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Exhibit 10.3    
    

NOVACARDIA, INC.

2007 EQUITY INCENTIVE PLAN

APPROVED BY BOARD ON: MARCH 28, 2007

APPROVED BY STOCKHOLDERS:            , 2007

TERMINATION DATE: MARCH 27, 2017  

1.    GENERAL.    

        (a)    Successor to Prior Plan.    The Plan is intended as the successor to the Company's 2003 Equity Incentive Plan
(the "Prior Plan"). Following the Effective Date, no additional stock awards shall be granted under the Prior Plan. Any shares remaining available for
issuance pursuant to the exercise of stock awards under the Prior Plan shall become available for issuance pursuant to Stock Awards granted hereunder. Any shares subject to outstanding stock awards
granted under the Prior Plan that expire or terminate for any reason prior to exercise or settlement shall become available for issuance pursuant to Stock Awards granted hereunder. On the Effective
Date, all outstanding stock awards granted under the Prior Plan shall be deemed to be stock awards granted pursuant to the Plan, but shall remain subject to the terms of the Prior Plan with respect to
which they were originally granted. All Stock Awards granted subsequent to the Effective Date shall be subject to the terms of the Plan. 

        (b)    Eligible Award Recipients.    The persons eligible to receive Awards are Employees, Directors and Consultants. 

        (c)    Available Awards.    The Plan provides for the grant of the following Awards: (i) Incentive Stock
Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, (iv) Restricted Stock Unit Awards, (v) Stock Appreciation Rights, (vi) Performance Stock
Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. 

        (d)    General Purpose.    The Company, by means of the Plan, seeks to secure and retain the services of the group of
persons eligible to receive Awards as set forth in Section 1(b), to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide
a means by which such eligible recipients may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Stock Awards. 

2.    ADMINISTRATION.    

        (a)    Administration by Board.    The Board shall administer the Plan unless and until the Board delegates
administration of the Plan to a Committee or Committees, as provided in Section 2(c). 

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

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

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

       (iii)  To settle all controversies regarding the Plan and Awards granted under it. 

 

        (iv)  To accelerate the time at which a Stock Award may first be exercised or the time during which an Award or any part
thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest. 

         (v)  To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant. 

        (vi)  To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, relating to
Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and to bring the Plan and/or Stock Awards granted under the Plan into compliance therewith,
subject to the limitations, if any, of applicable law. However, except as provided in Section 9(a) relating to Capitalization Adjustments, stockholder approval shall be required for any
amendment of the Plan that either (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals
eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan or materially reduces the price at which shares of Common Stock may be
issued or purchased under the Plan, (D) materially extends the term of the Plan, or (E) expands the types of Awards available for issuance under the Plan, but in each of (A) to
(E) only to the extent required by applicable law or listing requirements. Except as provided above, rights under any Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing. 

       (vii)  To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of (A) Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on
corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding Incentive Stock Options or (C) Rule 16b-3. 

      (viii)  To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards or stock
awards granted under the Prior Plan, including, but not limited to, amendments to provide terms more favorable than previously provided in the Award Agreement, subject to any specified limits in the
Plan that are not subject to Board discretion; provided however, that the Participant's rights under any Award shall not be impaired by any such
amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, subject to the limitations
of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant's consent if necessary to maintain the qualified status of the Award as an Incentive
Stock Option or to bring the Award into compliance with Section 409A of the Code and related Department of Treasury guidance. 

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

         (x)  To adopt such procedures and sub-plans as are necessary or appropriate to permit or facilitate participation
in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States. 

        (xi)  To effect, at any time and from time to time, with the consent of any adversely affected Optionholder, (A) the
reduction of the exercise price of any outstanding Option under the Plan; (B) the cancellation of any outstanding Option under the Plan and the grant in substitution 

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therefor
of (1) a new Option under the Plan or another equity plan of the Company covering the same or a different number of shares of Common Stock, (2) a Restricted Stock Award
(including a stock bonus), (3) a Stock Appreciation Right, (4) Restricted Stock Unit, (5) an Other Stock Award, (6) cash and/or (7) other valuable consideration (as
determined by the Board, in its sole discretion); or (C) any other action that is treated as a repricing under generally accepted accounting principles. 

        (c)    Delegation to Committee.    

        (i)    General.    The Board may delegate some or all of the
administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is
authorized to exercise (and references in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or
all of the powers previously delegated. 

        (ii)    Section 162(m) and Rule 16b-3
Compliance.    In the sole discretion of the Board, the Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the
Code, or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or the Committee, in its sole discretion, may
(A) delegate to a Committee who need not be Outside Directors the authority to grant Awards to eligible persons who are either (1) not then Covered Employees and are not expected to be
Covered Employees at the time of recognition of income resulting from such Stock Award, or (2) not persons with respect to whom the Company wishes to comply with Section 162(m) of the
Code, or (B) delegate to a Committee who need not be Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of
the Exchange Act. 

        (d)    Delegation to an Officer.    The Board may delegate to one or more Officers the authority to do one or both of
the following (i) designate Employees who are not Officers to be recipients of Options (and, to
the extent permitted by applicable law, other Stock Awards) and the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such
Employees; provided, however, that the Board resolutions regarding such delegation shall specify the total number of shares of Common Stock that may be
subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Notwithstanding anything to the contrary in this Section 2(d), the
Board may not delegate to an Officer authority to determine the Fair Market Value pursuant to Section 13(v)(ii) below. 

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

3.    SHARES SUBJECT TO THE PLAN.    

        (a)   Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares
of Common Stock that may be issued pursuant to Stock Awards shall consist of the sum of (i) the number of unallocated shares remaining available for issuance under the Prior Plan as of the
Effective Date, (ii) an additional 9,000,000 shares to be approved by the stockholders as part of the approval of this Plan and (iii) the number of shares added to the reserve pursuant
to Section 3(b) (the "Share Reserve"). In addition, the number of shares of Common Stock available for issuance under 

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Stock
Awards pursuant to the Plan shall automatically increase on January 1st of each year commencing in 2008 and ending on (and including) January 1, 2017, in an amount equal to the
lesser of (i) four percent of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year, or (ii) 6,000,000 shares of Common Stock.
Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year, to provide that there shall be no increase in the Share Reserve for such calendar year or that the
increase in the Share Reserve for such calendar year shall be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For clarity, the limitation in
this Section 3(a) is a limitation in the number of shares of the Company's common stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the
granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by NASD Rule 4350(i)(1)(A)(iii) or, if
applicable, NYSE Listed Company Manual Section 303A.08, or AMEX Company Guide Section 711 and such issuance shall not reduce the number of shares available for issuance under the Plan. 

        (b)    Additions to the Share Reserve.    The Share Reserve also shall be increased from time to time by a number of
shares equal to the number of shares of Common Stock that (i) are issuable pursuant to options outstanding under the Prior Plan as of the Effective Date and (ii) but for the termination
of the Prior Plan as of the Effective Date, would otherwise have reverted to the share reserve of the Prior Plan pursuant to the provisions thereof. 

        (c)    Reversion of Shares to the Share Reserve.    If a Stock Award (i) expires or otherwise terminates
without having been exercised in full, (ii) are forfeited back to the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant or
(iii) is settled in cash (i.e., the holder of the Stock Award receives cash rather than stock), the shares not issued under such Stock Award shall remain available for issuance under the Plan,
and such expiration, termination, forfeiture or settlement shall not reduce (or otherwise offset) the number of shares of the Company's common stock that may be issued pursuant to the Plan. Also, any
shares reacquired by the Company pursuant to subsection 8(g) or as consideration for the exercise of an Option shall again become available for issuance under the Plan. 

        (d)    Incentive Stock Option Limit.    Notwithstanding anything to the contrary in this Section 3(d), subject
to the provisions of Section 9(a) relating to Capitalization Adjustments the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options shall be 18,000,000 shares of Common Stock plus the amount of any increase in the number of shares that may be available for issuance pursuant to Stock Awards pursuant to Section 3(b). 

        (e)    Section 162(m) Limitation on Annual Grants.    Subject to the provisions of Section 9(a) relating
to Capitalization Adjustments, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, no Employee shall be eligible to be granted during any
calendar year Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock
Award is granted covering more than 5,000,000 shares of Common Stock. 

        (f)    Source of Shares.    The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
shares of Common Stock, including shares repurchased by the Company on the open market. 

4.    ELIGIBILITY.    

        (a)    Eligibility for Specific Stock Awards.    Incentive Stock Options may be granted only to employees of the
Company or a parent corporation or subsidiary corporation thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted
to Employees, Directors and Consultants. 

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        (b)    Ten Percent Stockholders.    A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five
(5) years from the date of grant. 

        (c)    Consultants.    A Consultant shall be eligible for the grant of a Stock Award only if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act ("Form S-8") is available to register either the offer or
the sale of the Company's securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, because the Consultant is a natural person, or because of
any other rule governing the use of Form S-8. 

5.    OPTION PROVISIONS.    

        Each
Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased on exercise of each type
of Option. If an Option is not specifically designated as an Incentive Stock Option, then the Option shall be a Nonstatutory Stock Option. The provisions of separate Options need not be identical;  provided,
however, that each Option Agreement shall conform to (through incorporation of provisions hereof by reference in the Option Agreement or
otherwise) the substance of each of the following provisions: 

        (a)    Term.    Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option shall
be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the Option Agreement. 

        (b)    Exercise Price.    Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the
exercise price of each Option shall be not less than one hundred percent (100%) of the Fair Market Value subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an
Option may be granted with an exercise price lower than one hundred percent (100%) of the Fair Market Value subject to the Option if such Option is granted pursuant to an assumption or substitution
for another option in a manner consistent with the provisions of Section 424(a) of the Code (whether or not such options are Incentive Stock Options). 

        (c)    Consideration.    The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be
paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board shall have the authority
to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to
utilize a particular method of payment. The methods of payment permitted by this Section 6(c) are: 

          (i)  by cash, check, bank draft or money order payable to the Company; 

         (ii)  pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds; 

       (iii)  by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock; 

        (iv)  by a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable
upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that
the Company shall accept a cash or other payment from the Participant to the extent of any remaining 

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balance
of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued; provided, further, that shares of
Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to
the "net exercise", (B) shares are delivered to the Participant as a result of such exercise, and/or (C) shares are withheld to satisfy tax withholding obligations; or 

         (v)  in any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under
applicable law. 

        (d)    Transferability of Options.    The Board may, in its sole discretion, impose such limitations on the
transferability of Options as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options shall apply: 

        (i)    Restrictions on Transfer.    An Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder; provided, however, that the Board may,
in its sole discretion, permit transfer of the Option in a manner that is not prohibited by applicable tax and/or securities laws upon the Optionholder's request. 

        (ii)    Domestic Relations Orders.    Notwithstanding the foregoing,
an Option may be transferred pursuant to a domestic relations order, provided, however, that if an Option is an Incentive Stock Option, such Option may
be deemed to be a Nonstatutory Stock Option as a result of such transfer. 

        (iii)    Beneficiary Designation.    Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option. In the absence of such a designation, the executor or administrator of the Optionholder's estate shall be entitled to exercise the
Option. 

        (e)    Vesting of Options Generally.    The total number of shares of Common Stock subject to an Option may vest and
therefore become exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions on the time or times when it may or may not be
exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of
this Section 5(e) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. 

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

        (g)    Extension of Termination Date.    An Optionholder's Option Agreement may provide that if the exercise of the
Option following the termination of the Optionholder's Continuous Service (other than for Cause or upon the Optionholder's death or Disability) would be prohibited at any time solely because the
issuance of shares of Common Stock would violate the registration requirements under the 

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Securities
Act, then the Option shall terminate on the earlier of (i) the expiration of a period of three (3) months after the termination of the Optionholder's Continuous Service during
which the exercise of the Option would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. 

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

        (i)    Death of Optionholder.    In the event that (i) an Optionholder's Continuous Service terminates as a
result of the Optionholder's death, or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder's Continuous Service for
a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or, if applicable, by a person designated as the beneficiary of the option upon the Optionholder's death, but only within the period
ending on the earlier of (A) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (B) the expiration
of the term of such Option as set forth in the Option Agreement. If, after the Optionholder's death, the Option is not exercised within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate. If the Optionholder designates a third party beneficiary of the Option in accordance with Section 5(d)(iii), then upon the death of the Optionholder
such designated beneficiary shall have the sole right to exercise the Option and receive the Common Stock or other consideration resulting from an Option exercise. 

        (j)    Termination for Cause.    Except as explicitly provided otherwise in an Optionholder's Option Agreement or any
other written agreement between the Optionholder and the Company, in the event that an Optionholder's Continuous Service is terminated for Cause, the Option shall terminate upon the termination date
of such Optionholder's Continuous Service, and the Optionholder shall be prohibited from exercising his or her Option from and after the time of such termination of Continuous Service. 

        (k)    Non-Exempt Employees.    No Option granted to an Employee that is a non-exempt employee
for purposes of the Fair Labor Standards Act shall be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Option. The foregoing provision is
intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate of pay. 

6.    PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.    

        (a)    Restricted Stock Awards.    Each Restricted Stock Award Agreement shall be in such form and shall contain such
terms and conditions as the Board shall deem appropriate. To the extent consistent with the Company's Bylaws, at the Board's election, shares of Common Stock may be (x) held in book entry form
subject to the Company's instructions until any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate shall be held in such form and
manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award
Agreements need not be identical, provided, however, that each Restricted Stock Award 

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Agreement
shall include (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 

        (i)    Consideration.    A Restricted Stock Award may be awarded in
consideration for (A) past or future services actually or to be rendered to the Company or an Affiliate, or (B) any other form of legal consideration that may be acceptable to the Board
in its sole discretion and permissible under applicable law. 

        (ii)    Vesting.    Shares of Common Stock awarded under the
Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board. 

        (iii)    Termination of Participant's Continuous Service.    In the
event a Participant's Continuous Service terminates, the Company may receive via a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant which
have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement. 

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

        (b)    Restricted Stock Unit Awards.    Each Restricted Stock Unit Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Unit Award Agreements need not be identical, provided, however, that each Restricted Stock Unit Award Agreement shall conform
to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions: 

        (i)    Consideration.    At the time of grant of a Restricted Stock
Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration
to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board in its
sole discretion and permissible under applicable law. 

        (ii)    Vesting.    At the time of the grant of a Restricted Stock
Unit Award, the Board may impose such restrictions or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate. 

        (iii)    Payment.    A Restricted Stock Unit Award may be settled by
the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit
Award Agreement. 

        (iv)    Additional Restrictions.    At the time of the grant of a
Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to
a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award. 

        (v)    Dividend Equivalents.    Dividend equivalents may be credited
in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the
Board, 

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such
dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by
the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they
relate. 

        (vi)    Termination of Participant's Continuous Service.    Except as
otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant's termination of
Continuous Service. 

        (vii)    Compliance with Section 409A of the
Code.    Notwithstanding anything to the contrary set forth herein, any Restricted Stock Unit Award granted under the Plan that is not exempt from the requirements of
Section 409A of the Code shall incorporate terms and conditions necessary to avoid the consequences of Section 409A(a)(1) of the Code. Such restrictions, if any, shall be determined by
the Board and contained in the Restricted Stock Unit Award Agreement evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without limitation, a requirement that any
Common Stock that is to be issued in a year following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed pre-determined schedule. 

        (c)    Stock Appreciation Rights.    Each Stock Appreciation Right Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. Stock Appreciation Rights may be granted as stand-alone Stock Awards or in tandem with other Stock Awards. The terms and conditions of
Stock Appreciation Right Agreements may change from time to time, and the terms and conditions of separate Stock Appreciation Right Agreements need not be identical; provided,
however, that each Stock Appreciation Right Agreement shall conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance
of each of the following provisions: 

        (i)    Term.    No Stock Appreciation Right shall be exercisable after
the expiration of ten (10) years from the date of its grant or such shorter period specified in the Stock Appreciation Right Agreement. 

        (ii)    Strike Price.    Each Stock Appreciation Right will be
denominated in shares of Common Stock equivalents. The strike price of each Stock Appreciation Right shall not be less than one hundred percent (100%) of the Fair Market Value equivalents subject to
the Stock Appreciation Right on the date of grant. 

        (iii)    Calculation of Appreciation.    The appreciation distribution
payable on the exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of shares of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right, and with
respect to which the Participant is exercising the Stock Appreciation Right on such date, over (B) the strike price that will be determined by the Board at the time of grant of the Stock
Appreciation Right. 

        (iv)    Vesting.    At the time of the grant of a Stock Appreciation
Right, the Board may impose such restrictions or conditions to the vesting of such Stock Appreciation Right as it, in its sole discretion, deems appropriate. 

        (v)    Exercise.    To exercise any outstanding Stock Appreciation
Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. 

9

 

        (vi)    Payment.    The appreciation distribution in respect to a
Stock Appreciation Right may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and set forth in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right. 

        (vii)    Termination of Continuous Service.    In the event that a
Participant's Continuous Service terminates other than for Cause, the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such
Stock Appreciation Right as of the date of termination of Continuous Service) but only within such period of time ending on the earlier of (A) the date three (3) months following the
termination of the Participant's Continuous Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement), or (B) the expiration of the term of the Stock
Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Stock Appreciation Right within the
time specified herein or in the Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right shall terminate. 

        (viii)    Termination for Cause.    Except as explicitly provided
otherwise in an Participant's Stock Appreciation Right Agreement, in the event that a Participant's Continuous Service is terminated for Cause, the Stock Appreciation Right shall terminate upon the
termination date of such Participant's Continuous Service, and the Participant shall be prohibited from exercising his or her Stock Appreciation Right from and after the time of such termination of
Continuous Service. 

        (ix)    Compliance with Section 409A of the
Code.    Notwithstanding anything to the contrary set forth herein, any Stock Appreciation Rights granted under the Plan that are not exempt from the requirements of
Section 409A of the Code shall incorporate terms and conditions necessary to avoid the consequences described in Section 409A(a)(1) of the Code. Such restrictions, if any, shall be
determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. For example, such restrictions may include, without limitation, a requirement
that a Stock Appreciation Right that is to be paid wholly or partly in cash must be exercised and paid in accordance with a fixed pre-determined schedule. 

        (d)    Performance Awards.    

        (i)    Performance Stock Awards.    A Performance Stock Award is a
Stock Award that may be granted, may vest, or may be exercised based upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not, require
the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained shall be conclusively determined by the Committee in its sole discretion. The maximum number of shares that may be granted to any Participant in a
calendar year attributable to Performance Stock Awards described in this Section 6(d)(i) shall not exceed 1,000,000 shares of Common Stock. In addition, to the extent permitted by
applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards. 

        (ii)    Performance Cash Awards.    A Performance Cash Award is a cash
award that may be granted upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period of Continuous
Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been
attained shall be conclusively determined by the Committee in its sole discretion. The maximum value that may be granted to any Participant in any calendar year attributable to cash awards described
in this Section 6(d)(ii) shall not $2,000,000. The Board may provide for or, 

10

 

subject
to such terms and conditions as the Board may specify, may permit a Participant to elect for, the payment of any Performance Cash Award to be deferred to a specified date or event. The
Committee may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or
such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the
Board may determine that Common Stock authorized under the Plan may be used in payment of Performance Cash Awards, including additional shares in excess of the Performance Cash Award as an inducement
to hold shares of Common Stock. 

        (e)    Other Stock Awards.    Other forms of Stock Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions
of the Plan, the Board shall have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common
Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards. 

7.    COVENANTS OF THE COMPANY.    

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

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

        (c)    No Obligation to Notify.    The Company shall have no duty or obligation to any holder of a Stock Award to
advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination
or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder
of such Stock Award. 

8.    MISCELLANEOUS.    

        (a)    Use of Proceeds from Sales of Common Stock.    Proceeds from the sale of shares of Common Stock pursuant to
Stock Awards shall constitute general funds of the Company. 

        (b)    Corporate Action Constituting Grant of Stock Awards.    Corporate action constituting a grant by the Company of
a Stock Award to any Participant shall be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument,
certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant. 

11

   
        (c)    Stockholder Rights.    No Participant shall be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Common Stock subject to such Stock Award unless and until (i) such Participant has validly exercised the Stock Award pursuant to its terms and
(ii) the issuance of the Common Stock pursuant to such exercise has been entered into the books and records of the Company. 

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

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

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

        (g)    Withholding Obligations.    Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its
sole discretion, satisfy any federal, state or local tax withholding obligation relating to an Award by any of the following means (in addition to the Company's right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares
of Common Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount
of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding
cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award
Agreement. 

12

 

        (h)    Electronic Delivery.    Any reference herein to a "written" agreement or document shall include any agreement
or document delivered electronically or posted on the Company's intranet. 

        (i)    Deferrals.    To the extent permitted by applicable law, the Board, in its sole discretion, may determine that
the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral
elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide
for distributions while a Participant is still an employee. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants may receive
payments, including lump sum payments, following the Participant's termination of employment or retirement, and implement such other terms and conditions consistent with the provisions of the Plan and
in accordance with applicable law. 

        (j)    Compliance with Section 409A of the Code.    To the extent that the Board determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences described
in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and related Department of
Treasury guidance. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Board determines that any Award may be subject to Section 409A
of the Code and related Department of Treasury guidance, the Board may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (i) exempt the Award from Section 409A
of the Code and/or preserve the
intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance. 

9.    ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.    

        (a)    Capitalization Adjustments.    In the event of a Capitalization Adjustment, the Board shall appropriately and
proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that
may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(d), (iii) the class(es) and maximum number of securities that may be awarded to any person
pursuant to Section 3(e) and 6(d)(i), and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive. 

        (b)    Dissolution or Liquidation.    Except as otherwise provided in a Stock Award Agreement, in the event of a
dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or
the Company's right of repurchase) shall terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company's repurchase rights may
be repurchased by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided, however, that the
Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not
previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion. 

        (c)    Corporate Transaction.    The following provisions shall apply to Stock Awards in the event of a Corporate
Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the holder of the Stock Award. 

13

 

        (i)    Stock Awards May Be Assumed.    Except as otherwise stated in
the Stock Award Agreement, in the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation's parent company) may assume or
continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding under the Plan (including but not limited to, awards to acquire the same
consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant
to Stock Awards may be assigned by the Company to the successor of the Company (or the successor's parent company, if any), in connection with such Corporate Transaction. A surviving corporation or
acquiring corporation (or its parent) may choose to assume or continue only a portion of a Stock Award or
substitute a similar stock award for only a portion of a Stock Award. The terms of any assumption, continuation or substitution shall be set by the Board in accordance with the provisions of
Section 2. 

        (ii)    Stock Awards Held by Current Participants.    Except as
otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue
such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards in accordance with subsection (i) above, then with respect to Stock Awards that have not been
assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the
"Current Participants"), the vesting of such Stock Awards (and, with respect to Options and Stock Appreciation Rights, the time at which such Stock
Awards may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the effective time of such Corporate Transaction as the Board
shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and such Stock Awards shall
terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Stock
Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction). 

        (iii)    Stock Awards Held by Persons other than Current
Participants.    Except as otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards in accordance with subsections
(i) or (ii) above, respectively, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, the
vesting of such Stock Awards (and, if applicable, the time at which such Stock Award may be exercised) shall not be accelerated and such Stock Awards (other than a Stock Award consisting of vested and
outstanding shares of Common Stock not subject to a forfeiture condition or the Company's right of repurchase) shall terminate if not exercised (if applicable) prior to the effective time of the
Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall not
terminate and may continue to be exercised notwithstanding the Corporate Transaction. 

        (iv)    Payment for Stock Awards in Lieu of
Exercise.    Notwithstanding the foregoing, in the event a Stock Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the
Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise such Stock Award but will receive a payment, in such form as may be determined by the Board, equal in
value to the excess, if any, of (A) the value of the property the holder of the Stock Award would have received upon the exercise of the Stock Award (including, at the 

14

 

discretion
of the Board, any unvested portion of such Stock Award), over (B) any exercise price payable by such holder in connection with such exercise. 

        (d)    Change in Control.    A Stock Award may be subject to additional acceleration of vesting and exercisability
upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the
Participant, but in the absence of such provision, no such acceleration shall occur. 

10.    TERMINATION OR SUSPENSION OF THE PLAN.    

        (a)    Plan Term.    Unless sooner terminated by the Board pursuant to Section 2, the Plan shall automatically
terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Awards may be granted
under the Plan while the Plan is suspended or after it is terminated. 

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

11.    EFFECTIVE DATE OF PLAN.    

        The
Plan shall become effective on the Effective Date. Prior to the Effective Date, the Prior Plan is unaffected by the Plan, and Stock Awards shall continue to be granted from the Prior
Plan. If the Plan has not been approved by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted by the Board, the adoption of the Plan shall be
null and void and the Prior Plan shall continue unaffected by the adoption of the Plan. 

12.    CHOICE OF LAW.    

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

13.    DEFINITIONS.    As used in the Plan, the definitions contained in this
Section 13 shall apply to the capitalized terms indicated below: 

        (a)   "Affiliate" means, at the time of determination, any "parent" or
"subsidiary" of the Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the authority to determine the time or times at which "parent" or "subsidiary"
status is determined within the foregoing definition. 

        (b)   "Award" means a Stock Award or a Performance Cash Award. 

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

        (d)   "Capitalization Adjustment" means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other transaction not involving the receipt of consideration by the Company. Notwithstanding the foregoing, the conversion of any convertible securities of the Company
shall not be treated as a transaction "without receipt of consideration" by the Company. 

        (e)   "Cause" means with respect to a Participant, the occurrence of any of the
following events: (i) such Participant's commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof;
(ii) such Participant's attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant's intentional, material violation of any
contract or agreement between the Participant and 

15

 

the
Company or of any statutory duty owed to the Company; (iv) such Participant's unauthorized use or disclosure of the Company's confidential information or trade secrets; or (v) such
Participant's gross misconduct. The determination that a termination of the Participant's Continuous Service is either for Cause or without Cause shall be made by the Company in its sole discretion.
Any determination by the Company that the Continuous Service of a Participant was terminated by reason of dismissal without Cause for the purposes of outstanding Awards held by such Participant shall
have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose. 

        (f)    "Change in Control" means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events: 

          (i)  any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company's then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or
(B) solely because the level of Ownership held by any Exchange Act Person (the "Subject Person") exceeds the designated percentage threshold of
the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any
additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over
the designated percentage threshold, then a Change in Control shall be deemed to occur; 

         (ii)  there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar
transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions relative to each other as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; 

       (iii)  the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the
Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation; 

        (iv)  there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its
Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions
relative to each other as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or 

         (v)  individuals who, on the date the Plan is adopted by the Board, are members of the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the members of the Board; (provided, however, that if the appointment or election (or nomination for
election) of 

16

 

any
new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of the Plan, be considered as a
member of the Incumbent Board). 

        Notwithstanding
the foregoing or any other provision of the Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or
any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if
no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. 

        The
Board may, in its sole discretion and without Participant consent, amend the definition of "Change in Control" to conform to the definition of "Change of Control" under
Section 409A of the Code and related Department of Treasury guidance. 

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

        (h)   "Committee" means a committee of one (1) or more Directors to whom
authority has been delegated by the Board in accordance with Section 2(c). 

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

        (j)    "Company" means NovaCardia Inc., a Delaware corporation. 

17

   
        (k)   "Consultant" means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered a "Consultant" for purposes of the Plan. 

        (l)    "Continuous Service" means that the Participant's service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant's service with the Company or
an Affiliate, shall not terminate a Participant's Continuous Service. For example, a change in status from an employee of the Company to a Consultant (whether to the Company or to an Affiliate) or to
a Director shall not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party's sole discretion, may
determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by the Board or the chief executive officer of the Company, including sick leave,
military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may
be provided in the Company's leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. 

        (m)  "Corporate Transaction" means the occurrence, in a single transaction or
in a series of related transactions, of any one or more of the following events: 

          (i)  a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the
consolidated assets of the Company and its Subsidiaries; 

         (ii)  a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company; 

       (iii)  the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving
corporation; or 

        (iv)  the consummation of a merger, consolidation or similar transaction following which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash or otherwise. 

        (n)   "Covered Employee" shall have the meaning provided in
Section 162(m)(3) of the Code and the regulations promulgated thereunder. 

        (o)   "Director" means a member of the Board. 

        (p)   "Disability" means, with respect to a Participant, the inability of such
Participant 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 can be expected to last for
a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code. 

        (q)   "Effective Date" means the date of the underwriting agreement between the
Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering. 

18

 

        (r)   "Employee" means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an "Employee" for purposes of the Plan. 

        (s)   "Entity" means a corporation, partnership, limited liability company or
other entity. 

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

        (u)   "Exchange Act Person" means any natural person, Entity or "group" (within
the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee
benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company,
(iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange
Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities. 

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

          (i)  If the Common Stock is listed on any established stock exchange, the Fair Market Value of a share of Common Stock shall
be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange (or the exchange with the greatest volume of trading in the Common Stock) on the
date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable. Unless otherwise provided by the Board,
if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date of determination, then the Fair Market Value shall be the closing sales price (or closing
bid if no sales were reported) on the last preceding date for which such quotation exists. 

         (ii)  In the absence of such market for the Common Stock, the Fair Market Value shall be determined by the Board in good faith
and in a manner that complies with Section 409A of the Code. 

        (w)  "Incentive Stock Option" means an Option that is intended to be, and
qualifies as, an "incentive stock option" within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

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

        (y)   "Nonstatutory Stock Option" means any Option that does not qualify as an
Incentive Stock Option. 

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

19

 

        (aa) "Option" means an Incentive Stock Option or a Nonstatutory Stock Option
to purchase shares of Common Stock granted pursuant to the Plan. 

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

        (cc) "Optionholder" means a person to whom an Option is granted pursuant to
the Plan or, if permitted under the terms of the Plan, such other person who holds an outstanding Option. 

        (dd) "Other Stock Award" means an award based in whole or in part by
reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d). 

        (ee) "Other Stock Award Agreement" means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject to the terms and conditions of the
Plan. 

        (ff)  "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company
or an "affiliated corporation" who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of
the Company or an "affiliated corporation," and does not receive remuneration from the Company or an "affiliated corporation," either directly or indirectly, in any capacity other than as a Director,
or (ii) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code. 

        (gg) "Own," "Owned," "Owner," "Ownership" A person or Entity shall be deemed
to "Own," to have "Owned," to be the "Owner" of, or to have acquired "Ownership" of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities. 

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

        (ii)   "Performance Cash Award" means an award of cash granted pursuant to the
terms and conditions of Section 6(d)(ii). 

        (jj)  "Performance Criteria" means the one or more criteria that the Board
shall select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or
combination of, the following: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization;
(iv) total stockholder return; (v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) gross margin;
(ix) operating income; (x) net income (before or after taxes); (xi) net operating income; (xii) net operating income after tax; (xiii) pre-tax profit;
(xiv) operating cash flow; (xv) sales or revenue targets; (xvi) increases in revenue or product revenue; (xvii) expenses and cost reduction goals;
(xviii) improvement in or attainment of working capital levels; (xix) economic value added (or an equivalent metric); (xx) market share; (xxi) cash flow; (xxii) cash
flow per share; (xxiii) share price performance; (xxiv) debt reduction; (xxv) implementation or completion of projects or processes; (xxvi) customer satisfaction;
(xxvii) completion of regulatory or development milestones; (xxviii) stockholders' equity; and (xxix) to the extent that an Award is not intended to comply with
Section 162(m) of the Code, other measures of performance selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree
of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash 

20

 

Award.
The Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to use for such Performance Period. 

        (kk) "Performance Goals" means, for a Performance Period, the one or more
goals established by the Board for the Performance Period based upon the satisfaction of the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to
one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or
more relevant indices. At the time of the grant of any Award, the Board is authorized to determine whether, when calculating the attainment of Performance Goals for a Performance Period: (i) to
exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings;
(iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any statutory
adjustments to corporate tax rates; and (v) to exclude the effects of any "extraordinary items" as determined under generally accepted accounting principles. In addition, the Board retains the
discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals. 

        (ll)   "Performance Period" means the period of time selected by the Board over
which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to and the payment of a Stock Award or a Performance Cash Award. Performance
Periods may be of varying and overlapping duration, at the sole discretion of the Board. 

        (mm) "Performance Stock Award" means a Stock Award granted under the terms
and conditions of Section 6(d)(i). 

        (nn) "Plan" means this NovaCardia, Inc. 2007 Equity Incentive Plan. 

        (oo) "Prior Plan" means the Company's 2003 Equity Incentive Plan as in effect
immediately prior to the Effective Date. 

        (pp) "Restricted Stock Award" means an award of shares of Common Stock which
is granted pursuant to the terms and conditions of Section 6(a). 

        (qq) "Restricted Stock Award Agreement" means a written agreement between the
Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement shall be subject to the terms and
conditions of the Plan. 

        (rr)  "Restricted Stock Unit Award" means an unfunded right to receive shares
of Common Stock at a future date which is granted pursuant to the terms and conditions of Section 6(b). 

        (ss) "Restricted Stock Unit Award Agreement" means a written agreement
between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement shall be
subject to the terms and conditions of the Plan. 

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

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

        (vv) "Stock Appreciation Right" means a right to receive the appreciation on
Common Stock that is granted pursuant to the terms and conditions of Section 6(c). 

        (ww) "Stock Appreciation Right Agreement" means a written agreement between
the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation 

21

 

Right
grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions of the Plan. 

        (xx) "Stock Award" means any right to receive Common Stock granted under the
Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award or any Other
Stock Award. 

        (yy) "Stock Award Agreement" means a written agreement between the Company
and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

        (zz) "Subsidiary" means, with respect to the Company, (i) any
corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent (50%). 

        (aaa) "Ten Percent Stockholder" means a person who Owns (or is deemed to Own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate. 

22

NOVACARDIA, INC.

2007 EQUITY INCENTIVE PLAN  

 STOCK OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)  

        Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement,
NovaCardia, Inc. (the "Company") has granted you an option under its 2007 Equity Incentive Plan (the
"Plan") to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant
Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan. 

        The
details of your option are as follows: 

        1.    VESTING.    Subject to the limitations contained herein, your option will vest as provided in your Grant Notice,
provided that vesting will cease upon the termination of your Continuous Service. 

        2.    NUMBER OF SHARES AND EXERCISE PRICE.    The number of shares of Common Stock subject to your option and your
exercise price per share referenced in your Grant Notice may be adjusted from time to time for any Capitalization Adjustment. 

        3.    EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES.    If you are an Employee eligible for overtime
compensation under the Fair Labor Standards Act of 1938, as amended (i.e., a "Non-Exempt
Employee"), you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant specified in your
Grant Notice, notwithstanding any other provision of your option. 

        4.    METHOD OF PAYMENT.    Payment of the exercise price is due in full upon exercise of all or any part of your
option. You may elect to make payment of the exercise price in cash or by check or in any other manner permitted by your Grant Notice, which may include
one or more of the following: 

        (a)   Bank draft or money order payable to the Company. 

        (b)   In the Company's sole discretion at the time your option is exercised and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds. 

        (c)   In the Company's sole discretion at the time your option is exercised and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall Street Journal, by delivery to the Company (either by actual delivery or attestation)
of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise.
"Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include delivery to the Company of your attestation of ownership of such shares of
Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company of Common Stock to the extent such tender would violate the
provisions of any law, regulation or agreement restricting the redemption of the Company's stock. 

        (d)   By a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued
upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that
the Company shall accept a cash or other payment from you to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be
issued; provided, further, that shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter to the
extent that (i) shares are used to pay the 

exercise
price pursuant to the "net exercise," (ii) shares are delivered to you as a result of such exercise, and (iii) shares are withheld to satisfy tax withholding obligations. 

        (e)   In any other form of legal consideration that may be acceptable to the Board. 

        5.    WHOLE SHARES.    You may exercise your option only for whole shares of Common Stock. 

        6.    SECURITIES LAW COMPLIANCE.    Notwithstanding anything to the contrary contained herein, you may not exercise
your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with other applicable laws and
regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations. 

        7.    TERM.    You may not exercise your option before the commencement or after the expiration of its term. The term
of your option commences on the Date of Grant and expires upon the earliest of the following: 

        (a)   three (3) months after the termination of your Continuous Service for any reason other than your Disability or
death (the "Three Month Post-Termination Exercise Period"); 

        (b)   twelve (12) months after the termination of your Continuous Service due to your Disability; 

        (c)   eighteen (18) months after your death if you die either during your Continuous Service or within three
(3) months after your Continuous Service terminates; 

        (d)   the Expiration Date indicated in your Grant Notice; or 

        (e)   the day before the tenth (10th) anniversary of the Date of Grant. 

        If
your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times
beginning on the date of grant of your option and ending on the day three (3) months before the date of your option's exercise, you must be an employee of the Company or an Affiliate, except in
the event of your death or your permanent and total disability, as defined in Section 22(e) of the Code. (The definition of disability in Section 22(e) of the Code is different from the
definition of the Disability under the Plan). The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option
will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you
otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates. 

        8.    EXTENSION OF TERM.    

        (a)   If during any part of the Three Month Post-Termination Exercise Period, your option is not exercisable solely
because of the condition set forth in Section 6, your option shall not expire until the earlier of the Expiration Date indicated in your Grant Notice or until it shall have been exercisable for
an aggregate period of three (3) months after the termination of your Continuous Service. 

        (b)   If during any part of the Three Month Post-Termination Exercise Period, the sale of shares issued upon
exercise of your option would violate the Company's Insider Trading Policy, your option shall not expire until the earlier of (i) the Expiration Date indicated in your Grant Notice,
(ii) until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service during which you can sell the shares issued upon
exercise of your option without violating the Company's Insider Trading Policy, (iii) the 15th day of the third month after the date on which your option would cease to be
exercisable but for this 

section,
or (iv) such longer period as would not cause your option to become subject to Section 409A(a)(1) of the Code. 

        (c)   If (i) you are a Non-Exempt Employee, (ii) you terminate your Continuous Service within six
(6) months after the Date of Grant specified in your Grant Notice, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your
option shall not expire until the earlier of (A) the later of the date that is seven (7) months after the Date of Grant specified in your Grant Notice or the date that is three
(3) months after the termination of your Continuous Service or (B) the Expiration Date indicated in your Grant Notice. 

        9.    EXERCISE.    

        (a)   You may exercise the vested portion of your option during its term by delivering a Notice of Exercise (in a form
designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require. 

        (b)   By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to
enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the
lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such
exercise. 

        (c)   If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in
writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the
date of your option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option. 

        10.    TRANSFERABILITY.    

        (i)    Restrictions on Transfer.    Your option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable during your lifetime only by you; provided, however,
that the Board may, in its sole discretion, permit you to transfer your option in a manner that is not prohibited by applicable tax and/or securities laws upon your request. Additionally, if your
option is an Incentive Stock Option, the Board may permit you to transfer your option only to the extent permitted by Sections 421, 422 and 424 of the Code and the regulations and other guidance
thereunder. 

        (b)    Domestic Relations Orders.    Notwithstanding the foregoing,
your option may be transferred pursuant to a domestic relations order; provided, however, that if your option is an Incentive Stock Option, your option
shall be deemed to be a Nonstatutory Stock Option as a result of such transfer. 

        (c)    Beneficiary Designation.    Notwithstanding the foregoing, you
may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of your death, shall thereafter be entitled
to exercise your option. 

        11.    OPTION NOT A SERVICE CONTRACT.    Your option is not an employment or service contract, and nothing in your
option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees to continue any relationship that
you might have as a Director or Consultant for the Company or an Affiliate. 

        12.    WITHHOLDING OBLIGATIONS.    

        (a)   At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you
hereby authorize withholding from payroll and any other amounts 

payable
to you, and otherwise agree to make adequate provision for (including by means of a "cashless exercise" pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which
arise in connection with the exercise of your option. 

        (b)   Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable
legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock
having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to
avoid variable award accounting). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the
preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding
the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility. 

        (c)   You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are
satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for herein unless such obligations are satisfied. 

        13.    NOTICES.    Any notices provided for in your option or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at
the last address you provided to the Company. 

        14.    GOVERNING PLAN DOCUMENT.    Your option is subject to all the provisions of the Plan, the provisions of which
are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control. 

NOVACARDIA, INC.

STOCK OPTION GRANT NOTICE

2007 EQUITY INCENTIVE PLAN  

        NovaCardia, Inc. (the "Company"), pursuant to its 2007 Equity Incentive Plan (the
"Plan"), hereby grants to Optionholder an option to purchase the number of shares of the Company's Common Stock set forth below. This option is subject
to all of the terms and conditions as set forth herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their
entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Stock Option Agreement. 

	Optionholder:	 	

	Date of Grant:	 	

	Vesting Commencement Date:	 	

	Number of Shares Subject to Option:	 	

	Exercise Price (Per Share):	 	

	Total Exercise Price:	 	

	Expiration Date:	 	

	Type of Grant:	 	o	 	Incentive Stock Option1	 	o	 	Nonstatutory Stock Option
	
Exercise Schedule:	
 	

Same as Vesting Schedule
	
Vesting Schedule:	
 	

[1/4th of the shares vest one year after the Vesting Commencement Date.
	 	 	1/48th of the shares vest monthly thereafter over the next three years.]
	
Payment:	
 	

By one or a combination of the following methods of payment (described in the Stock Option Agreement):
	

 	
 	

o	
 	

Cash or check	
 	

 
	 	 	o	 	Bank draft or money order payable to the Company
	 	 	o	 	Pursuant to a Regulation T program (cashless exercise) if the shares are publicly traded
	 	 	o	 	Delivery of already-owned shares if the shares are publicly traded
	 	 	o	 	By net exercise, if the Company has established procedures for net exercise

        Additional Terms/Acknowledgements:    The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this
Stock Option Grant Notice, the Stock Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Stock Option Agreement and the
Plan set forth the entire understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with
the exception of (i) options and other equity awards previously granted and delivered to Optionholder under the Plan or any other equity incentive plan of the Company, and (ii) the
following agreements only: 

	OTHER AGREEMENTS:	 	 
	 	 	

	 	 	

	1
	If
this is an Incentive Stock Option, it (plus other outstanding incentive stock options granted to Optionholder by the Company) cannot be first  exercisable for more than $100,000 in value (measured by
exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. 

	OPTIONHOLDER:	 	NOVACARDIA, INC.
	

 	

 	
 	

By:	

 
	
 Signature	 	 	
 Signature
	Date:	 	 	Title:	 
	 	
	 	 	

	Residence Address:	 	 	Date:	 
	 	
	 	 	

	

	
 	

 	

 

ATTACHMENTS:  Stock Option Agreement, 2007 Equity Incentive Plan and Notice of Exercise 

ATTACHMENT I

STOCK OPTION AGREEMENT  

ATTACHMENT II

2007 EQUITY INCENTIVE PLAN  

ATTACHMENT III

NOTICE OF EXERCISE  

NOTICE OF EXERCISE  

NOVACARDIA, INC.

12651 High Bluff Drive

Suite 200

San Diego, CA 92130 

	 	 	Date of Exercise:	 	 

Ladies
and Gentlemen: 

        This
constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below. 

	Type of option (check one):	 	Incentive o        Nonstatutory o
	

Stock option grant date:	
 	

 

	

Number of shares as to which option is exercised:	
 	

 

	

Certificates to be issued in name of:	
 	

 

	

Exercise price per share:	
 	

$                        
	

Total exercise price:	
 	

$                        
	

Payment delivered herewith:	
 	

$                        
	

Form of payment:	
 	

o	

Cash or check
	 	 	o	Bank draft or money order payable to the Company
	 	 	o	Pursuant to a Regulation T program (cashless exercise) if the shares are publicly traded
	 	 	o	Delivery of already-owned shares if the shares are publicly traded
	 	 	o	Net exercise if the Company has established procedures for net exercise

        By
this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the 2007 Equity Incentive Plan, (ii) to provide for the
payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock
option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this option that occurs within two
(2) years after the date of grant of this option or within one (1) year after such shares of Common Stock are issued upon exercise of this option. 

        I
agree that, if required by the Company (or a representative of the underwriters) in connection with an underwritten registration of the offering of any securities of the Company under
the Securities Act, I will not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such period following the effective date of the
registration statement of the Company filed under the Securities Act as may be requested by the Company or the representative of 

the
underwriters. I further agree that the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period. 

	SUBMITTED BY:	 	ACCEPTED BY:
	

 	
 	
NOVACARDIA, INC.
	

 
 Printed Name	
 	

By:	
 	

 
 Signature
	

 	
 	

Title:	
 	

 

	

 
 Signature	
 	

Date:	
 	

 

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Exhibit 10.4    
    

NOVACARDIA, INC.  

 2007 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN  

 ADOPTED BY BOARD OF DIRECTORS: MARCH 28, 2007

APPROVED BY STOCKHOLDERS:                        , 2007

EFFECTIVE DATE:                        , 2007  

1.    PURPOSES.    

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

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

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

2.    DEFINITIONS.    

        (a)   "Affiliate" means, at the time of determination, any "parent" or
"subsidiary" of the Company as such terms are defined in Rule 405 of the Securities Act. The Board shall have the authority to determine the time or times at which "parent" or "subsidiary"
status is determined within the foregoing definition. 

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

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

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

        (e)   "Capitalization Adjustment" means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or subject to any Option after the Effective Date without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other transaction not involving the receipt of consideration by the Company. Notwithstanding the foregoing, the conversion of any convertible securities of the Company
shall not be treated as a transaction "without receipt of consideration" by the Company. 

        (f)    "Change in Control" means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events: 

          (i)  any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company's then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the
Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because
the level of Ownership held by any Exchange Act Person (the "Subject Person") exceeds the designated percentage threshold of the outstanding voting
securities as a result of a repurchase or other acquisition of voting securities by the 

 

Company
reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur; 

         (ii)  there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar
transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions relative to each other as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; 

       (iii)  the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the
Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation; 

        (iv)  there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its
Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions
relative to each other as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or 

         (v)  individuals who, on the date the Plan is adopted by the Board, are members of the Board (the  "Incumbent Board") cease for any reason to constitute
at least a majority of the members of the Board; (provided,
however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of the Plan, be considered as a member of the Incumbent Board). 

        For
the avoidance of doubt, the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of
the Company. 

        Notwithstanding
the foregoing or any other provision of the Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or
any Affiliate and the Optionholder shall supersede the foregoing definition with respect to Options subject to such agreement; provided, however, that
if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. 

        The
Board may, in its sole discretion and without Optionholder consent, amend the definition of "Change in Control" to conform to the definition of "Change of Control" under
Section 409A of the Code and related Department of Treasury guidance. 

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

        (h)   "Committee" means a committee of one (1) or more Directors to whom
authority has been delegated by the Board in accordance with Section 3(c). 

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

2

 

        (j)    "Company" means NovaCardia, Inc., a Delaware corporation. 

        (k)   "Consultant" means any person, including an advisor, who is
(i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an
Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered a "Consultant" for purposes of
the Plan. 

        (l)    "Continuous Service" means that the Optionholder's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Optionholder renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for which the Optionholder renders such service, provided that there is no interruption or termination of the Optionholder's
service with the Company or an Affiliate, shall not terminate a Optionholder's Continuous Service. For example, a change in status from a Non-Employee Director of the Company to a
consultant to an Affiliate or an Employee of the Company shall not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the
Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in an Option only to such extent as may be
provided in the Company's leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Optionholder, or as otherwise required by law. 

        (m)  "Corporate Transaction" means the occurrence, in a single transaction or
in a series of related transactions, of any one or more of the following events: 

          (i)  a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the
consolidated assets of the Company and its Subsidiaries; 

         (ii)  a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company; 

       (iii)  the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving
corporation; or 

        (iv)  the consummation of a merger, consolidation or similar transaction following which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash or otherwise. 

        (n)   "Director" means a member of the Board. 

        (o)   "Disability" means, with respect to an Optionholder, the inability of
such Optionholder 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 can be expected to
last for a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code. 

        (p)   "Effective Date" means the date of the underwriting agreement between the
Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering. 

        (q)   "Employee" means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an "Employee" for purposes of the Plan. 

3

 

        (r)   "Entity" means a corporation, partnership, limited liability company or
other entity. 

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

        (t)    "Exchange Act Person" means any natural person, Entity or "group" (within
the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee
benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company,
(iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange
Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities. 

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

          (i)  If the Common Stock is listed on any established stock exchange, the Fair Market Value of a share of Common Stock shall
be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange (or the exchange with the greatest volume of trading in the Common Stock) on the
date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable. Unless otherwise provided by the Board,
if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date of determination, then the Fair Market Value shall be the closing sales price (or closing
bid if no sales were reported) on the last preceding date for which such quotation exists. 

         (ii)  In the absence of such market for the Common Stock, the Fair Market Value shall be determined by the Board in good faith
and in a manner that complies with Section 409A of the Code. 

        (v)   "Initial Grant" means an Option granted to a Non-Employee
Director who meets the specified criteria pursuant to Section 6(a). 

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

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

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

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

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

4

 

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

        (cc) "Own," "Owned," "Owner," "Ownership" A person or Entity shall be deemed
to "Own," to have "Owned," to be the "Owner" of, or to have acquired "Ownership" of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities. 

        (dd) "Plan" means this NovaCardia, Inc. 2007 Non-Employee
Directors' Stock Option Plan. 

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

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

        (gg) "Subsidiary" means, with respect to the Company, (i) any
corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%). 

3.    ADMINISTRATION.    

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

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

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

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

       (iii)  To effect, at any time and from time to time, with the consent of any adversely affected Optionholder, (1) the
reduction of the exercise price of any outstanding Option under the Plan, (2) the cancellation of any outstanding Option under the Plan and the grant in substitution therefor of (A) a
new Option under the Plan or another equity plan of the Company covering the same or a different number of shares of Common Stock, (B) cash and/or (C) other valuable consideration (as
determined by the Board, in its sole discretion), or (3) any other action that is treated as a repricing under generally accepted accounting principles. 

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

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

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

5

   
        (c)    Delegation to Committee.    The Board may delegate some or all of the administration of the Plan to a
Committee
or Committees. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been
delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board
may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. 

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

4.    SHARES SUBJECT TO THE PLAN.    

        (a)    Share Reserve.    Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the
shares of Common Stock that may be issued pursuant to Options shall not exceed in the 3,000,000 shares of Common Stock plus an annual increase to be added on January 1st of each year commencing
in 2008 and ending on (and including) January 1, 2017, equal to the lesser of: (i) the aggregate number of shares of Common Stock subject to options granted under the Plan as Initial
Grants and Annual Grants during the immediately preceding fiscal year, or (ii) an amount determined by the Board or a Committee. 

        (b)    Reversion of Shares to the Share Reserve.    If any Option shall for any reason expire or otherwise terminate,
in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Option shall revert to and again become available for issuance under the Plan. Also, any
shares reacquired by the Company pursuant to subsection 10(e) or as consideration for the exercise of an Option shall again become available for issuance under the Plan. 

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

5.    ELIGIBILITY.    

        The
Options, as set forth in Section 6, automatically shall be granted under the Plan to all Non-Employee Directors who meet the criteria specified in
Section 6. 

6.    NON-DISCRETIONARY GRANTS.    

        (a)    Initial Grants.    Without any further action of the Board, each person who after the Effective Date is elected
or appointed for the first time to be a Non-Employee Director automatically shall, upon the date of his or her initial election or appointment to be a Non-Employee Director, be
granted an Initial Grant to purchase 60,000 shares of Common Stock on the terms and conditions set forth herein. 

        (b)    Annual Grants.    Without any further action of the Board, on the date of each Annual Meeting, commencing with
the Annual Meeting in 2008, each person who is then a Non-Employee Director automatically shall be granted an Annual Grant to purchase 50,000 shares of Common Stock on the terms and
conditions set forth herein; provided, however, that if a person who is first elected as a Non-Employee Director after the Effective Date
has not been serving as a Non-Employee Director for the entire period since the preceding Annual Meeting, then the number of shares subject to such Annual Grant shall be reduced pro rata
for each full quarter prior to the date of grant during such period for which such person did not serve as a Non- Employee Director. 

6

 

7.    OPTION PROVISIONS.    

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

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

        (b)    Exercise Price.    The exercise price of each Option shall be one hundred percent (100%) of the Fair Market
Value of the Common Stock subject to the Option on the date the Option is granted. 

        (c)    Consideration.    The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the
extent permitted by applicable law, either (i) by cash, check, bank draft or money order payable to the Company at the time the Option is exercised or (ii) at the discretion of the Board
either at the time of the grant of the Option or subsequent thereto (A) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock at the time the Option is
exercised, (B) by a "net exercise" of the Option (as further described below), (C) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise
price to the Company from the sales proceeds or (D) in any other form of legal consideration that may be acceptable to the Board. Unless otherwise specifically provided in the Option, the
purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by
shares of the Common Stock of the Company that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting
purposes). 

        In
the case of a "net exercise" of an Option, the Company will not require a payment of the exercise price of the Option from the Optionholder but will reduce the number of shares of
Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided,
however, that the Company shall accept a cash or other payment from the Optionholder to the extent of any remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole shares to be issued; provided, further, that shares of Common Stock will no longer be subject to an Option and
will not be exercisable thereafter to the extent that (1) shares issuable upon exercise are reduced to pay the exercise price pursuant to the "net exercise", (2) shares are delivered to
the Optionholder as a result of such exercise, and/or (3) shares are withheld to satisfy tax withholding obligations 

        (d)    Transferability of Options.    The Board may, in its sole discretion, impose such limitations on the
transferability of Options as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options shall apply: 

        (i)    Restrictions on Transfer.    An Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder; provided, however, that the Board may,
in its sole discretion, permit transfer of the Option in a manner that is not prohibited by applicable tax and/or securities laws upon the Optionholder's request. 

        (ii)    Domestic Relations Orders.    Notwithstanding the foregoing,
an Option may be transferred pursuant to a domestic relations order, provided, however, that if an Option is an Incentive Stock Option, such Option may
be deemed to be a Nonstatutory Stock Option as a result of such transfer. 

7

 

        (iii)    Beneficiary Designation.    Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option. In the absence of such a designation, the executor or administrator of the Optionholder's estate shall be entitled to exercise the
Option. 

        (e)    Vesting.    Options shall vest as follows: 

          (i)  Initial Grants:    1/36th of the shares of Common Stock subject to an Initial Grant shall vest monthly over
three years. 

         (ii)  Annual Grants:    1/12th of the shares of Common Stock subject to an Annual Grant shall vest monthly over one
year. 

        (f)    Termination of Continuous Service.    In the event that an Optionholder's Continuous Service terminates for any
reason, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service) but only within
such period of time ending on the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall terminate. 

8.    SECURITIES LAW COMPLIANCE.    

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

9.    USE OF PROCEEDS FROM STOCK.    

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

10.    MISCELLANEOUS.    

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

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

        (c)    No Service Rights.    Nothing in the Plan, any Option Agreement or other instrument executed thereunder or any
Option granted pursuant thereto shall confer upon any Optionholder any right to continue to serve the Company as a Non-Employee Director or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's
agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of 

8

 

the
Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. 

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

        (e)    Withholding Obligations.    To the extent provided by the terms of an Option Agreement, the Company may in its
sole discretion, satisfy any federal, state or local tax withholding obligation relating to an Option by any of the following means (in addition to the Company's right to withhold from any
compensation paid to the Optionholder by the Company) or by a combination of such means: (i) causing the Optionholder to tender a cash payment; (ii) withholding shares of Common Stock
from the shares of Common Stock issued or otherwise issuable to the Optionholder in connection with the Option; or (iii) via such other method as may be set forth in the Option Agreement. 

11.    ADJUSTMENTS UPON CHANGES IN COMMON STOCK.    

        (a)    Capitalization Adjustments.    In the event of a Capitalization Adjustment, the Board shall appropriately and
proportionately adjust the class(es) and maximum number of securities subject both to the Plan pursuant to Section 4 and to the nondiscretionary Options specified in Section 6, and the
outstanding Options will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Options. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive. (Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a
transaction "without receipt of consideration" by the Company.) 

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

        (c)    Corporate Transaction.    The following provisions shall apply to Options in the event of a Corporate
Transaction unless otherwise provided in the instrument evidencing the Option or any other written agreement between the Company or any Affiliate and the holder of the Option or unless otherwise
expressly provided by the Board at the time of grant of a Option. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation may assume or continue any or all Options
outstanding under the Plan or may substitute similar stock options for Options outstanding under the Plan (including options to acquire the same consideration paid to the stockholders of the Company,
as the case may be, pursuant to the Corporate Transaction). In the event that any surviving corporation or acquiring corporation does not assume or continue all such outstanding Options or substitute
similar stock options for all such outstanding Options, then with 

9

 

respect
to Options that have been not assumed, continued or substituted and that are held by Optionholders whose Continuous Service has not terminated prior to the effective time of the Corporate
Transaction, the vesting of such Options (and, if applicable, the time at which such Options may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in
full to a date prior to the effective time of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior
to the effective time of the Corporate Transaction), and such Options shall terminate on the effective time of the Corporate Transaction if not exercised (if applicable) at or prior to such effective
time. With respect to any other Options outstanding under the Plan that have not been assumed, continued or substituted, the vesting of such Options (and, if applicable, the time at which such Options
may be exercised) shall not be accelerated, unless otherwise provided in a written agreement between the Company or any Affiliate and the Optionholder, and such Options shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate Transaction. 

        (d)    Change in Control.    If a Change in Control occurs and an Optionholder's Continuous Service with the Company
has not terminated as of, or immediately prior to, the effective time of the Change in Control, then, as of the effective time of such Change in Control, the vesting and exercisability of each
Optionholder's Option or Options shall be accelerated in full. 

12.    AMENDMENT OF THE PLAN AND OPTIONS.    

        (a)    Amendment of Plan.    Subject to the limitations, if any, of applicable law, the Board, at any time and from
time to time, may amend the Plan. However, except as provided in Section 11(a) relating to Capitalization Adjustments, no amendment shall be effective unless approved by the stockholders of the
Company to the extent stockholder approval is necessary to satisfy applicable law. 

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

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

        (d)    Amendment of Options.    The Board, at any time, and from time to time, may amend the terms of any one or more
Options, including, but not limited to, amendments to provide terms more favorable than previously provided in the agreement evidencing an Option, subject to any specified limits in the Plan that are
not subject to Board discretion; provided, however, that the rights under any Option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the Optionholder and (ii) the Optionholder consents in writing. 

13.    TERMINATION OR SUSPENSION OF THE PLAN.    

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

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

14.    EFFECTIVE DATE OF PLAN.    

        The
Plan shall become effective on the Effective Date. If the Plan has not been approved by the stockholders of the Company within twelve (12) months before or after the date the
Plan is adopted by the Board, the adoption of the Plan shall be null and void. 

15.    CHOICE OF LAW.    

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

10

 
 

NOVACARDIA, INC.
  2007 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN    
    
    STOCK OPTION AGREEMENT
  (NONSTATUTORY STOCK OPTION)    
    

        Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement,
NovaCardia, Inc. (the "Company") has granted you an option under its 2007 Non-Employee Directors' Stock Option Plan (the  "Plan") to
purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant
Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan. 

        The
details of your option are as follows: 

        1.    VESTING.    Subject to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service. In addition, if the Company is subject to a Change in Control
before your Continuous Service terminates, then all of the unvested shares subject to this option shall become fully vested and exercisable immediately prior to the effective date of such Change in
Control. 

        2.    NUMBER OF SHARES AND EXERCISE PRICE.    The number of shares of
Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for any Capitalization Adjustment, as provided in the Plan. 

        3.    METHOD OF PAYMENT.    Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may elect to make payment of the exercise price in cash or by check or in any other manner permitted by your Grant
Notice, which may include one or more of the following: 

        (a)   In the Company's sole discretion at the time your option is exercised and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds. 

        (b)   Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in  The Wall Street Journal, by delivery of
already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the
Company's reported earnings (generally six months) or that you did not acquire, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security
interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to
the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock. 

        4.    WHOLE SHARES.    You may exercise your option only for whole
shares of Common Stock. 

        5.    SECURITIES LAW COMPLIANCE.    Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common
Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must
also comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with
such laws and regulations. 

 

        6.    TERM.    You may not exercise your option before the
commencement of its term or after its term expires. The term of your option commences on the Date of Grant and expires upon the earliest of the following: 

        (a)   three (3) months after the termination of your Continuous Service for any reason other than your Disability or
death (or in connection with a Change in Control as provided in subsection (b) below), provided that if during any part of such three- (3-) month period your option is not
exercisable solely because of the condition set forth in the preceding paragraph relating to "Securities Law Compliance," your option shall not expire until the earlier of the Expiration Date or until
it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; 

        (b)   twelve (12) months after the termination of your Continuous Service in connection with a Change in Control where
all of the unvested shares subject to your option become fully vested and exercisable immediately prior to the effective date of such Change in Control in accordance with the provisions of
Section 1 above; 

        (c)   twelve (12) months after the termination of your Continuous Service due to your Disability; 

        (d)   eighteen (18) months after your death if you die either during your Continuous Service or within three
(3) months after your Continuous Service terminates; 

        (e)   the Expiration Date indicated in your Grant Notice; or 

        (f)    the day before the tenth (10th) anniversary of the Date of Grant. 

        Notwithstanding
the foregoing, if your sale of the shares acquired upon exercise of your option would subject you to suit under Section 16(b) of the Exchange Act, your option
shall remain exercisable until the earlier of (i) the expiration of a period of ten (10) days after the date on which a sale of the shares by you would no longer be subject to such suit,
(ii) the expiration of the one hundred and ninetieth (190th) day after your termination of Continuous Service, or (iii) the Expiration Date indicated in your Grant Notice. 

        7.    EXERCISE.    

        (a)   You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so
permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the
Company may designate, during regular business hours, together with such additional documents as the Company may then require. 

        (b)   By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to
enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the
lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such
exercise. 

        8.    TRANSFERABILITY.    Your option is not transferable, except
(i) by will or by the laws of descent and distribution, (ii) with the prior written approval of the Company, by instrument to an inter vivos or testamentary trust, in a form accepted by
the Company, in which the option is to be passed to beneficiaries upon the death of the trustor (settlor) and (iii) with the prior written approval of the Company, by gift, in a form accepted
by the Company, to a permitted transferee under Rule 701 of the Securities Act. 

2

 

        9.    OPTION NOT A SERVICE CONTRACT.    Your option is not an
employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of
the Company or an Affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate. 

        10.    WITHHOLDING OBLIGATIONS.    

        (a)   At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you
hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision as directed by the Company (including by means of a "cashless exercise"
pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent directed by the Company), for any sums required to satisfy the federal, state, local
and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your option. 

        (b)   The Company may, in its sole discretion, and in compliance with any applicable conditions or restrictions of law,
withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law. Any adverse consequences to you arising in connection with such share withholding
procedure shall be your sole responsibility. 

        (c)   You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are
satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for herein. 

        11.    PARACHUTE PAYMENTS.    

        (a)   If any payment or benefit you would receive pursuant to a Change in Control from the Company or otherwise ("Payment")
would (i) constitute a "parachute payment" within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then such Payment shall be equal to the Reduced Amount. The "Reduced Amount" shall be either (x) the largest portion of the Payment that
would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account
all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax
basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting "parachute
payments" is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless you elect in writing a different order (provided,
however, that such election shall be subject to Company approval if made on or after the effective date of the event that triggers the Payment): reduction of cash payments;
cancellation of accelerated vesting of Stock Awards; reduction of employee benefits. In the event that acceleration of vesting of Stock Award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of your Stock Awards (i.e., earliest granted Stock Award cancelled last) unless you elect in writing a different order for
cancellation. 

        (b)   The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the
Change in Control shall perform the foregoing calculations. If the 

3

 

accounting
firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. 

        (c)   The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed
supporting documentation, to you and the Company within fifteen (15) calendar days after the date on which your right to a Payment is triggered (if requested at that time by you or the Company)
or such other time as requested by you or the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish you and the Company with an opinion reasonably acceptable to you that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon you and the Company, except as specified below. 

        (d)   If, notwithstanding any reduction described in this Section 10, the IRS determines that you are liable for the
Excise Tax as a result of the receipt of the payment of benefits as described above, then you
shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that you challenge the final IRS determination, a final judicial
determination, a portion of the payment equal to the "Repayment Amount." The Repayment Amount with respect to the payment of benefits shall be the smallest such amount, if any, as shall be required to
be paid to the Company so that your net after-tax proceeds with respect to any payment of benefits (after taking into account the payment of the Excise Tax and all other applicable taxes
imposed on such payment) shall be maximized. The Repayment Amount with respect to the payment of benefits shall be zero if a Repayment Amount of more than zero would not result in your net
after-tax proceeds with respect to the payment of such benefits being maximized. If the Excise Tax is not eliminated pursuant to this paragraph, you shall pay the Excise Tax. 

        (e)   Notwithstanding any other provision of this Section 10, if (i) there is a reduction in the payment of
benefits as described in this Section 10, (ii) the IRS later determines that you are liable for the Excise Tax, the payment of which would result in the maximization of your net
after-tax proceeds (calculated as if your benefits had not previously been reduced), and (iii) you pay the Excise Tax, then the Company shall pay to you those benefits which were
reduced pursuant to this section contemporaneously or as soon as administratively possible after you pay the Excise Tax so that your net after-tax proceeds with respect to the payment of
benefits is maximized. 

        12.    NOTICES.    Any notices provided for in your option or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States
mail, postage prepaid, addressed to you at the last address you provided to the Company. 

        13.    GOVERNING PLAN DOCUMENT.    Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be
promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control. 

4

 
 

NOVACARDIA, INC.
  STOCK OPTION GRANT NOTICE    
    
    INITIAL GRANT
  (2007 Non-Employee Directors' Stock Option Plan)    
    

NovaCardia, Inc.
(the "Company"), pursuant to its 2007 Non-Employee Directors' Stock Option Plan (the "Plan"), hereby grants to Optionholder an option to purchase the number of
shares of the Company's Common Stock set forth below. This option is subject to all of the terms and conditions as set forth herein and in the Stock Option Agreement, the Plan and the Notice of
Exercise, all of which are attached hereto and incorporated herein in their entirety. 

	Optionholder:	 	
	 	 
	Date of Grant:	 	
	 	 
	Number of Shares Subject to Option:	 	
	 	 
	Exercise Price (Per Share):	 	
	 	 
	Total Exercise Price:	 	
	 	 
	Expiration Date:	 	The day before the 10th anniversary of the Date of Grant	 	 

	

Type of Grant:	
 	

Nonstatutory Stock Option
	

Exercise Schedule:	
 	

Same as Vesting Schedule
	

Vesting Schedule:	
 	

1/36th of the shares vest each month following the Date of Grant.
	

Payment:	
 	

By one or a combination of the following items (described in the Plan and/or Stock

Option Agreement):
	

 	
 	

o	
 	

By cash or check
	 	 	o	 	Pursuant to a Regulation T Program if the Shares are publicly traded
	 	 	o	 	By delivery of already-owned shares if the Shares are publicly traded
	 	 	o	 	Net exercise if the Company has established proceeding for net exercise

Additional Terms/Acknowledgements:  The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this Grant Notice,
the Stock Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding
between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of (i) options or
other equity awards previously granted and delivered to Optionholder under the Plan or under another equity incentive plan of the Company, and (ii) the following agreements only: 

	 	 	OTHER AGREEMENTS:	 	 	 	 
	 	 	 	 	

	 	 	 	 	

	NOVACARDIA, INC.	 	OPTIONHOLDER:
	

By:	

 	
 	

 	

 
	 	
 Signature	 	
 Signature
	

Title:	

 	
 	

Date:	

 
	 	
	 	 	

	

Date:	

 	
 	

 	

 
	 	
	 	 	 

ATTACHMENTS:  Stock Option Agreement, 2007 Non-Employee Directors' Stock Option Plan and Notice of Exercise 

 
 

NOVACARDIA, INC.
  STOCK OPTION GRANT NOTICE    
    
    ANNUAL GRANT
  (2007 Non-Employee Directors' Stock Option Plan)    
    

NovaCardia, Inc.
(the "Company"), pursuant to its 2007 Non-Employee Directors' Stock Option Plan (the "Plan"), hereby grants to Optionholder an option to purchase the number of
shares of the Company's Common Stock set forth below. This option is subject to all of the terms and conditions as set forth herein and in the Stock Option Agreement, the Plan and the Notice of
Exercise, all of which are attached hereto and incorporated herein in their entirety. 

	Optionholder:	 	
	 	 
	Date of Grant:	 	
	 	 
	Number of Shares Subject to Option:	 	
	 	 
	Exercise Price (Per Share):	 	
	 	 
	Total Exercise Price:	 	
	 	 
	Expiration Date:	 	The day before the 10th anniversary of the Date of Grant	 	 

	

Type of Grant:	
 	

Nonstatutory Stock Option
	

Exercise Schedule:	
 	

Same as Vesting Schedule
	

Vesting Schedule:	
 	

1/12th of the shares vest at the end of each month following the Date of Grant.
	

Payment:	
 	

By one or a combination of the following items (described in the Plan and/or Stock Option Agreement):
	

 	
 	

o	
 	

By cash or check
	 	 	o	 	Pursuant to a Regulation T Program if the Shares are publicly traded
	 	 	o	 	By delivery of already-owned shares if the Shares are publicly traded
	 	 	o	 	Net exercise if the Company has established procedures for net exercise

Additional Terms/Acknowledgements:  The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this Grant Notice,
the Stock Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding
between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of (i) options or
other equity awards previously granted and delivered to Optionholder under the Plan or under another equity incentive plan of the Company, and (ii) the following agreements only: 

	 	 	OTHER AGREEMENTS:	 	 	 	 
	 	 	 	 	

	 	 	 	 	

	NOVACARDIA, INC.	 	OPTIONHOLDER:
	

By:	

 	
 	

 	

 
	 	
 Signature	 	
 Signature
	

Title:	

 	
 	

Date:	

 
	 	
	 	 	

	

Date:	

 	
 	

 	

 
	 	
	 	 	 

ATTACHMENTS:  Stock Option Agreement, 2007 Non-Employee Directors' Stock Option Plan and Notice of Exercise 

 
 

NOTICE OF EXERCISE
  NOVACARDIA, Inc.
  2007 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN    
    

NovaCardia, Inc.

12651 High Bluff Drive

Suite 200

San Diego, CA 92130

        Date
of Exercise:                    

Ladies
and Gentlemen: 

        This
constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below. 

	Stock option dated:	 	 	 
	 	 	

	

Number of shares as to which option is exercised:	
 	
 	

 
	 	 	

	

Certificates to be issued in name of:	
 	
 	

 
	 	 	

	

Total exercise price:	
 	
$	

 
	 	 	

	 	
 Cash or check payment delivered herewith:	
 	
$	

 
	 	 	

	 	
 Regulation T Program (cashless exercise)	
 	
$	

 
	 	 	

	 	
 Value of                          shares of NovaCardia, Inc. common stock
delivered herewith1:	
 	
$	

 
	 	 	

	 	
 Value of                          shares of NovaCardia, Inc. common stock
pursuant to net exercise:	
 	
$	

 
	 	 	

	1
	Shares
must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, must have been
owned for the minimum period required in the option, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an
executed assignment separate from certificate. 

        By
this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the NovaCardia, Inc. 2007 Non-Employee Directors'
Stock Option Plan, and (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option. 

	 	 	Very truly yours,
	

 	
 	

QuickLinks

Exhibit 10.4

NOVACARDIA, INC. 2007 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN STOCK OPTION AGREEMENT (NONSTATUTORY STOCK OPTION)

NOVACARDIA, INC. STOCK OPTION GRANT NOTICE INITIAL GRANT (2007 Non-Employee Directors' Stock Option Plan)

NOVACARDIA, INC. STOCK OPTION GRANT NOTICE ANNUAL GRANT (2007 Non-Employee Directors' Stock Option Plan)

NOTICE OF EXERCISE NOVACARDIA, Inc. 2007 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

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