(e) an Optionee or any “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) which includes the Optionee), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Subsidiaries) representing more than 25% of either the then outstanding shares of Stock of the Company or the combined voting power of the Company’s then outstanding securities;

(ii)            the individuals who serve on the Board as of the effective date hereof (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, however, any person who becomes a director subsequent to the effective date hereof, whose election or nomination for election was approved by a vote of at least a majority of the directors then constituting the Incumbent Board, shall for purposes of this clause (ii) be considered an Incumbent Director;

(iii)           the consummation of a merger or consolidation of the Company in which the stockholders of the Company immediately prior to such merger or consolidation, would not, immediately after the merger or consolidation, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the merger or consolidation (or of its ultimate parent corporation, if any); or

(iv)           the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company, or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportion as their ownership of the Company immediately prior to such sale.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” means the Common Stock of the Company, par value $.0001 per share, either currently existing or authorized hereafter.

“Company” means Adolor Corporation, a Delaware corporation.

“Director” means a member of the Board who is not an employee of the Company or its Subsidiaries.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exercise Price” means the exercise price per Share of an Option.

“Fair Market Value” per Share as of a particular date means (i) if Shares are then listed on a national stock exchange, the closing sales price per share of Common Stock on the exchange for the last preceding date on which there was a sale of shares of Common Stock on such exchange, as determined by the Administrator, (ii) if Shares are then listed on the Nasdaq

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National Market or the Nasdaq SmallCap Market, the closing sales price (or the closing bid price if no sales were reported) per share of Common Stock on the Nasdaq National Market or the Nasdaq SmallCap Market, as applicable, for the last preceding date on which there was a sale of shares of Common Stock on the Nasdaq National Market or the Nasdaq SmallCap Market, as applicable, as determined by the Administrator, (iii) if Shares are not then listed on a national stock exchange, the Nasdaq National Market or the Nasdaq SmallCap Market  but are then traded on an over-the-counter market, the average of the closing bid and asked prices for the shares of Common Stock in such over-the-counter market for the last preceding date on which there was a sale of such shares of Common Stock in such market, as determined by the Administrator, or (iv) if Shares are not then listed on a national stock exchange or traded on an over-the-counter market, or if the Administrator determines that the value as determined pursuant to Section (i), (ii) or (iii) above does not reflect fair market value, the Administrator shall determine fair market value after taking into account such factors that it deems appropriate. Notwithstanding the foregoing, if Shares are listed on a national stock exchange or traded on an over-the-counter market, solely for purposes of determining the Exercise Price of any Option granted hereunder, the Fair Market Value per Share shall be the closing sales price on the applicable exchange or market on the date such Option is granted.

“Grant Letter” means a written agreement in a form approved by the Administrator to be entered into by the Company and the Optionee as provided in Section 3.

“Incentive Stock Option” means “incentive stock option” within the meaning of Section 422(b) of the Code.

“Non-Qualified Option” means an Option which is not intended to be an “incentive stock option” within the meaning of Section 422(b) of the Code.

“Option” means the right to purchase, at the price and for the term fixed by the Administrator in accordance with the Plan, and subject to such other limitations and restrictions in the Plan and the applicable Grant Letter, a number of Shares determined by the Administrator.

“Optionee” means an employee or Director of or consultant to, the Company to whom an Option is granted, or the Successors of the Optionee, as the context so requires.

“Person” means any individual, partnership, corporation, company, limited liability company, association, trust, joint venture, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

“Plan” means this Adolor Corporation Amended and Restated 1994 Equity Compensation Plan as amended from time to time.

“Public Offering” means a successfully completed firm-commitment underwritten public offering (other than a Unit Offering, as hereinafter defined) pursuant to an effective registration statement under the Securities Act in respect to the offer and sale of shares of Common Stock for the account of the Company resulting in aggregate net proceeds to the Company and any stockholder selling shares of Common Stock in such offering of not less than $25 million.

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

“Shares” means shares of Common Stock of the Company.

“Subsidiary” means any corporation (other than the Company) that is a “subsidiary corporation” with respect to the Company under Section 424(f) of the Code.  In the event the Company becomes a subsidiary of another company, the provisions hereof applicable to subsidiaries shall, unless otherwise determined by the Administrator, also be applicable to any company that is a “parent corporation” with respect to the Company under Section 424(e) of the Code.

“Successor of the Optionee” means:  (i) the legal representative of the estate of a deceased Optionee or the person, (ii) persons who shall acquire the right to exercise an Option by bequest or inheritance or other transfer or by reason of the death of the Optionee, (iii) if permitted by the Administrator in its sole discretion, any person who shall acquire the right to exercise an Option pursuant to any other transfer of the Option either pursuant to Section 12 hereof or pursuant to Court Order or (iv) persons who shall acquire the right to exercise an Option on behalf of the Optionee as the result of a determination by a court or other governmental agency of the incapacity of the Optionee.

“Termination of Service” means an Optionee’s termination of employment or other service, as applicable, with the Company and its Subsidiaries.  Cessation of service as an officer, employee, director or consultant shall not be treated as a Termination of Service if the Optionee continues without interruption to serve thereafter in a material manner in another one (or more) of such other capacities, as determined by the Administrator in its sole discretion.

“Unit Offering” means an underwritten public offering of a combination of debt securities and Common Stock (or warrants or exchange rights to purchase Common Stock) of the Company in which not more than 15% of the gross proceeds received for the sale of such securities is attributed to Common Stock.

2.              EFFECTIVE DATE AND TERMINATION OF PLAN .

The effective date of the amendment and restatement of the Plan is August 28, 2001.  The Plan shall terminate on, and no Option shall be granted hereunder on or after, the 10-year anniversary of the earlier of the approval of the Plan by (i) the Board or (ii) the stockholders of the Company; provided, however, that the Board may at any time prior to that date terminate the Plan.

3.              ADMINISTRATION OF PLAN .

(a)            The Plan shall be administered by the Administrator, which shall be either the Board, or a Committee appointed by the Board, who shall, on behalf of the Board, have full responsibility and authority to administer the Plan.  The Administrator shall consist of at least two individuals each of whom shall be a “nonemployee director” as defined in Rule 16b-3 as promulgated by the Securities and Exchange Commission under the Exchange Act and shall, at such times as the Company is subject to Section 162(m) of the Code (to the extent relief from the limitation of Section 162(m) of the Code is sought), qualify as “outside directors” for purposes of

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Section 162(m) of the Code and related Treasury regulations.  Notwithstanding the foregoing, the Board may designate one or more of its members or officers of the Company to serve as a secondary committee and delegate to the secondary committee authority to grant Options to eligible individuals who are not subject to the requirements of Rule 16b-3 under the Exchange Act or Section 162(m) of the Code.  The secondary committee shall have the same authority with respect to selecting the individuals to whom such Options are granted and establishing the terms and conditions of such Options as the Administrator has under the terms of the Plan.

(b)            The acts of a majority of the members present at any meeting of the Administrator at which a quorum is present, or acts approved in writing by a majority of the entire Administrator, shall be the acts of the Administrator for purposes of the Plan.  If and to the extent applicable, no member of the Administrator may act as to matters under the Plan specifically relating to such member.

(c)            Subject to the provisions of the Plan, the Administrator shall in its discretion as reflected by the terms of the Grant Letters (i) authorize the granting of Incentive Stock Options and Non-Qualified Options to employees, Directors and consultants of the Company and its Subsidiaries; and (ii) determine the eligibility of an employee, Director or consultant to receive an Option subject to Section 4 hereof, (iii) specify whether such Option is an Incentive Stock Option or Non-Qualified Option and (iv) determine the number of Shares to be covered under any Grant Letter, considering the position and responsibilities of the employee, Director or consultant, the nature and value to the Company of the employee’s, Director’s or consultant’s present and potential contribution to the success of the Company whether directly or through a Subsidiaries and such other factors as the Administrator may deem relevant.

(d)            The Grant Letter shall contain such other terms, provisions and conditions not inconsistent herewith as determined by the Administrator.  The Optionee shall take whatever additional actions and execute whatever additional documents the Administrator may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Optionee pursuant to the express provisions of the Plan and the Grant Letter .

4.              ELIGIBILITY .

Any employee, Director or consultant of the Company or a Subsidiary who is designated by the Administrator as eligible to participate in the Plan shall be eligible to receive an Option under the Plan.

5.              SHARES AND UNITS SUBJECT TO THE PLAN .

(a)            Subject to adjustments as provided in Section 16, the total number of Shares subject to Options granted under the Plan, in the aggregate, may not exceed 5,350,000 Shares distributed under the Plan may be treasury Shares or authorized but unissued Shares.  Any Shares that have been reserved for distribution in payment for Options but are later forfeited or for any other reason are not payable under the Plan may again be made the subject of Options under the Plan.

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(b)            The certificates for Shares issued hereunder may include any legend which the Administrator deems appropriate to reflect any restrictions on transfer hereunder or under the Grant Letter , or as the Administrator may otherwise deem appropriate.

(c)            In no event may any Optionee receive Options for more than 200,000 shares in any calendar year.  The aggregate fair market value of the shares on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year under the Plan and under any other stock option plan of the Company shall not exceed $100,000.

6.              GRANT OF OPTION .

Subject to the other terms of the Plan, the Administrator shall, in its discretion as reflected by the terms of the applicable Grant Letter:  (i) determine and designate from time to time those eligible employees, Directors and consultants o