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EXHIBIT 10.35  

 
 

VALENTIS, INC.
  
    AMENDED AND RESTATED
  
    1998 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
  
    Adopted by the Board of Directors September 16, 1998
  Approved By Stockholders
December 8, 1998
  
    Amended and Restated by the Board of Directors March 13, 2002
  
    Effective Date: December 8, 1998
  Termination Date: None    
  

1.    PURPOSES.  

        (a)    Eligible Option Recipients. The persons eligible to receive Options are
the Non-Employee Directors of the Company. 

        (b)    Available Options. The purpose of the Plan is to provide a means by which
Non-Employee Directors may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Nonstatutory Stock Options. 

        (c)    General Purpose. The Company, by means of the Plan, seeks to retain the
services of its Non-Employee Directors, to secure and retain the services of new Non-Employee Directors and to
provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates. 

2.    DEFINITIONS.  

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

        (b)    "Annual Grant" means an Option granted annually to all
Non-Employee Directors who meet the specified criteria pursuant to subsection 6(b) of the Plan. 

        (c)    "Annual Meeting" means the annual meeting of the stockholders of the
Company. 

        (d)    "Board" means the Board of Directors of the Company. 

        (e)    "Code" means the Internal Revenue Code of 1986, as amended. 

        (f)    "Common Stock" means the common stock of the Company. 

        (g)    "Company" means Valentis, Inc. (formerly Megabios Corp.), a
Delaware corporation. 

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

        (i)    "Continuous Service" means that the Optionholder's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Optionholder's
Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionholder renders service to the Company or an Affiliate as an Employee, Consultant 

 

or Director or a change in the entity for which the Optionholder renders such service, provided that there is no interruption or termination of the Optionholder's Continuous Service. For example, a
change in status from a Non-Employee Director of the Company to a Consultant of an Affiliate or an Employee of the Company will not constitute an interruption of Continuous Service. The
Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any other personal leave. 

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

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

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

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

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

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

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

        (o)    "Initial Grant" means an Option granted to a Non-Employee
Director who meets the specified criteria pursuant to subsection 6(a) of the Plan. 

        (p)    "Non-Employee Director" means a Director who is not employed
by the Company or an Affiliate. 

        (q)    "Nonstatutory Stock Option" means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

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

        (s)    "Option" means a Nonstatutory Stock Option granted pursuant to the Plan.

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

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

        (v)    "Plan" means this Amended and Restated Valentis, Inc. 1998
Non-Employee Directors' Stock Option Plan. 

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

        (x)    "Securities Act" means the Securities Act of 1933, as amended. 

3.    ADMINISTRATION.  

        (a)    Administration by Board. The Board shall administer the Plan. The Board
may not delegate administration of the Plan to a committee. 

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

        (i)    To determine the provisions of each Option to the extent not specified in the Plan. 

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

        (iii) To amend the Plan or an Option as provided in Section 12. 

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

4.    SHARES SUBJECT TO THE PLAN.  

        (a)    Share Reserve. Subject to the provisions of Section 11 relating to
adjustments upon changes in stock, the stock that may be issued pursuant to Options shall not exceed in the aggregate four hundred thousand (400,000) shares of Common Stock. 

        (b)    Reversion of Shares to the Share Reserve. If any Option shall for any
reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the stock not acquired under such Option shall revert to and again become available for issuance under
the Plan. 

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

5.    ELIGIBILITY.  

        Nondiscretionary grants of Options, as set forth in Section 6, shall be made under the Plan to all Non-Employee Directors. 

6.    NON-DISCRETIONARY GRANTS.  

        Without any further action of the Board, each Non-Employee Director shall be granted the following Options: 

        (a)    Initial Grants. After the date of approval of the Plan by the Board, each
person who is elected or appointed for the first time to be a Non-Employee Director automatically shall, upon the date of his or her initial election or appointment to be a
Non-Employee Director by the Board or stockholders of the Company, be granted an Initial Grant to purchase twenty-five thousand (25,000) shares of Common Stock on the terms and
conditions set forth herein. 

        (b)    Annual Grants. On the day following each Annual Meeting commencing with
the Annual Meeting in 1998, each person who is then a Non-Employee Director automatically shall be granted an 

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Annual Grant to purchase ten thousand (10,000) shares of Common Stock on the terms and conditions set forth herein. 

7.    OPTION PROVISIONS.  

        Each Option shall be in such form and shall contain such terms and conditions as required by the Plan. Each Option shall contain such additional terms and
conditions, not inconsistent with the Plan, as the
Board shall deem appropriate. Each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: 

        (a)    Term. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted. 

        (b)    Exercise Price. The exercise price of each Option shall be no less than
one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price
lower than that set forth in the preceding sentence, including where such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of
Section 424(a) of the Code, if such Option is approved by the holders of a majority of the shares of common stock of the Company present and entitled to vote at a duly convened meeting of
shareholders. 

        (c)    Consideration. The purchase price of stock acquired pursuant to an Option
may be paid, to the extent permitted by applicable statutes and regulations and specified in the Option Agreement, in any combination of (i) cash or check; (ii) delivery to the Company
of other Common Stock; (iii) deferred payment; or (iv) any other form of legal consideration that may be acceptable to the Board and provided in the Option Agreement; provided, however,
that at any time that the Company is incorporated in Delaware, payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment. In
the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the market rate of interest that is sufficient to avoid the treatment as interest,
under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. 

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

        (e)    Vesting Generally. Options shall vest and become exercisable as follows: 

        (i)    Initial Grants shall provide for vesting of 1/4th of the shares 12 months after the date of the
grant and 1/48th of the shares each month thereafter over the next 36 months. 

        (ii)  Annual Grants shall provide for vesting of 1/12th of the shares each month after the date of the grant. 

        (f)    Termination of Continuous Service. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise it
as of the date of termination) but only within such period of time ending on the earlier of (i) the date twelve (12) months following the termination of the Optionholder's Continuous
Service, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder 

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does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate. 

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

        (h)    Death of Optionholder. In the event an Optionholder's Continuous Service
terminates as a result of the Optionholder's death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise the Option as of the date of death) by the Optionholder's
estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder's death, but only within the period
ending on the earlier of (1) the date eighteen (18) months following the date of death or (2) the expiration of the term of such Option as set forth in the Option Agreement. If,
after death, the Option is not exercised within the time specified herein, the Option shall terminate. 

8.    COVENANTS OF THE COMPANY.  

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

        (b)    Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Options and to issue and sell shares of Common Stock upon exercise of the Options;
provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Option or any stock issued or issuable pursuant to any such Option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such Options
unless and until such authority is obtained. 

9.    USE OF PROCEEDS FROM STOCK.  

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

10.  MISCELLANEOUS.  

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

        (b)    No Service Rights. Nothing in the Plan or any instrument executed or
Option granted pursuant thereto shall confer upon any Optionholder any right to continue to serve the Company as a Non-employee Director or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's
agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the
state in which the Company or the Affiliate is incorporated, as the case may be. 

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

        (d)    Withholding Obligations. The Optionholder may satisfy any federal, state
or local tax withholding obligation relating to the exercise or acquisition of stock under an Option by any of the following means (in addition to the Company's right to withhold from any compensation
paid to the Optionholder by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold share from the shares of the Common
Stock otherwise issuable to the Optionholder as a result of the exercise or acquisition of stock under the Option; or (iii) delivering to the Company owned and unencumbered shares of the Common
Stock. 

11.  ADJUSTMENTS UPON CHANGES IN STOCK.  

        (a)    Capitalization Adjustments. If any change is made in the stock subject to
the Plan, or subject to any Option, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by
the Company), the Plan will be appropriately adjusted in the classes(es) and maximum number of securities subject both to the Plan pursuant to subsection 4(a) and to the nondiscretionary Options
specified in Section 5, and the outstanding Options will be appropriately adjusted in the class(es) and number of securities and price per share of stock subject to such outstanding Options.
The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.) 

        (b)    Dissolution or Liquidation. In the event of a dissolution or liquidation
of the Company, then all outstanding Options shall terminate immediately prior to such event. 

        (c)    Change of Control. In the event of (1) a consolidation or merger
of the Company with our into any other entity or person; (2) any other corporate reorganization in which the Company shall not be the continuing or surviving entity; (3) any transaction
or series of related transactions by the Company in which in excess of 50% of the Company's voting power is transferred; or (4) any sale, lease, license or other disposition of all or
substantially all of the assets of the Company, then any surviving corporation or acquiring corporation shall assume any Options outstanding under the Plan or shall substitute similar
Options(including an option to acquire the same consideration paid to the stockholders in the transaction described in this subsection 11(c)) for those outstanding under the Plan. In the vent any
surviving corporation or acquiring corporation refuses to assume such Options or to 

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substitute similar Options for those outstanding under the Plan, then with respect to Options held by Optionholders whose Continuous Service has not terminated, the vesting of such Options shall be
accelerated in full, and the Options shall terminate if not exercised at or prior to such event. With respect to any other Options outstanding under the Plan, such Options shall terminate if not
exercised prior to such event. 

12.  AMENDMENT OF THE PLAN AND OPTIONS.  

        (a)    Amendment of Plan. The Board at any time, and from time to time, may
amend the Plan. However, (i) except as provided in Section 11 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the
Company to the extent stockholder approval is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or securities exchange listing requirements, and (2) no
amendment to the minimum price provision of Section 7(b) and no amendment to Section 12(e) shall be effective unless approved by the holders of a majority of the shares of common stock
of the Company present and entitled to vote at a duly convened meeting of shareholders. 

        (b)    Stockholder Approval. The Board may, in its sole discretion, submit any
other amendment to the Plan for stockholder approval. 

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

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

        (e)    Repricing Prohibited. Notwithstanding any provision in this Plan to the
contrary, unless approved by the holders of a majority of the shares of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders, no Option may be amended to
reduce the price per share of the shares subject to such Option below the exercise price as of the date the Option is granted. In addition, unless approved by the holders of a majority of the shares
of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders, no Option may be granted in exchange for, or in connection with, the cancellation or surrender
of an Option having a higher exercise price or less favorable vesting schedule. 

13.  TERMINATION OR SUSPENSION OF THE PLAN.  

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

        (b)    No Impairment of Rights. Suspension or termination of the Plan shall not
impair rights and obligations under any Option granted while the Plan is in effect except with the written consent of the Optionholder. 

14.  EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective on the date the Plan is adopted by the Board but no Option shall be exercised unless and until the Plan has been approved by the
stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 

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15.  CHOICE OF LAW.  

        All questions concerning the construction, validity and interpretation of this Plan shall be governed by the law of the State of California, without regard to
such state's conflict of laws rules. 

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VALENTIS, INC. AMENDED AND RESTATED 1998 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN Adopted by the Board of Directors September 16, 1998 Approved By Stockholders December 8, 1998 Amended and Restated by the Board
of Directors March 13, 2002 Effective Date: December 8, 1998 Termination Date: NoneQuickLinks
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EXHIBIT 10.36  

 
 

VALENTIS, INC.
  
    AMENDED AND RESTATED
  2001 NONSTATUTORY INCENTIVE PLAN
  
    ADOPTED MARCH 21, 2001
  AMENDED MARCH 13, 2002    
  

1.    PURPOSES.  

        (a)    Eligible Stock Award Recipients. Only Eligible Participants may receive
Stock Awards under this Plan. 

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

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

2.    DEFINITIONS.  

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

        (b)    "Board" means the Board of Directors of the Company. 

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

        (d)    "Committee" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c). 

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

        (f)    "Company" means Valentis, Inc., a Delaware corporation. 

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

        (h)    "Continuous Service" means that the Holder's service with the Company or
an Affiliate, whether as an Employee or Consultant, is not interrupted or terminated. The Holder's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity
in which the Holder renders service to the Company or an Affiliate as an Employee or Consultant or a change in the entity for which the Holder renders such service, provided that there is no
interruption or termination of the Holder's service to the Company or an Affiliate. For example, a change in status without interruption from an Employee of the Company to a Consultant of an Affiliate
will not constitute an interruption of Continuous Service. The Board or the chief executive officer of the 

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Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave. 

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

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

        (k)    "Eligible Participant"
means any Employee or Consultant; provided, however, that except as provided in the following sentence, no Employee or Consultant who is a Director or an Officer may be granted Stock Awards under this
Plan. Notwithstanding the preceding sentence, an Officer may be an Eligible Participant if he or she is granted a Stock Award in connection with his or her initial commencement of employment with the
Company and such grant is an essential inducement to his or her entering into a contract of employment with the Company.

        (l)    "Employee" means any person employed by the Company or an Affiliate.

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

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

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

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

        (o)    "Holder" means a person to whom a Stock Award is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Stock Award. 

        (p)    "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. Incentive Stock Options may not be granted under the Plan. 

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

        (r)    "Officer" means a person who is either (i) an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder or (ii) an officer of the Company within the meaning of
Section 4310(c)(25)(G)(i) of the NASD Manual and Notices to Members (the "NASD Manual"), or any successor provision thereto. 

        (s)    "Option" means a Nonstatutory Stock Option granted pursuant to the Plan.

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

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

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        (v)    "Plan" means this Valentis, Inc. Amended and Restated 2001
Nonstatutory Incentive Plan. 

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

        (x)    "Securities Act" means the Securities Act of 1933, as amended. 

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

        (z)    "Stock Award Agreement" means a written agreement between the Company and
a Holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant (including a stock bonus agreement or restricted stock purchase agreement). Each Stock Award Agreement
shall be subject to the terms and conditions of the Plan. 

3.    ADMINISTRATION.  

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

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

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

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

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

        (iv)  To terminate or suspend the Plan as provided in Section 13. 

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

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

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

4.    SHARES SUBJECT TO THE PLAN.  

        (a)    Share Reserve. Subject to the provisions of Section 11 relating to
adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate three million (3,000,000) shares of Common Stock. 

        (b)    Reversion of Shares to the Share Reserve. If any Stock Award shall for
any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become
available for issuance under the Plan. 

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

5.    ELIGIBILITY.  

        (a)    Eligibility for Specific Stock Awards. Stock Awards may be granted only
to Eligible Participants. 

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

6.    OPTION PROVISIONS.  

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

        (a)    Option Exercise Price. The exercise price of each Nonstatutory Stock
Option shall be determined by the Board or Committee, as applicable, in their sole discretion; provided, however, that unless approved by the holders of
a majority of the shares of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders, the exercise price shall not be less than one hundred per cent (100%)
of the Fair Market Value of the stock subject to the Option on the date the option is granted. 

        (b)    Consideration. The purchase price of Common Stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash (or cash equivalent) at the time the Option is exercised or (ii) at the
discretion of the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock,
(2) according to a deferred payment or other similar arrangement with the Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board. Unless
otherwise specifically provided in the Option, the purchase price of Common Stock 

4

 

acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). At any time that
the Company is incorporated in Delaware, payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment. 

        In
the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at no less than a market rate of interest that is sufficient to avoid
the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. 

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

        (d)    Vesting Generally. The total number of shares of Common Stock subject to
an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. Notwithstanding anything in this Plan to the contrary, under no
circumstances shall an Option be exercisable later than ten years after its date of grant. The Option may be subject to further terms and conditions on the time or times when it may be exercised
(which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(d) are subject to
any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. 

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

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

        (g)    Disability of Optionholder. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as
of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such 

5

 

termination (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination,
the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate. 

        (h)    Death of Optionholder. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the
Optionholder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder's death pursuant to
subsection 6(e) or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in
the Option Agreement) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the
Option shall terminate. 

        (i)    Early Exercise. The Option may, but need not, include a provision whereby
the Optionholder may elect at any time before the Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to
the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be
appropriate. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial
accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option. 

7.    PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.  

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

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

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

      (iii)  Termination of Holder's Continuous Service. In the event a Holder's
Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Holder which have not vested as of the date of termination under the terms of the stock
bonus agreement. 

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

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

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

          (i)  Purchase Price. The purchase price under each restricted stock purchase
agreement shall be such amount as the Board shall determine and designate in such restricted stock purchase agreement; provided, however, that unless
approved by the holders of a majority of the shares of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders, the purchase price shall not be less than
one hundred per cent (100%) of the Fair Market Value of the stock subject to the restricted stock purchase agreement on the date of the restricted stock purchase agreement. 

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

      (iii)  Vesting. Shares of Common Stock acquired under the restricted stock
purchase agreement shall be subject to a share repurchase option in favor of the Company pursuant to a vesting schedule to be determined by the Board in accordance with the following guidelines:
(A) the vesting period for shares of Common Stock acquired under restricted stock purchase agreements shall be no less than three (3) years unless based upon performance milestones, in
which event the vesting period shall be no less than one (1) year; and (B) notwithstanding the provisions of Section 10(a), the Board may not accelerate such vesting except under
extraordinary circumstances, such as the death, disability or divorce of the Holder, or a change in corporate structure of the Company. 

        (iv)  Termination of Holder's Continuous Service. In the event a Holder's
Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Holder which have not vested as of the date of termination under
the terms of the restricted stock purchase agreement. 

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

8.    COVENANTS OF THE COMPANY.  

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

        (b)    Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock
Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful 

7

 

issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such
authority is obtained. 

9.    USE OF PROCEEDS FROM STOCK.  

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

10.  MISCELLANEOUS.  

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

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

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

        (d)    Investment Assurances. The Company may require a Holder, as a condition
of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Holder's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that
the Holder is acquiring Common
Stock subject to the Stock Award for the Holder's own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the
Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock. 

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

8

 

to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock. 

11.  ADJUSTMENTS UPON CHANGES IN STOCK.  

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

        (b)    Dissolution or Liquidation. In the event of a dissolution or liquidation
of the Company, then all outstanding Stock Awards shall terminate immediately prior to such event. 

        (c)    Change of Control. (i) Subject to clause (ii) below, in the
event of a Change of Control, to the extent permitted by law, any surviving corporation or acquiring corporation may assume any Stock Awards outstanding under the Plan or substitute similar stock
awards (including awards to acquire the same consideration paid to the stockholders in the Change of Control) for those outstanding under the Plan. In the event any surviving corporation or acquiring
corporation does not assume such Stock Awards or substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Holders whose Continuous Service has
not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall terminate if
not exercised (if applicable) at or prior to such event. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to
such event. 

        (ii)  In
the event of a Change of Control not approved by the Board, each outstanding Stock Award under the Plan shall become fully vested, and the Company's right of
repurchase shall lapse with respect to shares received upon exercise of a Stock Award prior to full vesting, notwithstanding the terms of the Stock Award or any early exercise stock purchase
agreement, immediately prior to the consummation of such Change of Control. 

        For
purposes of this Plan, "Change of Control" means: (i) a sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or consolidation in which shareholders immediately before the merger or consolidation have, immediately after the merger or consolidation, equal or
greater stock voting power); (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form of securities, cash or otherwise (other than a reverse merger in which stockholders immediately before the merger have, immediately
after the merger, greater stock voting power); or (iv) any transaction or series of related transactions in which in excess of 50% of the Company's voting power is transferred. 

12.  AMENDMENT OF THE PLAN AND STOCK AWARDS.  

        (a)    Amendment of Plan. The Board at any time, and from time to time, may
amend the Plan; provided, however, that no amendment to the minimum price provisions of Section 6(a) or 7(b) and no amendment to
Section 12(e) shall be effective unless approved by the holders of a majority of the 

9

 

shares of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders. 

        (b)    Contemplated Amendments. It is expressly contemplated that, subject to
Section 12(a) above, the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under
the provisions of the Code. 

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

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

        (e)    Repricing Prohibited. Notwithstanding any provision in this Plan to the
contrary, unless approved by the holders of a majority of the shares of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders, no Stock Award may be
amended to reduce the price per share of the shares subject to such Stock Award below the exercise or purchase price as of the date the Stock Award is granted. In addition, unless approved by the
holders of a majority of the shares of common stock of the Company present and entitled to vote at a duly convened meeting of shareholders, no Stock Award may be granted in exchange for, or in
connection with, the cancellation or surrender of a Stock Award having a higher option or exercise or purchase price or less favorable vesting schedule. 

13.  TERMINATION OR SUSPENSION OF THE PLAN.  

        (a)    Plan Term. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated. 

        (b)    No Impairment of Rights. Suspension or termination of the Plan shall not
impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the Holder. 

14.  EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective upon its adoption by the Board. 

15.  CHOICE OF LAW/INTERPRETATION.  

        The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state's
conflict of laws rules. Notwithstanding the foregoing, it is expressly intended that approval of the Company's stockholders not be required as a condition of the effectiveness of the Plan, and the
Plan's provisions shall be interpreted in a manner consistent with such intent for all purposes (including without limitation, for purposes of determining whether stockholder approval of the Plan is
necessary pursuant to the NASD Manual or any successor provisions thereto). 

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VALENTIS, INC. AMENDED AND RESTATED 2001 NONSTATUTORY INCENTIVE PLAN ADOPTED MARCH 21, 2001 AMENDED MARCH 13, 2002

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