Document:

EXHIBIT 4.2(b) 

ENGLISH TRANSLATION
FOR INFORMATION ONLY 

APPENDIX NO. 2 TO
LEASE DATED SEPTEMBER 25, 2002 

MAISON ANTOINE BAUD, a
joint-stock company with a capital of € 3,096,336 whose registered offices are at ZI
Les Acilloux, 27, Route du Cendre, Cournon d’ Auvergne (Puy de Dôme), France
and registered in Clermont-Ferrand under the number 855 201 521, represented by Yves
Dupré, the Vice-Chairman of the Board of Directors and party to the contract and
after this simply called the Lessor

	 	On
the one part, 

AND

the Company Technomed
Medical Systems S.A. (“TMS S.A.”), Société Anonyme [French
limited company] with a capital of € 3 166 488.00, with its registered office in
VAULX EN VELIN (69120) 4, rue du Dauphiné, recorded in the Lyon Trade Registry
under the number 394 804 447, represented by Mr. Hugues de Bantel, Chairman of the Board
of Directors, duly authorised for the purpose of this document, party to the contract and
after this simply called the Lesse

	 	On
the other part, 

The background is as
follows:

ACCOUNT 

Under an
administrative decision dated September 25, 2002, in Lyons, MAISON ANTOINE BAUD leased
premises at 4, rue du Dauphiné, Vaulx en Velin, France to EDAP TMS S.A. These
premises consist of:

In Building B: parts
B1, B6-B7, parts B4-B5, part B3 and,
In Building C: part C3 of the ground floor for
archiving.

The whole area covers
approximately 3 325 square metres for offices and 410 square meters for archives.

This said, the
following has been agreed:

Following a
restructuration of the EDAP TMS Group, on May 6, 2004 the Lessee met with the Lessor in
order to partially cancel its current leasing contract, for the part C3 representing 410
square meters of archiving in the ground floor of the Building C. In parallel, the Lessor
will make available to the Lessee an additional area in Building B (part B2) currently
leased by the Company SOPARA, and which surface is representing 825 m2, for an annual
lease of 39,617.80 €. This additional area will be available as from October 1, 2004.

The Lessor and the
Lessee decided collectively to amend the current leasing contract as of October 1, 2004.

1/2 

ENGLISH TRANSLATION
FOR INFORMATION ONLY 

Buildings: 

The parties agree
that, as from June 30, 2004, the above mentioned leasing contract dated September 25, 2002
do not include the Building C (part C3) reprensenting 410 square meters of archiving any
longer.

As from October 1,
2004, Le Lessor commits to make the additional area B2, representing 825 square meters in
the Building B, available to the Lessee.

Both parties agree
that, as from October 1, 2004, the leasing of this additional area will be submitted to
the same regulations stipulated in the leasing contract dated September 25, 2002, and for
the duraction of this latter contract.

Leasing price: 

Consequently, the
total annual leasing price which amounted 205,303.40 € will increase to 223, 363.68
€ as from October 1, 2004.

Deposit: 

On the fourth quarter
payment, the Lessee will pay the Lessor 4,515.07 € in addition to the deposit already
paid for the leasing of part B2.

All other resolutions
remain unchanged.

To execute the
current contract, the parties elect domiciliation at

Cournon d’Auvergne
(69800) 27, route du Cendre ZI Les Acilloux, for the Lessor,

Vaulx-en-Velin (69120)
4, rue du Dauphiné, for the Lessee.

Made in two originals,

Cournon, on

	The Lessor	The Lessee 

2/2EX-10.1

EXHIBIT 10.1

LA JOLLA PHARMACEUTICAL COMPANY

2004 EQUITY INCENTIVE PLAN

ARTICLE I

GENERAL PROVISIONS

1.01 Definitions.

Terms used herein and not otherwise defined shall have the meanings set forth below:

(a) "Administrator” means the Board or a Committee that has been delegated the authority to
administer the Plan.

(b) “Award” means an Incentive Award or a Nonemployee Director’s Option.

(c) "Award Document” means an award agreement duly executed on behalf of the Company and by
the Recipient or, in the Administrator’s discretion, a confirming memorandum issued by the Company
to the Recipient.

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

(e) "Change in Control” means the following and shall be deemed to occur if any of the
following events occur:

(i) Except as provided by subsection (iii) hereof, the acquisition (other than from
the Company) by any person, entity or “group,” within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act (excluding, for this purpose, the Company or its subsidiaries,
or any employee benefit plan of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either
the then outstanding shares of Common Stock or the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally in the election of directors;
or

(ii) Individuals who, as of the effective date of the Plan, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s stockholders, is or was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the directors of
the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be, for purposes of the Plan, considered as though such person were a
member of the Incumbent Board; or

(iii) Approval by the stockholders of the Company of a reorganization, merger or
consolidation with any other person, entity or corporation, other than:

(A) a merger or consolidation which would result in the persons holding the
voting securities of the Company outstanding immediately prior thereto continuing
to hold more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or its successor which are outstanding immediately after
such merger or consolidation, or

(B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires forty percent (40%) or
more of the combined voting power of the Company’s then outstanding voting
securities; or

(iv) Approval by the stockholders of the Company of a plan of complete liquidation of
the Company or an agreement for the sale or other disposition by the Company of all or
substantially all of the Company’s assets.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred (1) if the
“person” is an underwriter or underwriting syndicate that has acquired the ownership of 50% or more
of the combined voting power of the Company’s then outstanding voting securities solely in
connection with a public offering of the Company’s securities, or (2) if the “person” is an
employee stock ownership plan or other employee benefit plan maintained by the Company that is
qualified under the provisions of the Employee Retirement Income Security Act of 1974, as amended.

(f) "Code” means the Internal Revenue Code of 1986, as amended. Where the context so
requires, a reference to a particular Code section shall also refer to any successor provision of
the Code to such section.

(g) “Committee” means the committee appointed by the Board to administer the Plan.

(h) “Common Stock” means the common stock of the Company, $0.01 par value.

(i) “Company” means La Jolla Pharmaceutical Company.

(j) "Dividend Equivalent” means a right granted by the Company under Section 2.07 to a holder
of an Option, Stock Appreciation Right, or other Incentive Award denominated in shares of Common
Stock to receive from the Company during the Applicable Dividend Period (as defined in Section
2.07) payments equivalent to the amount of dividends payable to holders of the number of shares of
Common Stock underlying such Option, Stock Appreciation Right, or other Incentive Award.

(k) "Eligible Person” means any director, Employee or consultant of the Company or any Related
Corporation.

(l) "Employee” means an individual who is in the employ of the Company (or any Parent or
Subsidiary) subject to the control and direction of the employer entity as to both the work to be
performed and the manner and method of performance.

(m) "Exchange Act” means the Securities Exchange Act of 1934, as amended. Where the context
so requires, a reference to a particular section of the Exchange Act or rule thereunder shall also
refer to any successor provision to such section or rule.

(n) "Exercise Price” means the price at which the Holder may purchase shares of Common Stock
underlying an Option.

(o) "Fair Market Value” of capital stock of the Company shall be determined with reference to
the closing price of such stock on the day in question (or, if such day is not a trading day in the
U.S. securities markets, on the nearest preceding trading day), as reported with respect to the
principal market or trading system on which such stock is then traded; or, if no such closing
prices are reported, the mean between the high bid and low ask prices that day on the principal
market or national quotation system on which such shares are then quoted; provided, however, that
when appropriate, the Administrator in determining Fair Market Value of capital stock of the
Company may take into account such other factors as may be deemed appropriate under the
circumstances. Notwithstanding the foregoing, the Fair Market Value of capital stock for purposes
of grants of Incentive Stock Options shall be determined in compliance with applicable provisions
of the Code. The Fair Market Value of rights or property other than capital stock of the Company
means the fair market value thereof as determined by the Administrator on the basis of such factors
as it may deem appropriate.

(p) “Holder” means the Recipient of an Award or any permitted assignee holding the Award.

(q) "Incentive Award” means any Option (other than a Nonemployee Director’s Option),
Restricted Stock, Stock Appreciation Right, Stock Payment, Performance Award or Dividend Equivalent
granted or sold to an Eligible Person under this Plan.

(r) "Incentive Stock Option” means an Option that qualifies as an incentive stock option under
Section 422 (or any successor section) of the Code and the regulations thereunder.

(s) "Just Cause Dismissal” shall mean a termination of a Recipient’s Service for any of the
following reasons: (i) the Recipient violates any reasonable rule or regulation of the Company or
the Recipient’s superiors or the Chief Executive Officer or President of the Company that (A)
results in damage to the Company or (B) after written notice to do so, the Recipient fails to
correct within a reasonable time; (ii) any willful misconduct or gross negligence by the Recipient
in the responsibilities assigned to him or her; (iii) any willful failure to perform his or her
job; (iv) any wrongful conduct of a Recipient which has an adverse impact on the Company or which
constitutes fraud, embezzlement or dishonesty; (v) the Recipient’s performing services for any
other person or entity which competes with the Company while he or she is providing Service,
without the written approval of the Chief Executive Officer or President of the Company; or (vi)
any other conduct that the Administrator determines constitutes Just Cause for Dismissal; provided,
however, that if the term of concept has been defined in an employment agreement between the
Company and the Recipient, then Just Cause Dismissal shall have the definition set forth in such
employment agreement. The foregoing definition shall not in any way preclude or restrict the right
of the Company or any Related Corporation to discharge or dismiss any Recipient or other person in
the Service of the Company or any Related Corporation for any other acts or omissions but such
other acts or omission shall not be deemed, for purposes of the Plan, to constitute grounds for
Just Cause Dismissal.

(t) "Nonemployee Director” means a director of the Company who is not an Employee of the
Company or any of its Related Corporations.

(u) "Nonemployee Director’s Option” means a Nonqualified Stock Option granted to a Nonemployee
Director pursuant to Article III of the Plan.

(v) "Nonqualified Stock Option” means an Option that does not qualify as an Incentive Stock
Option.

(w) "Option” means a right to purchase stock of the Company granted under this Plan, and can
be an Incentive Stock Option or a Nonqualified Stock Option.

(x) "Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation in the unbroken chain (other than
the Company) owns, at the time of the determination, 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.

(y) "Performance Award” means an award, payable in cash, Common Stock or a combination
thereof, which vests and becomes payable over a period of time upon attainment of performance
criteria established in connection with the grant of the award.

(z) "Performance-Based Compensation” means performance-based compensation as described in
Section 162(m) of the Code and the regulations thereunder. If the amount of compensation an
Eligible Person will receive under any Incentive Award is not based solely on an increase in the
value of Common Stock after the date of grant or award, the Administrator, in order to qualify an
Incentive Award as performance-based compensation under Section 162(m) of the Code and the
regulations thereunder, can condition the grant, award, vesting, or exercisability of such an award
on the attainment of a preestablished, objective performance goal. For this purpose, a
preestablished, objective performance goal may include one or more of the following performance
criteria: (i) cash flow, (ii) earnings per share (including earnings before interest, taxes, and
amortization), (iii) return on equity, (iv) total stockholder return, (v) return on capital, (vi)
return on assets or net assets, (vii) income or net income, (viii) operating margin, (ix) return on
operating revenue, (x) attainment of stated goals related to the Company’s research and development
or clinical trials programs, (xi) attainment of stated goals related to the Company’s
capitalization, costs, financial condition, or results of operations, and (xii) any other similar
performance criteria.

(aa) "Permanent Disability” shall mean the inability of the Recipient to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or has lasted or can be expected to last for a continuous
period of twelve months or more.

(bb) "Plan” means the La Jolla Pharmaceutical Company 2004 Equity Incentive Plan as set forth
in this document.

(cc) "Purchase Price” means the purchase price (if any) to be paid by a Recipient for
Restricted Stock as determined by the Administrator (which price shall be at least equal to the
minimum price required under applicable laws and regulations for the issuance of Common Stock).

	 	 	 
	(dd)

(ee)

	 	"Recipient” means an Eligible Person who has received an Award hereunder.

"Related Corporation” means either a Parent or Subsidiary.

(ff) "Restricted Stock” means Common Stock that is the subject of an award made under Section
2.04 and which is nontransferable and subject to a substantial risk of forfeiture until specific
conditions are met as set forth in this Plan and in any Award Document.

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

(hh) "Service” means the performance of services for the Company or its Related Corporations
by a person in the capacity of an Employee, a director or a consultant, except to the extent
otherwise specifically provided in the Award Document.

(ii) "Stock Appreciation Right” means a right granted under Section 2.05 to receive a payment
that is measured with reference to the amount by which the Fair Market Value of a specified number
of shares of Common Stock appreciates from a specified date, such as the date of grant of the Stock
Appreciation Right, to the date of exercise.

(jj) "Stock Payment” means a payment in shares of Common Stock to replace all or any portion
of the compensation (other than base salary) that would otherwise become payable to a Recipient.

(kk) "Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, provided each corporation in the unbroken chain (other
than the last corporation) owns, at the time of the determination, 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.

1.02 Purpose of the Plan.

The Board has adopted this Plan to advance the interests of the Company and its stockholders
by (a) providing Eligible Persons with financial incentives to promote the success of the Company’s
business objectives, and to increase their proprietary interest in the success of the Company, and
(b) giving the Company a means to attract and retain Eligible Persons.

1.03 Common Stock Subject to the Plan.

(a) Number of Shares. Subject to Section 1.05(b), the maximum number of shares of Common
Stock that may be issued and outstanding or subject to outstanding Awards under the Plan shall not
exceed 4,800,000.

(b) Source of Shares. The Common Stock to be issued under this Plan will be made available,
at the discretion of the Administrator, either from authorized but unissued shares of Common Stock
or from previously issued shares of Common Stock reacquired by the Company, including shares
purchased on the open market.

(c) Availability of Unused Shares. Shares of Common Stock subject to unexercised portions of
any Award granted under this Plan that expire, terminate or are cancelled, and shares of Common
Stock issued pursuant to an Award under this Plan that are reacquired by the Company pursuant to
the terms of the Award under which such shares were issued, will again become available for the
grant of further Awards under this Plan.

(d) Grant Limits. Notwithstanding any other provision of this Plan, no Eligible Person shall
be granted Awards with respect to more than 1,000,000 shares of Common Stock in the aggregate in
any one calendar year; provided, however, that this limitation shall not apply if it is not
required in order for the compensation attributable to Awards hereunder to qualify as
Performance-Based Compensation.

1.04 Administration of the Plan.

(a) The Administrator. The Plan will be administered by a Committee, which will consist of
two or more members of the Board each of whom must be an “independent director” as defined by
applicable listing standards. Notwithstanding the foregoing or any provision of the Plan to the
contrary, the Board may, in lieu of the Committee, exercise any authority granted to the Committee
pursuant to the provisions of the Plan. To obtain the benefits of Rule 16b-3, Incentive Awards
must be granted by the entire Board or a Committee comprised entirely of “non-employee directors”
as such term is defined in Rule 16b-3. In addition, if Incentive Awards are to be made to persons
subject to Section 162(m) of the Code and such Awards are intended to constitute Performance-Based
Compensation, then such Incentive Awards must be granted by a Committee comprised entirely of
“outside directors” as such term is defined in the regulations under Section 162(m) of the Code.

(b) Authority of the Administrator. The Administrator has authority in its discretion to
select the Eligible Persons to whom, and the time or times at which, Incentive Awards shall be
granted or sold, the nature of each Incentive Award, the number of shares of Common Stock or the
number of rights that make up or underlie each Incentive Award, the period for the exercise of each
Incentive Award, the performance criteria (which need not be identical) utilized to measure the
value of Performance Awards, and such other terms and conditions applicable to each individual
Incentive Award as the Administrator shall determine. In addition, the Administrator shall have
all other powers granted to it in the Plan.

(c) Interpretation. Subject to the express provisions of the Plan, the Administrator has the
authority to interpret the Plan and any Award Documents, to determine the terms and conditions of
Incentive Awards and to make all other determinations necessary or advisable for the administration
of the Plan. All interpretations, determinations and actions by the Administrator shall be final,
conclusive and binding upon all parties. The Administrator has authority to prescribe, amend and
rescind rules and regulations relating to the Plan.

(d) Special Rules Regarding Nonemployee Director Options. Notwithstanding anything herein to
the contrary, the Administrator shall have no authority or discretion as to the selection of
persons eligible to receive Nonemployee Directors’ Options granted under the Plan, the number of
shares covered by Nonemployee Directors’ Options granted under the Plan, the timing of such grants,
or the Exercise Price of Nonemployee Directors’ Options granted under the Plan, which matters are
specifically governed by the provisions of the Plan.

(e) No Liability. The Administrator and its delegates shall be indemnified by the Company to
the fullest extent provided for in the Company’s certificate of incorporation and bylaws.

1.05 Other Provisions.

(a) Documentation. Each Award granted under the Plan shall be evidenced by an Award Document
which shall set forth the terms and conditions applicable to the Award as the Administrator may in
its discretion determine consistent with the Plan, provided that the Administrator shall exercise
no discretion with respect to Nonemployee Directors’ Options, which shall reflect only the terms of
the Award as set forth in Article III and certain administrative matters dictated by the Plan.
Award Documents shall comply with and be subject to the terms and conditions of the Plan. In case
of any conflict between the Plan and any Award Document, the Plan shall control. Various Award
Documents covering the same types of Awards may but need not be identical.

(b) Adjustment Provisions. Should any change be made to the outstanding shares of Common
Stock by reason of a merger, consolidation, reorganization, recapitalization, reclassification,
combination of shares, stock dividend, stock split, reverse stock split, exchange of shares or
other change affecting the outstanding Common Stock without the Company’s receipt of consideration,
an appropriate and proportionate adjustment may be made in (i) the maximum number and kind of
shares subject to the Plan as provided in Section 1.03, (ii) the number and kind of shares or other
securities subject to then outstanding Awards, (iii) the price for each share or other unit of any
other securities subject to then outstanding Awards and (iv) the number and kind of shares or other
securities subject to the Nonemployee Director Options described in Section 3.01 and 3.02. In
addition, the per person limitation set forth in Section 1.03(d) shall also be subject to
adjustment as provided in this Section 1.05(b), but only to the extent such adjustment would not
affect the status of compensation attributable to Awards hereunder as Performance-Based
Compensation. Such adjustments are to be effected in a manner that shall preclude the enlargement
or dilution of rights and benefits under the Awards. In no event shall any adjustments be made in
connection with the conversion of preferred stock or warrants into shares of Common Stock. No
fractional interests will be issued under the Plan resulting from any such adjustments.

(c) Continuation of Service. Nothing contained in this Plan (or in Award Documents or in any
other documents related to this Plan or to Awards granted hereunder) shall confer upon any Eligible
Person or Recipient any right to continue in the Service of the Company or its Related Corporations
or constitute any contract or agreement of employment or engagement, or interfere in any way with
the right of the Company or its Related Corporations to reduce such person’s compensation or other
benefits or to terminate the Service of such Eligible Person or Recipient, with or without cause.
Except as expressly provided in the Plan or in any Award Document, the Company shall have the right
to deal with each Recipient in the same manner as if the Plan and any Award Document did not exist,
including, without limitation, with respect to all matters related to the hiring, discharge,
compensation and conditions of the employment or engagement of the Recipient.

(d) Restrictions. All Awards granted under the Plan shall be subject to the requirement that,
if at any time the Company shall determine, in its discretion, that the listing, registration or
qualification of the shares subject to Awards granted under the Plan upon any securities exchange
or under any state or federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of such an Award or
the issuance, if any, or purchase of shares in connection therewith, such Award may not be
exercised in whole or in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to the Company.

(e) Additional Conditions. Any Incentive Award may also be subject to such other provisions
(whether or not applicable to any other Award or Recipient) as the Administrator determines
appropriate.

(f) Tax Withholding. The Company’s obligation to deliver shares of Common Stock under the
Plan shall be subject to the satisfaction of all applicable income and employment tax withholding
requirements.

(g) Privileges of Stock Ownership. Except as otherwise set forth herein, a Holder shall have
no rights as a stockholder of the Company with respect to any shares issuable or issued in
connection with the Award until the date of the receipt by the Company of all amounts payable in
connection with exercise of the Award, performance by the Holder of all obligations thereunder, and
the Company issues a stock certificate representing the appropriate number of shares. Status as an
Eligible Person shall not be construed as a commitment that any Incentive Award will be granted
under this Plan to an Eligible Person or to Eligible Persons generally. No person shall have any
right, title or interest in any fund or in any specific asset (including shares of capital stock)
of the Company by reason of any Award granted hereunder. Neither this Plan (or any documents
related hereto) nor any action taken pursuant hereto shall be construed to create a trust of any
kind or a fiduciary relationship between the Company and any person. To the extent that any person
acquires a right to receive an Award hereunder, such right shall be no greater than the right of
any unsecured general creditor of the Company.

(h) Effective Date and Duration of Plan; Amendment and Termination of Plan. The Plan shall
become effective upon its approval by the Company’s stockholders. Unless terminated by the Board
prior to such time, the Plan shall continue in effect until the 10th anniversary of the date the
Plan was adopted, whereupon the Plan shall terminate automatically. The Board may, insofar as
permitted by law, from time to time suspend or terminate the Plan. No Awards may be granted during
any suspension of this Plan or after its termination. Any Award outstanding after the termination
of the Plan shall remain in effect until such Award has been exercised or expires in accordance
with its terms and the terms of the Plan. The Board may, insofar as permitted by law, from time to
time revise or amend the Plan in any respect except that no such amendment shall adversely affect
any rights or obligations of the Holder under any outstanding Award previously granted under the
Plan without the consent of the Holder. Amendments shall be subject to stockholder approval to the
extent such approval is required to comply with the listing requirements imposed by any exchange or
trading system upon which the Company’s securities trade or applicable law.

(i) Amendment of Awards. The Administrator may make any modifications in the terms and
conditions of an outstanding Incentive Award, provided that (i) the resultant provisions are
permissible under the Plan and (ii) the consent of the Holder shall be obtained if the amendment
will adversely affect his or her rights under the Award. However, the outstanding Options may not
be repriced without stockholder approval.

(j) Nonassignability. No Incentive Stock Option granted under the Plan shall be assignable or
transferable except by will or by the laws of descent and distribution. No other Awards granted
under the Plan shall be assignable or transferable except (i) by will or by the laws of descent and
distribution, (ii) to one or more of the Recipient’s family members (as such term is defined in the
instructions to Form S-8) or (iii) upon dissolution of marriage pursuant to a qualified domestic
relations order. During the lifetime of a Recipient, an Award granted to him or her shall be
exercisable only by the Holder or his or her guardian or legal representative.

(k) Other Compensation Plans. The adoption of the Plan shall not affect any other stock
option, incentive or other compensation plans in effect for the Company, and the existence of the
Plan shall not preclude the Company from establishing any other forms of incentive or other
compensation for Eligible Persons.

(l) Plan Binding on Successors. The Plan shall be binding upon the successors and assigns of
the Company.

(m) Participation by Foreign Employees. Notwithstanding anything to the contrary herein, the
Administrator may, in order to fulfill the purposes of the Plan, structure grants of Incentive
Awards to Recipients who are foreign nationals or employed outside of the United States to
recognize differences in applicable law, tax policy or local custom.

ARTICLE II

INCENTIVE AWARDS

2.01 Grants of Incentive Awards.

Subject to the express provisions of this Plan, the Administrator may from time to time in its
discretion select from the class of Eligible Persons those individuals to whom Incentive Awards may
be granted pursuant to its authority as set forth in Section 1.04(b). Each Incentive Award shall
be subject to the terms and conditions of the Plan and such other terms and conditions established
by the Administrator as are not inconsistent with the provisions of the Plan.

2.02 Options.

(a) Nature of Options. The Administrator may grant Incentive Stock Options and Nonqualified
Stock Options under the Plan. However, Incentive Stock Options may only be granted to Employees of
the Company or its Related Corporations.

(b) Option Price. The Exercise Price per share for each Option (other than a Nonemployee
Director’s Option) shall be determined by the Administrator at the date such Option is granted and
shall not be less than the Fair Market Value of a share of Common Stock (or other securities, as
applicable) on the date of grant, except that the Exercise Price for a Nonqualified Stock Option
may reflect a discount of up to 15% of the Fair Market Value at the time of grant if the amount of
such discount is expressly in lieu of a reasonable amount of salary or cash bonus. Notwithstanding
the foregoing, however, in no event shall the Exercise Price be less than the par value of the
shares of Common Stock.

(c) Option Period and Vesting. Options (other than Nonemployee Directors’ Options) hereunder
shall vest and may be exercised as determined by the Administrator, except that exercise of such
Options after termination of the Recipient’s Service shall be subject to Section 2.02(g). Each
Option granted hereunder (other than a Nonemployee Directors Option) and all rights or obligations
thereunder shall expire on such date as shall be determined by the Administrator, but not later
than ten years after the date the Option is granted and shall be subject to earlier termination as
herein provided.

(d) Exercise of Options. Except as otherwise provided herein, an Option may become
exercisable, in whole or in part, on the date or dates specified by the Administrator (or, in the
case of Nonemployee Directors’ Options, the Plan) at the time the Option is granted and thereafter
shall remain exercisable until the expiration or earlier termination of the Option. No Option
shall be exercisable except in respect of whole shares, and fractional share interests shall be
disregarded. An Option shall be deemed to be exercised when the Secretary of the Company receives
written notice of such exercise from the Holder, together with payment of the Exercise Price made
in accordance with Section 2.02(e). Upon proper exercise, the Company shall deliver to the person
entitled to exercise the Option or his or her designee a certificate or certificates for the shares
of stock for which the Option is exercised.

(e) Form of Exercise Price. The aggregate Exercise Price shall be immediately due and payable
upon the exercise of an Option and shall, subject to the provisions of the Award Document, be
payable in one or more of the following: (i) by delivery of legal tender of the United States, (ii)
by delivery of shares of Common Stock held for the requisite period, if any, necessary to avoid a
charge to the Company’s earnings for financial reporting purposes, and/or (iii) through a sale and
remittance procedure pursuant to which the Holder shall concurrently provide irrevocable
instructions to (A) a brokerage firm to effect the immediate sale of the purchased shares and remit
to the Company, out of the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate Exercise Price payable for the purchased shares plus all applicable income and
employment taxes required to be withheld by the Company by reason of such exercise and (B) the
Company to deliver the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale. Any shares of Company stock or other non-cash consideration assigned
and delivered to the Company in payment or partial payment of the Exercise Price will be valued at
Fair Market Value on the exercise date.

(f) Limitation on Exercise of Incentive Stock Options. The aggregate Fair Market Value
(determined as of the respective date or dates of grant) of the Common Stock for which one or more
Options granted to any Recipient under the Plan (or any other option plan of the Company or any of
its subsidiaries or affiliates) may for the first time become exercisable as Incentive Stock
Options under the Code during any one calendar year shall not exceed $100,000. Any Options granted
as Incentive Stock Options pursuant to the Plan in excess of such limitation shall be treated as
Nonqualified Stock Options. Options are to be taken into account in the order in which they were
awarded.

(g) Termination of Service.

(i) Termination for Cause. Except as otherwise provided by the Administrator, in the
event of a Just Cause Dismissal of a Recipient, all of the outstanding Options granted to
such Recipient shall expire and become unexercisable as of the date of such Just Cause
Dismissal.

(ii) Termination Other Than for Cause. Subject to subsection (i) above and except as
otherwise provided by the Administrator, in the event of a Recipient’s termination of
Service from the Company or its Related Corporations due to:

(A) any reason other than Just Cause Dismissal, death, or Permanent
Disability, or normal retirement, the outstanding Options granted to such
Recipient, whether or not vested, shall expire and become unexercisable as of the
earlier of (1) the date such Options would expire in accordance with their terms if
the Recipient had remained in Service or (2) three calendar months after the date
the Recipient’s Service terminated in the case of Incentive Stock Options, or six
months after the Recipient’s Service terminated, in the case of Nonqualified Stock
Options.

(B) death or Permanent Disability, the outstanding Options granted to such
Recipient, whether or not vested, shall expire and become unexercisable as of the
earlier of (1) the date such Options would expire in accordance with their terms if
the Recipient had remained in Service or (2) twelve months after the date of
termination.

(C) normal retirement, the outstanding Options granted to such Recipient,
whether or not vested, shall expire and become unexercisable as of the earlier of
(A) the date such Options expire in accordance with their terms or (B) twenty-four
months after the date of retirement.

(iii) Termination of Director Service. In the event that a Director shall cease to be
a Nonemployee Director, all outstanding Options (other than a Nonemployee Director’s
Option) granted to such Recipient shall be exercisable, to the extent already vested and
exercisable on the date such Recipient ceases to be a Nonemployee Director and regardless
of the reason the Recipient ceases to be a Nonemployee Director until the fifth anniversary
of the date such Director ceases to be a Nonemployee Director; provided that the
Administrator may extend such post-termination period to up to the expiration date of the
Option.

2.03 Performance Awards.

(a) Grant of Performance Award. The Administrator may grant Performance Awards under the Plan
and shall determine the performance criteria (which need not be identical and may be established on
an individual or group basis) governing Performance Awards, the terms thereof, and the form and
timing of payment of Performance Awards.

(b) Payment of Award; Limitation. Upon satisfaction of the conditions applicable to a
Performance Award, payment will be made to the Holder in cash or in shares of Common Stock valued
at Fair Market Value or a combination of Common Stock and cash, as the Administrator in its
discretion may determine. Notwithstanding any other provision of this Plan, no Eligible Person
shall be paid Performance Awards with a value in excess of $1,000,000 in any one calendar year;
provided, however, that this limitation shall not apply if it is not required in order for the
compensation attributable to the Performance Award hereunder to qualify as Performance-Based
Compensation.

(c) Expiration of Performance Award. If any Recipient’s Service is terminated for any reason
other than normal retirement, death or Permanent Disability prior to the time a Performance Award
or any portion thereof becomes payable, all of the Holder’s rights under the unpaid portion of the
Performance Award shall expire unless otherwise determined by the Administrator. In the event of
termination of Service by reason of death, Permanent Disability or normal retirement, the
Administrator, in its discretion, may determine what portions, if any, of the Performance Award
should be paid to the Holder.

2.04 Restricted Stock.

(a) Award of Restricted Stock. The Administrator may issue Restricted Stock under the Plan.
The Administrator shall determine the Purchase Price (if any), the forms of payment of the Purchase
Price (which shall be either cash or past services), the restrictions upon the Restricted Stock,
and when such restrictions shall lapse (provided that the restriction period shall be at least one
year for performance-based grants and three years for non-performance-based grants).

(b) Requirements of Restricted Stock. All shares of Restricted Stock granted or sold pursuant
to the Plan will be subject to the following conditions:

(i) No Transfer. The shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, alienated or encumbered until
the restrictions are removed or expire;

(ii) Certificates. The Administrator may require that the certificates representing
 shares of Restricted Stock granted or sold to a Holder pursuant to the Plan remain in the
physical custody of an escrow holder or the Company until all restrictions are removed or
expire;

(iii) Restrictive Legends. Each certificate representing shares of Restricted Stock
granted or sold to a Holder pursuant to the Plan will bear such legend or legends making
reference to the restrictions imposed upon such Restricted Stock as the Administrator in
its discretion deems necessary or appropriate to enforce such restrictions; and

(iv) Other Restrictions. The Administrator may impose such other conditions on
Restricted Stock as the Administrator may deem advisable including, without limitation,
restrictions under the Securities Act, under the Exchange Act, under the requirements of
any stock exchange or upon which such Restricted Stock or shares of the same class are then
listed and under any blue sky or other securities laws applicable to such shares.

(c) Rights of Holder. Subject to the provisions of Section 2.04(b) and any additional
restrictions imposed by the Administrator, the Holder will have all rights of a stockholder with
respect to the Restricted Stock, including the right to vote the shares and receive all dividends
and other distributions paid or made with respect thereto.

(d) Termination of Service. Unless the Administrator in its discretion determines otherwise,
upon a Recipient’s termination of Service for any reason, all of the Restricted Stock issued to the
Recipient that remains subject to restrictions imposed pursuant to the Plan on the date of such
termination of Service may be repurchased by the Company at the Purchase Price (if any).

(e) Adjustments. Any new, substituted or additional securities or other property which Holder
may have the right to receive with respect to the Holder’s shares of Restricted Stock by reason of
a merger, consolidation, reorganization, recapitalization, reclassification, combination of shares,
stock dividend, stock split, reverse stock split, exchange of shares or other change affecting the
outstanding Common Stock without the Company’s receipt of consideration shall be issued subject to
the same vesting requirements applicable to the Holder’s shares of Restricted Stock and shall be
treated as if they had been acquired on the same date as such shares.

2.05 Stock Appreciation Rights.

(a) Granting of Stock Appreciation Rights. The Administrator may grant Stock Appreciation
Rights, either related or unrelated to Options, under the Plan.

(b) Stock Appreciation Rights Related to Options.

(i) A Stock Appreciation Right granted in connection with an Option granted under this
Plan will entitle the holder of the related Option, upon exercise of the Stock Appreciation
Right, to surrender such Option, or any portion thereof to the extent unexercised, with
respect to the number of shares as to which such Stock Appreciation Right is exercised, and
to receive payment of an amount computed pursuant to Section 2.05(b)(iii). Such Option
will, to the extent surrendered, then cease to be exercisable.

(ii) A Stock Appreciation Right granted in connection with an Option hereunder will be
exercisable at such time or times, and only to the extent that, the related Option is
exercisable, and will not be transferable except to the extent that such related Option may
be transferable.

(iii) Upon the exercise of a Stock Appreciation Right related to an Option, the Holder
will be entitled to receive payment of an amount determined by multiplying: (i) the
difference obtained by subtracting the Exercise Price of a share of Common Stock specified
in the related Option from the Fair Market Value of a share of Common Stock on the date of
exercise of such Stock Appreciation Right (or as of such other date or as of the occurrence
of such event as may have been specified in the instrument evidencing the grant of the
Stock Appreciation Right), by (ii) the number of shares as to which such Stock Appreciation
Right is exercised.

(c) Stock Appreciation Rights Unrelated to Options. The Administrator may grant Stock
Appreciation Rights unrelated to Options to Eligible Persons. Section 2.05(b)(iii) shall be used
to determine the amount payable at exercise under such Stock Appreciation Right, except that in
lieu of the Exercise Price specified in the related Option the initial base amount specified in the
Incentive Award shall be used.

(d) Limits. Notwithstanding the foregoing, the Administrator, in its discretion, may place a
dollar limitation on the maximum amount that will be payable upon the exercise of a Stock
Appreciation Right under the Plan.

(e) Payments. Payment of the amount determined under the foregoing provisions may be made
solely in whole shares of Common Stock valued at their Fair Market Value on the date of exercise of
the Stock Appreciation Right, in cash or in a combination of cash and shares of Common Stock as the
Administrator deems advisable. If permitted by the Administrator, the Holder may elect to receive
cash in full or partial settlement of a Stock Appreciation Right. If the Administrator decides to
make full payment in shares of Common Stock, and the amount payable results in a fractional share,
payment for the fractional share will be made in cash.

(f) Termination of Service. Section 2.02(g) will govern the treatment of Stock Appreciation
Rights upon the termination of a Recipient’s Service.

2.06 Stock Payments.

The Administrator may issue Stock Payments under the Plan for all or any portion of the
compensation (other than base salary) or other payment that would otherwise become payable by the
Company to the Eligible Person in cash.

2.07 Dividend Equivalents.

The Administrator may grant Dividend Equivalents to any Recipient who has received an Option,
Stock Appreciation Right, or other Incentive Award denominated in shares of Common Stock. Such
Dividend Equivalents shall be effective and shall entitle the Recipients thereof to payments during
the “Applicable Dividend Period,” which shall be (a) the period between the date the Dividend
Equivalent is granted and the date the related Option, Stock Appreciation Right, or other Incentive
Award is exercised, terminates, or is converted to Common Stock, or (b) such other time as the
Administrator may specify in the Award Document. Dividend Equivalents may be paid in cash, Common
Stock, or other Incentive Awards; the amount of Dividend Equivalents paid other than in cash shall
be determined by the Administrator by application of such formula as the Administrator may deem
appropriate to translate the cash value of dividends paid to the alternative form of payment of the
Dividend Equivalent. Dividend Equivalents shall be computed as of each dividend record date and
shall be payable to Recipients thereof at such time as the Administrator may determine.
Notwithstanding the foregoing, if it is intended that an Incentive Award qualify as
Performance-Based Compensation and the amount of the compensation the Eligible Person could receive
under the award is based solely on an increase in value of the underlying stock after the date of
grant or award (i.e., the grant, vesting, or exercisability of the award is not conditioned upon
the attainment of a preestablished, objective performance goal described in Section 1.01(x)), then
the payment of any Dividend Equivalents related to the Award shall not be made contingent on the
exercise of the Award.

ARTICLE III

NONEMPLOYEE DIRECTOR’S OPTIONS

3.01 Grants of Initial Options.

Each Nonemployee Director shall, upon first becoming a Nonemployee Director, receive a
one-time grant of a Nonqualified Stock Option to purchase up to 40,000 shares of Common Stock at an
Exercise Price per share equal to the Fair Market Value of the Common Stock on the date of grant.
Options granted under this Section 3.01 vest in accordance with Section 3.04(a) hereof and are
“Initial Options” for purposes hereof.

3.02 Grants of Additional Options.

On the date of the annual meeting of stockholders of the Company next following a Nonemployee
Director becoming such, and on the date of each subsequent annual meeting of stockholders of the
Company, in each case if the Nonemployee Director has served as a director since his or her
election or appointment and has been re-elected as a director at such annual meeting or is
continuing as a director without being re-elected due to the classification of the Board, such
Nonemployee Director shall automatically receive a Nonqualified Stock Option to purchase up to
10,000 shares of Common Stock at an Exercise Price per share equal to the Fair Market Value of
Common Stock on the date of grant. Options granted under this Section 3.02 vest in accordance with
Section 3.04(b) hereof and are “Additional Options” for purposes hereof. Notwithstanding the
foregoing to the contrary, the first grant of Additional Options shall be made to eligible
Nonemployee Directors on the date of the 2005 annual meeting of stockholders.

3.03 Exercise Price.

The Exercise Price for Nonemployee Directors’ Options shall be payable as set forth in Section
2.02(e).

3.04 Vesting and Exercise.

(a) Initial Options shall vest and become exercisable with respect to 25% of the underlying
shares on the grant date and with respect to an additional 25% of the underlying shares on the
dates of each of the first three anniversaries of the date of grant provided the Recipient has
remained a Nonemployee Director for the entire period from the date of grant to such date.

(b) Additional Options shall vest and become exercisable upon the earlier of (i) the first
anniversary of the grant date or (ii) immediately prior to the annual meeting of stockholders of
the Company next following the grant date, provided the Recipient has remained a Nonemployee
Director for the entire period from the date of grant to such earlier date.

(c) Notwithstanding the foregoing, however, Initial Options and Additional Options that have
not vested and become exercisable at the time the Recipient ceases to be a Nonemployee Director
shall expire.

3.05 Term of Options and Effect of Termination.

No Nonemployee Directors’ Option shall be exercisable after the expiration of ten years from
the date of its grant. In the event that the Recipient of a Nonemployee Director’s Option shall
cease to be a Nonemployee Director, all outstanding Nonemployee Directors’ Options granted to such
Recipient shall be exercisable, to the extent already vested and exercisable on the date such
Recipient ceases to be a Nonemployee Director and regardless of the reason the Recipient ceases to
be a Nonemployee Director until the fifth anniversary of the date such Director ceases to be a
Nonemployee Director; provided that the Administrator may extend such post-termination period to
the expiration date of the Option.

ARTICLE IV

RECAPITALIZATIONS AND REORGANIZATIONS

4.01 Corporate Transactions.

(a) Options. Unless the Administrator provides otherwise in the Award Document or another
written agreement, in the event of a Change in Control, the Administrator shall provide that all
Options (other than Non-employee Director Options) either (i) vest in full immediately preceding
the Change in Control and terminate upon the Change in Control, (ii) are assumed or continued in
effect in connection with the Change in Control transaction, (iii) are cashed out for an amount
equal to the deal consideration per share less the Exercise Price or (iv) are substituted for
similar awards of the surviving corporation. Each Option that is assumed or otherwise continued in
effect in connection with a Change in Control shall be appropriately adjusted, immediately after
such Change in Control, to apply to the number and class of securities which would have been
issuable to Recipient in consummation of such Change in Control had the Recipient been exercised
immediately prior to such Change in Control. Appropriate adjustments to reflect such Change in
Control shall also be made to (A) the Exercise Price payable per share under each outstanding
Option, provided the aggregate Exercise Price payable for such securities shall remain the same,
(B) the maximum number and/or class of securities available for issuance over the remaining term of
the Plan, (C) the maximum number and/or class of securities for which any one person may be granted
options and direct stock issuances pursuant to the Plan per calendar year and (D) the number and/or
class of securities subject to Nonemployee Director’s Options. To the extent the holders of Common
Stock receive cash consideration in whole or part for their Common Stock in consummation of the
Change in Control, the successor corporation may, in connection with the assumption of the
outstanding Options, substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such Change in Control
transaction.

(b) Nonemployee Directors’ Options. Immediately prior to a Change of Control, all outstanding
Nonemployee Directors’ Options shall vest in full.

(c) Other Incentive Awards. The Administrator may specify the effect that a Change in Control
has on an Incentive Award (other than an Option) outstanding at the time such a Change in Control
occurs either in the applicable Award Document or by subsequent modification of the Award.

4.02 No Restraint.

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 or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all
of any part of its business or assets.

1

Form of Option Grant

	 	 	 	 	 
	 	 	La Jolla Pharmaceutical Co.
	 
	 	ID: 33-0361285

	 
	 	6455 Nancy Ridge Drive
	Notice of Grant of Stock Options
	 	San Diego, CA  92121

	and Option Agreement
	 		(858) 452-6600	
	 
	 	Option Number: _________
	Name:
	 	Plan: 2004
	Address:
	 	ID: _________

Effective      , you have been granted a(n) Incentive Stock Option to buy      shares
of La Jolla Pharmaceutical Co. (the Company) stock at $    per share.

The total option price of the shares granted is $     .

Shares in each period will become fully vested on the date shown.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shares	 	Vest Type	 	Full Vest	 	Expiration

By your signature and the Company’s signature below, you and the Company agree that these options
are granted under and governed by the terms and conditions of the Company’s Stock Option Plan as
amended and the Option Agreement, all of which are attached and made a part of this document.

	 	 	 
	La Jolla Pharmaceutical Company

	 	Date
	 
	 	 
	 

	 	 
	Name

	 	Date
	 
	 	 

2

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