Theravance Inc – IPO: ‘S-1’ on 3/21/00 – EX-10.2

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Initial Public Offering (IPO):  Registration Statement (General Form)   —   Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)                 99    465K 
 2: EX-3.2      Articles of Incorporation/Organization or By-Laws      7     23K 
 3: EX-3.3      Articles of Incorporation/Organization or By-Laws     13     69K 
 4: EX-3.4      Articles of Incorporation/Organization or By-Laws     21     93K 
 5: EX-10.1     Material Contract                                     15     61K 
12: EX-10.10    Material Contract                                    109    334K 
 6: EX-10.2     Material Contract                                     13     54K 
 7: EX-10.3     Material Contract                                     20     95K 
 8: EX-10.4     Material Contract                                      8     39K 
 9: EX-10.5     Material Contract                                     12     50K 
10: EX-10.6     Material Contract                                     11     37K 
11: EX-10.9     Material Contract                                     13     57K 
13: EX-23.2     Consent of Experts or Counsel                          1      7K 
14: EX-23.3     Consent of Experts or Counsel                          1      7K 
15: EX-27.1     Financial Data Schedule (Pre-XBRL)                     2      8K 

EX-10.2   —   Material Contract
Exhibit Table of Contents

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EXHIBIT 10.2

 ADVANCED MEDICINE, INC.

 LONG-TERM STOCK OPTION PLAN

ADOPTED ON JUNE 27, 1998

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 TABLE OF CONTENTS

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                                                                                                             PAGE NO.
                                                                                                             ------- 
                                                                                                                     
SECTION 1.  ESTABLISHMENT AND PURPOSE.............................................................................1  

SECTION 2.  ADMINISTRATION........................................................................................1  

   (a)   Committees of the Board of Directors.....................................................................1  
   (b)   Authority of the Board of Directors......................................................................1  

SECTION 3.  ELIGIBILITY...........................................................................................1  

   (a)   General Rule.............................................................................................1  
   (b)   Ten-Percent Stockholders.................................................................................2  

SECTION 4.  STOCK SUBJECT TO PLAN.................................................................................2  

   (a)   Basic Limitation.........................................................................................2  
   (b)   Additional Shares........................................................................................2  

SECTION 5.  TERMS AND CONDITIONS OF AWARDS OR SALES...............................................................2  

   (a)   Stock Purchase Agreement.................................................................................2  
   (b)   Duration of Offers and Nontransferability of Rights......................................................2  
   (c)   Purchase Price...........................................................................................3  
   (d)   Withholding Taxes........................................................................................3  
   (e)   Restrictions on Transfer of Shares.......................................................................3  
   (f)   Accelerated Vesting......................................................................................3  

SECTION 6.  TERMS AND CONDITIONS OF OPTIONS.......................................................................3  

   (a)   Stock Option Agreement...................................................................................3  
   (b)   Number of Shares.........................................................................................3  
   (c)   Exercise Price...........................................................................................4  
   (d)   Withholding Taxes........................................................................................4  
   (e)   Exercisability...........................................................................................4  
   (f)   Accelerated Exercisability...............................................................................4  
   (g)   Basic Term...............................................................................................4  
   (h)   Nontransferability.......................................................................................4  
   (i)   No Rights as a Stockholder...............................................................................5  
   (j)   Modification, Extension and Assumption of Options........................................................5  
   (k)   Restrictions on Transfer of Shares.......................................................................5  
   (l)   Accelerated Vesting......................................................................................5  

SECTION 7.  PAYMENT FOR SHARES....................................................................................5  

   (a)   General Rule.............................................................................................5  

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   (b)   Surrender of Stock.......................................................................................6  
   (c)   Services Rendered........................................................................................6  
   (d)   Promissory Note..........................................................................................6  
   (e)   Exercise/Sale............................................................................................6  
   (f)   Exercise/Pledge..........................................................................................6  

SECTION 8.  ADJUSTMENT OF SHARES..................................................................................6  

   (a)   General..................................................................................................6  
   (b)   Mergers and Consolidations...............................................................................7  
   (c)   Reservation of Rights....................................................................................7  

SECTION 9.  SECURITIES LAWS REQUIREMENTS..........................................................................7  

SECTION 10.  NO RETENTION RIGHTS..................................................................................7  

SECTION 11.  DURATION AND AMENDMENTS..............................................................................8  

   (a)   Term of the Plan.........................................................................................8  
   (b)   Right to Amend or Terminate the Plan.....................................................................8  
   (c)   Effect of Amendment or Termination.......................................................................8  

SECTION 12.  DEFINITIONS..........................................................................................8  

SECTION 13.  EXECUTION...........................................................................................11  


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 ADVANCED MEDICINE, INC. LONG-TERM STOCK OPTION PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.                                           

         The purpose of the Plan is to offer selected individuals an opportunity
to acquire a proprietary interest in the success of the Company, or to increase 
such interest, by purchasing Shares of the Company's Stock. Participation in the
Plan is limited to individuals to whom the Company may offer and sell securities
pursuant to the exemption from qualification afforded by Section 25102(f) of the
California Corporations Code or who do not reside in the State of California.   
The Plan provides both for the direct award or sale of Shares and for the grant 
of Options to purchase Shares. Options granted under the Plan may include       
Nonstatutory Options as well as ISOs intended to qualify under Section 422 of   
the Code.                                                                       

Capitalized terms are defined in Section 12.                  

SECTION 2. ADMINISTRATION.                                                      

        (a) COMMITTEES OF THE BOARD OF DIRECTORS. The Plan may be administered
by one or more Committees. Each Committee shall consist of one or more members  
of the Board of Directors who have been appointed by the Board of Directors.    
Each Committee shall have such authority and be responsible for such functions  
as the Board of Directors has assigned to it. If no Committee has been          
appointed, the entire Board of Directors shall administer the Plan. Any         
reference to the Board of Directors in the Plan shall be construed as a         
reference to the Committee (if any) to whom the Board of Directors has assigned 
a particular function.                                                          

       (b) AUTHORITY OF THE BOARD OF DIRECTORS. Subject to the provisions of
the Plan, the Board of Directors shall have full authority and discretion to    
take any actions it deems necessary or advisable for the administration of the  
Plan. All decisions, interpretations and other actions of the Board of Directors
shall be final and binding on all Purchasers, all Optionees and all persons     
deriving their rights from a Purchaser or Optionee.                             

SECTION 3. ELIGIBILITY.                                                         

     (a) GENERAL RULE. Only Employees, Outside Directors and Consultants
shall be eligible for the grant of Options or the direct award or sale of       
Shares. Only Employees shall be eligible for the grant of ISOs. Participation in
the Plan shall be limited to individuals to whom the Company may offer and sell 
securities pursuant to the exemption from qualification afforded by Section     
25102(f) of the California Corporations Code or who do not reside in the State  
of California.                                                                  

       (b) TEN-PERCENT STOCKHOLDERS. An individual who owns more than 10% of
the total combined voting power of all classes of outstanding stock of the      
Company, its Parent or any of its Subsidiaries shall not be eligible for the    
grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair      
Market Value of a Share on the date of grant and (ii) such ISO by its terms is  
not exercisable after the expiration of five years from the date of grant. For  
purposes of this                                                                

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Subsection (b), in determining stock ownership, the attribution rules of        
Section 424(d) of the Code shall be applied.                                    

SECTION 4. STOCK SUBJECT TO PLAN.                                               

       (a) BASIC LIMITATION. Shares offered under the Plan may be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares that may 
be issued under the Plan (upon exercise of Options or other rights to acquire   
Shares) shall not exceed 2,000,000 Shares, subject to adjustment pursuant to    
Section 8. The number of Shares that are subject to Options or other rights     
outstanding at any time under the Plan shall not exceed the number of Shares    
that then remain available for issuance under the Plan. The Company, during the 
term of the Plan, shall at all times reserve and keep available sufficient      
Shares to satisfy the requirements of the Plan.                                 

    (b) ADDITIONAL SHARES. In the event that any outstanding Option or
other right for any reason expires or is canceled or otherwise terminated, the  
Shares allocable to the unexercised portion of such Option or other right shall 
again be available for the purposes of the Plan. In the event that Shares issued
under the Plan are reacquired by the Company pursuant to any forfeiture         
provision, right of repurchase or right of first refusal, such Shares shall     
again be available for the purposes of the Plan, except that the aggregate      
number of Shares which may be issued upon the exercise of ISOs shall in no event
exceed 2,000,000 Shares (subject to adjustment pursuant to Section 8).          

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.                             

      (a) STOCK PURCHASE AGREEMENT. Each award or sale of Shares under the
Plan (other than upon exercise of an Option) shall be evidenced by a Stock      
Purchase Agreement between the Purchaser and the Company. Such award or sale    
shall be subject to all applicable terms and conditions of the Plan and may be  
subject to any other terms and conditions which are not inconsistent with the   
Plan and which the Board of Directors deems appropriate for inclusion in a Stock
Purchase Agreement. The provisions of the various Stock Purchase Agreements     
entered into under the Plan need not be identical.                              

       (b) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to
acquire Shares under the Plan (other than an Option) shall automatically expire 
if not exercised by the Purchaser within 30 days after the grant of such right  
was communicated to the Purchaser by the Company. Such right shall not be       
transferable and shall be exercisable only by the Purchaser to whom such right  
was granted.                                                                    

      (c) PURCHASE PRICE. The Purchase Price of Shares to be offered under
the Plan, if newly issued, shall not be less than the par value of such Shares. 
Subject to the preceding sentence, the Purchase Price shall be determined by the
Board of Directors at its sole discretion. The Purchase Price shall be payable  
in a form described in Section 7.                                               

      (d) WITHHOLDING TAXES. As a condition to the purchase of Shares, the
Purchaser shall make such arrangements as the Board of Directors may require for
the satisfaction of any                                                         

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federal, state, local or foreign withholding tax obligations that may arise     
in connection with such purchase.                                               

    (e) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares awarded or sold
under the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the Board
of Directors may determine. Such restrictions shall be set forth in the         
applicable Stock Purchase Agreement and shall apply in addition to any          
restrictions that may apply to holders of Shares generally.                     

         (f) ACCELERATED VESTING. Unless the applicable Stock Purchase Agreement
provides otherwise, any right to repurchase a Purchaser's Shares at the original
Purchase Price (if any) upon termination of the Purchaser's Service shall lapse 
and all of such Shares shall become vested if (i) the Company is subject to a   
Change in Control before the Purchaser's Service terminates and (ii) the        
repurchase right is not assigned to the entity that employs the Purchaser       
immediately after the Change in Control or to its parent or subsidiary. The     
foregoing notwithstanding, if (i) the repurchase right has been assigned to the 
entity that employs the Purchaser immediately after the Change in Control or to 
its parent or subsidiary and (ii) the Purchaser is subject to an Involuntary    
Termination within 12 months after the Change in Control, then the repurchase   
right shall lapse and an additional number of the Purchaser's Shares shall vest,
calculated as if the Purchaser's Service had continued for an additional 12     
months.                                                                         

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.                                     

    (a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the     
Company. Such Option shall be subject to all applicable terms and conditions of 
the Plan and may be subject to any other terms and conditions which are not     
inconsistent with the Plan and which the Board of Directors deems appropriate   
for inclusion in a Stock Option Agreement. The provisions of the various Stock  
Option Agreements entered into under the Plan need not be identical.            

     (b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the       
adjustment of such number in accordance with Section 8. The Stock Option        
Agreement shall also specify whether the Option is an ISO or a Nonstatutory     
Option.                                                                         

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

         (d) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Board of Directors may require for 
the satisfaction of any federal, state, local or foreign withholding tax        
obligations that may arise in connection with such exercise. The Optionee shall 
also make such arrangements as the Board of Directors may require               

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for the satisfaction of any federal, state, local or foreign withholding tax    
obligations that may arise in connection with the disposition of Shares         
acquired by exercising an Option.                                               

        (e) EXERCISABILITY. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. The         
exercisability provisions of a Stock Option Agreement shall be determined by the
Board of Directors at its sole discretion.                                      

    (f) ACCELERATED EXERCISABILITY. Unless the applicable Stock Option
Agreement provides otherwise, all of an Optionee's Options shall become         
exercisable in full if (i) the Company is subject to a Change in Control before 
the Optionee's Service terminates, (ii) such Options do not remain outstanding, 
(iii) such Options are not assumed by the surviving corporation or its parent   
and (iv) the surviving corporation or its parent does not substitute options    
with substantially the same terms for such Options. The foregoing               
notwithstanding, if (i) the Optionee's Options do not become exercisable in full
under the preceding sentence and (ii) the Optionee is subject to an Involuntary 
Termination within 12 months after the Change in Control, then the Optionee's   
Options shall become exercisable with respect to an additional number of Shares,
calculated as if the Optionee's Service had continued for an additional 12      
months.                                                                         

      (g) BASIC TERM. The Stock Option Agreement shall specify the term of
the Option. The term shall not exceed 10 years from the date of grant, and in   
the case of an ISO a shorter term may be required by Section 3(b). Subject to   
the preceding sentence, the Board of Directors at its sole discretion shall     
determine when an Option is to expire. A Stock Option Agreement may provide for 
expiration prior to the end of its term in the event of the termination of the  
Optionee's Service or death.                                                    

         (h) NONTRANSFERABILITY. No Option shall be transferable by the Optionee
other than by beneficiary designation, will or the laws of descent and          
distribution. An Option may be exercised during the lifetime of the Optionee    
only by the Optionee or by the Optionee's guardian or legal representative. No  
Option or interest therein may be transferred, assigned, pledged or hypothecated
by the Optionee during the Optionee's lifetime, whether by operation of law or  
otherwise, or be made subject to execution, attachment or similar process.      

    (i) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares      
covered by the Optionee's Option until such person becomes entitled to receive  
such Shares by filing a notice of exercise and paying the Exercise Price        
pursuant to the terms of such Option.                                           

   (j) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Board of Directors may modify, extend or assume    
outstanding Options or may accept the cancellation of outstanding Options       
(whether granted by the Company or another issuer) in return for the grant of   
new Options for the same or a different number of Shares and at the same or a   
different Exercise Price. The foregoing notwithstanding, no modification of an  
Option shall, without the consent of the Optionee, impair the Optionee's rights 
or increase the Optionee's obligations under such Option.                       

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         (k) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise
of an Option shall be subject to such special forfeiture conditions, rights of  
repurchase, rights of first refusal and other transfer restrictions as the Board
of Directors may determine. Such restrictions shall be set forth in the         
applicable Stock Option Agreement and shall apply in addition to any            
restrictions that may apply to holders of Shares generally.                     

       (l) ACCELERATED VESTING. Unless the applicable Stock Option Agreement
provides otherwise, any right to repurchase an Optionee's Shares at the original
Exercise Price upon termination of the Optionee's Service shall lapse and all of
such Shares shall become vested if (i) the Company is subject to a Change in    
Control before the Optionee's Service terminates and (ii) the repurchase right  
is not assigned to the entity that employs the Optionee immediately after the   
Change in Control or to its parent or subsidiary. A Stock Option Agreement may  
also provide for accelerated vesting in the event of the Optionee's death or    
disability or other events. The foregoing notwithstanding, if (i) the repurchase
right has been assigned to the entity that employs the Optionee immediately     
after the Change in Control or to its parent or subsidiary and (ii) the Optionee
is subject to an Involuntary Termination within 12 months after the Change in   
Control, then the repurchase right shall lapse and an additional number of the  
Optionee's Shares shall vest, calculated as if the Optionee's Service had       
continued for an additional 12 months.                                          

SECTION 7. PAYMENT FOR SHARES.                                                  

         (a) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares
issued under the Plan shall be payable in cash or cash equivalents at the time  
when such Shares are purchased, except as otherwise provided in this Section 7. 

        (b) SURRENDER OF STOCK. To the extent that a Stock Option Agreement so
provides, all or any part of the Exercise Price may be paid by surrendering, or 
attesting to the ownership of, Shares that are already owned by the Optionee.   
Such Shares shall be surrendered to the Company in good form for transfer and   
shall be valued at their Fair Market Value on the date when the Option is       
exercised. The Optionee shall not surrender, or attest to the ownership of,     
Shares in payment of the Exercise Price if such action would cause the Company  
to recognize compensation expense (or additional compensation expense) with     
respect to the Option for financial reporting purposes.                         

     (c) SERVICES RENDERED. At the discretion of the Board of Directors,
Shares may be awarded under the Plan in consideration of services rendered to   
the Company, a Parent or a Subsidiary prior to the award. At the discretion     
of the Board of Directors, Shares may also be awarded under the Plan in         
consideration of services to be rendered to the Company, a Parent or a          
Subsidiary after the award, except that the par value of such Shares, if        
newly issued, shall be paid in cash or cash equivalents.                        

     (d) PROMISSORY NOTE. To the extent that a Stock Option Agreement or
Stock Purchase Agreement so provides, all or a portion of the Exercise Price or 
Purchase Price (as the case may be) of Shares issued under the Plan may be paid 
with a full-recourse promissory note. However, the par value of the Shares, if  
newly issued, shall be paid in cash or cash equivalents. The Shares shall be    
pledged as security for payment of the promissory note. Subject to the          

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foregoing, the Board of Directors (at its sole discretion) shall specify the    
term, interest rate (if any), amortization requirements (if any) and other      
provisions of such note.                                                        

   (e) EXERCISE/SALE. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part by
the delivery (on a form prescribed by the Company) of an irrevocable direction  
to a securities broker approved by the Company to sell Shares and to deliver all
or part of the sales proceeds to the Company in payment of all or part of the   
Exercise Price and any withholding taxes.                                       

     (f) EXERCISE/PLEDGE. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part by
the delivery (on a form prescribed by the Company) of an irrevocable direction  
to pledge Shares to a securities broker or lender approved by the Company, as   
security for a loan, and to deliver all or part of the loan proceeds to the     
Company in payment of all or part of the Exercise Price and any withholding     
taxes.                                                                          

SECTION 8. ADJUSTMENT OF SHARES.                                                

        (a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of an extraordinary  
dividend payable in a form other than Shares in an amount that has a material   
effect on the Fair Market Value of the Stock, a combination or consolidation of 
the outstanding Stock into a lesser number of Shares, a recapitalization, a     
spin-off, a reclassification or a similar occurrence, the Board of Directors    
shall make appropriate adjustments in one or more of (i) the number of Shares   
available for future grants under Section 4, (ii) the number of Shares covered  
by each outstanding Option or (iii) the Exercise Price under each outstanding   
Option.                                                                         

    (b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a
party to a merger or consolidation, outstanding Options shall be subject to the 
agreement of merger or consolidation. Such agreement, without the Optionees'    
consent, may provide for:                                                       

           (i) The continuation of such outstanding Options by the
Company (if the Company is the surviving corporation);        

                (ii) The assumption of the Plan and such outstanding Options
by the surviving corporation or its parent;                   

              (iii) The substitution by the surviving corporation or its
parent of options with substantially the same terms for such  
outstanding Options; or                                       

             (iv) The cancellation of such outstanding Options without
payment of any consideration.                                 

     (c) RESERVATION OF RIGHTS. Except as provided in this Section 8, an
Optionee or Purchaser shall have no rights by reason of (i) any subdivision or  
consolidation of shares of stock of any class, (ii) the payment of any dividend 
or (iii) any other increase or decrease in the number of shares of stock of any 
class. Any issuance by the Company of shares of stock of any                    

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class, or securities convertible into shares of stock of any class, shall not   
affect, and no adjustment by reason thereof shall be made with respect to,      
the number or Exercise Price of Shares subject to an Option. The grant of an    
Option pursuant to the Plan shall not affect in any way the right or power of   
the Company to make adjustments, reclassifications, reorganizations or          
changes of its capital or business structure, to merge or consolidate or to     
dissolve, liquidate, sell or transfer all or any part of its business or        
assets.                                                                         

SECTION 9. SECURITIES LAW REQUIREMENTS.                                         

   Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares comply with (or are exempt from) all applicable         
requirements of law, including (without limitation) the Securities Act of 1933, 
as amended, the rules and regulations promulgated thereunder, state securities  
laws and regulations, and the regulations of any stock exchange or other        
securities market on which the Company's securities may then be traded.         

SECTION 10. NO RETENTION RIGHTS.                                                

      Nothing in the Plan or in any right or Option granted under the Plan
shall confer upon the Purchaser or Optionee any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any  
way the rights of the Company (or any Parent or Subsidiary employing or         
retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which     
rights are hereby expressly reserved by each, to terminate his or her Service at
any time and for any reason, with or without cause.                             

SECTION 11. DURATION AND AMENDMENTS.                                            

   (a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors. The Plan shall 
terminate automatically 10 years after its adoption by the Board of Directors   
and may be terminated on any earlier date pursuant to Subsection (b) below.     

      (b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason. Stockholder
approval shall not be required for any amendment of the Plan.                   

      (c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an   
Option granted prior to such termination. The termination of the Plan, or any   
amendment thereof, shall not affect any Share previously issued or any Option   
previously granted under the Plan.                                              

SECTION 12. DEFINITIONS.                                                        

   (a) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.                                      

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      (b) "CAUSE" shall mean (i) the unauthorized use or disclosure of the
confidential information or trade secrets of the Company, which use causes      
material harm to the Company, (ii) conviction of a felony under the laws of the 
United States or any state thereof, (iii) gross negligence or (iv) repeated     
failure to perform lawful assigned duties for 30 days after receiving written   
notification from the Board of Directors.                                       

(c) "CHANGE IN CONTROL" shall mean:                           

            (i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate    
     reorganization, if persons who were not shareholders of the Company
         immediately prior to such merger, consolidation or other reorganization
own immediately after such merger, consolidation or other     
   reorganization 50% or more of the voting power of the outstanding
      securities of each of (A) the continuing or surviving entity and (B)
 any direct or indirect parent corporation of such continuing or
surviving entity;                                             

               (ii) The acquisition, directly or indirectly, by any person
      or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under
   common control with, the Company) of beneficial ownership (within
      the meaning of Rule 13d-3 under the Securities Exchange Act of 1934,
 as amended) of securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities 
pursuant to a tender or exchange offer made directly to the   
Company's stockholders; or                                    

           (iii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.                    

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company  
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.                   

      (d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

      (e) "COMMITTEE" shall mean a committee of the Board of Directors, as
described in Section 2(a).                                                      

(f) "COMPANY" shall mean Advanced Medicine, Inc., a Delaware  
corporation.                                                                    

      (g) "CONSULTANT" shall mean a person who performs bona fide services
for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding 
Employees and Outside Directors.                                                

       (h) "EMPLOYEE" shall mean any individual who is a common-law employee
of the Company, a Parent or a Subsidiary.                                       

8   

EX-10.2
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       (i) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Board of Directors in 
the applicable Stock Option Agreement.                                          

         (j) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by the Board of Directors in good faith. Such determination shall be 
conclusive and binding on all persons.                                          

 (k) "INVOLUNTARY TERMINATION" shall mean the termination of the
Optionee's pr Purchaser's Service by reason of:                                 

                 (i) The involuntary dismissal or discharge of the Optionee or
        Purchaser by the Company (or the Parent or Subsidiary employing him or
her) for reasons other than for Cause; or                     

               (ii) The voluntary resignation of the Optionee or Purchaser
        following (A) a change in his or her position with the Company (or the
        Parent or Subsidiary employing him or her) that materially reduces his
        or her level of responsibility, (B) a reduction in his or her level of
        compensation (including base salary, fringe benefits and participation
        in bonus or incentive programs based on corporate performance) by more
         than 15% or (C) a relocation of his or her workplace more than 50 miles
         from the workplace designated by the Company on his or her initial date
of service.                                                   

      (l) "ISO" shall mean an employee incentive stock option described in
Section 422(b) of the Code.                                                     

      (m) "NONSTATUTORY OPTION" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.                                          

         (n) "OPTION" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.                               

(o) "OPTIONEE" shall mean an individual who holds an Option.  

      (p) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors
who is not an Employee.                                                         

        (q) "PARENT" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the          
corporations other than the Company owns stock possessing 50% or more of the    
total combined voting power of all classes of stock in one of the other         
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.                                                                   

    (r) "PLAN" shall mean this Advanced Medicine, Inc. Long-Term Stock
Option Plan.                                                                    

9 

EX-10.2
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       (s) "PURCHASE PRICE" shall mean the consideration for which one Share
may be acquired under the Plan (other than upon exercise of an Option), as      
specified by the Board of Directors.                                            

         (t) "PURCHASER" shall mean an individual to whom the Board of Directors
has offered the right to acquire Shares under the Plan (other than upon exercise
of an Option).                                                                  

      (u) "SERVICE" shall mean service as an Employee, Outside Director or
Consultant.                                                                     

      (v) "SHARE" shall mean one share of Stock, as adjusted in accordance
with Section 8 (if applicable).                                                 

    (w) "STOCK" shall mean the Common Stock of the Company, with a par
value of $0.01 per Share.                                                       

   (x) "STOCK OPTION AGREEMENT" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions   
pertaining to the Optionee's Option.                                            

     (y) "STOCK PURCHASE AGREEMENT" shall mean the agreement between the
Company and a Purchaser who acquires Shares under the Plan which contains the   
terms, conditions and restrictions pertaining to the acquisition of such Shares.

       (z) "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the       
corporations other than the last corporation in the unbroken chain owns stock   
possessing 50% or more of the total combined voting power of all classes of     
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be    
considered a Subsidiary commencing as of such date.                             

SECTION 13. EXECUTION.                                                          

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

                       ADVANCED MEDICINE, INC.

   By:
                                         -----------------------------------

      Title:
                                            --------------------------------

10  

Dates Referenced Herein

				Referenced-On Page
This ‘S-1’ Filing		Date		First		Last			Other Filings
		3/22/00							None on these Dates
Filed on:		3/21/00
		6/27/98		1
									List all Filings