Document:

2001 Stock Plan

 EXHIBIT 4.4 
  
 XCEL PHARMACEUTICALS, INC. 
  
 (formerly MJCB CORP.) 
  
 2001 STOCK PLAN 
  
 (Effective March 30, 2001) 

 XCEL PHARMACEUTICALS, INC. 
  
 (formerly MJCB CORP.) 
  
 2001 STOCK PLAN 
  
 (EFFECTIVE March 30, 2001) 
  
 TABLE OF CONTENTS 
  

	 1.
	  	 Purpose
	  	1
	 2.
	  	 Definitions
	  	1
	 3.
	  	Administration	  	5
	 	  	 3.1
	  	Committees of the Board	  	5
	 	  	 3.2
	  	Committee Procedures	  	5
	 	  	 3.3
	  	Authority of the Committee	  	5
	 	  	 3.4
	  	Committee Liability	  	6
	 4.
	  	 Eligibility
	  	6
	 5.
	  	 Stock Subject to Plan
	  	6
	 	  	 5.1
	  	Basic Limitation	  	6
	 	  	 5.2
	  	Additional Shares	  	6
	 6.
	  	 Terms and Conditions of Grants
	  	6
	 	  	 6.1
	  	Form and Amount of Stock Grant	  	6
	 	  	 6.2
	  	Stock Grant Agreement	  	6
	 	  	 6.3
	  	Exercisability	  	7
	 	  	 6.4
	  	Vesting	  	7
	 	  	 6.5
	  	Duration of Stock Grant	  	7
	 	  	 6.6
	  	Purchase Price	  	7
	 	  	 6.7
	  	Effect of Change in Control	  	8
	 	  	 6.8
	  	Rights as Stockholder	  	8
	 7.
	  	 Terms and Conditions of Options
	  	8
	 	  	 7.1
	  	Stock Option Agreement	  	8
	 	  	 7.2
	  	Number of Shares; Nature of Option	  	8
	 	  	 7.3
	  	Purchase Price	  	8
	 	  	 7.4
	  	Exercisability	  	9
	 	  	 7.5
	  	Vesting	  	9
	 	  	 7.6
	  	Early Exercise	  	9
	 	  	 7.7
	  	Effect of Change in Control	  	9
	 	  	 7.8
	  	Term	  	10
	 	  	 7.9
	  	Exercise of Options on Termination of Service	  	10
	 	  	 7.10
	  	No Rights as Stockholder	  	10
	 	  	 7.11
	  	Modification, Extension and Assumption of Options	  	10
	 8.
	  	Forms of Payment	  	10
	 	  	 8.1
	  	General Rule	  	10
	 	  	 8.2
	  	Surrender of Stock	  	10
	 	  	 8.3
	  	Promissory Notes	  	10
	 	  	 8.4
	  	Cashless Exercise	  	11

  

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	 	  	 8.5
	  	Other Forms of Payment	  	11
	 9.
	  	Adjustments upon Changes in Common Stock	  	11
	 	  	 9.1
	  	General	  	11
	 	  	 9.2
	  	Merger, Consolidation or Other Reorganization	  	11
	 	  	 9.3
	  	Reservation of Rights	  	12
	 10.
	  	Withholding Taxes	  	12
	 	  	 10.1
	  	General	  	12
	 	  	 10.2
	  	Stock Withholding	  	12
	 	  	 10.3
	  	Cashless Exercise/Pledge	  	12
	 	  	 10.4
	  	Other Forms of Payment	  	12
	 11.
	  	Legal Requirements	  	12
	 	  	 11.1
	  	Restrictions on Issuance	  	12
	 	  	 11.2
	  	Restrictions on Transfer	  	13
	 	  	 11.3
	  	Financial Reports	  	13
	 12.
	  	Assignment or Transfer of Stock Grant, Option or Shares	  	13
	 	  	 12.1
	  	General	  	13
	 	  	 12.2
	  	Trusts	  	13
	 	  	 12.3
	  	Company’s Right to Repurchase Shares	  	13
	 13.
	  	No Employment Rights	  	14
	 14.
	  	Duration and Amendments	  	14
	 	  	 14.1
	  	Term of the Plan	  	14
	 	  	 14.2
	  	Right to Amend or Terminate the Plan	  	14
	 	  	 14.3
	  	Effect of Amendment or Termination	  	14
	 15.
	  	Execution	  	14

  

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 XCEL PHARMACEUTICALS, INC. 
  
 (formerly MJBC CORP.) 
  
 2001 STOCK PLAN 
  
 1. Purpose. The purpose of the Plan is to offer selected employees, directors and consultants an opportunity to acquire a proprietary interest in the success of the
Company, or to increase such interest, to encourage such persons to remain in the employ of the Company and to attract new employees with outstanding qualifications. The Plan seeks to achieve this purpose by providing for the direct grant or sale of
Shares of the Company’s Stock and for the grant of Options to purchase Shares of the Company’s Stock. Options granted under the Plan may include Nonstatutory Stock Options as well as Incentive Stock Options intended to qualify under
Section 422 of the Code. While this Plan is intended to satisfy Rule 701 under the Securities Act and Section 25102(o) of the Corporations Code, Options may be granted and Shares may be awarded or sold under this Plan in reliance upon other federal
and state securities law exemptions and to the extent another exemption is relied upon, the terms of this Plan which are required only because of Rule 701 or Section 25102(o) need not apply to the extent provided by the Board in the Stock Option
Agreement or the Stock Grant Agreement, as the case may be. 
  
 2. Definitions.
The following terms shall have the meanings set forth in this Section 2. 
  
 “Board” shall mean the Board of Directors of the Company, as constituted from time to time. 
  
 “Cause” means (i) the Key Contributor’s conviction of any felony; (ii) the Key Contributor’s commission of any act of fraud or
embezzlement; or (iii) any willful failure of the Key Contributor to perform his duties or responsibilities, which either (x) in the case of any ongoing violation, the Key Contributor does not cease within a reasonable period after receiving written
notice of the alleged deficiencies or (y) in the case of a violation capable of being cured, the Key Contributor does not cure within thirty (30) days after receiving written notice of the alleged deficiencies. 
  
 “Change in Control” shall mean: 
  
 (i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization; or 
  
 (ii) Any transaction (other than an issuance of shares by the Company for cash) in or by means of which one or more persons acting in
concert acquire, in the aggregate, more than 50% of the combined voting power of Company’s outstanding equity securities; or 
  
 (iii) The sale, transfer or other disposition of all or substantially all of the Company’s assets; or 
  

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 (iv) Any other event determined by the Board to constitute a Change in Control for
purposes of the Plan. 
  
 A transaction shall not constitute a Change in Control
if: (a) its sole purpose is to change the state of the Company’s incorporation; (b) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities
immediately before such transaction; or (c) it constitutes the Company’s initial public offering of its securities. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 “Committee” shall mean a committee consisting of one or more members of the Board that is appointed by the Board
to administer the Plan under Section 3. 
  
 “Common-Law
Employee” shall mean an individual paid from W-2 Payroll of the Company or a Subsidiary. If, during any period, the Company (or a Subsidiary, as applicable) has not treated an individual as a Common-Law Employee and, for that reason, has not
paid such individual in a manner which results in the issuance of a Form W-2 and withheld taxes with respect to him or her, then that individual shall not be an eligible Common-Law Employee for that period, even if any person, court or government
agency determines, retroactively, that such individual is or was a Common-Law Employee during all or any portion of that period. 
  
 “Company” shall mean Xcel Pharmaceuticals, Inc. (formerly, MJBC Corp.), a Delaware corporation. 
  
 “Consultant” shall mean an individual who performs bona fide
Service other than as a Common-Law Employee, a member of the Board, or a member of the board of directors of a Subsidiary. 
  
 “Corporations Code” shall mean the California Corporations Code. 
  
 “Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended. 
  
 “Fair Market Value” shall mean the determination of the market
price of Shares of the Company’s Stock made by the Board, which in all cases shall be conclusive and binding on all persons in accordance with the following guidelines: 
  
 (i) If the Shares are traded over-the-counter on the Valuation Date but are not traded on the Nasdaq Stock Market or the
Nasdaq National Market System, the Fair Market Value shall be equal to the mean between the last reported representative bid and asked prices quoted for the Valuation Date by the principal automated inter-dealer quotation system on which the Shares
are quoted or, if the Shares are not quoted on any such system, by the “Pink Sheets” published by the National Quotation Bureau, Inc.; 
  
 (ii) If the Shares are traded over-the-counter on the Valuation Date and are traded on the Nasdaq Stock Market or the Nasdaq National Market System, the
Fair Market Value shall be equal to the last-transaction price quoted for the Valuation Date by the Nasdaq Stock Market or the Nasdaq National Market; 
  

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 (iii) If the Shares are traded on a stock exchange on the Valuation Date, the Fair Market Value shall be
equal to the closing price reported by the applicable composite transactions report for the Valuation Date; and 
  
 (iv) If none of the foregoing provisions is applicable, the Fair Market Value shall be determined by the Board in good faith on such basis as it deems
appropriate. 
  
 “Good Reason” means (i) a material
reduction in the Key Contributor’s level of duties or responsibilities or the nature of the Key Contributor’s functions; (ii) a reduction in the Key Contributor’s base salary or a reduction in the Key Contributor’s total cash
compensation (consisting of base salary and target bonus); (iii) a relocation of the Key Contributor’s principal place of employment by more than thirty (30) miles, if the new location is both (A) more than thirty (30) miles from the Key
Contributor’s principle residence and (B) farther from the Key Contributor’s principal residence than the Key Contributor’s principal place of employment immediately before such relocation; or (iv) the repudiation or failure by the
Company or its successor to acknowledge (upon the Key Contributor’s written request) or to comply with any of its obligations under any employment agreement with the Key Contributor. The Company shall have the right, within thirty (30) days
after receiving written notice from the Key Contributor, to cease any ongoing violation or cure any violation capable of being cured which would give rise to a termination for Good Reason. 
  
 “Grantee” shall mean the holder of a Stock Grant. 
  
 “Incentive Stock Option” shall mean an incentive stock option
described in Section 422(b) of the Code. 
  
 “Involuntary
Termination” shall mean the termination of an Optionee’s or Grantee’s Service by reason of: 
  
 (i) The involuntary discharge of the Optionee or Grantee by the Company (or the Parent or Subsidiary employing him or her) or any successor to the
Company after a Change in Control for reasons other than Cause; or 
  
 (ii) The voluntary resignation of the Optionee or Grantee for Good Reason. 
  
 “Key Contributor” shall mean: (i) an individual who is a Common-Law Employee of the Company, a Parent or a Subsidiary; (ii) a member of the Board, including (without limitation) a Non-Employee Director, or
an affiliate of a member of the Board; (iii) a member of the board of directors of a Subsidiary; or (iv) a Consultant. 
  
 “Non-Employee Director” shall mean a member of the Board who is not a Common-Law Employee of the Company or a Subsidiary and who is otherwise
not disqualified from being a “non-employee director,” as set forth in Rule 16b-3 promulgated under the Exchange Act. 
  
 “Nonstatutory Stock Option” shall mean a stock option that is not an Incentive Stock Option. 
  

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 “Option” shall mean an Incentive Stock Option or Nonstatutory Stock Option granted under the
Plan entitling the holder to purchase Shares. 
  
 “Optionee” shall mean holder of an Option. 
  
 “Parent” shall have the meaning set forth in Section 424(e) of the Code. 
  
 “Participant” shall mean an individual or estate that holds an Option or Stock Grant. 
  
 “Plan” shall mean this 2001 Stock Plan of Xcel Pharmaceuticals, Inc. (formerly, MJBC Corp.), 
  
 “Purchase Price” shall mean the consideration for which one Share
may be acquired under the Plan. 
  
 “Securities Act”
shall mean the Securities Act of 1933, as amended. 
  
 “Share” shall mean one share of Stock, as adjusted in accordance with Section 9 of the Plan. 
  
 “Service” shall mean service as a Key Contributor. 
  
 “Stock” shall mean the Company’s common stock. 
  
 “Stock Acquisition Agreement” shall mean the agreement between the Company and a person who acquires Shares under the Plan whether pursuant to
an Option or a Stock Grant. 
  
 “Stock Grant” shall mean
a right to acquire Shares under the Plan other than by the exercise of an Option. 
  
 “Stock Grant Agreement” shall mean the agreement between the Company and a Grantee that contains the terms, conditions and restrictions pertaining to a Stock Grant. 
  
 “Stock Option Agreement” shall mean the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions pertaining to an Option. 
  
 “Subsidiary” shall have the meaning set forth in Section 424(f) of the Code. 
  
 “Ten Percent Stockholder” shall mean an individual who owns more than 10% of the total combined voting power of
all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied and “outstanding stock” shall include all stock
actually issued and outstanding immediately after granting of an Option or Stock Grant, but shall not include Shares authorized for issuance under outstanding Options held by a Key Contributor or by any other person. 
  

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 “Total and Permanent Disability” shall mean a Key Contributor’s inability to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment. 
  
 “Valuation Date” shall mean the date on which the Fair Market Value of Shares is determined. 
  
 “W-2 Payroll” shall mean the mechanism or procedure the Company or
a Subsidiary utilizes to pay any individual which results in the issuance of Internal Revenue Service Form W-2 to the individual. “W-2 Payroll” does not include any mechanism or procedure which results in the issuance of any Internal
Revenue Service form other than Form W-2 to an individual, including, but not limited to, Form 1099. Whether a mechanism or procedure constitutes “W-2 Payroll” shall be determined in the absolute discretion of the Company (or Subsidiary,
as applicable), and such determination shall be conclusive and binding on all persons. 
  
 3. Administration. 
  
 3.1 Committees of the Board. The
Plan shall be administered by the Board (which, in the absence of a specific designation of a committee, shall be the Committee); however, any or all administrative functions otherwise exercisable by the Board may be delegated to a Committee.
Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and
authority previously delegated to the Committee. If a Committee has been appointed, any reference to the Board in the Plan shall be construed as a reference to the Committee to whom the Board has assigned a particular function. If the Company’s
Stock becomes publicly traded, the Board may appoint a Committee which, if appointed, shall be comprised solely of two or more Non-Employee Directors (although Committee functions may be delegated to officers to the extent the Options or Stock
Grants are made to persons who are not subject to the reporting requirements of Section 16 of the Exchange Act). 
  
 3.2 Committee Procedures. The Board shall designate one of the members of the Committee as chairperson. The Committee may hold meetings at such times and
places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee. 
  
 3.3 Authority of the Committee. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. The Committee has authority to determine, in its sole discretion, to whom, and the time or times at which,
Options or Stock Grants may be made and the number of Shares subject to each Option or Stock Grant. The Committee has authority to prescribe, amend and rescind rules and regulations relating to the Plan and to make all other determinations necessary
or advisable for Plan administration. All decisions, interpretations and other actions of the Committee shall be final, conclusive and binding on all parties who have an interest in the Plan or any Option or Shares issued thereunder. 
  

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 3.4 Committee Liability. No member of the Board or the Committee will be liable for any action or
determination made in good faith by the Committee with respect to the Plan or any Award made under the Plan. 
  
 4. Eligibility. Only Key Contributors shall be eligible for designation as Participants by the Board. In addition, only individuals who are Common-Law Employees shall be eligible for the grant of Incentive Stock
Options. 
  
 5. Stock Subject to Plan. 
  
 5.1 Basic Limitation. The Shares issuable under the Plan shall be authorized
but unissued or reacquired Shares of Stock. The maximum number of Shares which may be issued under the Plan shall not exceed 1,480,000 Shares, subject to adjustment pursuant to Section 10. In any event, (i) the number of Shares subject to Options or
Stock Grants outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan; and (ii) to the extent an award is made in reliance upon the exemption available under Section
25102(o) of the Corporations Code, the number of Shares subject to Options or Stock Grants outstanding at any time under the Plan (together with other shares of Stock that must be aggregated for this purpose) shall not exceed the limitation imposed
by Section 260.140.45 of Title 10 of the California Code of Regulations or Section 25102(o) of the Corporations Code. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan. The number of Shares that may be issued or transferred to any Key Contributor during any twelve (12) month period pursuant to any Options or Stock Grants (in the aggregate) shall not exceed 200,000 Shares. 
  
 5.2 Additional Shares. If any outstanding Option or Stock Grant expires or is
canceled, forfeited or otherwise terminated, the Shares allocable to the unexercised portion of such Option or Stock Grant shall again be available for issuance under the Plan. If Shares issued under the Plan are reacquired by the Company pursuant
to any right of repurchase or right of first refusal, such Shares shall again be available for issuance under the Plan, except that the aggregate number of Shares that may be issued upon the exercise of Incentive Stock Options shall in no event
exceed the number of Shares reserved for issuance pursuant to Section 5.1 plus the number of Shares that revert to the Plan pursuant to the first sentence of this Section 5.2, as adjusted pursuant to Section 9. 
  
 6. Terms and Conditions of Grants. 
  
 6.1 Form and Amount of Stock Grant. Each Stock Grant shall specify the number
of Shares that are subject to the Stock Grant. A Stock Grant may be awarded in combination with a Nonstatutory Stock Option and such a Stock Grant may provide that the Shares subject to the Stock Grant will be forfeited in the event that the related
Nonstatutory Stock Option is exercised. 
  
 6.2 Stock Grant
Agreement. Each Stock Grant shall be evidenced by a Stock Grant Agreement between the Grantee and the Company. Each Stock Grant shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions
that are not inconsistent with the Plan as the Board deems appropriate for inclusion in a Stock 
  

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 Acquisition Agreement. The provisions of the various Stock Grant Agreements entered into under the Plan need not be
identical. 
  
 6.3 Exercisability. Each Stock Acquisition
Agreement shall specify the conditions upon which the Stock Grant shall become exercisable, if applicable, which shall be determined by the Board in its sole discretion. If required by applicable law, however, including the Corporations Code or the
regulations thereunder, each Stock Grant shall become exercisable no less rapidly than the rate of 20% per year for each of the first five (5) years from the date of the Stock Grant. 
  
 6.4 Vesting. 
  
 6.4.1 General. Each Stock Grant shall specify the conditions upon which the Grantee’s rights in the Shares subject to the Stock Grant shall
vest, which shall be determined by the Board in its sole discretion. If required by applicable law, however, including the Corporations Code or the regulations thereunder, the Shares subject to each Stock Grant shall vest no less rapidly than the
rate of 20% per year for each of the first five (5) years from the date of the Stock Grant. 
  
 6.4.2 Accelerated Vesting. Unless the applicable Stock Acquisition Agreement provides otherwise, any right to repurchase a Grantee’s Shares at the original Purchase Price (if any) upon termination of the
Grantee’s Service shall lapse and all of such Shares shall become vested if the following occur: 
  
 (i) The Company is subject to a Change in Control before the Grantee’s Service terminates; and 
  
 (ii) Either of the following occurs: 
  
 (A) The repurchase right is not assigned to or held by the entity that
employs the Grantee immediately after the Change in Control or to its Parent or Subsidiary; or 
  
 (B) The Grantee is subject to an Involuntary Termination within eighteen (18) months following such Change in Control. 
  
 6.5 Duration of Stock Grant. Any Stock Grant shall automatically expire
thirty (30) days after the Stock Grant is communicated in writing to the Grantee if the Grantee does not, within such thirty (30) day period, accept the Stock Grant by signing the Stock Grant Agreement. 
  
 6.6 Purchase Price. The Purchase Price of Shares offered under a Stock Grant
shall be established by the Board and set forth in the Stock Grant Agreement. To the extent required by applicable law, including the Corporations Code or the regulations thereunder, the Purchase Price shall not be less than 85% of Fair Market Value
(100% for Ten Percent Stockholders). In no event will the Purchase Price be less than the par value of a Share. The Purchase Price shall be payable in a form described in Section 8 or, in the discretion of the Board, in consideration for past
services rendered to the Company or for its benefit. 
  

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 6.7 Effect of Change in Control. The Board may determine at the time of making a Stock Grant or
thereafter, that upon a Change in Control such Stock Grant shall become exercisable as to all or a portion of the Shares subject to the Stock Grant or that the vesting of a Grantee’s rights in all or a portion of the Shares subject to such
Stock Grant shall be accelerated. 
  
 6.8 Rights as Stockholder.
Holders of Shares acquired under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Stock Grant, however, may require that the holder of Shares acquired under such Stock Grant invest any cash
dividends received in additional Shares. Such additional Shares shall be subject to the same conditions and restrictions as the Shares with respect to which the dividends were paid. Such additional Shares shall not reduce the number of Shares
available for issuance under the Plan. 
  
 7. Terms and Conditions of Options.

  
 7.1 Stock Option Agreement. Each grant of an Option under the
Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent
with the Plan and that the Board deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 
  
 7.2 Number of Shares; Nature of Option. Each Stock Option Agreement shall
specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number of Shares in accordance with Section 9. The Stock Option Agreement shall also specify whether the Option is an Incentive Stock Option or
a Nonstatutory Stock Option. Notwithstanding such designation, however, to the extent the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar
year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 7.2, Incentive Stock Options shall be taken into account in the order in
which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
  
 7.3 Purchase Price. The Purchase Price of Shares subject to an Option shall be established by the Board and set forth in a Stock Option Agreement. The
Purchase Price of Shares subject to an Incentive Stock Option shall not be less than 100% of the Fair Market Value (110% for Ten Percent Stockholders) on the date the Option is granted. If required by applicable law, including the Corporations Code
or the regulations thereunder, the Purchase Price of Shares subject to a Nonstatutory Stock Option shall not be less than 85% of the Fair Market Value (110% for Ten Percent Stockholders) on the date the Option is granted. In no event shall the
Purchase Price be less than the par value of a Share. The Purchase Price shall be payable in a form described in Section 8. Notwithstanding the foregoing, an Option may be granted with a Purchase Price lower than that prescribed in this Section 7.3
if the Option grant is attributable to the issuance or assumption of an option in a transaction to which Section 424(a) of the Code applies. 
  

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 7.4 Exercisability. Each Stock Option Agreement shall specify the date when the Option becomes
exercisable, which shall be determined by the Board in its sole discretion. If required by applicable law, however, including the Corporations Code or the regulations thereunder, Options granted to Key Contributors who are not officers shall become
exercisable no less rapidly than the rate of 20% per year for each of the first five (5) years from the date the Option is granted. 
  
 7.5 Vesting. 
  
 7.5.1 General. Each Stock Option Agreement shall specify the date or events upon which the Optionee’s rights in the Shares subject to the
Option shall vest, which shall be determined by the Board in its sole discretion. If required by applicable law, however, including the Corporations Code or the regulations thereunder, Shares subject to Options granted to Key Contributors who are
not officers shall vest no less rapidly than the rate of 20% per year for each of the first five (5) years from the date the Option is granted. 
  
 7.5.2 Accelerated Vesting. Unless the applicable Stock Option Agreement provides otherwise, any right to repurchase an Optionee’s shares at
the original Purchase Price upon termination of the Optionee’s Service shall lapse and all of such Shares shall become vested if the following occur: 
  
 (i) The Company is subject to a Change in Control before the Optionee’s Service terminates; and 
  
 (ii) Either of the following occurs: 
  
 (A) Such Options do not remain outstanding, such Options are not assumed by
the surviving corporation and the surviving corporation does not substitute new options with substantially the same terms for such Options; or 
  
 (B) The Optionee is subject to an Involuntary Termination within eighteen (18) months following such Change in Control. 
  
 7.6 Early Exercise. A Stock Option Agreement may permit an Optionee to
exercise an Option before it is vested (i.e., make an “early exercise”), subject to the Company’s right to repurchase Shares acquired under the Option. The Company’s right to repurchase Shares shall lapse at the same rate
as the Optionee’s rights in the Shares would have vested in accordance with Section 7.5 had there been no early exercise. If required by applicable law, including the Corporations Code or the regulations thereunder, the Company’s right to
repurchase Shares may be exercised only within ninety (90) days after the later of (i) the termination of the Optionee’s Service or (ii) the date of exercise of the Option, and in any event for cash or for cancellation of indebtedness incurred
in purchasing the Shares. 
  
 7.7 Effect of Change in Control. The
Board may determine, at the time of granting an Option or thereafter, that upon a Change in Control such Option shall become exercisable as to all or a portion of the Shares subject to the Option or that the vesting of an Optionee’s rights in
all or a portion of the Shares subject to such Option shall be accelerated. 
  

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 7.8 Term. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed ten
(10) years from the date of grant or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, five (5) years from the date of grant. Subject to the preceding sentence, the Board in its sole discretion, shall determine when an
Option will expire. 
  
 7.9 Exercise of Options on Termination of
Service. Each Option shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service with the Company and its Subsidiaries. Such provisions shall be determined in the
sole discretion of the Board, need not be uniform among all Optionees, and may reflect distinctions based on the reasons for termination of Service. If required by applicable law, however, including the Corporations Code or the regulations
thereunder, each Stock Option Agreement shall provide the Optionee with the right to exercise the Option following the Optionee’s termination of Service during the Option term (x) for at least thirty (30) days if termination of Service is due
to any reason other than Cause, death or Total and Permanent Disability, and (y) for at least six (6) months after termination of Service if due to death or Total and Permanent Disability. 
  
 7.10 No Rights as Stockholder. An Optionee, or a transferee of an Optionee,
shall have no rights as a stockholder with respect to any Shares subject to an Option until such person becomes entitled to receive such Shares by delivering to the Company a signed Stock Acquisition Agreement and paying the Purchase Price pursuant
to the terms of such Option. 
  
 7.11 Modification, Extension and
Assumption of Options. Within the limitations of the Plan, the Board may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of Shares and at the same or a different Purchase Price. The foregoing notwithstanding and except as set forth in Section 9.2, no modification of an Option shall, without the consent of the Optionee,
impair the Optionee’s rights or increase the Optionee’s obligations under such Option. 
  
 8. Forms of Payment. 
  
 8.1
General Rule. Except as otherwise provided in this Section 8, the entire Purchase Price shall be payable in cash or cash equivalents acceptable to the Company at the time of purchase. 
  
 8.2 Surrender of Stock. To the extent that a Stock Option Agreement or Stock Grant Agreement so provides, payment may be
made wholly or in part with Stock that has already been owned by the Optionee or Grantee, or the representative of either, for such time period as may be specified by the Board and that is surrendered to the Company in good form for transfer. Such
Stock shall be valued at Fair Market Value on the date when the new Shares are acquired under the Plan. 
  
 8.3 Promissory Notes. To the extent that a Stock Option Agreement or Stock Grant Agreement so provides, payment may be made wholly or in part with a full
recourse promissory note executed by the Optionee or Grantee. The interest rate and other terms and conditions of such note shall be determined by the Board. The Board may require that the Optionee or Grantee 
  

 -10- 

 pledge Shares to the Company for the purpose of securing payment of such note. In no event shall the stock certificate(s)
representing such Shares be released to the Optionee or Grantee until such note is paid in full, unless otherwise provided in the Stock Option Agreement, Stock Grant Agreement or Stock Acquisition Agreement. 
  
 8.4 Cashless Exercise. To the extent provided in a Stock Option Agreement or
Stock Grant Agreement, if a public market for the Stock exists, payment may be made by delivery (on a form acceptable to the Board) of an irrevocable direction to a securities broker to sell Stock and to deliver all or part of the sale proceeds to
the Company in payment of the aggregate Purchase Price. 
  
 8.5
Other Forms of Payment. To the extent provided in a Stock Option Agreement or Stock Grant Agreement, payment may be made in any other form that is consistent with applicable laws, regulations and rules. 
  
 9. Adjustments upon Changes in Common Stock. 
  
 9.1 General. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Stock, a combination or consolidation of the outstanding Stock into a lesser number of shares, a recapitalization, a reclassification of the outstanding Stock or such other event as the Board may determine
necessitates an adjustment be made, the Board shall make appropriate adjustments, subject to the limitations set forth in Section 9.3, in one or more of (i) the number of Shares of Stock available for future grants of Options or Stock Grants, (ii)
the number of Shares of Stock covered by each outstanding Option or Stock Grant or (iii) the Purchase Price of each outstanding Option or Stock Grant. 
  
 9.2 Merger, Consolidation or Other Reorganization. If the Company is a party to a merger, consolidation or other corporate reorganization, outstanding
unexercised Options shall be subject to the terms and conditions of the agreement between the Company and the other party to such merger, consolidation or reorganization and such Options may be assumed, substituted, modified or cancelled, without
the consent of any Optionee, as the Board, in its sole discretion, may determine. By way of example only, and not in limitation of the Board’s authority, any such agreement may provide for any of the following: 
  
 (i) The continuation of such outstanding Options by the Company (if the
Company is the surviving corporation); or 
  
 (ii) The assumption
of the Plan and such outstanding Options by the surviving corporation or its parent; or 
  
 (iii) The substitution by the surviving corporation or its parent of options with substantially the same terms for such outstanding Options; or 
  
 (iv) The cancellation of each outstanding Option (whether vested or unvested) after payment to the Optionee of an amount in
cash or cash equivalents equal to (A) the Fair Market Value at the time of the merger, consolidation or other reorganization of the Shares subject to such Option (to the extent then vested) minus (B) the Purchase Price of the Shares subject to such
Option. 
  

 -11- 

 9.3 Reservation of Rights. Except as set forth in Section 9.1, an Optionee or Grantee shall have no
rights by reason of (i) any subdivision or consolidation of shares of Company stock of any class, (ii) the payment of any dividend by the Company, or (iii) any other increase or decrease in the number of shares of Company stock of any class. Except
as set forth in Section 9.1, any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to an Option, the number of Shares subject to any Stock Grant and/or the Purchase Price under any Option or Stock Grant. The grant of an Option or a Stock Grant pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge, consolidate or reorganize or to dissolve or liquidate or sell, transfer or otherwise dispose of all or any part of its
business, assets or securities. 
  
 10. Withholding Taxes. 
  
 10.1 General. To the extent required by applicable federal, state, local or
foreign law, a Participant shall make arrangements satisfactory to the Committee for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash
payment under the Plan until such obligations are satisfied. 
  
 10.2 Stock Withholding. The Committee may permit a Participant to satisfy all or part of the withholding or income tax obligations by having the Company withhold all or a portion of any Shares of Stock that otherwise would be issued or by
surrendering all or a portion of any Shares of Stock previously acquired. Shares of Stock that are withheld or surrendered pursuant to this Section 10 shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in
cash. Any payment of taxes by assigning Shares of Stock to the Company may be subject to restrictions, including any restrictions required by rules of any federal or state regulatory body or other authority. 
  
 10.3 Cashless Exercise/Pledge. The Committee may provide that if Company
Shares of Stock are publicly traded at the time of exercise, arrangements may be made to meet the Optionee’s withholding obligation by cashless exercise or pledge. 
  
 10.4 Other Forms of Payment. The Committee may permit such other means of tax withholding as it determines to be
appropriate. 
  
 11. Legal Requirements. 
  
 11.1 Restrictions on Issuance. Shares shall not be issued under the Plan
unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval of or a favorable ruling from any governmental agency that the Company determines to be
necessary or advisable. 
  

 -12- 

 11.2 Restrictions on Transfer. If the Company or any managing underwriter of an offering of securities of
the Company so determines, no Shares issued upon exercise of a Stock Grant or an Option may be sold or otherwise transferred or disposed of during a period of up to one hundred eighty (180) days following the effective date of a registration
statement covering securities of the Company filed under the Securities Act. Any Shares issued upon exercise of a Stock Grant or an Option shall be subject to such rights of repurchase, rights of first refusal and other transfer restrictions as the
Board may determine. Such restrictions shall apply in addition to any restrictions that may apply to holders of Stock generally. 
  
 11.3 Financial Reports. To the extent required to comply with the Corporations Code or the regulations thereunder, not less often than annually the
Company shall furnish to Optionees and Grantees summary financial information, including a balance sheet, regarding the Company’s financial condition and results of operations, unless such Optionees or Grantees have duties with the Company that
assure them access to equivalent information. Such financial statements need not be audited. 
  
 12. Assignment or Transfer of Stock Grant, Option or Shares. 
  
 12.1 General. No Stock Grant or Option shall be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of
law, except as approved by the Committee. Notwithstanding the foregoing: 
  
 (i) while the Shares are subject to Corporations Code Section 25102(o), (a) Grantees and Optionees may not transfer their rights hereunder except by will, beneficiary designation or the laws of descent and
distribution, and (b) any rights of repurchase in favor of the Company shall take into account the provisions of Sections 260.140.41 or 260.140.42 of Title 10 of the California Code of Regulations, as applicable; and 
  
 (ii) Incentive Stock Options may not be transferred or alienated in any
way. 
  
 12.2 Trusts. Neither this Section 12 nor any other
provision of the Plan shall preclude a Participant from transferring or assigning Shares to (i) the trustee of a trust that is revocable by such Participant alone, both at the time of the transfer or assignment and at all times thereafter prior to
such Participant’s death, or (ii) the trustee of any other trust to the extent approved by the Committee in writing. A transfer or assignment of Shares from such trustee to any person other than such Participant shall be permitted only to the
extent approved in advance by the Committee in writing, and Shares held by such trustee shall be subject to all the conditions and restrictions set forth in the Plan and in the applicable Stock Acquisition Agreement, as if such trustee were a party
to such Stock Acquisition Agreement. 
  
 12.3 Company’s Right
to Repurchase Shares. The Company shall have the right to repurchase a Participant’s Shares that have been acquired through a Stock Grant or an Option upon termination of the Participant’s Service if provided in the applicable Stock
Acquisition Agreement. If the Company retains a right to repurchase Shares at their Fair Market Value on the date that the Participant’s Service terminates, then such repurchase right shall terminate when 
  

 -13- 

 the Company’s Stock becomes publicly traded. If the Company retains a right to repurchase Shares at the original
Purchase Price, then such repurchase right shall lapse at the minimum rate of twenty percent (20%) per year over the five (5) year period starting on the date that the Stock Grant or Option was granted. The foregoing restrictions on the
Company’s right of repurchase shall not apply to Options and Stock Grants granted to Non-Employee Directors, Consultants or officers of the Company, a Parent or a Subsidiary and repurchase rights applicable to Shares held by such persons may be
subject to additional greater restrictions, as determined by the Board. 
  
 13. No
Employment Rights. No provision of the Plan, nor any Option or Stock Grant shall be construed to give any person any right to become, to be treated as, or to remain a Key Contributor. The Company and its Subsidiaries reserve the right to terminate
any Key Contributor’s employment at any time and for any reason or for no reason, with or without Cause. 
  
 14. Duration and Amendments. 
  
 14.1 Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to the approval of the Company’s stockholders. If the stockholders fail to approve the Plan within twelve
(12) months after its adoption by the Board, any Options or Stock Grants granted within such twelve (12) month period shall be null and void, and no additional Options or Stock Grants shall be granted after the expiration of such twelve (12) month
period. The Plan shall terminate automatically ten (10) years after its adoption by the Board and may be terminated on any earlier date pursuant to Section 14.2 below. 
  
 14.2 Right to Amend or Terminate the Plan. The Board may amend or terminate the Plan at any time. Except as may otherwise be
permitted under Section 9.2, rights under any Option or Stock Grant granted before amendment or termination of the Plan shall not be materially impaired by any such amendment or termination, except with consent of the Optionee or Grantee. An
amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. 
  

14.3 Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an
Option or Stock Grant granted prior to such termination. Except as may be permitted under Section 9.2, the termination of the Plan, or any amendment thereof, shall not affect any Shares previously issued or Option or Stock Grant previously granted
under the Plan. 
  
 15. Execution. To record the adoption of the Plan, the Company
has caused its authorized officer to execute the same. 
  

	 XCEL PHARMACEUTICALS, INC.

(formerly, MJBC Corp.),

		
	 By:
	 	 /s/    MICHAEL T.
BORER        

	 Its:
	 	 Michael T. Borer
 President & CEO

  

 -14-Form of 2003 Stock Incentive Plan

 EXHIBIT 4.5 
  
 XCEL PHARMACEUTICALS, INC. 
  
 2003 STOCK INCENTIVE PLAN 
  
 (Effective                 , 2003) 
  

 TABLE OF CONTENTS 
  

	 	  	Page

		
	 SECTION 1. ESTABLISHMENT AND PURPOSE
	  	1
		
	 SECTION 2. DEFINITIONS
	  	1
		
	 SECTION 3. ADMINISTRATION
	  	4
	 (a) Committee Composition
	  	4
	 (b) Committee for Non-Officer Grants
	  	5
	 (c) Committee Procedures
	  	5
	 (d) Committee Responsibilities
	  	5
		
	 SECTION 4. ELIGIBILITY
	  	6
	 (a) General Rule
	  	6
	 (b) Transferability
	  	6
	 (c) Limitation on Grants
	  	8
	 (d) Ten-Percent Stockholders
	  	8
	 (e) Attribution Rules
	  	8
	 (f) Outstanding Stock
	  	8
		
	 SECTION 5. STOCK SUBJECT TO PLAN
	  	9
	 (a) Basic Limitation
	  	9
	 (b) Annual Increase in Shares
	  	9
	 (c) Additional Shares
	  	9
	 (d) Dividend Equivalents
	  	9
		
	 SECTION 6. RESTRICTED SHARES
	  	9
	 (a) Restricted Stock Agreement
	  	9
	 (b) Payment for Awards
	  	9
	 (c) Vesting
	  	10
	 (d) Voting and Dividend Rights
	  	10
		
	 SECTION 7. OTHER TERMS AND CONDITIONS OF AWARDS OR SALES
	  	10
	 (a) Duration of Offers and Nontransferability of Rights
	  	10
	 (b) Purchase Price
	  	10
	 (c) Withholding Taxes
	  	10
	 (d) Restrictions on Transfer of Shares
	  	10
		
	 SECTION 8. TERMS AND CONDITIONS OF OPTIONS
	  	10
	 (a) Stock Option Agreement
	  	10
	 (b) Number of Shares
	  	11
	 (c) Exercise Price
	  	11
	 (d) Withholding Taxes
	  	11
	 (e) Exercisability and Term
	  	11

  

 i 

	 (f) Exercise of Options Upon Termination of Service
	  	11
	 (g) Effect of Change in Control
	  	12
	 (h) Leaves of Absence
	  	12
	 (i) No Rights as a Stockholder
	  	12
	 (j) Modification, Extension and Renewal of Options
	  	12
	 (k) Restrictions on Transfer of Shares
	  	12
	 (l) Buyout Provisions
	  	12
		
	 SECTION 9. PAYMENT FOR SHARES
	  	13
	 (a) General Rule
	  	13
	 (b) Surrender of Stock
	  	13
	 (c) Services Rendered
	  	13
	 (d) Cashless Exercise
	  	13
	 (e) Exercise/Pledge
	  	13
	 (f) Promissory Note
	  	13
	 (g) Other Forms of Payment
	  	13
		
	 SECTION 10. STOCK APPRECIATION RIGHTS
	  	13
	 (a) SAR Agreement
	  	13
	 (b) Number of Shares
	  	14
	 (c) Exercise Price
	  	14
	 (d) Exercisability and Term
	  	14
	 (e) Effect of Change in Control
	  	14
	 (f) Exercise of SARs
	  	14
	 (g) Modification or Assumption of SARs
	  	14
		
	 SECTION 11. STOCK UNITS
	  	15
	 (a) Stock Unit Agreement
	  	15
	 (b) Payment for Awards
	  	15
	 (c) Vesting Conditions
	  	15
	 (d) Voting and Dividend Rights
	  	15
	 (e) Form and Time of Settlement of Stock Units
	  	15
	 (f) Death of Recipient
	  	15
	 (g) Creditors’ Rights
	  	16
		
	 SECTION 12. ADJUSTMENT OF SHARES
	  	16
	 (a) Adjustments
	  	16
	 (b) Dissolution or Liquidation
	  	16
	 (c) Reorganizations
	  	16
	 (d) Reservation of Rights
	  	17
		
	 SECTION 13. DEFERRAL OF AWARDS
	  	17
		
	 SECTION 14. AWARDS UNDER OTHER PLANS
	  	18

  

 ii 

	 SECTION 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES
	  	18
	 (a) Effective Date
	  	18
	 (b) Elections to Receive NSOs, Restricted Shares or Stock Units
	  	18
	 (c) Number and Terms of NSOs, Restricted Shares or Stock Units
	  	18
		
	 SECTION 16. LEGAL AND REGULATORY REQUIREMENTS
	  	18
		
	 SECTION 17. WITHHOLDING TAXES
	  	18
	 (a) General
	  	18
	 (b) Share Withholding
	  	19
		
	 SECTION 18. NO EMPLOYMENT RIGHTS
	  	19
		
	 SECTION 19. DURATION AND AMENDMENTS
	  	19
	 (a) Term of the Plan
	  	19
	 (b) Right to Amend or Terminate the Plan
	  	19
	 (c) Effect of Amendment or Termination
	  	19
		
	 SECTION 20. EXECUTION
	  	20

  

 iii 

 XCEL PHARMACEUTICALS, INC. 
  
 2003 STOCK INCENTIVE PLAN 
  
 SECTION 1. ESTABLISHMENT AND PURPOSE. 
  
 The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, Outside
Directors and Consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares, Stock Units, Options (which may constitute incentive stock options or
nonstatutory stock options) and SARs. 
  
 SECTION 2. DEFINITIONS.

  
 (a) “Affiliate” shall mean any entity
other than a Subsidiary, if the Company and/or one of more Subsidiaries own not less than fifty percent (50%) of such entity. 
  
 (b) “Award” shall mean any award of an Option, a SAR, a Restricted Share or a Stock Unit under the Plan. 
  
 (c) “Board of Directors” shall mean the Board of Directors
of the Company, as constituted from time to time. 
  
 (d)
“Change in Control” shall mean the occurrence of any of the following events: 
  
 (i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if
more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other reorganization; or 
  
 (ii) Any transaction (other than issuance of shares by the Company for cash) in or by means of which one or more persons acting in concert
acquire, in the aggregate, more than fifty percent (50%) of the combined voting power of the Company’s outstanding equity securities; or 
  
 (iii) The sale, transfer or other disposition of all or substantially all of the Company’s assets; or 
  
 (iv) Any other event determined by the Board of Directors to
constitute a Change of Control for purposes of this Plan. 
  

 1 

 For purposes of this Section 2(d), the term “person” shall have the same meaning as when
used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock. 
  
 Any other provision of this Section 2(d) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to (x)
change the state of the Company’s incorporation or (y) create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. 
  
 (e) “Code” shall mean the Internal Revenue Code of 1986, as
amended. 
  
 (f) “Committee” shall mean the
committee designated by the Board of Directors, which is authorized to administer the Plan, as described in Section 3 below. 
  
 (g) “Company” shall mean Xcel Pharmaceuticals, Inc., a Delaware corporation. 
  
 (h) “Consultant” shall mean a consultant or advisor who is
not an Employee and who provides bona fide services to the Company, a Parent or a Subsidiary as an independent contractor or a member of the board of directors of the Company, a Parent or a Subsidiary. Service as a Consultant shall be considered
Service for all purposes of the Plan. Notwithstanding any other provision herein to the contrary, a Consultant may be an entity. 
  
 (i) “Employee” shall mean any individual classified as an employee on the payroll records of the Company, a Parent or a Subsidiary.

  
 (j) “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended. 
  
 (k) “Exercise
Price” shall mean, (x) in the case of an Option, the amount for which one Common Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement, and (y) in the case of a SAR, an amount, as
specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one Common Share in determining the amount payable upon exercise of such SAR. 
  
 (l) “Fair Market Value,” with respect to a Share, shall mean the market price of one Share, determined by
the Committee as follows: 
  
 (i) If the Stock
was traded over-the-counter on the date in question but was not traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be
equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the
“Pink Sheet” system maintained by Pink Sheets LLC; 
  

 2 

 (ii) If the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value shall
be equal to the last reported sale price quoted for such date by The Nasdaq Stock Market; 
  
 (iii) If the Stock was traded on a United States stock exchange on the date in question, then the Fair Market Value shall be equal to the
closing price reported for such date by the applicable composite-transactions report; and 
  
 (iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on
such basis as it deems appropriate. 
  
 In all cases, the determination of Fair
Market Value by the Committee shall be conclusive and binding on all persons. 
  
 (m) “ISO” shall mean an incentive stock option described in Section 422 of the Code. 
  
 (n) “Nonstatutory Option” or “NSO” shall mean a stock option that is not an ISO. 
  
 (o) “Offeree” shall mean an individual to whom the Committee
has offered the right to acquire Shares under the Plan pursuant to an Award (other than upon exercise of an Option). 
  
 (p) “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. 
  
 (q) “Optionee” shall mean an individual or estate holding an
Option or SAR. 
  
 (r) “Outside Director” shall
mean a member of the Board of Directors who is not an Employee. 
  
 (s) “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be a Parent commencing as of such date.

  
 (t) “Participant” shall mean an individual or
estate holding an Award. 
  
 (u) “Plan” shall
mean this Xcel Pharmaceuticals, Inc. 2003 Stock Incentive Plan, as amended from time to time. 
  
 (v) “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee. 
  
 (w) “Restricted Share” shall mean a Share awarded under the
Plan pursuant to a Restricted Share Agreement. 
  

 3 

 (x) “Restricted Share Agreement” shall mean the agreement between the Company and the
recipient of a Restricted Share which contains the terms, conditions and restrictions pertaining to such Restricted Shares. 
  
 (y) “SAR” shall mean a stock appreciation right granted under the Plan pursuant to a SAR Agreement. 
  
 (z) “SAR Agreement” shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions pertaining to his or her SAR. 
  
 (aa) “Service” shall mean service as an Employee, Consultant or Outside Director. 
  
 (bb) “Share” shall mean one share of Stock, as adjusted in
accordance with Section 12 below (if applicable). 
  
 (cc)
“Stock” shall mean the Common Stock of the Company. 
  
 (dd) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option. 
  
 (ee) “Stock Purchase Agreement” shall mean the agreement
between the Company and an Offeree who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares. 
  
 (ff) “Stock Unit” shall mean a bookkeeping entry representing the equivalent of one Share, as awarded under
the Plan. 
  
 (gg) “Stock Unit Agreement” shall
mean the agreement between the Company and the recipient of a Stock Unit which contains the terms, conditions and restrictions pertaining to such Stock Unit. 
  
 (hh) “Subsidiary” shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than fifty percent (50%)
of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

  
 (ii) “Total and Permanent Disability” shall
mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. 
  
 SECTION 3. ADMINISTRATION. 
  
 (a) Committee Composition. The Plan shall be administered by the Committee. The Committee shall consist of three (3) or more directors of the
Company, who shall be appointed by the Board of Directors. In addition, the composition of the Committee shall satisfy: 
  

 4 

 (i) such requirements as the Securities and Exchange Commission may establish for
administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and 
  
 (ii) such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for
exemption under Section 162(m)(4)(C) of the Code. 
  
 (b)
Committee for Non-Officer Grants. The Board of Directors may also appoint one or more separate committees of the Board of Directors, each composed of one or more directors of the Company who need not satisfy the requirements of Section
3(a) above, who may (1) designate Employees who are not considered officers or directors of the Company under Section 16 of the Exchange Act to be recipients of Awards, and (2) determine the number of such Awards to be received by such
Employees; provided, however, that the resolution so authorizing such committee shall specify the total number of Awards such committee may so grant. 
  
 (c) Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold meetings
at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee.

  
 (d) Committee Responsibilities. Subject to the
provisions of the Plan, the Committee shall have full authority and discretion to take the following actions: 
  
 (i) To interpret the Plan and to apply its provisions; 
  
 (ii) To adopt, amend or rescind rules, procedures and forms relating to the Plan; 
  
 (iii) To authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of the Plan; 
  
 (iv) To determine when Shares are to be awarded or offered for sale and when Awards are to be granted under the Plan; 
  
 (v) To select the Offerees and Optionees; 
  
 (vi) To determine the number of Shares to be offered to each Offeree or to be made subject to each Award; 
  
 (vii) To prescribe the terms and conditions of each Award,
including (without limitation) the Purchase Price (or the Exercise Price in the case of an Option), the vesting of the Award (including accelerating the vesting of Awards), whether an Option is to be classified as an ISO or as an NSO, and to specify
the provisions of the Stock Purchase Agreement or Stock Option Agreement (as applicable) relating to such Award; 
  

 5 

 (viii) To amend any outstanding Stock Purchase Agreement or Stock Option Agreement
(including, without limitation, repricing the exercise or purchase price with respect to such Stock Purchase Agreement or Stock Option Agreement, as applicable), subject to applicable legal restrictions and to the consent of the Offeree or Optionee
who entered into such agreement; 
  
 (ix) To
prescribe the consideration for the grant of each Award and to determine the sufficiency of such consideration; 
  
 (x) To determine the disposition of each Award in the event of an Optionee’s or Offeree’s divorce or dissolution of marriage;

  
 (xi) To determine whether Awards will be
granted in replacement of other grants under an incentive or other compensation plan of an acquired business; 
  
 (xii) To correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Stock Option Agreement or any Stock
Purchase Agreement; and 
  
 (xiii) To take any
other actions deemed necessary or advisable for the administration of the Plan. 
  
 Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except
that the Committee may not delegate its authority to any person to grant Awards to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all
Optionees, and all persons deriving their rights from an Offeree or Optionee. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan or any Award. 
  
 SECTION 4. ELIGIBILITY. 
  
 (a) General Rule. Only Employees shall be eligible for the grant of ISOs. Only Employees, Consultants and Outside
Directors shall be eligible for the grant of Restricted Shares, Stock Units, NSOs or SARs. 
  
 (b) Transferability. Except as otherwise provided by the Board of Directors: 
  
 (i) Except as provided by subsections (iv) and (v) below, no Award shall be transferable by the recipient other than by
will, by written beneficiary designation or by the laws of descent and distribution; 
  
 (ii) An Award may be exercised during the lifetime of the recipient only by the recipient or by the recipient’s guardian or legal
representative; 
  
 (iii) Except as provided in
subsections (iv) and (v) below, no Award or interest therein may be transferred, assigned, pledged or hypothecated by the recipient during his 
  

 6 

 
or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process; 
  
 (iv) An Award can be assigned in accordance with the terms
of a “qualified domestic relations order” within the meaning of Section 414(p) of the Code, provided that any ISO that is so assigned will lose its ISO status and be treated as an NSO; 
  
 (v) The Committee may permit a recipient of an Award (other
than an ISO) to transfer all or any portion of an Award (other than an ISO), or authorize that all or a portion of any Award to be granted to a recipient may be transferred by such recipient, to: 
  
 (A) the spouse, children or grandchildren of the recipient
(the “Immediate Family Members”), 
  
 (B) a trust or trusts for the exclusive benefit of such Immediate Family Members and/or such recipient, or 
  
 (C) a partnership or limited liability company, the partners or members of which are limited to the recipient and/or such Immediate Family
Members 
  
 (collectively, the “Permitted
Transferees”); provided, however, that (x) the recipient receives no consideration for any such transfer and (y) subsequent transfers of the transferred Award shall be prohibited except those by will or the laws of descent and
distribution or pursuant to a qualified domestic order. The Stock Option Agreement or other documents evidencing the Award with respect to which such transferability is authorized at the time of grant must be approved by the Committee and must
expressly provide for transferability in a manner consistent with this Section 4(b)(v); 
  
 (vi) Following the transfer of any Award under subsections (iv) or (v) above, 
  
 (A) such Award shall continue to be subject to the same
terms and conditions as were in effect immediately prior to the transfer; provided, however, that the term “Offeree” shall be deemed to refer to the Permitted Transferee, the recipient under a qualified domestic relations
order, or the estate or heirs of a deceased recipient, as applicable, to the extent necessary to enable such person to exercise the transferred Award in accordance with the terms of this Plan and applicable law, and 
  
 (B) the provisions regarding the recipient’s cessation
of Service or death shall continue to be applied with respect to the original recipient and, upon the recipient’s cessation of Service or death, the Award shall be exercisable only to the extent and for the periods specified in the Stock Option
Agreement evidencing the Award; 
  

 7 

 (vii) Any recipient desiring to transfer an Award pursuant to subdivision (v)
above shall make application therefor in the manner and at the time specified by the Committee and shall comply with such other requirements as the Committee may determine to be necessary to insure compliance with all applicable securities laws.
Notwithstanding any other provision herein to the contrary, the Committee shall not permit a transfer of an Award if such transfer cannot be made in compliance with all applicable securities laws; and 
  
 (viii) Neither the Committee nor the Company shall have any
obligation to inform any transferee of an Award of any expiration, termination, lapse or acceleration of such Award. 
  
 (c) Limitation on Awards. No Employee, Consultant or Outside Director shall be granted Awards with respect to more than Two Hundred Thousand
(200,000) Shares in any fiscal year of the Company, except that Awards granted to a new Employee, Consultant or Outside Director in the fiscal year of the Company in which his or her Service first commences shall not pertain to more than
Three Hundred Thousand (300,000) Shares (in each case subject to adjustment in accordance with Section 12 below). For purposes of this Section 4(c), a Stock Unit shall be treated as the equivalent of one Share, and a SAR
shall be treated as the equivalent of the number of underlying shares upon which its value is based. 
  
 (d) Ten-Percent Stockholders. An Employee who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5) of the Code. 
  
 (e) Attribution Rules. For purposes of Section 4(d) above, and only to the extent required by the Code, an
Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or
trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries. 
  
 (f) Outstanding Stock. For purposes of Section 4(d) above, “outstanding stock” shall include all stock actually issued and
outstanding immediately after the grant. “Outstanding stock” shall not include shares authorized for issuance under outstanding options held by the Employee or by any other person. 
  
 (g) Performance Goals. Notwithstanding any provision herein to the
contrary, the Committee may condition the vesting or settlement of any Award on the attainment of one or more of the following corporate performance goals, to be determined in the discretion of the Committee, earnings per share, net income growth,
appreciation in share price, either on an absolute basis or on a basis relative to the peers of the Company, retirement of debt, corporate milestone achievement, total shareholder return, revenue growth, operating expense containment or control,
product acquisition activities, regulatory approval or similar corporate goals that are designed to measure the performance of a recipient or the contribution of the recipient to the Company. Such right of the Committee shall be subject to
additional stockholder ratification and approval on or before             , 2008. 
  

 8 

 SECTION 5. STOCK SUBJECT TO PLAN. 
  
 (a) Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares or treasury Shares. The
maximum aggregate number of Shares subject to the Plan shall not exceed Two Million (2,000,000), plus the additional Shares described in Sections 5(b) and (c) below. The limitation of this Section 5(a) shall be
subject to adjustment pursuant to Section 12 below. 
  
 (b)
Annual Increase in Shares. As of January 1 of each year, commencing with the year 2004, the aggregate number of Shares subject to the Plan shall automatically increase by a number equal to the lesser of: (i) One Percent (1%) of the fully
diluted outstanding shares of Stock of the Company on such date or (ii) a lesser amount determined by the Board of Directors. The aggregate number of Shares that may be issued under the Plan shall at all times be subject to adjustment pursuant to
Section 12 below. The number of Shares that are subject to Awards shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan. 
  
 (c) Additional Shares. If Restricted Shares or Shares issued upon the exercise of Options are forfeited, then such Shares shall again become available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or
terminate for any other reason before being exercised, then the corresponding Shares shall again become available for Awards under the Plan. If Stock Units are settled, then only the number of Shares (if any) actually issued in settlement of such
Stock Units shall reduce the number available under Section 5(a) above and the balance shall again become available for Awards under the Plan. If SARs are exercised, then only the number of Shares (if any) actually issued in settlement of
such SARs shall reduce the number available in Section 5(a) above and the balance shall again become available for Awards under the Plan. The foregoing notwithstanding, the aggregate number of Shares that may be issued under the Plan upon the
exercise of ISOs shall not be increased when Restricted Shares or other Shares are forfeited. 
  
 (d) Dividend Equivalents. Any dividend equivalents paid or credited under the Plan shall not be applied against the number of Shares available for Awards, whether or not such dividend equivalents are converted
into Stock Units. 
  
 SECTION 6. RESTRICTED SHARES 
  
 (a) Restricted Stock Agreement. Each grant of Restricted Shares under
the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the
Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. 
  
 (b) Payment for Awards. Subject to the following sentence, Restricted Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services. To the extent that an Award consists of newly issued Restricted 
  

 9 

 Shares, the Award recipient shall furnish consideration with a value not less than the par value of such Restricted
Shares in the form of cash, cash equivalents, or past services rendered to the Company (or a Parent or Subsidiary), as the Committee may determine. 
  
 (c) Vesting. Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated vesting in the event of the Participant’s death, Total and Permanent Disability or retirement or other events.
The Committee may determine, at the time of granting Restricted Shares or thereafter, that all or part of such Restricted Shares shall become vested in the event that a Change in Control occurs with respect to the Company. 
  
 (d) Voting and Dividend Rights. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Stock Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. 
  
 SECTION 7. OTHER TERMS AND CONDITIONS OF AWARDS OR SALES. 
  
 (a) Duration of Offers and Nontransferability of Rights. Except as otherwise provided by the Committee, any right to
acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Offeree thirty (30) days after the grant of such right was communicated to him by the Committee. 
  
 (b) Purchase Price. The Purchase Price shall be determined by the
Committee at its sole discretion. The Purchase Price shall be payable in one of the forms described in Section 6(b) above, as determined by the Committee. 
  
 (c) Withholding Taxes. As a condition to the purchase of Shares, the Offeree shall make such arrangements as the
Committee may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such purchase. 
  
 (d) Restrictions on Transfer of Shares. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any general restrictions that may
apply to all holders of Shares. 
  
 SECTION 8. TERMS AND CONDITIONS OF OPTIONS.

  
 (a) Stock Option Agreement. Each grant of an
Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are
not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The provisions of the various Stock Option

  

 10 

 
Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee’s other
compensation. A Stock Option Agreement may provide that a new Option will be granted automatically to the Optionee when he or she exercises a prior Option and pays the Exercise Price in a form described in Section 9 below. 
  
 (b) Number of Shares. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 12 below. 
  
 (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than One Hundred
Percent (100%) of the Fair Market Value of a Share on the date of grant (One Hundred Ten Percent (110%) for Employees as described in Section 4(d) above). In no event shall the Exercise Price of an NSO be less than the par value of a Share.
Subject to the foregoing in this Section 8(c), the Exercise Price under any Option shall be determined by the Committee at its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 9 below.
Notwithstanding the foregoing, an Option may be granted with an Exercise Price lower than that prescribed in this Section 8(c) pursuant to a merger or other corporation transaction as contemplated by Section 424(a) of the Code. 
  
 (d) Withholding Taxes. As a condition to the exercise of an Option,
the Optionee shall make such arrangements as the Committee may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as
the Committee may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. 
  
 (e) Exercisability and Term. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided, however, that the term of an ISO shall in no event exceed ten (10) years from
the date of grant (five (5) years for Employees described in Section 4(d) above). A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability, or retirement or other events and may
provide for expiration prior to the end of its term in the event of the termination of the Optionee’s service. Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the
related SARs are forfeited. Subject to the foregoing in this Section 8(e), the Committee at its sole discretion shall determine when all or any installment of an Option is to become exercisable and when an Option is to expire. 
  
 (f) Exercise of Options Upon Termination of Service. Each Stock Option
Agreement shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service with the Company, a Parent or Subsidiary, and the right to exercise the Option of any
executors or administrators of the Optionee’s estate or any person who has acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions shall be determined at the sole discretion of the Committee, need not be
uniform 
  

 11 

 
among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. 
  
 (g) Effect of Change in Control. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Shares subject to such Option in the event that a Change in Control occurs with respect to the Company. 
  
 (h) Leaves of Absence. An Employee’s Service shall cease when
such Employee ceases to be actively employed by, or a consultant or adviser to, the Company (or a Parent or Subsidiary) as determined in the sole discretion of the Committee. For purposes of Options, Service does not terminate when an Employee goes
on a bona fide leave of absence, that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, for purposes of determining
whether an Option is entitled to ISO status, an Employee’s Service will be treated as terminating ninety (90) days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a
contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Committee determines which leaves count toward Service, and when Service terminates for all purposes under the Plan.

  
 (i) No Rights as a Stockholder. An Optionee, or a
transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by his or her Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in
Section 12 below. 
  
 (j) Modification, Extension and
Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding options (including, without limitation, repricing the exercise price with respect to any such option) or may accept the cancellation of
outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such Option. 
  
 (k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights
of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may
apply to all holders of Shares. 
  
 (l) Buyout Provisions.
The Committee may at any time (i) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (ii) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon
such terms and conditions as the Committee shall establish. 
  

 12 

 SECTION 9. PAYMENT FOR SHARES. 
  
 (a) General Rule. The entire Exercise Price of Shares issued under the Plan shall be payable in lawful money of the
United States of America at the time when such Shares are purchased, except as provided in Sections 9(b) through 9(g) below. 
  
 (b) Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may be made all or in part by surrendering, or attesting
to the ownership of, Shares which have already been owned by the Optionee or his or her representative for more than six (6) months. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.
The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for
financial reporting purposes. 
  
 (c) Services Rendered. At
the discretion of the Committee, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or Subsidiary prior to the award. If Shares are awarded without the payment of a Purchase Price in cash, the
Committee shall make a determination (at the time of the award) of the value of the services rendered by the Offeree and the sufficiency of the consideration to meet the requirements of Section 6(b) above. 
  
 (d) Cashless Exercise. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the
aggregate Exercise Price. 
  
 (e) Exercise/Pledge. To the
extent that a Stock Option Agreement so provides, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Shares, as security for a loan, and to
deliver all or part of the loan proceeds to the Company in payment of the aggregate Exercise Price. 
  
 (f) Promissory Note. To the extent permitted by law, and to the extent that a Stock Option Agreement so provides, payment may be made all or in
part by delivering (on a form prescribed by the Company) a full-recourse promissory note. However, the par value of the Common Shares being purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents. 
  
 (g) Other Forms of Payment. To the extent that a Stock Option
Agreement so provides, payment may be made in any other form that is consistent with applicable laws, regulations and rules. 
  
 SECTION 10. STOCK APPRECIATION RIGHTS. 
  
 (a) SAR Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with 

  

 13 

 
the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction
in the Optionee’s other compensation. 
  
 (b) Number of
Shares. Each SAR Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such number in accordance with Section 12 below. 
  
 (c) Exercise Price. Each SAR Agreement shall specify the Exercise Price. A SAR Agreement may specify an Exercise
Price that varies in accordance with a predetermined formula while the SAR is outstanding. 
  
 (d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR. A SAR Agreement
may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s
service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in
an NSO at the time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control. 
  
 (e) Effect of Change in Control. The Committee may determine, at the time of granting a SAR or thereafter, that such SAR shall become fully
exercisable as to all Shares subject to such SAR in the event that a Change in Control occurs with respect to the Company. 
  
 (f) Exercise of SARs. In the discretion of the Committee, a SAR Agreement may provide that, if, on the date when a SAR expires, the Exercise Price
under such SAR is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of such date with respect to such portion. Upon exercise
of a SAR, the Optionee (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (i) Shares, (ii) cash or (iii) a combination of Shares and cash, as the Committee shall determine. The amount of cash
and/or the Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price. 

 
 (g) Modification or Assumption of SARs. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding SARs (including, without limitation, changing the exercise price with respect thereto) or may accept the cancellation of outstanding SARs (whether granted by the Company or by another
issuer) in return for the grant of new SARs for the same or a different number of shares and at the same or a different exercise price. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the recipient, alter or
impair his or her rights or obligations under such SAR. 
  

 14 

 SECTION 11. STOCK UNITS. 
  

(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the recipient and the
Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Stock Unit Agreements entered into under the Plan need not be
identical. Stock Units may be granted in consideration of a reduction in the recipient’s other compensation. 
  
 (b) Payment for Awards. To the extent that an Award is granted in the form of Stock Units, no cash consideration shall be required of the Award
recipients. 
  
 (c) Vesting Conditions. Each Award of Stock
Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated vesting in the event of the
Participant’s death, disability or retirement or other events. The Committee may determine, at the time of granting Stock Units or thereafter, that all or part of such Stock Units shall become vested in the event that a Change in Control occurs
with respect to the Company. 
  
 (d) Voting and Dividend
Rights. The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles
the holder to be credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form
of cash, in the form of Shares, or in a combination of both. Prior to distribution, any dividend equivalents which are not paid shall be subject to the same conditions and restrictions (including without limitation, any forfeiture conditions) as the
Stock Units to which they attach. 
  
 (e) Form and Time of
Settlement of Stock Units. Settlement of vested Stock Units may be made in the form of (i) cash, (ii) Shares or (iii) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger
or smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a
series of trading days. Vested Stock Units may be settled in a lump sum or installments. The distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to
any later date. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section
12 below. 
  
 (f) Death of Recipient. Any Stock Units
Award that becomes payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by
filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award 

  

 15 

 
recipient’s death. If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any Stock Units Award that
becomes payable after the recipient’s death shall be distributed to the recipient’s estate. 
  
 (g) Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units
represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement. 
  
 SECTION 12. ADJUSTMENT OF SHARES. 
  
 (a) Adjustments. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a
spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of: 
  
 (i) The number of Shares available for future Awards under Section 5 above; 
  
 (ii) The limitations on the number of Shares that may be
granted under this Plan (including the limitations set forth in Section 4(c) above); 
  
 (iii) The number of Shares covered by each outstanding Option and SAR; 
  
 (iv) The Exercise Price under each outstanding Option and SAR; or 
  
 (v) The number of Stock Units included in any prior Award
which has not yet been settled. 
  
 Except as provided in this Section 12,
a Participant shall have no rights by reason of any issue by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or
any other increase or decrease in the number of shares of stock of any class. 
  
 (b) Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company. 

 
 (c) Reorganizations. In the event that the Company is a party to a
merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement shall provide for: 
  
 (i) The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; 
  
 (ii) The assumption of the outstanding Awards by the
surviving corporation or its parent or subsidiary; 
  

 16 

 (iii) The substitution by the surviving corporation or its parent or subsidiary of its
own awards for the outstanding Awards with substantially the same terms as the outstanding Awards; 
  
 (iv) Full exercisability or vesting and accelerated expiration of the outstanding Awards; or 
  
 (v) Settlement of the full value of the outstanding Awards
in cash or cash equivalents followed by cancellation of such Awards. 
  
 (d) Reservation of Rights. Except as provided in this Section 12, an Optionee or Offeree shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any
other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 
  
 SECTION 13. DEFERRAL OF AWARDS. 
  
 The Committee (in its sole discretion) may permit a Participant to: 
  

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

  

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

  

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

  
 A deferred compensation
account established under this Section 13 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is established shall have no rights other than those of a
general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the
deferral or conversion of Awards is permitted, the 

  

 17 

 
Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such Awards, including (without limitation) the settlement of
deferred compensation accounts established under this Section 13. 
  
 SECTION 14. AWARDS UNDER OTHER PLANS. 
  
 The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Shares issued under this Plan. Such Shares shall be treated for all purposes under the Plan like Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Shares available under Section
5 above. 
  
 SECTION 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

  
 (a) Effective Date. No provision of this
Section 15 shall be effective unless and until the Board of Directors has determined to implement such provision. 
  
 (b) Right of Board to Establish Fixed Formula. The Board shall have the right to establish fixed formula grants of Awards for outside directors in
its discretion. 
  
 (c) Elections to Receive NSOs, Restricted
Shares or Stock Units. In the event the Company has in effect any cash retention policy, an Outside Director may elect to receive his or her annual retainer payments and/or meeting fees, if any, from the Company in the form of cash, NSOs,
Restricted Shares or Stock Units, or a combination thereof, as determined by the Board of Directors. Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan. An election under this Section 15 shall be filed with the
Company on the prescribed form. 
  
 (d) Number and Terms of
NSOs, Restricted Shares or Stock Units. The number of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees, if any, that would otherwise be paid in cash shall be calculated in a
manner determined by the Board of Directors. The terms of such NSOs, Restricted Shares or Stock Units shall also be determined by the Board of Directors. 
  
 SECTION 16. LEGAL AND REGULATORY REQUIREMENTS. 
  
 Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange on which the Company’s securities may
then be listed, and the Company has obtained the approval or favorable ruling from any governmental agency which the Company determines is necessary or advisable. 
  
 SECTION 17. WITHHOLDING TAXES. 
  
 (a) General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The 

  

 18 

 
Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied. 
  
 (b) Share Withholding. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her, or by surrendering all or a portion of any Shares that he or she
previously acquired and has held for at least six (6) months; provided, however, the Participant may not have Shares withheld to satisfy withholding or income tax obligations in excess of the minimum legally required obligations. Such
Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. 
  
 SECTION 18. NO EMPLOYMENT RIGHTS. 
  
 No provision of the Plan, nor any right or Option granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee. The Company, its Parents and its
Subsidiaries reserve the right to terminate any person’s Service at any time and for any or no reason, with or without notice. 
  
 SECTION 19. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan, as set forth herein, shall terminate automatically on the date ten years from the effective date of this Plan and
may be terminated on any earlier date pursuant to Section 19(b) below. 
  
 (b) Right to Amend or Terminate the Plan. The Board of Directors may amend the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be
materially impaired by such amendment, except with consent of the person to whom the Award was granted. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws,
regulations or rules. 
  
 (c) Effect of Amendment or
Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Award granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share
previously issued or any Award previously granted under the Plan. 
  

 19 

 SECTION 20. EXECUTION. 
  

To record the adoption of the Plan by the Board of Directors effective as of
                            , 2003, the Company has caused its authorized officer to execute the same.

  

	 XCEL PHARMACEUTICALS, INC .
 a Delaware corporation

		
	 By
	 	  

	 	 	 Name:
 Title:

  

 20

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