or termination of the Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a
Consultant of an Affiliate or a Director of the Company will not constitute an
interruption of Continuous Service. The Board or the chief executive officer of
the Company, in that party’s sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any other
personal leave.

 

(i)            “Covered  Employee” means the
chief executive officer and the four (4) other highest compensated officers of
the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of
Section 162(m) of the Code.

 

(j)            “Director” means a
member of the Board of Directors of the Company.

 

(k)           “Disability” means the
permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code.

 

2

 

(l)            “Employee” means any
person employed by the Company or an Affiliate. Mere service as a Director or
payment of a director’s fee by the Company or an Affiliate shall not be
sufficient to constitute “employment” by the Company or an Affiliate.

 

(m)          “Exchange  Act” means the
Securities Exchange Act of 1934, as amended.

 

(n)           “Fair Market Value”
means, as of any date, the value of the Common Stock determined as follows:

 

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

 

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

 

(o)           “Incentive Stock Option”
means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated
thereunder.

 

(p)           “Non-Employee Director”
means a Director of the Company who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or a
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

(q)           “Nonstatutory Stock Option”
means an Option not intended to qualify as an Incentive Stock Option.

 

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

 

(s)           “Option” means an
Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the
Plan.

 

3

 

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

 

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

 

(v)            “Outside  Director” means a
Director of the Company who either (i) is not a current employee of the Company
or an “affiliated corporation” (within the meaning of Treasury Regulations
promulgated under Section 162(m) of the Code), is not a former employee of
the Company or an “affiliated corporation” receiving compensation for prior
services (other than benefits under a tax qualified pension plan), was not an
officer of the Company or an “affiliated corporation” at any time and is not
currently receiving direct or indirect remuneration from the Company or an
“affiliated corporation” for services in any capacity other than as a Director
or (ii) is otherwise considered an “outside director” for purposes of
Section 162(m) of the Code.

 

(w)           “Participant” means a
person to whom a Stock Award is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Stock Award.

 

(x)           “Plan” means this
Nektar Therapeutics 2000 Equity Incentive Plan.

 

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

 

(z)           “Securities Act” means
the Securities Act of 1933, as amended.

 

(aa)         “Stock Award” means any right granted under
the Plan, including an Option, a stock bonus and a right to acquire restricted
stock.

 

(bb)         “Stock Award Agreement” means a written
agreement between the Company and a holder of a Stock Award evidencing the
terms and conditions of an individual Stock Award grant. Each Stock Award
Agreement shall be subject to the terms and conditions of the Plan.

 

(cc)         “Ten Percent Stockholder” means a person who
owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates.

 

3.             ADMINISTRATION.

 

(a)           Administration by Board.  The Board will administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).

 

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

 

(i)            To determine from
time to time which of the persons eligible under the Plan shall be granted
Stock Awards; when and how each Stock Award shall be granted; what

 

4

 

type or combination of types of Stock Award shall be granted; the
provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive stock pursuant to
a Stock Award; and the number of shares with respect to which a Stock Award
shall be granted to each such person.

 

(ii)           To construe and
interpret the Plan and Stock Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the
exercise of this power, may correct any defect, omission or inconsistency in
the Plan or in any Stock Award Agreement, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.

 

(iii)         To amend the Plan or
a Stock Award as provided in Section 12.

 

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

 

(c)           Delegation to Committee.

 

(i)            General.  The Board may delegate administration of the
Plan to a Committee or Committees of one (1) or more members of the Board, and
the term “Committee” shall apply to any person or persons to whom such
authority has been delegated. If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan.

 

(ii)           Committee Composition
when Common Stock is Publicly Traded. 
At such time as the Common Stock is publicly traded, in the discretion
of the Board, a Committee may consist solely of two or more Outside Directors,
in accordance with Section 162(m) of the Code, and/or solely of two or
more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of
such authority, the Board or the Committee may (i) delegate to a committee of
one or more members of the Board who are not Outside Directors, the authority
to grant Stock Awards to eligible persons who are either (a) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award or (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the
Code and/or (ii) delegate to a committee of one or more members of the Board
who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange
Act.

 

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

 

5

 

4.             SHARES
SUBJECT TO THE PLAN.

 

(a)           Share  Reserve.  Subject to the provisions of Section 11
relating to adjustments upon changes in stock, the stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate Eleven Million Two
Hundred Fifty Thousand (11,250,000)(1) shares of Common Stock.  Subject to Section 4(b), the number of shares
available for issuance under the Plan shall be reduced by (i) one (1) share for
each share of stock issued pursuant to an Option granted under Section 6,
and (ii) one and one-half (1.5) shares for each share that is issued pursuant
to a stock bonus award or restricted stock award under Section 7.

 

(b)           Reversion of Shares to
the Share Reserve.  If any Stock
Award shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full or if any shares of Common Stock issued
to a Participant pursuant to a Stock Award are forfeited to or reacquired or
repurchased by the Company, including, but not limited to, any forfeiture,
reacquisition or repurchase caused by the failure to meet a contingency or
condition required for the vesting of such shares, the stock not acquired under
such Stock Award shall revert to and again become available for issuance under
the Plan at the rate of (i) one (1) share for each share of stock that had been
issued pursuant to an Option granted under Section 6, and (ii) one and one-half
(1.5) shares for each share that had been issued pursuant to a stock bonus
award or restricted stock award under Section 7; provided, however, that if any unvested
Common Stock acquired pursuant to a Stock Award is forfeited to or reacquired
or repurchased by the Company, the unvested stock forfeited to or reacquired or
repurchased by the Company shall revert to and again become available for
issuance under the Plan for all Stock Awards other than Incentive Stock
Options.

 

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

 

5.             ELIGIBILITY.

 

(a)           Eligibility for
Specific Stock Awards.  Incentive
Stock Options may be granted only to Employees. Stock Awards other than
Incentive Stock Options may be granted to Employees, Directors and Consultants.

 

(b)           Ten Percent
Stockholders.  No Ten Percent
Stockholder shall be eligible for the grant of an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock at the date of grant and the Option
is not exercisable after the expiration of five (5) years from the date of
grant.

 

(c)           Section 162(m)
Limitation.  Subject to the
provisions of Section 11 relating to adjustments upon changes in stock, no
employee shall be eligible to be granted Options covering

 

(1)           The
5,175,000 shares in the share reserve automatically were adjusted to 10,350,000
shares pursuant to the 2-for-1 stock split on August 22, 2000.

 

6

 

more than eight hundred thousand (800,000)(2) shares of the Common
Stock during any calendar year.

 

(d)           Consultants.  A Consultant shall not be eligible for
the grant of a Stock Award if, at the time of grant, a Form S-8 Registration
Statement under the Securities Act (“Form S-8”) is not available to register
either the offer or the sale of the Company’s securities to such Consultant
because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the Company
determines both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration
Statement) or (B) does not require registration under the Securities Act in
order to comply with the requirements of the Securities Act, if applicable, and
(ii) that such grant complies with the securities laws of all other relevant
jurisdictions.(3)

 

6.             OPTION
PROVISIONS.

 

Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and a separate certificate or certificates will be issued for shares
purchased on exercise of each type of Option. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

 

(a)           Term.  Subject to the provisions of
subsection 5(b) regarding Ten Percent Stockholders, no Incentive Stock
Option shall be exercisable after the expiration of eight (8) years from the
date it was granted.  No Nonstatutory
Stock Option shall be exercisable after the expiration of eight (8) years from
the date it was granted.

 

(b)           Exercise Price of an
Incentive Stock Option.  Subject to
the provisions of subsection 5(b) regarding Ten Percent Stockholders, the
exercise price of each Incentive Stock Option shall be not less than one
hundred percent (100%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an
Incentive Stock Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

 

(c)           Exercise Price of a
Nonstatutory Stock Option. The exercise price of each Nonstatutory Stock
Option shall be not less than one hundred percent (100%) of the Fair Market

 

(2)           The
400,000 share limitation automatically was adjusted to 800,000 shares pursuant
to the 2-for-1 stock split on August 22, 2000.

 

(3)           Form S-8
generally is available to consultants and advisors only if (i) they are natural
persons; (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s
parent; and (iii) the services are not in connection with the offer or sale of
securities in a capital-raising transaction, and do not directly or indirectly promote
or maintain a market for the issuer’s securities.

 

7

 

Value of the stock subject to the Option on the date the Option is
granted.  Notwithstanding the foregoing,
a Nonstatutory Stock Option may be granted with an exercise price lower than
that set forth in the preceding sentence if such Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

 

(d)           Consideration.

 

(i)            The purchase price
of stock acquired pursuant to an Option shall be paid, to the extent permitted
by applicable statutes and regulations, either (A) in cash at the time the
Option is exercised or (B) at the discretion of the Board at the time of the grant
of the Option (or subsequently in the case of a Nonstatutory Stock Option) by
delivery to the Company of other Common Stock, according to a deferred payment
or other similar arrangement (which may include, without limiting the
generality of the foregoing, the use of other Common Stock) with the
Participant or in any other form of legal consideration that may be acceptable
to the Board; provided, however, that at any time that the Company is
incorporated in Delaware, payment of the Common Stock’s “par value,” as defined
in the Delaware General Corporation Law, shall not be made by deferred payment.

 

(ii)           Unless otherwise
specifically provided in the Option, the purchase price of Common Stock
acquired pursuant to an Option that is paid by delivery to the Company of other
Common Stock acquired, directly or indirectly from the Company, shall be paid
only by shares of the Common Stock of the Company that have been held for more
than six (6) months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes).

 

(iii)         In the case of any
deferred payment arrangement, interest shall be compounded at least annually
and shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.

 

(e)           Transferability of an
Incentive Stock Option.  An
Incentive Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Notwithstanding the foregoing provisions
of this subsection 6(e), the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

 

(f)            Transferability of a
Nonstatutory Stock Option.  A
Nonstatutory Stock Option shall be transferable to the extent provided in the
Option Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing provisions of this subsection 6(f), the
Optionholder may, by delivering written notice to the Company, in a form satisfactory
to the Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

 

8

 

(g)           Vesting  Generally.  The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable
in periodic installments which may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board
may deem appropriate. The vesting provisions of individual Options may vary.
The provisions of this subsection 6(g) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.

 

(h)           Termination of
Continuous Service.  In the event an
Optionholder’s Continuous Service terminates (other than upon the
Optionholder’s death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise it as of
the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionholder’s Continuous Service (or such longer or shorter period specified
in the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, after termination, the Optionholder does
not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate.

 

(i)            Extension of
Termination Date.  An Optionholder’s
Option Agreement may also provide that if the exercise of the Option following
the termination of the Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements
under the Securities Act, then the Option shall terminate on the earlier of (i)
the expiration of the term of the Option set forth in subsection 6(a) or
(ii) the expiration of a period of three (3) months (or such longer or shorter
period specified in the Option Agreement) after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.

 

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

 

(k)           Death of Optionholder.  In the event an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s death, then, subject to
any restrictions in the Option Agreement, the Option shall become fully vested
and exercisable as of the date of termination. 
In the event (i) an Optionholder’s Continuous Service terminates as a
result of the Optionholder’s death or (ii) the Optionholder dies within the
period (if any) specified in the Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the
Option may be exercised (to the extent the Optionholder was entitled to
exercise the Option as of the date of death) by the Optionholder’s estate, by a
person who

 

9

 

acquired the right to exercise the Option by bequest or inheritance or
by a person designated to exercise the Option upon the Optionholder’s death
pursuant to subsection 6(e) or 6(f), but only within the period ending on
the earlier of (1) the date eighteen (18) months following the date of death
(or such longer or shorter period specified in the Option Agreement) or (2) the
expiration of the term of such Option as set forth in the Option Agreement.  If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.

 

(l)            Early  Exercise.  The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder’s Continuous Service terminates to exercise the Option as to any
part or all of the shares subject to the Option prior to the full vesting of
the Option. Any unvested shares so purchased may be subject to an unvested
share repurchase option in favor of the Company or to any other restriction the
Board determines to be appropriate.

 

7.             PROVISIONS
OF STOCK AWARDS OTHER THAN OPTIONS.

 

(a)           Stock Bonus Awards.  Each stock bonus agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of stock bonus agreements may change from
time to time, and the terms and conditions of separate stock bonus agreements
need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

 

(b)           Consideration.  A stock bonus shall be awarded in
consideration for past services actually rendered to the Company for its
benefit.

 

(c)           Vesting.  Shares of Common Stock awarded under the
stock bonus agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.

 

(d)           Termination of
Participant’s Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may reacquire any or all of the shares of
Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the stock bonus agreement; provided, however,
that in the event a Participant’s Continuous Service terminates as a result of
the Participant’s death, then, subject to any restrictions in the stock bonus
agreement, the shares acquired pursuant to the stock bonus agreement shall become
fully vested as of the date of termination.

 

(e)           Transferability.  Rights to acquire shares under the stock
bonus agreement shall be transferable by the Participant only upon such terms
and conditions as are set forth in the stock bonus agreement, as the Board
shall determine in its discretion, so long as stock awarded under the stock
bonus agreement remains subject to the terms of the stock bonus agreement.

 

(f)            Restricted Stock
Awards.  Each restricted stock
purchase agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of the
restricted stock purchase agreements may change from time to time,

 

10

 

and the terms and conditions of separate restricted stock purchase
agreements need not be identical, but each restricted stock purchase agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

 

(g)           Purchase  Price.  The purchase price under each restricted
stock purchase agreement shall be such amount as the Board shall determine and
designate in such restricted stock purchase agreement. The purchase price shall
not be less than eighty-five percent (85%) of the stock’s Fair Market Value on
the date such award is made or at the time the purchase is consummated.

 

(h)           Consideration.  The purchase price of stock acquired
pursuant to the restricted stock purchase agreement shall be paid either: (i)
in cash at the time of purchase; (ii) at the discretion of the Board, according
to a deferred payment or other similar arrangement with the Participant; or
(iii) in any other form of legal consideration that may be acceptable to the
Board in its discretion; provided, however, that at any time that the Company
is incorporated in Delaware, payment of the Common Stock’s “par value,” as
defined in the Delaware General Corporation Law, shall not be made by deferred
payment.

 

(i)            Vesting.  Shares of Common Stock acquired under the
restricted stock purchase agreement may, but need not, be subject to a share
repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.

 

(j)            Termination of
Participant’s Continuous Service. 
In the event a Participant’s Continuous Service terminates, the Company
may repurchase or otherwise reacquire any or all of the shares of Common Stock
held by the Participant that have not vested as of the date of termination
under the terms of the restricted stock purchase agreement; provided, however,
that in the event a Participant’s Continuous Service terminates as a result of
the Participant’s death, then, subject to any restrictions in the restricted
stock purchase agreement, the shares acquired pursuant to the restricted stock
purchase agreement shall become fully vested as of the date of termination.

 

(k)           Transferability.  Rights to acquire shares under the
restricted stock purchase agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the restricted stock
purchase agreement, as the Board shall determine in its discretion, so long as
stock awarded under the restricted stock purchase agreement remains subject to
the terms of the restricted stock purchase agreement.

 

8.             COVENANTS
OF THE COMPANY.

 

(a)           Availability of Shares.  During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.

 

(b)           Securities Law
Compliance.  The Company shall seek
to obtain from each regulatory commission or agency having jurisdiction over
the Plan such authority as may be

 

11

 

required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any stock issued or issuable pursuant to any such
Stock Award. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such Stock Awards unless and until such authority
is obtained.

 

9.             USE
OF PROCEEDS FROM STOCK.

 

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

 

10.          MISCELLANEOUS.

 

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

 

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

 

(c)           No Employment or other
Service Rights.  Nothing in the Plan
or any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant or other holder of Stock Awards any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice
and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate or (iii)
the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.

 

(d)           Incentive Stock Option
$100,000 Limitation.  To the extent
that the aggregate Fair Market Value (determined at the time of grant) of stock
with respect to which Incentive Stock Options are exercisable for the first
time by any Optionholder during any calendar year (under all plans of the
Company and its Affiliates) exceeds one hundred thousand dollars ($100,000),
the Options or portions thereof which exceed such limit (according to the order
in which they were granted) shall be treated as Nonstatutory Stock Options.

 

12

 

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

 

(f)            Withholding
Obligations.  To the extent provided
by the terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the
Participant by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares
of the Common Stock otherwise issuable to the Participant as a result of the
exercise or acquisition of stock under the Stock Award, provided, however, that
no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the Company
owned and unencumbered shares of the Common Stock.

 

11.          ADJUSTMENTS
UPON CHANGES IN STOCK.

 

(a)           Capitalization  Adjustments.  If any change is made in the stock subject
to the Plan, or subject to any Stock Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject
to award to any person pursuant to subsection 5(c), and the outstanding
Stock Awards will be appropriately adjusted in the class(es) and number of
securities and price per share of stock subject to such outstanding Stock
Awards. Such adjustments shall be made by the Board, the determination of which
shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction “without
receipt of consideration” by the Company.)

 

13

 

(b)           Dissolution or
Liquidation.  In the event of a
dissolution or liquidation of the Company, then such Stock Awards shall be
terminated if not exercised (if applicable) prior to such event.

 

(c)           Corporate Transaction.  In the event of (1) a sale, lease or other
disposition of all or substantially all of the assets of the Company, (2) a
merger or consolidation in which the Company is not the surviving corporation
or (3) a reverse merger in which the Company is the surviving corporation but
the shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (a “Corporate Transaction”), then any surviving
corporation or acquiring corporation shall assume any Stock Awards outstanding
under the Plan or shall substitute similar stock awards (including an award to
acquire the same consideration paid to the stockholders in the Corporate
Transaction) for those outstanding under the Plan. In the event any surviving
corporation or acquiring corporation refuses to assume such Stock Awards or to
substitute similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by Participants whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated in full,
and the Stock Awards shall terminate if not exercised (if applicable) at or
prior to such Corporate Transaction. With respect to any other Stock Awards
outstanding under the Plan, such Stock Awards shall terminate if not exercised
(if applicable) prior to such Corporate Transaction.

 

(d)           Securities Acquisition.  In the event of an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of
the Exchange Act, or any comparable successor provisions (excluding any
employee benefit plan, or related trust, sponsored or maintained by the Company
or an Affiliate) of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act, or comparable successor rule) of securities
of the Company representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of Directors and provided that such
acquisition is not a result of, and does not constitute, a Corporate
Transaction described in subsection 11(c) hereof, then with respect to
Stock Awards held by Participants whose Continuous Service has not terminated,
the vesting of such Stock Awards (and, if applicable, the time during which
such Stock Awards may be exercised) shall be accelerated in full.

 

12.          AMENDMENT
OF THE PLAN AND STOCK AWARDS.

 

(a)           Amendment of Plan.  The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11
relating to adjustments upon changes in stock, no amendment shall be effective
unless approved by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy the requirements of Section 422 of the
Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

 

(b)           Stockholder  Approval.  The Board may, in its sole discretion,
submit any other amendment to the Plan for stockholder approval, including, but
not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations

 

14

 

thereunder regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to certain
executive officers.

 

(c)           Contemplated Amendments.  It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

 

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

 

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

 

13.          TERMINATION
OR SUSPENSION OF THE PLAN.

 

(a)           Plan  Term.  The Board may suspend or terminate the Plan
at any time. Unless sooner terminated, the Plan shall terminate on
February 9, 2010. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.

 

(b)           No  Impairment
of
Rights.  Rights and obligations under any Stock Award
granted while the Plan is in effect shall not be impaired by suspension or
termination of the Plan, except with the written consent of the Participant.

 

14.          EFFECTIVE
DATE OF PLAN.

 

The Plan shall become effective upon adoption by the Board, but no
Stock Award shall be exercised (or, in the case of a stock bonus, shall be
granted) unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

 

15.          CHOICE
OF LAW.

 

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

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]