Document:

Employment Agreement between Donald Santel and Registrant dated 10/8/03.

  
 EXHIBIT 10.3

  
 EXECUTIVE EMPLOYMENT AGREEMENT 
  
 This Executive Employment Agreement (“Agreement”) is entered
into and employment (in the below capacities) shall commence pursuant to its terms as of October 8, 2003 (the “Employment Date”), by and between CoTherix, Inc. (formerly known as Exhale Therapeutics, Inc.) a Delaware corporation
(the “Company”), and Donald Santel (the “Executive”), collectively herein the “Parties.” 
  
 WHEREAS, Executive is currently a member of the Board of Directors of the Company and has served as its President and Chief Executive Officer since April
4, 2001; 
  
 WHEREAS, the Company and Executive hereby agree that
Executive will retain his title as President, resign as Chief Executive Officer and attain the role of Chief Operating Officer, effective as of the Employment Date, under the terms of this Agreement; 
  
 WHEREAS, the Company and Executive hereby agree that the terms of this
Agreement supersede and replace in their entirety the Executive Employment Agreement between the Company and Executive, entered into as of April 4, 2001 (the “Previous Employment Agreement”); 
  
 WHEREAS, the Company desires to employ the Executive pursuant to this
Agreement in the capacities set forth below from and after the Employment Date, and the Executive desires to continue his employment with the Company from and after such date on the terms and conditions set forth below; 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and the respective
covenants and agreements of the Parties contained in this document, the Company and the Executive agree as follows: 
  
 1. Employment, Title and Duties. From the Employment Date, the Executive will serve as the Company’s President and Chief Operating Officer and
continue as a member of the Company’s Board of Directors. Executive hereby agrees that he has resigned as Chief Executive Officer of the Company, effective prior to or as of the Employment Date. The duties, authorities, powers and
responsibilities of the Executive as President and Chief Operating Officer shall be those typical for such position in the industry, as well as those that the Company’s Chief Executive Officer and Board of Directors may from time to time
reasonably assign to the Executive. The Executive shall perform faithfully and competently such services and duties during his employment and the Executive shall report to the Company’s Chief Executive Officer and Board of Directors. By signing
this Agreement, Executive confirms to the Company that Executive has no contractual commitments or other legal obligations that would prohibit Executive from performing Executive’s duties for the Company. 
  
 2. Employment Relationship. Employment with the Company is for no
specific period of time. Executive’s employment with the Company will be “at will,” meaning that either Executive or the Company may terminate Executive’s employment at any time and for any reason, with or without Cause (defined
below). Any contrary representations that may have 

  

 
been made to Executive are superseded by this Agreement. This is the full and complete agreement between Executive and the Company on this term. Although
Executive’s job duties, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of Executive’s employment may only be changed in an express
written agreement signed by Executive and a duly authorized member of the Company’s Board of Directors (other than Executive); provided, however, that the Company may not change Executive’s title without his written consent unless the
change in title occurs in connection with a Change in Control (as defined below). 
  
 3. Base Salary. For services rendered by Executive pursuant to this Agreement, Executive shall receive a base salary (“Base Salary”) at an annual rate of $235,000 as of the Employment Date. At
present, Executive shall be entitled to no additional compensation for service as a member of the Board of Directors of the Company. Executive’s Base Salary shall be reviewed no less than annually by the Board of Directors and may be increased,
but in no event shall be decreased without the Executive’s written consent. Executive’s Base Salary, less applicable deductions, shall be paid in periodic installments in accordance with the Company’s regular payroll practices.

  
 4. Bonus. The Company agrees to implement a written
bonus plan for Executive whereby Executive shall have the opportunity during each fiscal year of his employment with the Company, starting in fiscal 2004, to earn an annual bonus of up to 50% of his Base Salary (“Bonus”), upon
achievement of certain mutually agreed-upon performance goals set with the Board of Directors. The performance goals for fiscal 2004 shall be specified within two (2) months after the Employment Date and the performance goals for each succeeding
fiscal year of the Company shall be specified at least six weeks prior to the start of each such fiscal year. The determination of the Company’s Board of Directors with respect to the Bonus shall be final and binding. 
  
 5. Equity. In addition to all other compensation and benefits provided
hereunder, the Parties acknowledge and agree that, as additional incentive to Executive, Executive shall be granted, at the first meeting of the Company’s Board of Directors immediately following the closing of the Company’s Series C
Preferred Stock financing, an option to purchase 903,862 shares of Company common stock (the “Option”), which, when added to Executive’s previously granted options for 750,000 shares of Company common stock (the “Previous
Options”), will represent the right to purchase an aggregate of 2.25% of the Company’s total outstanding securities on a fully-diluted basis, assuming an investment in the Company of $55,000,000 in connection with its Series C Preferred
Stock financing. The exercise price per share of the Option shall be eleven and one-half cents ($.115) (the “Exercise Price”). The Option will be subject to the terms and conditions applicable to options granted under the Company’s
Amended and Restated 2000 Stock Plan (the “Plan”), as described in the Plan and the applicable Stock Option Agreement (which agreement shall be consistent in its terms with the terms of this Section 5). To the extent requested by the
Executive, the Option will be a nonstatutory stock option and will be immediately exercisable, but any unvested purchased shares will be subject to repurchase by the Company at the Exercise Price in the event that Executive’s service terminates
for any reason before Executive vests in those particular shares. Subject to acceleration as described below, Executive will vest in 1/48 of the Option shares upon his completion of each month of continuous employment under this Agreement following
the 

  

 
Employment Date, as described in the applicable Stock Option Agreement. If the Company is subject to a Change in Control (as defined below) and Executive is
subject to an Involuntary Termination (as defined below) (a) upon the effective date of the Change in Control or (b) within 60 days prior to the effective date of the Change in Control if on the date of the Involuntary Termination a person
authorized by the Company’s Board of Directors is in discussion with a potential acquiror or (c) within 12 months after that Change in Control, then Executive will become vested in an additional number of shares subject to the Option equal to
50% of the then unvested shares subject to the Option. 
  
 Subject
to Executive’s satisfaction and completion of the obligations described in Sections l0(a)(i), (ii) and (iii), if the Company terminates Executive’s employment under this Agreement for any reason other than Cause or Disability (both as
defined below), then the total vested number of Executive’s Option shares will be determined by adding 6 months to the number of months of employment that Executive has provided for the Company under this Agreement. In no event shall Executive
receive both the vesting acceleration described in this paragraph and the immediately preceding paragraph, and in the event that Executive’s termination would trigger vesting acceleration according to both paragraphs, Executive shall only
receive the vesting acceleration in this paragraph or the immediately preceding paragraph, whichever provides him with the most number of vested Option shares. 
  
 “Involuntary Termination” means either (a) involuntary discharge by the Company for reasons other than Cause (as
defined below) or (b) voluntary resignation following: (i) a change in Executive’s position with the Company that materially reduces Executive’s level of authorities, responsibilities, or duties without Executive’s written consent,
(ii) a reduction in Executive’s then base salary of more than 10%, or (iii) receipt of notice that Executive’s principal workplace will be relocated more than 50 miles away. 
  
 For all purposes under this Agreement, “Cause” means (a) an unauthorized use or disclosure of the Company’s
confidential information or trade secrets, which use or disclosure causes material harm to the Company, (b) a material breach of this Agreement, which Executive has not cured within thirty (30) days of written notice thereof, (c) a material failure
to comply with the Company’s written policies or rules, which Executive has not cured within thirty (30) days of written notice thereof, (d) conviction of, or entry of plea of “guilty” or “no contest” to, a felony under the
laws of the United States or any state thereof, (e) gross negligence or willful misconduct in the scope of Executive’s services to the Company, which Executive has not cured within thirty (30) days of written notice thereof, or (f) a continued
material failure to perform assigned duties as President and Chief Operating Officer of the Company after receiving written notification of such failure from the Company’s Board of Directors, which failure Executive has not cured within 30 days
of written notice thereof. The Company’s Board of Directors will determine whether Executive has cured any of the foregoing breaches or failures. 
  
 “Change in Control” means the consummation of a merger of the Company with another entity or the consummation of a sale or other disposition of
all, or substantially all, of the Company’s assets. The foregoing notwithstanding, the following transactions shall not constitute a “Change in Control”: (a) a merger of the Company, if immediately after such merger a majority of the
voting power of the securities of the continuing or surviving entity, or any direct or indirect parent corporation of such continuing or surviving entity, will be owned by the 

  

 
persons who were the Company’s stockholders immediately prior to such merger in substantially the same proportions as their ownership of the voting
power of the Company’s securities immediately prior to such merger; (b) a transaction whose sole purpose is to change the state of the Company’s incorporation; and (c) a transaction whose sole purpose is to create a holding company that
will be owned in substantially the same proportions by the persons who were the Company’s stockholders immediately before such transaction. For purposes of this definition, the term “merger” shall include a consolidation,
reorganization, acquisition or similar transaction. 
  
 6.
Indemnification; Duty to Defend; Hold Harmless. As an employee, officer, board member and agent of the Company, Executive shall continue to be fully indemnified, defended and held harmless by the Company to the fullest extent permitted by all
applicable (e.g., Delaware) law. Executive has executed the attached indemnification agreement (the “Indemnification Agreement” – Exhibit A) for executives, officers and/or directors which shall be effective beginning from the
date Executive’s Company Board membership began. Executive shall thereafter also be entitled to the benefits of any subsequent amendments thereto made for the benefit of Company’s executives, officers and/or directors. 
  
 7. Expenses. The Executive, in the performance of his duties and
responsibilities under this Agreement, shall be entitled to reimbursement by the Company for all reasonable, ordinary and necessary travel, entertainment, and other expenses incurred by the Executive during his employment and/or board membership
with the Company in accordance with the policies and procedures established by the Company; provided, however, that Executive shall properly account for such expenses in accordance with the Company’s policies and procedures and shall
timely submit accurate and complete reports of such expenses. The Executive shall endeavor to submit such reports no less frequently than once per month. 
  
 8. Present and Future Benefits. During Executive’s employment with the Company, Executive and his eligible dependents (to the fullest extent
applicable), shall also be entitled to participate in and have the full benefits of all present and future vacation, holiday, paid leave, unpaid leave, life, accident, disability, dental, vision and health plans, pension, profit-sharing and savings
plans and all other plans and benefits which the Company now or in the future from time to time makes available to any of its management executives. 
  
 9. Vacation, Sick Time and Holidays. Executive shall be entitled to such annual vacation time with full pay as the Company may provide in its
standard policies and practices for any other management executives; provided, however, that in any event Executive shall be entitled to fully-paid vacation at a minimum of fifteen (15) business days per calendar year, provided, further,
however, that the Executive shall not be entitled to accrue beyond an outstanding balance of five (5) weeks of vacation at any one time. In addition, Executive shall be entitled to all sick time and holidays provided for under the Company’s
existing and future sick time policy and regular holiday schedule. 
  
 10. Termination Payments. 
  
 (a)
Termination without Cause. Subject to (i) the prior execution of a release by the Executive, hereby attached as Exhibit B (the “Release”), (ii) Executive’s written 

  

 
resignation from the Company’s Board of Directors (unless otherwise agreed) and (iii) Executive’s return of all Company property, if the Company
terminates Executive’s employment for any reason other than Cause or Disability (as defined in Section 10(b) below), then, in addition to the acceleration of Executive’s Option under Section 5 above, the Company shall pay Executive all
Base Salary due or accrued but unpaid as of the date of termination without Cause, all accrued but unused vacation pay and the portion of his Bonus earned (to the extent that the Bonus has been earned in accordance with the applicable bonus plan),
the Company shall continue to pay Executive his then-current Base Salary on a monthly basis in accordance with the Company’s standard payroll practices for a period of six (6) months after the date of termination, and if Executive elects to
continue Executive’s health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the termination of Executive’s employment, then the Company will pay Executive’s (and all his
eligible dependents’) monthly premium under COBRA (“COBRA Premium Amount”) until the earlier of (x) the date on which Executive (or his eligible dependents) is no longer eligible for COBRA in accordance with the requirements under
COBRA and (y) the close of the six-month period following the month in which Executive’s employment termination occurs. In the event Executive chooses (including for all eligible dependents) health insurance coverage other than through COBRA,
the Company will reimburse Executive in an amount (“Other Coverage Amount”) not exceeding the COBRA Premium Amount, which amount shall be subject to applicable withholding. Executive agrees to notify the Company in the event he no longer
needs the Company’s assistance with respect to payment of his COBRA Premium Amount or the Other Coverage Amount, as applicable. 
  
 (b) Termination as a Result of Disability. Until such time as the Company offers disability insurance benefits to its senior
executives, then in the event of Executive’s Disability (as defined herein) during Executive’s employment under this Agreement, the Company shall have the right to terminate Executive’s employment under this Agreement upon thirty (30)
days prior written notice to Executive. Within ten (10) days following the termination of employment due to such Disability, the Company shall pay Executive all Base Salary due or accrued but unpaid as of the date of termination due to Disability,
all accrued but unused vacation pay, and the portion of his Bonus earned (to the extent that the Bonus has been earned in accordance with the applicable bonus plan). In addition, the Company shall continue to pay Executive’s then-current Base
Salary for six (6) months following the date of Disability, net of all proceeds of stale disability insurance received by Executive during such period. “Disability” means a physical or mental disability, the existence of which is confirmed
by a licensed health care provider selected by the Company’s Board of Directors, that has caused Executive to be unable to perform consistently and materially the essential duties of his position hereunder with or without reasonable
accommodation for a period of three (3) consecutive months, provided, that in the event that the Executive fails or refuses to submit to an examination by the health care provider selected by the Company for reasons unrelated to his
Disability within twelve (12) days of written request by the Company, and if such health care provider has been made reasonably available to the Executive for such examination, such failure or refusal shall be deemed a material breach of this
Agreement constituting “Cause,” as defined in Section 5 above if Executive has not cured the material breach within thirty (30) days of written notice thereof. In order to receive the continuation of Executive’s Base Salary, as
described in this Section 10(b), Executive must (i) execute the Release, (ii) resign from the Company’s Board of Directors and (iii) return all Company property. 
  

 (c) Termination as a Result of Death. Until such time as the Company offers life
insurance benefits to its senior executives, then in the event of the death of Executive during Executive’s employment under this Agreement, the Company, within ten (10) days of receiving notice of such death, shall pay Executive’s estate
all Base Salary due or accrued but unpaid as of the date of his death, all accrued but unused vacation pay, and the portion of his Bonus earned (to the extent that the Bonus has been earned in accordance with the applicable bonus plan). 

 
 11. Other Activities. Executive shall devote substantially all of
his working time and efforts to the business and affairs of the Company, and to the diligent and faithful performance of the duties and responsibilities duly assigned to him pursuant to this Agreement, except for vacations, holidays, weekends, and
sickness. However, the Executive may devote a reasonable amount of time to civic, community, or charitable activities and, with the prior written consent of the Board of Directors, to serve as a director of or consultant to other companies, provided
that nothing in this Section 11 shall be deemed to modify or reduce any obligations of the Executive under the Proprietary Information and Inventions Agreement referenced in Section 12 below. 
  
 12. Confidential and Proprietary Information. The Executive shall not,
without the prior written consent of the Board of Directors, disclose or use for any purpose (except in the course of his employment under this Agreement and in furtherance of the business of the Company) any confidential information, trade secrets
or proprietary data of the Company. As an express condition of the Executive’s employment with the Company, the Executive agrees to continue to abide by the Company’s Proprietary Information and Inventions Agreement that Executive signed
on September 29, 2003, attached hereto as Exhibit C. The obligations of the Executive under this Section 12 shall survive any termination of this Agreement. 
  
 13. Absence of Conflict. Executive represents and warrants that his employment by the Company, and his performance of
his obligations as described herein, shall not conflict with, and will not be constrained by, any prior employment or consulting agreement or relationship, and that any limitations on the Executive’s ability to perform as provided under this
Agreement have been disclosed in writing to the Company. 
  
 14.
Assignment. This Agreement, and all rights and obligations under this Agreement, shall be binding upon and inure to the benefit of (a) the heirs, successors, executors, administrators and assigns of Executive and b) any successor or assignee
of the Company in connection with a Change in Control or otherwise, provided that if an assignment of this Agreement is made to an assignee not in connection with a Change in Control, Executive must consent to such assignment, which consent shall
not be unreasonably withheld. Any such successor or assignee of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. Under this Agreement, “successor” means any person, firm,
corporation, or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly, acquires all or substantially all of the assets or business of the Company. Executive, however, may not delegate any of his
duties under this Agreement. 
  
 15. Notices. For purposes
of this Agreement, notices and other communications provided for in this Agreement (“Notice”), shall be in writing and shall be 

  

 
delivered personally or sent by United States certified mail, return receipt requested, postage prepaid, addressed to each party’s last known address,
or to such other address, or to the attention of such other persons, as the recipient party has previously furnished to the other party in writing in accordance with this paragraph. Such Notice shall be effective upon delivery, or three days after
it has been mailed as provided above, whichever occurs first. 
  
 16. Integration. This Agreement, Exhibits A-C, the Plan and the stock option agreement evidencing the Option and the stock option agreements evidencing the Previous Options represent the entire agreement and understanding
between the Parties as to the subject matter hereof, and supersede all prior or contemporaneous agreements, whether written or oral, including but not limited to the Previous Employment Agreement. No waiver, alteration, or modification of any of the
provisions of this Agreement shall be binding unless in writing and signed by Executive and by an authorized member of the Board of the Company (other than Executive). 
  
 17. Waiver. Executive acknowledges and agrees that he is not entitled to any benefits under the Previous Employment
Agreement, including but not limited to the termination payments described in Section 10 of the Previous Employment Agreement as a result of his change in employment status from the positions of President and Chief Executive Officer to the positions
under this Agreement of President and Chief Operating Officer and hereby waives any and all rights to any such benefits; provided, however, that Executive shall be entitled to receive any bonuses that the Company’s Board of Directors determines
that he earned with respect to the achievement of performance goals specified for fiscal 2003. Failure or delay on the part of either Party hereto to enforce any right, power or privilege under this Agreement shall not be deemed to constitute a
waiver thereof. Additionally, a waiver by either party of a breach of any promise herein by the other Party shall not operate as, or be construed to constitute, a waiver of any subsequent breach by such other Party. 
  
 18. Severability. Each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein 

 
 19. Arbitration. Executive and the Company agree to waive any
rights to a trial before a judge or jury and agree to arbitrate before a neutral arbitrator (but in the event the Parties fail to agree on a neutral arbitrator within ten business days of a Party raising the selection issue, the Parties agree to
select an arbitrator with the American Arbitration Association (“AAA”) through its selection process) any and all claims or disputes arising out of this Agreement and any and all claims arising from or relating to Executive’s
employment with the Company, including (but not limited to) claims against any current or former employee, director or agent of the Company, claims of wrongful termination, retaliation, discrimination, harassment, breach of contract, breach of the
covenant of good faith and fair dealing, defamation, invasion of privacy, fraud, misrepresentation, constructive discharge or failure to provide a leave of absence, or claims regarding commissions, stock options or bonuses, infliction of emotional
distress or unfair business practices. 
  

 The arbitrator’s decision must be written and must include the findings of fact and law that support
the decision. The arbitrator’s decision will be final and binding on both Parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator may award any remedies that would otherwise be available to
the Parties if they were to bring the dispute in court. The arbitration will be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the AAA; provided, however that the arbitrator must allow the discovery
authorized by the California Arbitration Act or the discovery that the arbitrator deems necessary for the parties to vindicate their respective claims or defenses. The arbitration will take place in San Mateo County, California or, at
Executive’s option, the county in which Executive primarily worked with the Company at the time when the arbitrable dispute or claim first arose. 
  
 The Company will bear the cost of the arbitrator’s fee and any other type of expense or cost that Executive would not be required to bear if
Executive were to bring the dispute or claim in court. Both the Company and Executive will be responsible for their own attorneys’ fees, and the arbitrator may not award attorneys’ fees unless a statute or contract at issue specifically
authorizes such an award. 
  
 The foregoing notwithstanding, this
arbitration provision does not apply to (a) workers’ compensation or unemployment insurance claims or (b) claims concerning the ownership, validity, infringement, misappropriation, disclosure, misuse or enforceability of any confidential
information, patent right, copyright, mask work, trademark or any other trade secret or intellectual property held or sought by Executive or the Company (whether or not arising under the Proprietary Information and Inventions Agreement between
Executive and the Company). 
  
 If an arbitrator or court of
competent jurisdiction (the “Neutral”) determines that any provision of this arbitration provision is illegal or unenforceable, then the Neutral shall modify or replace the language of this arbitration provision with a valid and
enforceable provision, but only to the minimum extent necessary to render this arbitration provision legal and enforceable. 
  
 20. Headings. The headings of the paragraphs contained in the Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of any provision of this Agreement. 
  
 21. Applicable Law. This Agreement shall be governed by and construed in accordance with, exclusively the laws of the State of California. 
  
 22. Counterparts. This Agreement may be executed (including by facsimile signature each of which will be treated as a valid original signature) in
any number of counterparts, none of which need contain the signature of more than one Party hereto, and each of which shall be deemed to be an original, and all of which together shall constitute a single agreement. 
  

 23. Attorneys Fees. The Company shall reimburse to Executive the reasonable attorneys Fees
incurred by Executive with respect to the negotiation and drafting of this Agreement and the documents referred to herein, up to a maximum amount of $10,000. 
  
 [Remainder of page left intentionally blank.] 
  

 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its
duly authorized representative, as of the day and year first above written. 
  

	
	 Donald Santel

	 Executive

	
	/s/    DONALD J. SANTEL        
	

  

			
	CoTherix, Inc.
		
	By:	 	/s/    W. SCOTT HARKONEN        
	 	 	

	 Name:
	 	W. Scott Harkonen
	 Title:
	 	CEO

  

 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT 
  
 The following confirms and memorializes an agreement that Exhale
Therapeutics, Inc., a Delaware corporation (the “Company”) and I (Donald Santel) have had since the commencement of my employment with the Company in any capacity and that is and has been a material part of the consideration for my
employment by Company: 
  
 1. I have not entered into, and I agree
I will not enter into, any agreement either written or oral in conflict with this Agreement or my employment with Company. I will not violate any agreement with or rights of any third party or, except as expressly authorized by Company in writing
hereafter, use or disclose my own or any third party’s confidential information or intellectual property when acting within the scope of my employment or otherwise on behalf of Company. Further, I have not retained anything containing any
confidential information of a prior employer or other third party, whether or not created by me. 
  
 2. Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, sui generis
database rights and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designs, know-how, ideas and information
made or conceived or reduced to practice, in whole or in part, by me during the term of any employment with Company to and only to the fullest extent allowed by California Labor Code Section 2870 (which is attached as Appendix A) (collectively
“Inventions”) and I will promptly disclose all Inventions to Company. I hereby make all assignments necessary to accomplish the foregoing. I shall further assist Company, at Company’s expense, to further evidence, record and perfect
such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified to be so owned or assigned. I hereby irrevocably designate and appoint Company as its agent and attorney-in-fact, coupled with an interest and with full
power of substitution, to act for and in my behalf to execute and file any document and to do all other lawfully permitted acts to further the purposes of the foregoing with the same legal force and effect as if executed by me. If anything created
by me prior to my employment relates in any way to Company’s actual or proposed business, I have listed it on Appendix B in a manner that does not violate any third party rights. Without limiting Section 1 or Company’s other rights and
remedies, if, when acting within the scope of my employment or otherwise on behalf of Company, I use or disclose my own or any third party’s confidential information or intellectual property (or if any Invention cannot be fully made, used,
reproduced, distributed and otherwise exploited without using or violating the foregoing), Company will have and I hereby grant Company a perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable right and license to exploit and
exercise all such confidential information and intellectual property rights. 
  
 3. To the extent allowed by law, paragraph 2 includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights,”
“artist’s rights,” “droit moral,” or the like (collectively “Moral Rights”). To the extent I retain any such Moral Rights under applicable law, I hereby ratify and consent to any action that may be taken with
respect to such Moral Rights by or authorized by Company and agree not to assert any Moral Rights with respect thereto,I will confirm any such ratifications, consents and agreements from time to time as requested by Company. 
  

 4. I agree that all Inventions and all other business, technical and financial information (including,
without limitation, the identity of and information relating to customers or employees) I develop, learn or obtain during the term of my employment that relate to Company or the business or demonstrably anticipated business of Company or that are
received by or for Company in confidence, constitute “Proprietary Information.” I will hold in confidence and not disclose or, except within the scope of my employment, use any Proprietary Information. However, I shall not be obligated
under this paragraph with respect to information I can document is or becomes readily publicly available without restriction through no fault of mine. Upon termination of my employment, I will promptly return to Company all items containing or
embodying Proprietary Information (including all copies), except that I may keep my personal copies of (i) my compensation records, (ii) materials distributed to shareholders generally and (iii) this Agreement. I also recognize and agree that I have
no expectation of privacy with respect to Company’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and that my activity and any files or
messages on or using any of those systems may be monitored at any time without notice. 
  
 5. Until one year after the term of my employment, I will not encourage or solicit any employee or consultant of Company to leave Company for any reason (except for the bona fide firing of Company personnel within the
scope of my employment). 
  
 6. I agree that during the term of my
employment with Company (whether or not during business hours), I will not engage in any activity that is in any way competitive with the business or demonstrably anticipated business of Company, and I will not assist any other person or
organization in competing or in preparing to compete with any business or demonstrably anticipated business of Company. 
  
 7. I agree that this Agreement is not an employment contract for any particular term and that I have the right to resign and Company has the right to
terminate my employment at will, at any time, for any or no reason, with or without cause. In addition, this Agreement does not purport to set forth all of the terms and conditions of my employment, and, as an employee of Company, I have obligations
to Company which are not set forth in this Agreement. However, the terms of this Agreement govern over any inconsistent terms and can only be changed by a subsequent written agreement signed by the President of Company. 
  
 8. I agree that my obligations under paragraphs 2, 3, 4 and 5 of this
Agreement shall continue in effect after termination of my employment, regardless of the reason or reasons for termination, and whether such termination is voluntary or involuntary on my part, and that Company is entitled to communicate my
obligations under this Agreement to any future employer or potential employer of mine. My obligations under paragraphs 2, 3 and 4 also shall be binding upon my heirs, executors, assigns, and administrators and shall inure to the benefit of Company,
it subsidiaries, successors and assigns. 
  
 9. Any dispute in the
meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of California without regard to the conflict of 

  

 2 

 
laws provisions thereof. I further agree that if one or more provisions of this Agreement are held to be illegal or unenforceable under applicable California
law, such illegal or unenforceable portion(s) shall be limited or excluded from this Agreement to the minimum extent required so that this Agreement shall otherwise remain in full force and effect and enforceable in accordance with its terms. I also
understand that any breach of this Agreement will cause irreparable harm to Company for which damages would not be a adequate remedy, and, therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other
remedies and without any requirement to post bond. 
  
 I HAVE
READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I SIGN THIS AGREEMENT VOLUNTARILY AND
FREELY, IN DUPLICATE, WITH THE UNDERSTANDING THAT THE COMPANY WILL RETAIN ONE COUNTERPART AND THE OTHER COUNTERPART WILL BE RETAINED BY ME. 
  

					
	 Sep 29, 2003
	 	 	 	 Accepted and Agreed to:

			
	  	 	 	 	/s/    DONALD J. SANTEL        
	 	 	 	 	

	 	 	 	 	 Signature

			
	 	 	 	 	Donald J. Santel
	 	 	 	 	

	 	 	 	 	 Name (Printed)

  

 3 

 APPENDIX A 
  

California Labor Code Section 2870. Application of provision providing that employee shall assign or offer to assign rights in invention to
employer. 
  
 (a) Any provision in an employment agreement
which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the
employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either; 
  
 (1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably
anticipated research or development of the employer; or 
  
 (2) Result from any work performed by the employee for his employer. 
  
 (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to
be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. 

  

 4 

 APPENDIX B 
  

PRIOR MATTERRegistrant's 2000 Stock Option Plan.

 EXHIBIT 10.4 
  
 COTHERIX, INC. 
  
 2000 STOCK PLAN 
  
 ADOPTED ON FEBRUARY 23, 2000

 AMENDED AND RESTATED ON JUNE 1, 2001,
OCTOBER 8, 2003, JANUARY 9, 2004 AND 
 FEBRUARY 12, 2004 
  

 TABLE OF CONTENTS 
  

			
	 	  	Page No.

	 SECTION 1. ESTABLISHMENT AND PURPOSE
	  	1
		
	 SECTION 2. ADMINISTRATION
	  	1
		
	 (a) Committees of the Board of Directors
	  	1
	 (b) Authority of the Board of Directors
	  	1
		
	 SECTION 3. ELIGIBILITY
	  	1
		
	 (a) General Rule
	  	1
	 (b) Ten-Percent Stockholders
	  	1
		
	 SECTION 4. STOCK SUBJECT TO PLAN
	  	2
		
	 (a) Basic Limitation
	  	2
	 (b) Additional Shares
	  	2
		
	 SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES
	  	2
		
	 (a) Stock Purchase Agreement
	  	2
	 (b) Duration of Offers and Nontransferability of Rights
	  	2
	 (c) Purchase Price
	  	2
	 (d) Withholding Taxes
	  	3
	 (e) Restrictions on Transfer of Shares and Minimum Vesting
	  	3
		
	 SECTION 6. TERMS AND CONDITIONS OF OPTIONS
	  	3
		
	 (a) Stock Option Agreement
	  	3
	 (b) Number of Shares
	  	3
	 (c) Exercise Price
	  	3
	 (d) Exercisability
	  	4
	 (e) Accelerated Exercisability
	  	4
	 (f) Basic Term
	  	4
	 (g) Termination of Service (Except by Death)
	  	4
	 (h) Leaves of Absence
	  	5
	 (i) Death of Optionee
	  	5
	 (j) Restrictions on Transfer of Shares and Minimum Vesting
	  	5
	 (k) Transferability of Options
	  	5
	 (l) Withholding Taxes
	  	6
	 (m) No Rights as a Stockholder
	  	6
	 (n) Modification, Extension and Assumption of Options
	  	6
	 (o) Stockholders Agreement and Right of First Refusal Agreement
	  	6

  

 i 

			
	 SECTION 7. PAYMENT FOR SHARES
	  	6
		
	 (a) General Rule
	  	6
	 (b) Surrender of Stock
	  	7
	 (c) Services Rendered
	  	7
	 (d) Promissory Note
	  	7
	 (e) Exercise/Sale
	  	7
	 (f) Exercise/Pledge
	  	7
		
	 SECTION 8. ADJUSTMENT OF SHARES
	  	7
		
	 (a) General
	  	7
	 (b) Mergers and Consolidations
	  	8
	 (c) Reservation of Rights
	  	8
		
	 SECTION 9. SECURITIES LAW REQUIREMENTS
	  	8
		
	 (a) General
	  	8
	 (b) Financial Reports
	  	8
		
	 SECTION 10. NO RETENTION RIGHTS
	  	9
		
	 SECTION 11. DURATION AND AMENDMENTS
	  	9
		
	 (a) Term of the Plan
	  	9
	 (b) Right to Amend or Terminate the Plan
	  	9
	 (c) Effect of Amendment or Termination
	  	9
		
	 SECTION 12. DEFINITIONS
	  	9

  

 ii 

 COTHERIX, INC. 2000 STOCK
PLAN 
  
 SECTION 1. ESTABLISHMENT AND PURPOSE.

  
 The purpose of the Plan is to offer selected persons an
opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options
to purchase Shares. Options granted under the Plan may include Nonstatutory Options as well as ISOs intended to qualify under Section 422 of the Code. 
  
 Capitalized terms are defined in Section 12. 
  
 SECTION 2. ADMINISTRATION. 
  
 (a) Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of one or
more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been
appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.

  
 (b) Authority of the Board of Directors. Subject
to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of
Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee. 
  
 SECTION 3. ELIGIBILITY. 
  
 (a) General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct
award or sale of Shares. Only Employees shall be eligible for the grant of ISOs. 
  
 (b) Ten-Percent Stockholders. A person 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 shall not be
eligible for designation as an Optionee or Purchaser unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the date of grant, (ii) the Purchase Price (if any) is at least 100% of the Fair Market Value of a Share and
(iii) in the case of an ISO, such ISO by its terms is not exercisable after the expiration of five years from the date of grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code
shall be applied. 
  

 SECTION 4. STOCK SUBJECT TO PLAN. 
  
 (a) Basic Limitation. Not more than 5,218,8111 Shares may be issued under the Plan (subject to Subsection (b) below and Section 8). The number of Shares that are subject to Options or other rights
outstanding at any time under the Plan shall not exceed the number of Shares that 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. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. 
  
 (b) Additional Shares. In the event that Shares previously issued under the Plan are reacquired by the Company pursuant to a forfeiture
provision, right of repurchase or right of first refusal, such Shares shall be added to the number of Shares then available for issuance under the Plan. However, the aggregate number of Shares issued upon the exercise of ISOs (including Shares
reacquired by the Company) shall in no event exceed 200% of the number specified in Subsection (a) above. In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion
of such Option or other right shall not reduce the number of Shares available for issuance under the Plan. 
  
 SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES. 
  
 (a) Stock Purchase Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company.
Such award or sale 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 Board of Directors deems appropriate for inclusion in
a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical. 
  
 (b) Duration of Offers and Nontransferability of Rights. Any right to acquire Shares under the Plan (other than an Option) shall
automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such
right was granted. 
  
 (c) Purchase Price. The
Purchase Price of Shares to be offered under the Plan shall not be less than 85% of the Fair Market Value of such Shares, and a higher percentage may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors shall
determine the Purchase Price at its sole discretion. The Purchase Price shall be payable in a form described in Section 7. 

	1	Reflects a 7,037,434-share increase approved by the Board of Directors on October 8, 2003; reflects the 1-for-3 stock split effective on December 9, 2003; reflects
1,500,000-share increase approved by the Board of Directors on January 9, 2004; and reflects 473,000-share increase approved by the Board of Directors on February 12, 2004. 

  

 2 

 (d) Withholding Taxes. As a condition to the purchase of Shares, the Purchaser shall make
such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase. 
  
 (e) Restrictions on Transfer of Shares and Minimum Vesting. 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 Board of Directors may determine. Such restrictions shall be set forth
in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. In the case of a Purchaser who is not an officer of the Company, an Outside Director or a Consultant:

  
 (i) Any right to repurchase the
Purchaser’s Shares at the original Purchase Price upon termination of the Purchaser’s Service shall lapse at least as rapidly as 20% per year over the five-year period commencing on the date of the award or sale of the Shares; 

 
 (ii) Any such right may be exercised only for cash or for
cancellation of indebtedness incurred in purchasing the Shares; and 
  
 (iii) Any such right may be exercised only within 90 days after the termination of the Purchaser’s Service. 
  
 SECTION 6. 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 Board of Directors 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. 
  
 (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 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. 
  

(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an ISO shall not be less than
100% of the Fair Market Value of a Share on the date of grant, and a higher percentage may be required by Section 3(b). The Exercise Price of a Nonstatutory Option shall not be less than 85% of the Fair Market Value of a Share on the date of grant,
and a higher percentage may be required by Section 3(b). Subject to the preceding two sentences, the Exercise Price under any Option shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form
described in Section 7. 
  

 3 

 (d) Exercisability. Each Stock Option Agreement shall specify the date when all or any
installment of the Option is to become exercisable. In the case of an Optionee who is not an officer of the Company, an Outside Director or a Consultant, an Option shall become exercisable at least as rapidly as 20% per year over the five-year
period commencing on the date of grant. Subject to the preceding sentence, the Board of Directors shall determine the exercisability provisions of any Stock Option Agreement at its sole discretion. 
  
 (e) Accelerated Exercisability. Unless the applicable Stock
Option Agreement provides otherwise, all of an Optionee’s Options shall become exercisable in full if (i) the Company is subject to a Change in Control before the Optionee’s Service terminates, (ii) such Options do not remain outstanding,
(iii) such Options are not assumed by the surviving corporation or its parent and (iv) the surviving corporation or its parent does not substitute options with substantially the same terms for such Options. 
  
 (f) Basic Term. The Stock Option Agreement shall specify the
term of the Option. The term shall not exceed 10 years from the date of grant, and a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to
expire. 
  
 (g) Termination of Service (Except by
Death). If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following occasions: 
  
 (i) The expiration date determined pursuant to Subsection
(f) above; 
  
 (ii) The date three months after
the termination of the Optionee’s Service for any reason other than Disability, or such later date as the Board of Directors may determine; or 
  
 (iii) The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of
Directors may determine. 
  
 The Optionee may exercise all or part of the
Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result
of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that
the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the
Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service
terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). 
  

 4 

 (h) Leaves of Absence. For purposes of Subsection (g) above, Service shall be deemed to
continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as
determined by the Company). 
  
 (i) Death of
Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates: 
  

(i) The expiration date determined pursuant to Subsection (f) above; or 
  
 (ii) The date 12 months after the Optionee’s death, or such later date as the Board of Directors may
determine. 
  
 All or part of the Optionee’s Options may be exercised at any
time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a
result of the Optionee’s death). The balance of such Options shall lapse when the Optionee dies. 
  
 (j) Restrictions on Transfer of Shares and Minimum Vesting. 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 Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition
to any restrictions that may apply to holders of Shares generally. In the case of an Optionee who is not an officer of the Company, an Outside Director or a Consultant: 
  
 (i) Any right to repurchase the Optionee’s Shares at the original Exercise Price upon termination of
the Optionee’s Service shall lapse at least as rapidly as 20% per year over the five-year period commencing on the date of the option grant; 
  
 (ii) Any such right may be exercised only for cash or for cancellation of indebtedness incurred in purchasing the Shares; and 

 
 (iii) Any such right may be exercised only within 90 days
after the later of (A) the termination of the Optionee’s Service or (B) the date of the option exercise. 
  
 (k) Transferability of Options. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii)
the laws of descent and distribution, except as provided in the next sentence. If the applicable Stock Option Agreement so provides, an NSO shall also be transferable by the Optionee by (i) a gift to a member of the Optionee’s Immediate Family
or (ii) a gift to an inter vivos or testamentary trust in which members of the Optionee’s Immediate Family have a beneficial interest of more than 50% and 

  

 5 

 
which provides that such NSO is to be transferred to the beneficiaries upon the Optionee’s death. An ISO may be exercised during the lifetime of the
Optionee only by the Optionee or by the Optionee’s guardian or legal representative. 
  
 (l) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. 
  
 (m) 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 the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. 
  
 (n) Modification, Extension and Assumption of Options. Within
the limitations of the Plan, the Board of Directors 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 Exercise Price. The foregoing notwithstanding, 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. 
  
 (o)
Stockholders Agreement and Right of First Refusal Agreement. Each Optionee or such Optionee’s representative shall deliver to the Company, at or before the time of exercising an Option, the following instruments: 
  
 (i) An executed counterpart of, or an instrument of
adherence to, the Amended and Restated Stockholders Agreement among the Company and certain stockholders and option holders of the Company, dated as of April 5, 2001, as amended, modified, supplemented or replaced from time to time, whereby the
Optionee or the Optionee’s representative agrees to become a party as an “Additional Stockholder Party” (as defined in such Agreement); and 
  
 (ii) An executed counterpart of, or an instrument of adherence to, the Amended and Restated Right of First Refusal and Co-Sale Agreement
among the Company and the “Investors” (as defined in such Agreement), dated as of April 5, 2001, as amended, modified, supplemented or replaced from time to time, whereby the Optionee or the Optionee’s representative agrees to become
a party as a “Founder” (as defined in such Agreement). 
  
 SECTION 7.
PAYMENT FOR SHARES. 
  
 (a) General Rule. The
entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7. 
  

 6 

 (b) Surrender of Stock. To the extent that a Stock Option Agreement so provides, all or any
part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair
Market Value on the date when the Option is exercised. 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 Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award.

  
 (d) Promissory Note. To the extent that a Stock
Option Agreement or Stock Purchase Agreement so provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. However, the par value of the
Shares, if newly issued, shall be paid in cash or cash equivalents. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory
note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate,
amortization requirements (if any) and other provisions of such note. 
  
 (e) Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction
to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 
  
 (f) Exercise/Pledge. To the extent that a Stock Option
Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company,
as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 
  
 SECTION 8. ADJUSTMENT OF SHARES. 
  
 (a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an
extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each
outstanding Option or (iii) the Exercise Price under each outstanding Option. 
  

 7 

 (b) Mergers and Consolidations. In the event that the Company is a party to a merger or
consolidation, outstanding Options shall be subject to the agreement of merger or consolidation. Such agreement shall provide for: 
  
 (i) The continuation of such outstanding Options by the Company (if the Company is the surviving corporation); 
  
 (ii) The assumption of the Plan and such outstanding Options
by the surviving corporation or its parent; 
  
 (iii) The substitution by the surviving corporation or its parent of options with substantially the same terms for such outstanding Options; 
  
 (iv) The full exercisability of such outstanding Options and full vesting of the Shares subject to such Options, followed by the
cancellation of such Options; or 
  
 (v) The
settlement of the full value of such outstanding Options (whether or not then exercisable) in cash or cash equivalents, followed by the cancellation of such Options. 
  
 (c) Reservation of Rights. Except as provided in this Section 8, an Optionee or Purchaser shall have no rights
by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. 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 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 9. SECURITIES
LAW REQUIREMENTS. 
  
 (a) General. Shares shall
not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are 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 or other securities market on which the Company’s securities may then be traded. 
  
 (b) Financial Reports. The Company each year shall furnish to
Optionees, Purchasers and stockholders who have received Stock under the Plan its balance sheet and income statement, unless such Optionees, Purchasers or stockholders are key Employees whose duties with the Company assure them access to equivalent
information. Such balance sheet and income statement need not be audited. 
  

 8 

 SECTION 10. NO RETENTION RIGHTS. 
  
 Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or Optionee any right
to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee,
which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 
  
 SECTION 11. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its approval by the Board of Directors, subject
to the approval of the Company’s stockholders. If the stockholders fail to approve the Plan (or the most recent increase in the number of Shares reserved under Section 4) within 12 months after its adoption by the Board of Directors, then any
grants of Options or sales or awards of Shares that have already occurred under the Plan (or in reliance on such increase) shall be rescinded, and no additional grants, sales or awards shall be made thereafter under the Plan. The Plan shall
terminate automatically 10 years after the later of (i) its adoption by the Board of Directors or (ii) the most recent increase in the number of Shares reserved under Section 4 that was approved by the Company’s stockholders. The Plan may be
terminated on any earlier date pursuant to Subsection (b) below. 
  
 (b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan which increases the number of Shares
available for issuance under the Plan (except as provided in Section 8), or which materially changes the class of persons who are eligible for the grant of ISOs, shall be subject to the approval of the Company’s stockholders. Stockholder
approval shall not be required for any other amendment of the Plan. 
  
 (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 Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan. 
  
 SECTION 12. DEFINITIONS. 
  
 (a) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time. 
  
 (b) “Change in Control” shall mean the consummation of a
merger of the Company with another entity or the consummation of a sale or other disposition of all, or substantially all, of the Company’s assets. The foregoing notwithstanding, the following transactions shall not constitute a “Change in
Control”: 
  
 (i) A merger of the Company,
if immediately after such merger a majority of the voting power of the securities of the continuing or surviving entity, or any direct or indirect parent corporation of such continuing or 

  

 9 

 
surviving entity, will be owned by the persons who were the Company’s stockholders immediately prior to such merger in substantially the same
proportions as their ownership of the voting power of the Company’s securities immediately prior to such merger; 
  
 (ii) A transaction whose sole purpose is to change the state of the Company’s incorporation; and 
  
 (iii) A transaction whose sole purpose is to create a
holding company that will be owned in substantially the same proportions by the persons who were the Company’s stockholders immediately before such transaction. 
  
 For purposes of this Subsection (b), the term “merger” shall include a consolidation or a similar reorganization. 
  
 (c) “Code” shall mean the Internal Revenue Code of 1986, as
amended. 
  
 (d) “Committee” shall mean a
committee of the Board of Directors, as described in Section 2(a). 
  
 (e) “Company” shall mean CoTherix, Inc., a Delaware corporation. 
  
 (f) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors. 
  
 (g) “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. 
  
 (h) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
  
 (i) “Exercise Price” shall mean the amount for which one
Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement. 
  
 (j) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such
determination shall be conclusive and binding on all persons. 
  
 (k) “Immediate Family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall
include adoptive relationships. 
  
 (l) “ISO”
shall mean an employee incentive stock option described in Section 422(b) of the Code. 
  

 10 

 (m) “Nonstatutory Option” shall mean a stock option not described in Sections 422(b) or
423(b) of the Code. 
  
 (n) “Option” shall mean
an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. 
  
 (o) “Optionee” shall mean a person who holds an Option. 
  
 (p) “Outside Director” shall mean a member of the Board of Directors who is not an Employee. 
  
 (q) “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 50% or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. 
  
 (r) “Plan” shall mean this CoTherix, Inc. 2000 Stock Plan. 
  
 (s) “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 Board of Directors. 
  
 (t) “Purchaser” shall mean a person to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than
upon exercise of an Option). 
  
 (u) “Service”
shall mean service as an Employee, Outside Director or Consultant. 
  
 (v) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable). 
  
 (w) “Stock” shall mean the Common Stock of the Company, with a par value of $0.001 per Share. 
  
 (x) “Stock Option Agreement” shall mean the agreement
between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option. 
  
 (y) “Stock Purchase Agreement” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that
contains the terms, conditions and restrictions pertaining to the acquisition of such Shares. 
  
 (z) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the
Plan shall be considered a Subsidiary commencing as of such date. 
  

 11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]