ARCA biopharma, Inc. (Form: 8-K, Received: 01/28/2009 17:18:02)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of earliest event reported: January 22, 2009

ARCA biopharma, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware

000-22873

36-3855489

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

8001 Arista Place, Suite 200, Broomfield, CO 80021

(Address of Principal Executive Offices) (Zip Code)

(720) 940-2200

(Registrant’s telephone number, including area code)

Nuvelo, Inc.

201 Industrial Road, Suite 310, San Carlos, CA 94070-6211

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry Into Material Definitive Agreement

Background

On January 27 2009, Nuvelo, Inc. (“Nuvelo”) completed its business combination with ARCA biopharma, Inc. (“ABI”) in accordance with the terms of that Agreement and Plan of Merger and Reorganization, dated September 24, 2008, by and among Nuvelo, Dawn Acquisition Sub, Inc., a wholly-owned subsidiary of Nuvelo (“Merger Sub”), and ABI, which the parties amended on October 28, 2008 (as amended, the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub merged with and into ABI, with ABI continuing after the merger as the surviving corporation and a wholly owned subsidiary of Nuvelo. Immediately following the merger, ABI changed its name to ARCA biopharma Colorado, Inc. and Nuvelo changed its name to ARCA biopharma, Inc. (“ARCA”). Unless the context otherwise requires, all references herein to “ARCA” refer to ARCA and its wholly owned subsidiaries following the completion of the merger and the name change, all references to “Nuvelo” refer to Nuvelo prior to the completion of the merger and the name change, and all references to “ABI” refer to ABI prior to the completion of the merger and its name change.

As a result of the merger:

•

each share of ABI’s series A preferred stock automatically converted into 1 share of ABI’s common stock;

•

each share of ABI’s series B-1 preferred stock automatically converted into 1.219875 shares of ABI’s common stock;

•

each share of ABI’s series B-2 preferred stock automatically converted into 1.6265 shares of ABI’s common stock; and

•

each share of ABI’s common stock, including each share issuable upon conversion of ABI series A, series B-1 and series B-2 preferred stock in accordance with the ratios described above, was converted into the right to receive 0.16698070 shares of ARCA common stock.

Each option and warrant to purchase ABI capital stock outstanding at the effective time of the merger was assumed by ARCA at the effective time of the merger. Each such option or warrant became an option or warrant, as applicable, to acquire that number of shares of ARCA common stock equal to the product obtained by multiplying the number of shares of ABI capital stock subject to such option or warrant by 0.16698070, rounded down to the nearest whole share of ARCA common stock. Following the merger, each such option or warrant has a purchase price per share of ARCA common stock equal to the quotient obtained by dividing the per share purchase price of ABI capital stock subject to such option or warrant by 0.16698070, rounded up to the nearest whole cent.

As of immediately following the effective time of the merger, former ABI stockholders owned approximately 67% of the outstanding common stock of ARCA, and Nuvelo stockholders owned approximately 33% of the outstanding common stock of ARCA, after giving effect to the issuance of shares pursuant to ABI’s outstanding options and warrants prior to the merger, primarily on a treasury method basis, without giving effect to the issuance of stock pursuant to Nuvelo’s outstanding options and warrants. Options exercisable for a total of 4,328,443 shares of ABI common stock (equivalent to a total of 722,686 shares of ARCA common stock), warrants exercisable for a total of 1,075,933 shares of ABI common stock (equivalent to a total of 179,657 shares of ARCA common stock) and warrants exercisable for a total of 56,382 shares of ABI preferred stock (equivalent to a total of 13,154 shares of ARCA common stock) were assumed by ARCA in connection with the merger.

Following the completion of the merger, starting January 28, 2009, ARCA’s common stock began trading on the Nasdaq Global Market under the symbol “ABIO”. As of January 27, 2009, immediately following the consummation of the merger, there were approximately 7.55 million shares of ARCA common stock issued and outstanding. The full text of the Merger Agreement, including the amendment, as well as ARCA’s press releases dated January 27, 2009, and January 28, 2009 announcing, respectively, the completion of the merger and the commencement of

ARCA’s common stock trading on the Nasdaq Global Market under the symbol “ABIO” are attached hereto as Exhibits 2.1, 2.2, 99.1 and 99.2 to this Current Report on Form 8-K and are incorporated herein by reference.

Material ABI Agreements

Following the completion of the merger, the following material ABI agreements and arrangements became material agreements and arrangements of ARCA:

Note and Warrant Purchase Agreement

On September 24, 2008, ABI entered into a Note and Warrant Purchase Agreement, as amended on October 10, 2008, with certain holders of ABI’s then outstanding preferred stock pursuant to which ABI sold, for an aggregate consideration of $8.75 million, its 6% Convertible Promissory Notes due March 31, 2009 (the “Notes”) and warrants (the “Warrants”) to purchase a number of shares of ABI’s common stock as determined pursuant to the Warrants. At the effective time of the merger, the outstanding principal amount and accrued interest on the Notes converted into 5,226,927 shares of ABI common stock, which, as a result of the merger, represent the right to receive an aggregate of 872,792 shares of ARCA common stock. Each Warrant outstanding at the effective time of the merger was assumed by ARCA at the effective time of the merger. Following the merger, the Warrants will have an exercise price equal to $9.7406 per share and will be exercisable for an aggregate of 179,657 shares of ARCA common stock.

Lease

On February 8, 2008, ABI entered into a five-year lease for approximately 15,000 square feet of commercial space at 8001 Arista Place in Broomfield, Colorado for approximately $20,000 per month for the first three years and $21,000 per month for years four and five. The space is used as ARCA’s headquarters and main corporate office. The lease contains rights of first refusal over approximately 8,400 square feet of contiguous space on the second floor of the building, rights of first offer to lease 100% of the 8181 Arista Place building with the exception of first floor retail space, and an option to extend the lease for two additional three year renewal terms at an agreed upon market rate.

License and Sublicense Agreement with CPEC, L.L.C.

On October 28, 2003, ABI entered into a License and Sublicense Agreement, as amended on February 22, 2006, under which ABI licensed from CPEC, L.L.C. (“CPEC”) and Bristol Myers Squibb (“BMS”), the exclusive rights to ABI’s lead investigational compound, Gencaro, for all therapeutic and diagnostic uses in any country until the termination of ARCA’s royalty obligations in such country. Gencaro, including the trade name, is currently under review by the United States Food and Drug Administration and is not approved. ABI is obligated to use commercially reasonable efforts to develop and commercialize Gencaro, including obtaining regulatory approvals. CPEC, ARCA and BMS have the right to terminate the license if, among other conditions, the other party materially breaches its obligations under the license agreement and fails to cure any such breach within the terms of the license. ABI has the obligation to make milestone payments of up to $13.0 million in the aggregate upon regulatory approval in the U.S., Europe and Japan, and to pay royalties based on a percentage of annual sales of Gencaro in any jurisdiction worldwide.

Diagnostic Collaboration and Option Agreement with CardioDx, Inc.

On June 23, 2006, ABI entered into a Diagnostic Collaboration and Option Agreement, as amended October 1, 2007, with CardioDx, Inc. (“CardioDx”). Under the agreement, CardioDx granted ABI a nonexclusive, royalty bearing license for diagnostic rights to key genetic markers that are relevant for prescribing Gencaro. The term of the agreement extends to the latest expiring patent underlying the diagnostic rights. The license permits ABI to sublicense its rights under certain conditions, and in February 2007, ABI sublicensed its rights and transferred its royalty and other fee obligations to Laboratory Corporation of America (“LabCorp”).

Development, Commercialization and Licensing Agreement with Laboratory Corporation of America Holdings, Inc.

On February 1, 2007, ABI entered into a commercialization and marketing agreement with LabCorp, as amended May 14, 2007 and June 10, 2008, to develop, make, market and sell diagnostic tests (the “Gencaro Test”). The Gencaro Test is currently under review by the United States Food and Drug Administration and is not approved. Under the agreement, LabCorp is responsible for determining the appropriate regulatory pathway for the Gencaro Test and obtaining market clearance or approval from the FDA. Under the agreement, ABI granted to LabCorp an exclusive license to its diagnostic rights under the CardioDx agreement and the Company’s diagnostic rights associated with Gencaro. The license agreement has a term of 10 years. The sublicense transferred to LabCorp the royalty and all other fee obligations arising from the CardioDx agreement. Royalty payments will be made directly to CardioDx by LabCorp. If LabCorp does not fulfill its royalty payment and other fee obligations, ABI is responsible for the payments. In addition, ABI granted to LabCorp 100,000 shares of ABI common stock, which as a result of the merger, represent the right to acquire 16,698 shares of ARCA common stock. The shares are subject to a restricted stock agreement in which shares vest upon the attainment of certain regulatory approval and drug product sales milestones.

Manufacturing Agreement with Patheon, Inc.

On September 11, 2006, ABI entered into an agreement with Patheon to manufacture Gencaro in tablet form for feasibility and registration manufacturing and validation purposes. The agreement provides that Gencaro is to be produced by Patheon utilizing standard solid oral dosage processing techniques. Six separate dosage strengths are manufactured. The agreement with Patheon, Inc. will terminate upon completion of the validation process.

Exclusive License Agreement with the Regents of the University of Colorado

On October 14, 2005, ABI entered into an Exclusive License Agreement with the University of Colorado’s License Equity Holdings, Inc. (“ULEHI”), as amended June 23, 2006, July 20, 2006, July 19, 2007, and August 22, 2007, whereby ULEHI licensed to ABI patent applications covering use of Gencaro therapy and various options to license future inventions and targets, among other intellectual property, and ABI agreed to issue stock to ULEHI (as described below) and to make certain payments beginning in 2006. A portion of the license revenue received by ULEHI is allocated to the research laboratory of Dr. Michael R. Bristow, ARCA’s chief science officer and chairman of the board of directors. The agreement extends through the expiration for the last to expire of any patents embodying the licensed products and processes.

In connection with the licensing arrangement, ABI issued to ULEHI at total of 302,785 shares of ABI common stock, which as a result of the merger, represent the right to acquire 50,555 shares of ARCA common stock. Pursuant to an anti-dilution provision agreed to as part of the licensing transaction, ABI had issued 69,882 shares, 142,903 shares, and 0 shares in 2007, 2006, 2005, respectively, and 212,785 shares from inception through December 31, 2007. This anti-dilution provision was fully satisfied in May 2007.

Loan and Security Agreement

ABI entered into a Loan and Security Agreement dated July 17, 2007, as amended January 21, 2009, with Silicon Valley Bank (“SVB”) under which SVB provided ABI a growth capital facility of up to $4.0 million dollars, to be used solely for working capital and to fund ABI’s general business requirements. As of January 27, 2009, $3.8 million aggregate principal amount was outstanding under the SVB credit facility.

No additional drawings are permitted under the credit facility. The credit facility matures on March 23, 2009 and is not subject to any prepayment penalties. All borrowings under this agreement bear interest at a floating per annum rate equal to SVB’s prime rate. As of January 27, 2009, SVB’s prime rate was 4.0%.

In connection with the loan and security agreement, ABI issued to SVB warrants to purchase 31,790 shares of ABI’s series B-1 preferred stock at $2.43975 per share and 24,592 shares of ABI’s series B-2 preferred stock at $3.253 per share (collectively, the “SVB Warrants”). As a result of the merger, ARCA assumed the SVB Warrants, which following the merger will have an exercise price equal to $14.61 and $19.48 per share, respectively, and will be exercisable for an aggregate of 13,154 shares of ARCA common stock.

The agreement contains customary affirmative and negative covenants including, without limitation, (i) covenants requiring ABI to comply with applicable laws, provide to SVB copies of ARCA’s financial statements, maintain appropriate levels of insurance, protect, defend and maintain the validity and enforceability of ABI’s material intellectual property, and (ii) covenants restricting ABI’s ability to dispose of all or substantially all of its assets, engage in other lines of business, change its senior management, enter into transactions constituting a change of control, assume additional indebtedness, incur liens on its assets, among other covenants. ABI’s obligations under the credit facilities are secured by all of ABI’s assets.

Item 2.01.

Completion of Acquisition or Disposition of Assets

The information set forth in Item 1.01 under the section entitled “Background” of this Current Report on Form 8-K is incorporated herein by reference. The full text of the Merger Agreement, including the amendment, as well as ARCA’s press releases dated January 27, 2009, and January 28, 2009 announcing, respectively, the completion of the merger and the commencement of ARCA’s common stock trading on the Nasdaq Global Market under the symbol “ABIO” are attached hereto as Exhibits 2.1, 2.2, 99.1 and 99.2 to this Current Report on Form 8-K and are incorporated herein by reference.

Item 2.03.

Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 above, under the title “Material ABI Agreements – Loan and Security Agreement” with respect to the SVB loan is incorporated herein by reference.

Item 3.03.

Material Modification to Rights of Security Holders

Bylaw Amendment, Reverse Stock Split Amendment and Name Change

On January 23, 2009, the board of directors of Nuvelo approved an amendment to Nuvelo’s amended and restated bylaws to increase the maximum number of directors that may constitute the entire board of directors of Nuvelo from nine to 10 directors (the “Bylaw Amendment”).

On January 23, 2009, the stockholders of Nuvelo approved an amendment to Nuvelo’s amended and restated certificate of incorporation to effect a reverse stock split of the issued and outstanding shares of Nuvelo’s common stock whereby a number of outstanding shares of Nuvelo’s common stock between and including 1 and 50, such number consisting only of whole shares, would be combined into one share of Nuvelo’s common stock, with this exact number (the “Split Ratio”) within the range to be determined by Nuvelo’s board of directors. That same day, following stockholder approval of the reverse stock split

amendment, Nuvelo’s board of directors acted to set the Split Ratio at 20 for one so that every 20 shares of Nuvelo common stock outstanding immediately prior to the effective time of the merger represent one share of Nuvelo common stock, and adopted an amendment to Nuvelo’s amended and restated certificate of incorporation to effect the reverse stock split in accordance with the Split Ratio (the “Reverse Stock Split Amendment”). The Reverse Stock Split Amendment became effective after the close of markets on January 27, 2009 and the common stock of Nuvelo (now known as ARCA) began trading on the Nasdaq Global Market on a post-reverse-split basis on January 28, 2009 under the new symbol “ABIO”.

On January 27, 2009, immediately following the effective time of the merger, the board of directors of ARCA approved a merger with ARCA’s wholly-owned subsidiary, ARCA Merger, Inc., pursuant to which ARCA Merger, Inc. was merged with and into ARCA, and ARCA changed its name from Nuvelo, Inc. to ARCA biopharma, Inc. (such change in name, the “Name Change”).

The Bylaw Amendment, the Reverse Stock Split Amendment and the certificate of ownership and merger that, once filed with the Delaware Secretary of State effectuated the Name Change are attached as Exhibits 3.1, 3.2 and 3.3 to this Current Report on Form 8-K and are incorporated herein by reference.

Stock Certificate

On January 27, 2009, ARCA’s board of directors adopted a new form of stock certificate representing ARCA’s common stock after the effective time of the reverse stock split and merger. The form of stock certificate is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.01.

Change in Control of Registrant

Item 5.02.

Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

Pursuant to the terms of the Merger Agreement, effective as of the effective time of the merger, James R. Gavin, III, M.D., Ph.D. resigned from Nuvelo’s board of directors and compensation committee, Mark L. Perry resigned from Nuvelo’s board of directors, audit committee and compensation committee, and Kimberly Popovits resigned from Nuvelo’s board of directors and compensation committee, Ted W. Love, M.D. resigned from his position as Nuvelo’s chairman and chief executive officer, and Lee Bendekgey resigned from his position as Nuvelo’s general counsel. These resignations were provided to Nuvelo beginning January 22, 2009. Mr. Bendekgey will remain with ARCA as its chief financial officer and treasurer on a transitional basis. Ted W. Love, M.D., Burton E. Sobel, M.D. and Mary K. Pendergast did not resign from Nuvelo’s board of directors and will remain members of ARCA’s board of directors following the merger.

In addition, pursuant to the terms of the Merger Agreement, effective as of the effective time of the merger, the following individuals were elected to ARCA’s board of directors: John-Francois Formela, M.D., J. William Freytag, Ph.D., John L. Zabriskie, Ph.D., David G. Lowe, Ph.D., Linda Grais, M.D., Richard B. Brewer and Michael R. Bristow, M.D., Ph.D. Dr. Love, Dr. Sobel, Dr. Freytag and Dr. Formela have been elected as Class I directors, whose terms expire at the 2009 annual meeting of

ARCA’s stockholders, Dr. Zabriskie, Dr. Lowe and Dr. Grais have been elected as Class II directors, whose terms expire at the 2010 annual meeting of ARCA’s stockholders and Ms. Pendergast, Dr. Bristow and Mr. Brewer have been elected as Class III directors, whose terms expire at the 2011 annual meeting of ARCA’s stockholders.

In addition, effective as of the effective time of the merger, the compensation committee of ARCA’s board of directors will be comprised of Dr. Freytag, as the chairperson, Dr. Formela and Dr. Grais, the audit committee of ARCA’s board of directors will be comprised of Dr. Zabriskie, as the chairperson, Dr. Sobel and Ms. Pendergast, and the nominating and corporate governance committee of ARCA’s board of directors will be comprised of Ms. Pendergast, as the chairperson, Dr. Lowe and Dr. Grais.

Finally, pursuant to the terms of the Merger Agreement, effective as of the effective time of the merger, Richard B. Brewer was appointed president and chief executive officer of ARCA, Michael R. Bristow, M.D., Ph.D. was appointed chairman of the board and chief science and medical officer, Christopher D. Ozeroff was appointed executive vice president of business development, general counsel and secretary and Randall St. Laurent was appointed executive vice president of commercial operations.

The following is a brief biographical summary for each of Messrs. Brewer, Bristow, Ozeroff, and St. Laurent:

Richard B. Brewer, 57. Mr. Brewer joined ABI in November 2006. From January 2003 until he joined ABI, Mr. Brewer was managing partner of Crest Asset Management, where he provided guidance to and invested in biotechnology opportunities. Before that, Mr. Brewer was president and CEO of Scios, Inc., a Johnson & Johnson company. Before Scios, Mr. Brewer served as chief operating officer of Heartport, a cardiovascular device company developing minimally invasive approaches to major heart surgery. Prior to that, he spent over a decade at Genentech in various management positions, including senior vice president of sales and marketing and senior vice president of Genentech Europe and Canada. Mr. Brewer holds a B.S. from Virginia Polytechnic Institute and an M.B.A. from Northwestern University.

Michael R. Bristow, M.D., Ph.D., 64. Dr. Bristow joined ABI as one of ABI’s founders in September 2004, and served as chairman and chief executive officer of ABI until he was appointed to the position of chief science and medical officer in November 2006. Dr. Bristow is a professor of medicine and the former head of cardiology at the University of Colorado Health Sciences Center, where he has been since October 1991. Dr. Bristow was one of the founders of Myogen, Inc. and served as Myogen’s chief science and medical officer from October 1996 to February 2006 and as a scientific advisor to Myogen from February 2006 until the acquisition of Myogen by Gilead Sciences, Inc. in November 2006.

Christopher D. Ozeroff, 49 . Mr. Ozeroff was a co-founder of ABI in September 2004 and has been its executive vice president of business development and general counsel since that date. From August 1999, Mr. Ozeroff was previously a partner with the law firm of Hogan & Hartson L.L.P., where he practiced in such areas as finance, acquisitions, public offerings and licensing. Mr. Ozeroff completed his undergraduate degree at Stanford University, and his law degree at the University of Chicago Law School.

Randall St. Laurent, 48. Mr. St. Laurent joined ABI in January 2008. From March 2001 until he joined ABI, Mr. St. Laurent was employed by Scios, Inc., first as the vice president of sales and marketing and later as the vice president of commercial development. From September 1999 until March 2001, Mr. St. Laurent was an executive sales director at Transkaryotic Therapies in Cambridge, Massachusetts. Mr. St. Laurent received a B.A. with a major in marketing from the Ohio State University.

Employment Agreement with Richard B. Brewer

Richard B. Brewer is employed as ARCA’s president and chief executive officer under an Employment and Retention Agreement with ABI dated November 2, 2006 that was amended and restated as of July 7, 2008 and that was assumed by ARCA in connection with the closing of the merger. Under his employment agreement, Mr. Brewer is entitled to receive an annual base salary of $300,000, subject to annual increases if approved by ARCA’s board of directors and is eligible to receive an annual bonus as determined by the board of directors in its sole discretion. Mr. Brewer is permitted to serve on a maximum of four outside corporate boards of directors, so long as such service does not interfere with his duties as president and chief executive officer.

If ARCA terminates Mr. Brewer’s employment without “cause,” or if Mr. Brewer terminates his employment with “good reason” (as these terms are defined in his employment agreement), ARCA has agreed to pay Mr. Brewer a severance payment equivalent to (i) 12 months of his base salary and (ii) a pro rata portion of any bonus compensation under any employee bonus plan that has been approved by the board of directors payable to him for the fiscal year in which his employment terminated, to be paid at the same time that the incentive bonus would have been paid had the termination not occurred. ARCA may elect to pay Mr. Brewer additional severance equal to up to 12 months’ of his base salary, which additional payments would extend Mr. Brewer’s obligations under his Employee Intellectual Property, Confidentiality and Non-Compete Agreement for such additional period. Severance payments may be made by ARCA on a monthly basis or, at ARCA’s election, in a lump sum. The severance payment is conditioned on the execution by Mr. Brewer of a legal release in a form acceptable to ARCA. A termination for “cause” includes willful misconduct, gross negligence, theft, fraud or other illegal or dishonest conduct, any of which are considered to be materially harmful to ARCA; refusal, unwillingness, failure or inability to perform material job duties or habitual absenteeism; or violation of fiduciary duty, violation of any duty of loyalty or material breach of any material term of the employment agreement or the Employee Intellectual Property, Confidentiality and Non-Compete Agreement, or any other agreement, with ARCA. “Good reason” includes a decrease in current base salary, with certain exceptions; change in title or reporting relationship; failure of ARCA’s stockholders to elect Mr. Brewer to the board of directors; a move of ARCA’s headquarters to a location greater than 60 miles from Denver, Colorado; resignation within 90 days of a corporate transaction; or ARCA’s unilateral decision to significantly and detrimentally reduce Mr. Brewer’s job responsibilities.

Employment Agreement with Dr. Michael R. Bristow

Dr. Michael R. Bristow, M.D., Ph.D. serves as ARCA’s chief science and medical officer under an Employment and Retention Agreement that was amended and restated as of June 4, 2008 and that was assumed by ARCA in connection with the closing of the merger. Dr. Bristow is permitted to continue his academic work for the University of Colorado Health Sciences Center and for the Cardiovascular Institute, so long as it does not interfere with his duties as chairman and chief science and medical officer.

Under his employment agreement, Dr. Bristow is entitled to receive an annual base salary of $250,000, subject to further annual increases if approved by ARCA’s board of directors (or ARCA’s compensation committee) and is eligible to receive an annual bonus as determined by the board of directors (or ARCA’s compensation committee) in its sole discretion.

If ARCA terminates Dr. Bristow’s employment without “cause,” or if Dr. Bristow terminates his employment with “good reason” (as these terms are defined in his employment agreement), ARCA has agreed to pay Dr. Bristow a severance payment equivalent to (i) 12 months of his base salary, (ii) a pro rata portion of any bonus compensation under any employee bonus plan that has been approved by the board of directors payable to him for the fiscal year in which his employment terminated to be paid at the same time that such incentive bonus would have been paid had the termination not occurred, and (iii) reimbursement to cover out-of-pocket costs to continue group health insurance benefits under COBRA for 12 months, whether he elects or is eligible to receive COBRA (provided, that even if he does

not elect or is not eligible to receive COBRA, he will receive the equivalent of such out-of-pocket expenses paid by him not to exceed the costs that the benefits would equal under COBRA if he were so eligible). In addition, ARCA may elect in its sole discretion, to pay additional severance equal to up to 12 months base salary, which additional payment would extend the covenants and obligations under Dr. Bristow’s Employee Intellectual Property, Confidentiality and Non-Compete Agreement for such additional period. The severance payment is conditioned on the execution by Dr. Bristow of a legal release in a form acceptable to ARCA. A termination for “cause” includes willful misconduct, gross negligence, theft, fraud or other illegal or dishonest conduct, any of which are considered to be materially harmful to ARCA; refusal, unwillingness, failure or inability to perform material job duties or habitual absenteeism; or violation of fiduciary duty, violation of any duty of loyalty or material breach of any material term of the employment agreement or the Employee Intellectual Property, Confidentiality and Non-Compete Agreement, or any other agreement, with ARCA. “Good reason” includes a relocation of normal work location greater than 30 miles; a decrease in current base salary by more than 15%, with certain exceptions; and ARCA’s unilateral decision to significantly and detrimentally reduce Dr. Bristow’s job responsibilities.

Employment Agreement with Christopher D. Ozeroff

Mr. Christopher D. Ozeroff is employed as ARCA’s executive vice president of business development and general counsel pursuant to an employment agreement amended and restated as of June 12, 2008, which agreement was assumed by ARCA in connection with the closing of the merger. Under his employment agreement, Mr. Ozeroff is entitled to receive an annual base salary of $220,000, subject to further annual increases if approved by ARCA’s board of directors (or ARCA’s compensation committee) and is eligible to receive an annual bonus as determined by ARCA’s board of directors (or ARCA’s compensation committee) in its sole discretion.

If ARCA terminates Mr. Ozeroff’s employment without “cause,” or if Mr. Ozeroff terminates his employment with “good reason” (as these terms are defined in his employment agreement), ARCA has agreed to pay Mr. Ozeroff a severance payment equivalent to (i) 12 months of his base salary, (ii) a pro rata portion of any bonus compensation under any employee bonus plan that has been approved by the board of directors payable to him for the fiscal year in which his employment terminated to be paid at the same time that such incentive bonus would have been paid had the termination not occurred, and (iii) reimbursement to cover out-of-pocket costs to continue group health insurance benefits under COBRA for 12 months, whether he elects or is eligible to receive COBRA (provided, that even if he does not elect or is not eligible to receive COBRA, he will receive the equivalent of such out-of-pocket expenses paid by him not to exceed the costs that the benefits would equal under COBRA if he were so eligible). In addition ARCA may elect in its sole discretion, to pay additional severance equal to up to 12 months base salary, which additional payment would extend the covenants and obligations under Mr. Ozeroff’s Employee Intellectual Property, Confidentiality and Non-Compete Agreement for such additional period. The severance payment is conditioned on the execution by Mr. Ozeroff of a legal release in a form acceptable to ARCA. A termination for “cause” includes willful misconduct, gross negligence, theft, fraud or other illegal or dishonest conduct, any of which are considered to be materially harmful to ARCA; refusal, unwillingness, failure or inability to perform material job duties or habitual absenteeism; or violation of fiduciary duty, violation of any duty of loyalty or material breach of any material term of the employment agreement or the Employee Intellectual Property, Confidentiality and Non-Compete Agreement, or any other agreement, with ARCA. “Good reason” includes a relocation of normal work location greater than 30 miles; a decrease in current base salary by more than 15%, with certain exceptions; and ARCA’s unilateral decision to significantly and detrimentally reduce Mr. Ozeroff’s job responsibilities.

2004 Stock Incentive Plan

General

Each option and warrant to purchase ABI capital stock outstanding at the effective time of the merger was assumed by ARCA at the effective time of the merger. ABI had initially adopted the 2004 Stock Incentive Plan (as amended, the “Plan”) to enhance the ability of ABI and its affiliates to attract and retain highly qualified officers, directors, key employees and other persons, and to motivate such persons to serve ABI and to expend maximum effort to improve its business results and earnings, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of ABI.

At the effective time of the merger, each outstanding option awarded under the Plan became an option to acquire that number of shares of ARCA common stock equal to the product obtained by multiplying the number of shares of ABI capital stock subject to such option by 0.16698070, rounded down to the nearest whole share of ARCA common stock. Following the merger, each such option has a purchase price per share of ARCA common stock equal to the quotient obtained by dividing the per share purchase price of ABI capital stock subject to such option by 0.16698070, rounded up to the nearest whole cent.

The Plan authorizes the granting of awards of stock options and restricted stock to ABI’s employees, officers, consultants and directors and to employees, officers, consultants and directors of its subsidiaries. As of the closing of the merger, no additional option awards or grants of restricted stock will be made under the Plan and all shares of restricted stock issued under the Plan that were previously unvested were vested as a result of the merger, excluding the unvested shares of restricted stock held by LabCorp, which vest upon the attainment of certain regulatory approval and drug product sales milestones.

Limitations on Transfer; Beneficiaries

Except for certain authorized transfers to family members: (i) during the lifetime of a participant, only the participant (or, in the event of legal incapacity or incompetency, the participant’s guardian or legal representative) may exercise an option and (ii) no option shall be assignable or transferable by the participant to whom it is granted, other than by will or the laws of descent and distribution.

Assumption of Awards Upon Certain Reorganizations

If ARCA is the surviving entity in any reorganization, merger or consolidation with one or more entities and in which no change of control occurs, any outstanding awards under the Plan will pertain to and apply solely to the common stock to which the participant would have been entitled immediately following such reorganization, merger or consolidation with a corresponding adjustment in the price of any options.

Acceleration Upon Certain Events

In the event of a “change of control” (as defined in the Plan) of ARCA in which ARCA is not the surviving entity, all outstanding options and restricted stock may be assumed or continued, or substituted for new common stock options and new common stock restricted stock relating to the stock of a successor entity, or its parent or subsidiary, if provision is made in writing in connection with the change of control. In this event, appropriate adjustments as to the number of shares and option prices would be made and outstanding options and restricted stock would continue in the manner and under the terms so provided. If the options and restricted stock awards are not to be assumed, continued or substituted, then (i) all outstanding shares of restricted stock will be deemed to have vested, and with the exception of any rights of first refusal, repurchase rights or other restrictions as formerly discussed, all restrictions and conditions applicable to shares of restricted stock will be deemed to have lapsed immediately prior to such change of control, and (ii) either of the following two actions shall have been taken: (x) 15 days prior to the scheduled consummation of a change of control, all options outstanding shall become immediately exercisable and shall remain exercisable for a period of 15 days or (y) the compensation committee of the board of directors may elect to cancel any outstanding grants and pay or deliver, or cause to be paid or delivered, to each participant an amount in cash or securities having an equivalent value (as determined by the compensation committee in good faith).

Amendment

An amendment to the Plan is contingent on approval of ARCA’s shareholders only to the extent required by applicable law, regulations or rules. No grants can be made after termination of the Plan. No amendment, suspension or termination of the Plan will, without the consent of the participant, alter or impair rights or obligations under any grant theretofore awarded under the Plan.

The Plan, including all amendments, and the forms of agreements evidencing awards of stock options made thereunder are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9 and 10.10 to this Current Report on Form 8-K and are incorporated herein by reference.

Option and Restricted Stock Grants under the Plan

The following executive officers and directors of ARCA were granted stock options to purchase shares of ABI common stock prior to the merger. The number of shares of ARCA common stock issuable pursuant to these option grants and the exercise price, as adjusted for the merger, is set forth opposite such executive officer’s and director’s name in the following table. The options will remain subject to the terms and conditions of the Plan and the stock option agreements between ABI and each director and executive officer.


Name	Grant Date	ARCA Option Shares	Exercise Price		Exercise Date	Vesting
Richard B. Brewer	11/2/2006	165,644	$	0.90	N/A	Fully exercisable at date of grant, subject to ARCA’s right to repurchase(1)

	1/22/2009	25,047	$	5.57		Equal monthly installments over a four year period from the date of grant

Michael R. Bristow, M.D. Ph.D.	1/03/2005	118,319	$	0.06	02/14/08(2) 09/09/08(3)	25% on October 18, 2005; 6.25% at the end of each three month period thereafter

	1/22/2009	25,047	$	5.57		Equal monthly installments over a four year period from the date of grant

John L. Zabriskie, Ph.D.	8/03/2005	3,887	$	0.60	N/A	971 shares on May 4, 2006; 242 shares at the end of each


						quarter thereafter

	8/03/2006	5,694	$	0.90	N/A	1,423 shares on August 3, 2007; 355 shares at the end of each quarter thereafter

	2/02/2007	4,174	$	1.68	N/A	1,043 shares on February 2, 2008; 260 shares at the end of each quarter thereafter

	5/02/2008	4,174	$	1.86		1,043 shares at the end of each quarter following grant date

	1/22/2009	1,786	$	5.57		Fully exercisable at date of grant

J. William Freytag, Ph.D.	2/2/2007	13,692	$	1.68		3,423 shares on February 2, 2008; 855 shares at the end of each quarter thereafter.

	5/2/2008	4,174	$	1.86		1,043 shares at the end of each quarter following grant date

	1/22/2009	1,786	$	5.57		Fully exercisable at date of grant

Christopher D. Ozeroff	1/03/2005	65,623	$	0.06	9/23/08(4)	25% on October 18, 2005; 6.25% at the end of each three month period thereafter

Randall St. Laurent	2/12/2008	30,056.00	$	1.86		25% on January 2, 2009; 6.25%


				at the end of each three month period thereafter
1/22/2009	10,018.00	$	5.57	Equal monthly installments over a four year period from the date of grant

(1)

The options were exercisable immediately and if exercised are subject to ARCA’s right of repurchase, which lapses at the rate of 25% upon grant and 6.25% at the end of each three-month period following the first anniversary of the November 2, 2006 grant date. Of these options, as of December 31, 2008, 124,233 were subject to a right of repurchase in favor of ARCA.

(2)	96,134 shares exercised.

(3)	14,790 shares exercised.

(4)	61,522 shares exercised.

In addition, Mr. Brewer received 500,000 shares of ABI restricted common stock under the Plan, pursuant to the terms of his restricted stock agreement with ABI, which was amended in October 2008 to provide that all 500,000 shares of ABI restricted stock subject to the agreement would vest in full upon the closing of the merger. As a result of the merger, these shares represent the right to acquire 83,490 shares of ARCA common stock.

Transactions with ARCA’s Chief Science and Medical Officer and Chairman

University of Colorado Research Grant

ABI entered into an unrestricted research grant with a research laboratory of the University of Colorado led by Dr. Michael R. Bristow, ARCA’s chief science and medical officer and chairman of the board of directors, for the advancement of research in chronic heart failure. Under this agreement, ABI paid the research laboratory $22,500 per quarter and $7,500 per month to offset salary expenses at the laboratory. This arrangement was in place through June 2007.

Effective July 1, 2007, ABI terminated its prior grant funding arrangement and entered into another unrestricted research grant with Dr. Bristow’s research laboratory for $23,917 per month. Total expenses under these arrangements for the nine months ended September 30, 2008 and 2007 were $226,920, and $112,834, respectively. Total expenses during fiscal years 2007, 2006 and 2005 were $222,502, $154,992 and $123,311, respectively, and $742,638 from inception through September 30, 2008.

University of Colorado Materials Transfer Agreement

ABI also entered into a materials transfer agreement with the University of Colorado, under which ABI has agreed to pay $35,000 per year to maintain the Heart Tissue Bank associated with Dr. Bristow’s research laboratory at the University of Colorado. Total expenses for the nine months ended September 30, 2008 and 2007 were $26,250 and $17,500, respectively. Total expenses during fiscal years 2007, 2006 and 2005 were $35,000, $35,000 and $35,000, respectively, and $140,000 from inception through September 30, 2008.

Gilead Sciences, Inc. (formerly Myogen Inc.)

On October 7, 2005, ABI entered into a strategic alliance agreement with Myogen, Inc., now known as Gilead Sciences, Inc., in exchange for certain sublicenses and licenses for technology licensed by Myogen. At that time, Dr. Bristow served as a director of Myogen and as its chief science and medical officer and as ABI’s chief executive officer and chairman of ABI’s board of directors. Dr. Freytag was

also president, chief executive officer and chairman of the board of directors of Myogen at that time, and until the acquisition of Myogen by Gilead Sciences in November 2006, but was not then a director of ABI. On February 21, 2006, Dr. Bristow resigned as Myogen’s chief science and medical officer. In connection with the strategic alliance agreement, ABI issued 614,834 shares of its common stock to Myogen, which as a result of the merger, represent the right to acquire 102,665 shares of ARCA common stock. The estimated fair value of the shares granted was $0.12 per share. ABI recorded the estimated fair value of the shares as research and development expense because the rights granted under the agreement have no alternate use other than ABI’s research and development efforts.

Exclusive License Agreement with the Regents of the University of Colorado

As described above in Item 1.01 of this Current Report on Form 8-K under the section entitled “Material ABI Agreements – Exclusive License Agreement with the Regents of the University of Colorado” which description is incorporated herein by reference, ABI entered into an exclusive license agreement with ULEHI, whereby ULEHI licensed to ABI patent applications covering use of Gencaro therapy and various options to license future inventions and targets, among other intellectual property, and ABI agreed to issue stock to ULEHI (as described below) and to make certain payments beginning in 2006. A portion of the license revenue received by ULEHI is allocated to the research laboratory of Dr. Bristow. ABI expensed $18,750 and $25,000 for the nine months ended September 30, 2008 and 2007, respectively. During 2007, 2006 and 2005, ABI paid $25,000, $25,000 and $0, respectively and has paid $68,750 from ABI’s inception through September 30, 2008. In addition, ABI will owe royalties based upon its commercial sales (other than Gencaro) and other milestones, if any. In August 2007 ABI executed an amendment to the license agreement to acquire additional patent rights and paid $15,000 for those rights.

As part of its licensing arrangement, ABI has issued to ULEHI at total of 302,785 shares of ABI common stock, which as a result of the merger, represent the right to acquire 50,555 shares of ARCA common stock. Pursuant to an anti-dilution provision in the license agreement, ABI issued 69,882 shares of its common stock, 142,903 shares of its common stock, and 0 shares of its common stock in 2007, 2006, 2005, respectively, and 212,785 shares of its common stock from inception through December 31, 2007. The estimated fair value of shares granted in 2007 was $0.29 per share. The anti-dilution provision was fully satisfied in May 2007.

Convertible Promissory Notes and Warrants

As described above in Item 1.01 of this Current Report on Form 8-K under the section entitled “Material ABI Agreements – Note and Warrant Purchase Agreement” which description is incorporated herein by reference, ABI entered into a Note and Warrant Purchase Agreement dated September 24, 2008, as amended on October 10, 2008, with certain holders of ABI preferred stock. Atlas Venture Fund VII, L.P., of which Dr. Jean-François Formela is a partner in the life sciences group, purchased $3,674,630 in principal amount of notes and corresponding warrants, Skyline Venture Partners Qualified Purchaser Fund IV, L.P., of which David G. Lowe is a partner, purchased $1,825,696 in principal amount of notes and corresponding warrants, and InterWest Partners IX, L.P., of which Dr. Linda Grais is a partner, purchased $1,461,872 in principal amount of notes and corresponding warrants. Each of these investors acquired convertible notes and warrants on the same terms and conditions as the other investors under the Note and Warrant Purchase Agreement.

Investor Rights Agreement and Related Financing Documents

In connection with its preferred stock financings, ABI entered into an Amended and Restated Investor Rights Agreement dated May 31, 2007 with its investors, including Atlas Venture Fund VII, L.P., and Skyline Venture Partners Qualified Purchaser Fund IV, L.P. and InterWest Partners, IX, L.P., pursuant to which such investors received registration rights with respect to their shares of preferred stock, an Amended and Restated Right of First Refusal and Co-Sale Agreement and Amended and

Restated Voting Agreement. As a condition to completion of the merger, each of these agreements and the rights thereunder was terminated.

Indemnification of Directors and Officers

ARCA has entered into indemnification agreements with each of its directors and certain of its executive officers. These agreements provide for the indemnification of the directors and executive officers of ARCA for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were directors or officers of ARCA. ARCA believes that these indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

Item 5.03.

Amendments to Articles of Incorporation or Bylaws

The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits

(a)

Financial Statements of Businesses Acquired.

The consolidated financial statements of ABI, including the report of the independent registered public accounting firm, KPMG LLP, required by this item have not been filed on this initial Current Report on Form 8-K but will be filed by amendment on or before February 2, 2009.

(b)

Pro Forma Financial Information.

The pro forma financial information required by this item has not been filed on this initial Current Report on Form 8-K but will be filed by amendment on or before February 2, 2009.

(c)

Shell Company Transactions.

N/A

(d)

Exhibits.


Exhibit No.		Description
2.1		Agreement and Plan of Merger and Reorganization, dated as of September 24, 2008, among Nuvelo, Inc., Dawn Acquisition Sub, Inc. and ARCA biopharma, Inc.(1)

2.2		Amendment No. 1 to Agreement and Plan of Merger and Reorganization dated October 28, 2008, by and among Nuvelo, Inc., Dawn Acquisition Sub, Inc. and ARCA biopharma, Inc.(2)

3.1		Amendment to amended and restated bylaws of the registrant.

3.2		Amendment to amended and restated certificate of incorporation of the registrant.

3.3		Certificate of Ownership and Merger merging ARCA Merger, Inc. with and into Nuvelo, Inc.

4.1		Form of Common Stock Certificate.

10.1†		ARCA 2004 Stock Incentive Plan.


10.2†		Amendment No. 1 to ARCA 2004 Stock Incentive Plan.

10.3†		Amendment No. 2 to ARCA 2004 Stock Incentive Plan.

10.4†		Amendment No. 3 to ARCA 2004 Stock Incentive Plan.

10.5†		Amendment No. 4 to ARCA 2004 Stock Incentive Plan.

10.6†		Amendment No. 5 to ARCA 2004 Stock Incentive Plan.

10.7†		Amendment No. 6 to ARCA 2004 Stock Incentive Plan.

10.8†		Form of Executive Incentive Stock Option Agreement.

10.9†		Form of Non-executive Incentive Stock Option Agreement.

10.10†		Form of Nonqualified Stock Option Agreement.

99.1		Press release of ARCA biopharma, Inc. dated January 27, 2009.

99.2		Press release of ARCA biopharma, Inc. dated January 28, 2009.

†	Compensatory plan or agreement.

(1)	Previously filed with the SEC as an Exhibit to and incorporated herein by reference from ARCA’s Form 8-K, filed September 25, 2008, File No. 000-22873.

(2)	Previously filed with the SEC as an Exhibit to and incorporated herein by reference from Nuvelo, Inc.’s Form 8-K, filed October 29, 2008, File No. 000-22873.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


ARCA biopharma, Inc.
(Registrant)

By:		/s/ Christopher D. Ozeroff
Name:		Christopher D. Ozeroff
Title:		Executive Vice President of Business Development, General Counsel and Secretary

Dated: January 28, 2009

EXHIBIT INDEX


Exhibit No.		Description
2.1		Agreement and Plan of Merger and Reorganization, dated as of September 24, 2008, among Nuvelo, Inc., Dawn Acquisition Sub, Inc. and ARCA biopharma, Inc.(1)

2.2		Amendment No. 1 to Agreement and Plan of Merger and Reorganization dated October 28, 2008, by and among Nuvelo, Inc., Dawn Acquisition Sub, Inc. and ARCA biopharma, Inc.(2)

3.1		Amendment to amended and restated bylaws of the registrant.

3.2		Amendment to amended and restated certificate of incorporation of the registrant.

3.3		Certificate of Ownership and Merger merging ARCA Merger, Inc. with and into Nuvelo, Inc.

4.1		Form of Common Stock Certificate.

10.1†		ARCA 2004 Stock Incentive Plan.

10.2†		Amendment No. 1 to ARCA 2004 Stock Incentive Plan.

10.3†		Amendment No. 2 to ARCA 2004 Stock Incentive Plan.

10.4†		Amendment No. 3 to ARCA 2004 Stock Incentive Plan.

10.5†		Amendment No. 4 to ARCA 2004 Stock Incentive Plan.

10.6†		Amendment No. 5 to ARCA 2004 Stock Incentive Plan.

10.7†		Amendment No. 6 to ARCA 2004 Stock Incentive Plan.

10.8†		Form of Executive Incentive Stock Option Agreement.

10.9†		Form of Non-executive Incentive Stock Option Agreement.

10.10†		Form of Nonqualified Stock Option Agreement.

99.1		Press release of ARCA biopharma, Inc. dated January 27, 2009.

99.2		Press release of ARCA biopharma, Inc. dated January 28, 2009.

†	Compensatory plan or agreement.

(1)	Previously filed with the SEC as an Exhibit to and incorporated herein by reference from ARCA’s Form 8-K, filed September 25, 2008, File No. 000-22873.

(2)	Previously filed with the SEC as an Exhibit to and incorporated herein by reference from Nuvelo, Inc.’s Form 8-K, filed October 29, 2008, File No. 000-22873.

Exhibit 3.1

AMENDMENT TO AMENDED AND RESTATED BYLAWS

NUVELO, INC.,

a Delaware corporation

Effective January 23, 2009 by resolutions duly adopted by a majority of the Board of Directors of Nuvelo, Inc. (the “ Company ”) on January 23, 2009, Article III, Section 1, Subsection (a) of the Company’s Bylaws was amended to read in its entirety as follows:

“(a) The number of directors of the corporation shall consist of not less than two (2) nor more than ten (10) directors, the exact number of directors to be determined from time to time by resolution adopted by the affirmative vote of a majority of the directors. A director shall hold office until the later of (i) the next annual meeting of the stockholders of the corporation immediately following, or (ii) coinciding with the expiration of the director’s term or until the director’s successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Directors need not be residents of the State of Delaware or stockholders of the corporation.”

The remainder of the Company’s Bylaws remain in full force and effect.

Executed at San Carlos, California, on January 23, 2009.

/s/ Lee Bendekgey

Lee Bendekgey, Secretary

Exhibit 3.2

CERTIFICATE OF AMENDMENT TO THE

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

NUVELO, INC.

N UVELO , I NC . , a corporation organized and existing under the General Corporation law of the State of Delaware does hereby certify:

ONE: The date of filing the original Certificate of Incorporation of this company with the Secretary of State of the State of Delaware was March 16, 2004 as amended and restated on March 18, 2004.

TWO: The Board of Directors of the Company, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions amending its Amended and Restated Certificate of Incorporation as follows:

Article IV shall be amended to add the following provisions in their entirety to the existing provisions of Article IV:

“Effective at 5:00 p.m. Eastern time, on the date of filing of this Certificate of Amendment to the Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Effective Time”), the shares of the Corporation’s Common Stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time and the shares of Common Stock issued and held in the treasury of the Corporation immediately prior to the Effective Time shall be combined into a smaller number of shares such that each 20 shares of issued Common Stock immediately prior to the Effective Time are combined into one validly issued, fully paid and nonassessable share of Common Stock, par value $0.001 per share. Notwithstanding the immediately preceding sentence, no fractional shares shall be issued and, in lieu thereof, upon surrender after the Effective Time of a certificate which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, any person who would otherwise be entitled to a fractional share of Common Stock as a result of the combination, following the Effective Time (after taking into account all fractional shares of Common Stock otherwise issuable to such holder), shall be entitled to receive a cash payment equal to the fraction to which such holder would otherwise be entitled multiplied by the then fair value of the Common Stock as determined by the Board of Directors.

Each stock certificate that, immediately prior to the Effective Time, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Common Stock after the Effective Time

into which the shares of Common Stock formerly represented by such certificate shall have been combined (as well as the right to receive cash in lieu of fractional shares of Common Stock after the Effective Time), provided, however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been combined.”

THREE: Thereafter, pursuant to a resolution by the Board of Directors of the Corporation, this Certificate of Amendment was submitted to the stockholders of the corporation for their consideration and was duly adopted and approved in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware at a special meeting of the stockholders.

I N W ITNESS W HEREOF , Nuvelo, Inc. has caused this C ERTIFICATE OF A MENDMENT TO THE A MENDED AND R ESTATED C ERTIFICATE OF I NCORPORATION to be signed by its Chairman of the Board of Directors and Chief Executive Officer this 27th day of January, 2009.


N UVELO , I NC .

By:		/s/ Ted W. Love, M.D.
		Ted. W. Love, M.D.
		Chairman of the Board of Directors and Chief Executive Officer

Exhibit 3.3

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

ARCA MERGER, INC.

(a Delaware corporation)

WITH AND INTO

NUVELO, INC.

(a Delaware corporation)

(Pursuant to Section 253 of the General Corporation Law

of the State of Delaware)

Nuvelo, Inc., a Delaware corporation (the “ Corporation ”) does hereby certify:

FIRST : That the Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware (the “ Delaware Law ”).

SECOND : That the Corporation owns all of the outstanding shares of each class of the outstanding capital stock of ARCA Merger, Inc., a Delaware corporation (the “ Subsidiary ”).

THIRD : That the Corporation, by the following resolutions of its Board of Directors (the “ Board ”) duly adopted by unanimous written consent on January 27, 2009, determined to merge Subsidiary with and into the Corporation pursuant to Section 253 of the Delaware Law:

WHEREAS, the Corporation owns all of the outstanding shares of each class of the outstanding capital stock of the Subsidiary; and

WHEREAS, the Board has determined that it is fair to, advisable and in the best interests of, the Corporation and its stockholders for the Subsidiary to be merged with and into the Corporation pursuant to Section 253 of the Delaware Law, with the Corporation surviving the merger and assuming all of the Subsidiary’s liabilities and obligations (the “ Merger ”); now, therefore, be it

RESOLVED, the Merger be, and it hereby is, authorized, approved and adopted in all respects;

FURTHER RESOLVED , that, in accordance with Section 103(d) of the Delaware Law, the Merger shall become effective upon the filing of the Certificate of Ownership and Merger with the Secretary of State of the State of Delaware;

FURTHER RESOLVED, that pursuant to Section 253(b) of the Delaware Law, the Board deems it advisable and in the best interest of the Corporation and its stockholders, and hereby approves, a change in the Corporation’s corporate name to

“ARCA biopharma, Inc.”, such change to become effective upon the effectiveness of the Merger;

FURTHER RESOLVED, that the assumption by the Corporation of all of the Subsidiary’s liabilities and obligations of the Subsidiary be, and it hereby is, authorized, approved and adopted in all respects;

FURTHER RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding share of common stock of the Subsidiary shall be canceled and no consideration shall be issued in respect thereof; and

FURTHER RESOLVED, that the President or any Vice President of the Corporation be, and is hereby, authorized to make, execute and acknowledge a Certificate of Ownership and Merger setting forth a copy of the resolution to merge said Subsidiary with and into the Corporation, to effect the name change above and to assume the Subsidiary’s liabilities and obligations and the date of adoption thereof and to file the same in the office of the Secretary of State of Delaware, and to do all acts and things whatsoever, whether within or without the State of Delaware, which may be in any way necessary or appropriate to effect said Merger.

FOURTH : Pursuant to Section 253(b) of the Delaware Law, upon the effectiveness of the Merger, the Corporation, as the surviving corporation in the Merger, will change its corporate name to “ARCA biopharma, Inc.”

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Ownership and Merger to be signed by an authorized officer this 27 day of January, 2009.


NUVELO, INC.

By:		/s/ Christopher Ozeroff
Name:		Christopher Ozeroff
Title:		Executive Vice President of Business Development and General Counsel

Exhibit 4.1

LOGO

ARCA BIOPHARMA, INC.

THE CORPORATION WILL FURNISH TO ANY STOCKHOLDER, UPON REQUEST AND WITHOUT CHARGE, A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM

- as tenants in common

UNIF GIFT MIN ACT-

Custodian

(Cust)

(Minor)

TEN ENT

- as tenants by the entireties

under Uniform Gifts to Minors Act

(State)

JT TEN

- as joint tenants with right of survivorship and not as tenants in common

UNIF TRF MIN ACT

Custodian (until age. )

(Cust)

(Minor)

under Uniform Transfers to Minors Act

(State)

Additional abbreviations may also be used though not in the above list.


		PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
For value received, hereby sell, assign and transfer unto

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

Shares of the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.


Dated:			20	Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.
Signature:
Signature:
	Notice:	The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever.

LOGO

Exhibit 10.1

ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

TABLE OF CONTENTS


				Page
1.	PURPOSE			1
2.	DEFINITIONS			1
3.	ADMINISTRATION OF THE PLAN			4
	3.1	Board		4
	3.2	Committee		5
	3.3	Grants		5
	3.4	Deferral Arrangement		6
	3.5	No Liability		6
4.	STOCK SUBJECT TO THE PLAN			6
5.	GRANT ELIGIBILITY			6
	5.1	Employees and Other Service Providers		6
	5.2	Successive Grants		7
	5.3	Limitations on Incentive Stock Options		7
6.	AWARD AGREEMENT			7
7.	TERMS AND CONDITIONS OF OPTIONS			7
	7.1	Option Price		7
	7.2	Vesting		7
	7.3	Term		8
	7.4	Exercise of Options on Termination of Service		8
	7.5	Limitations on Exercise of Option		8
	7.6	Exercise Procedure		8
	7.7	Right of Holders of Options		9
	7.8	Delivery of Stock Certificates		9
8.	TRANSFERABILITY OF OPTIONS			9
	8.1	Transferability of Options		9
	8.2	Family Transfers		9
9.	RESTRICTED STOCK			10
	9.1	Grant of Restricted Stock		10
	9.2	Restrictions		10
	9.3	Restricted Stock Certificates		10
	9.4	Rights of Holders of Restricted Stock		10
	9.5	Termination of Service		11
	9.6	Purchase and Delivery of Stock		11
10.	FORM OF PAYMENT			11
	10.1	General Rule		11
	10.2	Surrender of Stock		11
	10.3	Cashless Exercise		12
	10.4	Promissory Note		12
11.	WITHHOLDING TAXES			12
12.	RESTRICTIONS ON TRANSFER OF SHARES OF STOCK			12
	12.1	Right of First Refusal		12
	12.2	Repurchase and Other Rights		13
	12.3	Installment Payments		13
		12.3.1	General Rule	13
		12.3.2	Exception in the Case of Stock Repurchase Right	13

- i -


	12.4	Publicly Traded Stock	13
	12.5	Legend	14
13.	PARACHUTE LIMITATIONS		14
14.	REQUIREMENTS OF LAW		14
	14.1	General	14
	14.2	Rule 16b-3	15
	14.3	Financial Reports	15
15.	EFFECT OF CHANGES IN CAPITALIZATION		16
	15.1	Changes in Stock	16
	15.2	Reorganization in Which the Company Is the Surviving Entity and in Which No Change of Control Occurs	16
	15.3	Reorganization, Sale of Assets or Sale of Stock Which Involves a Change of Control	16
	15.4	Adjustments	17
	15.5	No Limitations on Company	17
16.	DURATION AND AMENDMENTS		18
	16.1	Term of the Plan	18
	16.2	Amendment and Termination of the Plan	18
17.	GENERAL PROVISIONS		18
	17.1	Disclaimer of Rights	18
	17.2	Nonexclusivity of the Plan	18
	17.3	Captions	19
	17.4	Other Award Agreement Provisions	19
	17.5	Number and Gender	19
	17.6	Severability	19
	17.7	Governing Law	19
18.	EXECUTION		20

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ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

ARCA Discovery, Inc., a Delaware corporation (the “ Company ”), sets forth herein the terms of its 2004 Stock Incentive Plan (the “ Plan ”) as follows:

1.	PURPOSE

The Plan is intended to enhance the Company’s and its Affiliates’ (as defined herein) ability to attract and retain highly qualified officers, directors, key employees, and other persons, and to motivate such officers, directors, key employees, and other persons to serve the Company and its Affiliates and to expend maximum effort to improve the business results and earnings of the Company, by providing to such officers, directors, key employees and other persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this end, the Plan provides for the grant of stock options and restricted stock in accordance with the terms hereof. Stock options granted under the Plan may be nonqualified stock options or incentive stock options, as provided herein.

2.	DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply:

2.1 “ Affiliate ” means, with respect to the Company, any company or other trade or business that controls, is controlled by or is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary.

2.2 “ Award Agreement ” means the stock option agreement, restricted stock agreement or other written agreement between the Company and a Grantee that evidences and sets out the terms and conditions of a Grant.

2.3 “ Benefit Arrangement ” shall have the meaning set forth in Section 13 hereof.

2.4 “ Board ” means the Board of Directors of the Company.

2.5 “ Cause ” means, as determined by the Board and unless otherwise provided in an applicable employment agreement with the Company or an Affiliate, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of a criminal offense (other than minor traffic offenses); or (iii) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Service Provider and the Company or an Affiliate.

2.6 “Change of Control” means (i) the dissolution or liquidation of the Company or a merger, consolidation, or reorganization of the Company with one or more other entities in

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which the Company is not the surviving entity (other than a recapitalization transaction which results in 50% or more of the combined voting power of all classes of stock of the surviving entity being held by one or more persons that were Affiliates of the Company immediately prior to the transaction), (ii) a sale of substantially all of the assets of the Company to another person or entity, or (iii) any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity (other than persons who are shareholders or Affiliates immediately prior to the transaction) owning 50% or more of the combined voting power of all classes of stock of the Company, other than the sale by the Company of stock in transactions the primary purpose of which is to raise capital for the Company’s operations and activities.

2.7 “ Code ” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.

2.8 “ Committee ” means a committee of, and designated from time to time by resolution of, the Board, which shall consist of one or more members of the Board.

2.9 “ Company ” means ARCA Discovery, Inc.

2.10 “Disability” means the Grantee is unable to perform each of the essential duties of such Grantee’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months; provided, however, that, with respect to rules regarding expiration of an Incentive Stock Option following termination of the Grantee’s Service, Disability shall mean the Grantee is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

2.11 “ Effective Date ” means September 30, 2004, the date the Plan is approved by the Board.

2.12 “ Exchange Act ” means the Securities Exchange Act of 1934, as now in effect or as hereafter amended.

2.13 “ Fair Market Value ” means the value of a share of Stock, determined as follows: if on the Grant Date or other determination date the Stock is listed on an established national or regional stock exchange, is admitted to quotation on The Nasdaq Stock Market, Inc., or is publicly traded on an established securities market, the Fair Market Value of a share of Stock shall be the closing price of the Stock on such exchange or in such market (if there is more than one such exchange or market the Board shall determine the appropriate exchange or market) on the Grant Date or such other determination date (or if there is no such reported closing price, the Fair Market Value shall be the mean between the highest bid and lowest asked prices or between the high and low sale prices on such trading day) or, if no sale of Stock is reported for such trading day, on the next preceding day on which any sale shall have been reported. If the Stock is not listed on such an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the value of the Stock as determined by the Board in good faith.

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2.14 “ Family Member ” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which any one or more these persons have more than 50% of the beneficial interest, a foundation in which any one or more of these persons (or the Grantee) control the management of assets, and any other entity in which one or more these persons (or the Grantee) own more than 50% of the voting interests; provided, however, that to the extent required by applicable law, the term Family Member shall be limited to a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the Grantee or a trust or foundation for the exclusive benefit of any one or more of these persons.

2.15 “ Grant ” means an award of an Option or Restricted Stock under the Plan.

2.16 “ Grant Date ” means, as determined by the Board, the latest to occur of (i) the date as of which the Board approves a Grant, (ii) the date on which the recipient of a Grant first becomes eligible to receive a Grant under Section 5 hereof, or (iii) such other date as may be specified by the Board.

2.17 “ Grantee ” means a person who receives or holds an Option or Restricted Stock under the Plan.

2.18 “ Incentive Stock Option ” means an “incentive stock option” within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended from time to time.

2.19 “ Nonqualified Stock Option ” means a stock option that is not an Incentive Stock Option.

2.20 “ Option ” means an option to purchase one or more shares of Stock pursuant to the Plan.

2.21 “ Option Price ” means the purchase price for each share of Stock subject to an Option.

2.22 “ Other Agreement ” shall have the meaning set forth in Section 13 hereof.

2.23 “ Plan ” means this ARCA Discovery, Inc. 2004 Stock Incentive Plan.

2.24 “ Purchase Price ” means the purchase price for each share of Stock pursuant to a Grant of Restricted Stock.

2.25 “ Reporting Person ” means a person who is required to file reports under Section 16(a) of the Exchange Act.

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2.26 “ Restricted Stock ” means shares of Stock, awarded to a Grantee pursuant to Section 9 hereof, that are subject to restrictions and to a risk of forfeiture.

2.27 “ Securities Act ” means the Securities Act of 1933, as now in effect or as hereafter amended.

2.28 “ Service ” means service as an employee, officer, director or other Service Provider of the Company or an Affiliate. Unless otherwise stated in the applicable Award Agreement, a Grantee’s change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues to be an employee, officer, director or other Service Provider of the Company or an Affiliate. Subject to the preceding sentence, whether a termination of Service shall have occurred for purposes of the Plan shall be determined by the Board, which determination shall be final, binding and conclusive.

2.29 “ Service Provider ” means an employee, officer or director of the Company or an Affiliate, or a consultant or adviser currently providing services to the Company or an Affiliate.

2.30 “ Stock ” means the common stock, $0.001 par value per share, of the Company.

2.31 “ Subsidiary ” means any “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code.

2.32 “Ten-Percent Stockholder” means 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. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

3.	ADMINISTRATION OF THE PLAN

3.1

Board.

The Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s certificate of incorporation and by-laws and applicable law. The Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Grant or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan, any Grant or any Award Agreement. All such actions and determinations shall be by the affirmative vote of a majority of the members of the Board present at a meeting or by unanimous consent of the Board executed in writing in accordance with the Company’s certificate of incorporation and by-laws and applicable law. The interpretation and construction by the Board of any provision of the Plan, any Grant or any Award Agreement shall be final, binding and conclusive. To the extent permitted by law, the Board may delegate its authority under the Plan to a member of the Board or an executive officer of the Company who is a member of the Board.

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3.2

Committee.

The Board from time to time may delegate to one or more Committees such powers and authorities related to the administration and implementation of the Plan, as set forth in Section 3.1 above and in other applicable provisions, as the Board shall determine, consistent with the certificate of incorporation and by-laws of the Company and applicable law. In the event that the Plan, any Grant or any Award Agreement entered into hereunder provides for any action to be taken by or determination to be made by the Board, such action may be taken by or such determination may be made by the applicable Committee if the power and authority to do so has been delegated to the Committee by the Board as provided for in Section 3.1 . Unless otherwise expressly determined by the Board, any such action or determination by the Committee shall be final, binding and conclusive. To the extent permitted by law, the Committee may delegate its authority under the Plan to a member of the Board or an executive officer of the Company who is a member of the Board.

3.3

Grants.

Subject to the other terms and conditions of the Plan, the Board shall have full and final authority to:

(i)

designate Grantees,

(ii)

determine the type or types of Grants to be made to a Grantee,

(iii)

determine the number of shares of Stock to be subject to a Grant,

(iv)

establish the terms and conditions of each Grant (including, but not limited to, the Option Price of any Option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of a Grant or the shares of Stock subject thereto, and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options),

(v)

prescribe the form of each Award Agreement evidencing a Grant, and

(vi)

amend, modify, or supplement the terms of any outstanding Grant.

Such authority specifically includes the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to modify Grants to eligible individuals who are foreign nationals or are individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom. As a condition to any Grant, the Board shall have the right, at its discretion, to require Grantees to return to the Company Grants previously awarded under the Plan. Subject to the terms and conditions of the Plan, any such subsequent Grant shall be upon such terms and conditions as are specified by the Board at the time the new Grant is made. The Board shall have the right, in its discretion, to make Grants in substitution or exchange for any other grant under another plan of the Company, any Affiliate, or any business entity to be acquired by the Company or an Affiliate. The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in conflict with any non-competition agreement, any

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agreement prohibiting solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality obligation with respect to the Company or any Affiliate thereof or otherwise in competition with the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to the Grantee. Furthermore, the Company may annul a Grant if the Grantee is an employee of the Company or an Affiliate thereof and is terminated for Cause as defined in the applicable Award Agreement or the Plan, as applicable.

3.4

Deferral Arrangement.

The Board may permit or require the deferral of any award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred Stock equivalents and restricting deferrals to comply with hardship distribution rules affecting 401(k) plans.

3.5

No Liability.

No member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant or Award Agreement.

4.	STOCK SUBJECT TO THE PLAN

Subject to adjustment as provided in Section 15 hereof and the limitation of the next paragraph relating to Restricted Stock, the number of shares of Stock available for issuance under the Plan shall be 700,000. Stock issued or to be issued under the Plan shall be authorized but unissued shares or, to the extent permitted by applicable law, issued shares that have been reacquired by the Company. If any shares covered by a Grant are not purchased or are forfeited, or if a Grant otherwise terminates without delivery of any Stock subject thereto, then the number of shares of Stock counted against the aggregate number of shares available under the Plan with respect to such Grant shall, to the extent of any such forfeiture or termination, again be available for making Grants under the Plan. If the exercise price of any Option granted under the Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number of shares of Stock issued net of the shares of Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

5.	GRANT ELIGIBILITY

5.1

Employees and Other Service Providers.

Grants (including Grants of Incentive Stock Options, subject to Section 5.3 ) may be made under the Plan to any employee , officer or director of, or other Service Provider providing services to, the Company or any Affiliate. To the extent required by applicable state law, Grants within certain states may be limited to employees and officers or employees, officers and directors.

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5.2

Successive Grants.

An eligible person may receive more than one Grant, subject to such restrictions as are provided herein.

5.3

Limitations on Incentive Stock Options.

An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is an employee of the Company or any Subsidiary of the Company; (ii) to the extent specifically provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Stock with respect to which all Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Grantee’s employer and its affiliates) does not exceed $100,000. This limitation shall be applied by taking Options into account in the order in which they were granted.

6.	AWARD AGREEMENT

Each Grant pursuant to the Plan shall be evidenced by an Award Agreement, in such form or forms as the Board shall from time to time determine, which specifies the number of shares subject to the Grant and provides for adjustment in accordance with Section 15 . Award Agreements granted from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing a Grant of Options shall specify whether such Options are intended to be Nonqualified Stock Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed Nonqualified Stock Options.

7.	TERMS AND CONDITIONS OF OPTIONS

7.1

Option Price.

The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement evidencing such Option. In the case of an Incentive Stock Option the Option Price shall not be less than the Fair Market Value on the Grant Date of a share of Stock; provided, however, that in the event that a Grantee is a Ten-Percent Stockholder, the Option Price of an Incentive Stock Option granted to such Grantee shall be not less than 110% of the Fair Market Value of a share of Stock on the Grant Date. To the extent required by applicable law, in the case of a Nonqualified Stock Option, the Option Price shall be not less than 85% of the Fair Market Value on the Grant Date of a share of Stock; provided, however, that in the event that a Grantee is a Ten-Percent Stockholder, the Option Price shall be not less than 110% of the Fair Market Value of a share of Stock on the Grant Date. In no case shall the Option Price of any Option be less than the par value of a share of Stock.

7.2

Vesting.

Subject to Sections 7.3 and 15.3 hereof, each Option granted under the Plan shall become exercisable at such times and under such conditions as shall be determined by the Board and stated in the Award Agreement. For purposes of this Section 7.2 , fractional numbers of shares

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of Stock subject to an Option shall be rounded down to the next nearest whole number. To the extent required by applicable law, each Option shall become exercisable no less rapidly than the rate of 20% per year for each of the first five years from the Grant Date based on continued Service. Subject to the preceding sentence, the Board may provide, for example, in the Award Agreement for (i) accelerated exercisability of the Option in the event the Grantee’s Service terminates on account of death, Disability or another event, (ii) expiration of the Option prior to its term in the event of the termination of the Grantee’s Service, (iii) immediate forfeiture of the Option in the event the Grantee’s Service is terminated for Cause or (iv) unvested Options to be exercised subject to the Company’s right of repurchase with respect to unvested shares of Stock.

7.3

Term.

Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, upon the expiration of ten years from the Grant Date, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Board and stated in the Award Agreement relating to such Option; provided, however, that in the event that the Grantee is a Ten-Percent Stockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the expiration of five years from its Grant Date.

7.4

Exercise of Options on Termination of Service.

Each Award Agreement shall set forth the extent to which the Grantee shall have the right to exercise the Option following termination of the Grantee’s Service. Such provisions shall be determined in the sole discretion of the Board, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. Notwithstanding the foregoing, to the extent required by applicable law, each Option shall provide that the Grantee shall have the right to exercise the vested portion of any Option held at termination for at least 30 days following termination of Service with the Company for any reason (other than for Cause), and that the Grantee shall have the right to exercise the Option for at least six months if the Grantee’s Service terminates due to death or Disability.

7.5

Limitations on Exercise of Option.

Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole or in part, prior to the date the Plan is approved by the shareholders of the Company, or after ten years following the Grant Date, or after the occurrence of an event referred to in Section 15 hereof which results in termination of the Option.

7.6

Exercise Procedure.

An Option that is exercisable may be exercised by the Grantee’s delivery to the Company of written notice of exercise on any business day, at the Company’s principal office , on the form specified by the Company. Such notice shall specify the number of shares of Stock with respect to which the Option is being exercised and shall be accompanied by payment in full of the Option Price of the shares for which the Option is being exercised. The minimum number of shares of Stock with respect to which an Option may be exercised, in whole or in part, at any time shall be the lesser of (i) 100 shares or such lesser number set forth in the applicable Award

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Agreement and (ii) the maximum number of shares available for purchase under the Option at the time of exercise. The Option Price shall be payable in a form described in Section 10 .

7.7

Right of Holders of Options.

Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising an Option shall have none of the rights of a shareholder (for example, the right to cash or dividend payments or distributions attributable to the subject shares of Stock or to direct the voting of shares of Stock) until the shares of Stock covered thereby are fully paid and issued to such individual.

7.8

Delivery of Stock Certificates.

Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates evidencing such Grantee’s ownership of the shares of Stock purchased upon such exercise of the Option.

8.	TRANSFERABILITY OF OPTIONS

8.1

Transferability of Options.

Except as provided in Section 8.2 , during the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may exercise an Option. Except as provided in Section 8.2 , no Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

8.2

Family Transfers.

If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part of an Option that is not an Incentive Stock Option to any Family Member. For the purpose of this Section 8.2 , a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii) unless applicable law does not permit such transfers, a transfer to an entity in which more than 50% of the voting interests are owned by Family Members (or the Grantee) in exchange for an interest in that entity. Following a transfer under this Section 8.2 , any such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, and shares of Stock acquired pursuant to the Option shall be subject to the same restrictions on transfer of shares as would have applied to the Grantee. Subsequent transfers of transferred Options are prohibited except to Family Members of the original Grantee in accordance with this Section 8.2 or by will or the laws of descent and distribution. The events of termination of Service under an Option shall continue to be applied with respect to the original Grantee, following which the Option shall be exercisable by the transferee only to the extent, and for the periods specified in the applicable Award Agreement, and the shares may be subject to repurchase by the Company or its assignee.

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9.	RESTRICTED STOCK

9.1

Grant of Restricted Stock.

The Board may from time to time grant Restricted Stock to persons eligible to receive Grants under Section 5 hereof, subject to such restrictions, conditions and other terms as the Board may determine.

9.2

Restrictions.

At the time a Grant of Restricted Stock is made, the Board shall establish a restriction period applicable to such Restricted Stock. Each Grant of Restricted Stock may be subject to a different restriction period. The Board may, in its sole discretion, at the time a Grant of Restricted Stock is made, prescribe conditions that must be satisfied prior to the expiration of the restriction period, including the satisfaction of corporate or individual performance objectives or continued Service, in order that all or any portion of the Restricted Stock shall vest. To the extent required by applicable law, the vesting restrictions applicable to a Grant of Restricted Stock shall lapse no less rapidly than the rate of 20% per year for each of the first five years from the Grant Date, based on continued Service.

The Board also may, in its sole discretion, shorten or terminate the restriction period or waive any of the conditions applicable to all or a portion of the Restricted Stock. The Restricted Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restriction period or prior to the satisfaction of any other conditions prescribed by the Board with respect to such Restricted Stock.

9.3

Restricted Stock Certificates.

The Company shall issue, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company , or the restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, provided, however, that such certificates shall bear a legend or legends that complies with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under the Plan and the Award Agreement.

9.4

Rights of Holders of Restricted Stock.

Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such Stock and the right to receive any dividends declared or paid with respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Grant.

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9.5

Termination of Service.

Unless otherwise provided by the Board in the applicable Award Agreement, upon the termination of a Grantee’s Service with the Company or an Affiliate, any shares of Restricted Stock held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted Stock, the Grantee shall have no further rights with respect to such Grant, including but not limited to any right to vote Restricted Stock or any right to receive dividends with respect to shares of Restricted Stock.

9.6

Purchase and Delivery of Stock.

The Grantee shall be required to purchase the Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if any, specified in the Award Agreement relating to such Restricted Stock. The Purchase Price shall be payable in a form described in Section 10 or, in the discretion of the Board, in consideration for past Services rendered to the Company or an Affiliate. To the extent required by applicable law, the Purchase Price of a share of Restricted Stock shall be not less than 85% of the Fair Market Value on the Grant Date of a share of Stock; provided, however, that in the event that the Grantee is a Ten-Percent Stockholder, the Purchase Price shall be not less than 100% of the Fair Market Value on the Grant Date of a share of Stock.

Upon the expiration or termination of the restriction period and the satisfaction of any other conditions prescribed by the Board, having properly paid the Purchase Price, the restrictions applicable to shares of Restricted Stock shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be.

10.

FORM OF PAYMENT

10.1

General Rule.

Payment of the Option Price for the shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to the Company.

10.2

Surrender of Stock.

To the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be made all or in part through the tender to the Company of shares of Stock, which shares, if acquired from the Company, shall have been held for at least six months at the time of tender and which shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of exercise.

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10.3

Cashless Exercise.

With respect to an Option only (and not with respect to Restricted Stock), to the extent the Award Agreement so provides and the shares of Stock have become publicly traded, payment of the Option Price for shares purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form acceptable to the Board) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes described in Section 11 .

10.4

Promissory Note.

To the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be made all or in part with a full recourse promissory note executed by the Grantee. The interest rate and other terms and conditions of such note shall be determined by the Board. The Board may require that the Grantee pledge the Stock subject to the Grant for the purpose of securing payment of the note. In no event shall stock certificate(s) representing the Stock be released to the Grantee until such note is paid in full.

11.

WITHHOLDING TAXES

The Company or any Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any Federal, state, or local taxes of any kind required by law to be withheld with respect to the vesting of or other lapse of restrictions applicable to Restricted Stock or upon the issuance of any shares of Stock upon the exercise of an Option. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or Affiliate, as the case may be, any amount that the Company or Affiliate may reasonably determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned by the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the date that the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section 11 may satisfy his or her withholding obligation only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

12.

RESTRICTIONS ON TRANSFER OF SHARES OF STOCK

12.1

Right of First Refusal.

Subject to Section 12.4 below, a Grantee (or such other individual who is entitled to exercise an Option or otherwise acquire shares pursuant to a Grant under the terms of this Plan) shall not sell, pledge, assign, gift, transfer, or otherwise dispose of any shares of Stock acquired

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pursuant to a Grant to any person or entity without first offering such shares to the Company for purchase on the same terms and conditions as those offered the proposed transferee. The Company may assign its right of first refusal under this Section 12.1 in whole or in part, to (1) any holder of stock or other securities of the Company (a “ Stockholder ”), (2) any Affiliate or (3) any other person or entity that the Board determines has a sufficient relationship with or interest in the Company. The Company shall give reasonable written notice to the Grantee of any such assignment of its rights. The restrictions of this Section 12.1 apply to any person to whom Stock that was originally acquired pursuant to a Grant is sold, pledged, assigned, bequeathed, gifted, transferred or otherwise disposed of, without regard to the number of such subsequent transferees or the manner in which they acquire the Stock, but the restrictions of this Section 12.1 do not apply to a transfer of Stock that occurs as a result of the death of the Grantee or of any subsequent transferee (but shall apply to the executor, the administrator or personal representative, the estate, and the legatees, beneficiaries and assigns thereof).

12.2

Repurchase and Other Rights.

Stock issued upon exercise of an Option or pursuant to the Grant of Restricted Stock may be subject to such right of repurchase or other transfer restrictions as the Board may determine, consistent with applicable law. Any such additional restriction shall be set forth in the Award Agreement.

12.3

Installment Payments.

12.3.1

General Rule.

In the case of any purchase of Stock or an Option under this Section 12 , the Company or its permitted assignee may pay the Grantee, transferee of the Option or other registered owner of the Stock the purchase price in three or fewer annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. The Company or its permitted assignee shall pay at least one-third of the total purchase price each year, plus interest on the unpaid balance, with the first payment being made on or before the 60th day after the purchase.

12.3.2

Exception in the Case of Stock Repurchase Right.

If an Award Agreement authorizes, upon the Grantee’s termination of Service, the repurchase of shares of Stock acquired by the Grantee pursuant to the exercise of an Option or under a Grant of Restricted Stock, to the extent required by applicable law, payment shall be made in cash or by cancellation of indebtedness within the later of 90 days from the date of termination of Service or 90 days from the date of exercise or purchase, as the case may be.

12.4

Publicly Traded Stock.

If the Stock is listed on an established national or regional stock exchange or is admitted to quotation on The Nasdaq Stock Market, Inc., or is publicly traded in an established securities market, the foregoing transfer restrictions of Sections 12.1 and 12.2 shall terminate as of the first date that the Stock is so listed, quoted or publicly traded.

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12.5

Legend.

In order to enforce the restrictions imposed upon shares of Stock under this Plan or as provided in an Award Agreement, the Board may cause a legend or legends to be placed on any certificate representing shares issued pursuant to this Plan that complies with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under it.

13.

PARACHUTE LIMITATIONS

Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate, except an agreement, contract, or understanding hereafter entered into that expressly modifies or excludes application of this paragraph (an “ Other Agreement ”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of participants or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “ Benefit Arrangement ”), if the Grantee is a “disqualified individual,” as defined in Section 280G(c) of the Code, any Options or Restricted Stock held by that Grantee and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Grantee under this Plan to be considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Code as then in effect (a “ Parachute Payment ”) and (ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment. In the event that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other rights, payments, or benefits to or for the Grantee under any Other Agreement or any Benefit Arrangement would cause the Grantee to be considered to have received a Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount received by the Grantee as described in clause (ii) of the preceding sentence, then the Grantee shall have the right, in the Grantee’s sole discretion, to designate those rights, payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Grantee under this Plan be deemed to be a Parachute Payment.

14.

REQUIREMENTS OF LAW

14.1

General.

The Company shall not be required to sell or issue any shares of Stock under any Grant if the sale or issuance of such shares would constitute a violation by the Grantee, any other individual exercising a right emanating from such Grant, or the Company of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that

- 14 -

the listing, registration or qualification of any shares subject to a Grant upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the Grantee or any other individual exercising an Option pursuant to such Grant unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Grant. Specifically, in connection with the Securities Act, upon the exercise of any right emanating from such Grant or the delivery of any shares of Restricted Stock, unless a registration statement under the Securities Act is in effect with respect to the shares of Stock covered by such Grant, the Company shall not be required to sell or issue such shares unless the Board has received evidence satisfactory to it that the Grantee or any other individual exercising an Option may acquire such shares pursuant to an exemption from registration under the Securities Act. Any determination in this connection by the Board shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or the issuance of shares of Stock pursuant to the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that an Option shall not be exercisable until the shares of Stock covered by such Option are registered or are exempt from registration, the exercise of such Option (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

14.2

Rule 16b-3.

During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Grants pursuant to the Plan and the exercise of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan in any respect necessary to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement.

14.3

Financial Reports.

To the extent required by applicable law, not less often than annually, the Company shall furnish to Grantees summary financial information including a balance sheet regarding the Company’s financial condition and results of operations, unless such Grantees have duties with the Company that assure them access to equivalent information. Such financial statements need not be audited.

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15.

EFFECT OF CHANGES IN CAPITALIZATION

15.1

Changes in Stock.

The number of shares for which Grants of Options and Restricted Stock may be made under the Plan shall be proportionately increased or decreased for any increase or decrease in the number of shares of Stock on account of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock, or for any other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date (any such event hereafter referred to as a “ Corporate Event ”). In addition, subject to the exception set forth in the last sentence of Section 15.4 , the number of shares for which Grants are outstanding shall be proportionately increased or decreased for any increase or decrease in the number of shares of Stock on account of any Corporate Event. Any such adjustment in outstanding Options shall not change the aggregate Option Price payable with respect to shares that are subject to the unexercised portion of an Option outstanding but shall include a corresponding proportionate adjustment in the Option Price per share. The conversion of any convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Company may, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares subject to outstanding Awards and/or (ii) the exercise price of outstanding Options to reflect such distribution.

15.2

Reorganization in Which the Company Is the Surviving Entity and in Which No Change of Control Occurs.

Subject to the exception set forth in the last sentence of Section 15.4 , if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities and in which no Change of Control occurs, any Grant theretofore made pursuant to the Plan shall pertain to and apply solely to the common stock shares to which a holder of the number of shares of Stock subject to such Grant would have been entitled immediately following such reorganization, merger, or consolidation, and in the case of Options, with a corresponding proportionate adjustment of the Option Price per share so that the aggregate Option Price thereafter shall be the same as the aggregate Option Price of the shares remaining subject to the Option immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement evidencing a Grant of Restricted Stock, any restrictions applicable to such Restricted Stock shall apply as well to any replacement shares received by the Grantee as a result of the reorganization, merger or consolidation.

15.3

Reorganization, Sale of Assets or Sale of Stock Which Involves a Change of Control.

Subject to the exceptions set forth in the last sentence of this Section 15.3 and the last sentence of Section 15.4 upon the occurrence of a Change of Control, (i) all outstanding shares of Restricted Stock shall be deemed to have vested, and, with the exception of such restrictions imposed under Section 12 , all restrictions and conditions applicable to such shares of Restricted

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Stock shall be deemed to have lapsed, immediately prior to the occurrence of such Change of Control, and (ii) either of the following two actions shall be taken:

(A) 15 days prior to the scheduled consummation of a Change of Control, all Options outstanding hereunder shall become immediately exercisable and shall remain exercisable for a period of 15 days; or

(B) the Board may elect, in its sole discretion, to cancel any outstanding Grants and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Board acting in good faith), in the case of Restricted Stock, equal to the formula or fixed price per share paid to holders of shares of Stock and, in the case of Options, equal to the product of the number of shares of Stock subject to the Option (the “ Option Shares ”) multiplied by the amount, if any, by which (I) the formula or fixed price per share paid to holders of shares of Stock pursuant to such transaction exceeds (II) the Option Price applicable to such Option Shares.

With respect to the Company’s establishment of an exercise window, (i) any exercise of an Option during such 15-day period shall be conditioned upon the consummation of the event and shall be effective only immediately before the consummation of the event, and (ii) upon consummation of any Change of Control the Plan, and all outstanding but unexercised Options shall terminate. The Board shall send written notice of an event that will result in such a termination to all individuals who hold Options not later than the time at which the Company gives notice thereof to its shareholders. This Section 15.3 shall not apply to any Change of Control to the extent that provision is made in writing in connection with such Change of Control for the assumption or continuation of the Options and Restricted Stock theretofore granted, or for the substitution for such Options and Restricted Stock for new common stock options and new common stock restricted stock relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and option prices, in which event the Plan and Options and Restricted Stock theretofore granted shall continue in the manner and under the terms so provided.

15.4

Adjustments.

Adjustments under Section 15 related to shares of Stock or securities of the Company shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. The Board may provide in the Award Agreements at the time of Grant, or any time thereafter with the consent of the Grantee, for different provisions to apply to a Grant in place of those described in Sections 15.1, 15.2 and 15.3 .

15.5

No Limitations on Company.

The making of Grants pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its

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

16.

DURATION AND AMENDMENTS

16.1

Term of the Plan.

The Effective Date of this Plan is the date of its adoption by the Board, subject to the approval of the Plan by the Company’s stockholders. In the event that the stockholders fail to approve the Plan within 12 months after its adoption by the Board, any Grants already made shall be null and void, and no additional Grants shall be made after such date. The Plan shall terminate automatically ten years after its adoption by the Board and may be terminated on any earlier date as next provided.

16.2

Amendment and Termination of the Plan.

The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to any shares of Stock as to which Grants have not been made. An amendment to the Plan shall be contingent on approval of the Company’s stockholders only to the extent required by applicable law, regulations or rules. No Grants shall be made after the termination of the Plan. No amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, alter or impair rights or obligations under any Grant theretofore awarded under the Plan.

17.

GENERAL PROVISIONS

17.1

Disclaimer of Rights

No provision in the Plan or in any Grant or Award Agreement shall be construed to confer upon any individual the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payments to any individual at any time, or to terminate any employment or other relationship between any individual and the Company or any Affiliate. The obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any participant or beneficiary under the terms of the Plan.

17.2

Nonexclusivity of the Plan

Neither the adoption of the Plan nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating any limitations upon the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Board in its discretion determines desirable, including, without limitation, the granting of stock options otherwise than under the Plan.

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17.3

Captions

The use of captions in this Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement.

17.4

Other Award Agreement Provisions

Each Grant awarded under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Board, in its sole discretion.

17.5

Number and Gender

With respect to words used in this Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires.

17.6

Severability

If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

17.7

Governing Law

The validity and construction of this Plan and the instruments evidencing the Grants awarded hereunder shall be governed by the laws of the State of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan and the instruments evidencing the Grants awarded hereunder to the substantive laws of any other jurisdiction.

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18.

EXECUTION

To record adoption of the Plan by the Board as of September 30, 2004, and approval of the Plan by the stockholders on September 30, 2004, the Company has caused its authorized officer to execute the Plan.


ARCA D ISCOVERY , I NC .

By:		/s/ Michael R. Bristow
		Michael R. Bristow
		Chief Executive Officer and President

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Exhibit 10.2

AMENDMENT NO. 1

TO THE ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

The ARCA Discovery, Inc. 2004 Stock Incentive Plan is hereby amended as set forth below:

1. The first sentence of Section 4 is hereby deleted and replaced with the following sentence:

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 2,954,694.

The remaining sentences of Section 4 shall not be amended.

2. Capitalized terms as used in this Amendment No. 1 (this “ Amendment ”) and not otherwise defined in this Amendment, shall have the meanings assigned to them in the Plan. The Plan shall otherwise be unchanged by this Amendment.

* * * * *

This Amendment was duly adopted by the board of directors of ARCA Discovery, Inc. by unanimous written consent on February 17, 2006, and approved by the written consent of the stockholders of ARCA Discovery, Inc. on February 17, 2006, in accordance with Section 16.2 of the Plan.


ARCA DISCOVERY, INC.

By:		/s/ Christopher D. Ozeroff
		Christopher D. Ozeroff, Secretary

- 2 -

Exhibit 10.3

AMENDMENT NO. 2

TO THE ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

The ARCA Discovery, Inc. 2004 Stock Incentive Plan (as amended, the “ Plan ”) is hereby amended as set forth below:

1. The first sentence of Section 4 is hereby deleted and replaced with the following sentence:

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 3,954,694.

The remaining sentences of Section 4 shall not be amended.

2. Capitalized terms as used in this Amendment No. 2 (this “ Amendment ”) and not otherwise defined in this Amendment, shall have the meanings assigned to them in the Plan. The Plan shall otherwise be unchanged by this Amendment.

* * * * *

This Amendment was duly adopted by the board of directors of ARCA Discovery, Inc. at a meeting held on November 2, 2006, and approved by the written consent of the stockholders of ARCA Discovery, Inc. on November 2, 2006, in accordance with Section 16.2 of the Plan.


ARCA DISCOVERY, INC.

By:		/s/ Christopher D. Ozeroff
		Christopher D. Ozeroff, Secretary

- 2 -

Exhibit 10.4

AMENDMENT NO. 3

TO THE ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

The ARCA Discovery, Inc. 2004 Stock Incentive Plan (as amended, the “ Plan ”) is hereby amended as set forth below:

1. The first sentence of Section 4 is hereby deleted and replaced with the following sentence:

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 5,157,846.

The remaining sentences of Section 4 shall not be amended.

2. Capitalized terms as used in this Amendment No. 3 (this “ Amendment ”) and not otherwise defined in this Amendment, shall have the meanings assigned to them in the Plan. The Plan shall otherwise be unchanged by this Amendment.

* * * * *

This Amendment was duly adopted by the board of directors of ARCA Discovery, Inc. by unanimous written consent on May 31, 2007, and approved by the written consent of the stockholders of ARCA Discovery, Inc. on May 31, 2007, in accordance with Section 16.2 of the Plan.


ARCA DISCOVERY, INC.

By:		/s/ Christopher D. Ozeroff
		Christopher D. Ozeroff, Secretary

- 2 -

Exhibit 10.5

AMENDMENT NO. 4

TO THE ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

The ARCA Discovery, Inc. 2004 Stock Incentive Plan (as amended, the “ Plan ”) is hereby amended as set forth below:

1. The first sentence of Section 4 is hereby deleted and replaced with the following sentence:

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 6,388,339.

The remaining sentences of Section 4 shall not be amended.

2. Capitalized terms as used in this Amendment No. 4 (this “ Amendment ”) and not otherwise defined in this Amendment, shall have the meanings assigned to them in the Plan. The Plan shall otherwise be unchanged by this Amendment.

* * * * *

This Amendment was duly adopted by the board of directors of ARCA Discovery, Inc. by unanimous written consent on December 20, 2007, and approved by the written consent of the stockholders of ARCA Discovery, Inc. on December 20, 2007, in accordance with Section 16.2 of the Plan.


ARCA DISCOVERY, INC.

By:		/s/ Christopher D. Ozeroff
		Christopher D. Ozeroff, Secretary

- 2 -

Exhibit 10.6

AMENDMENT NO. 5

TO THE ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

The ARCA Discovery, Inc. 2004 Stock Incentive Plan (as amended, the “ Plan ”) is hereby amended as set forth below:

1. The first sentence of Section 4 is hereby deleted and replaced with the following sentence:

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 6,356,550.

The remaining sentences of Section 4 shall not be amended.

2. Capitalized terms as used in this Amendment No. 5 (this “ Amendment ”) and not otherwise defined in this Amendment, shall have the meanings assigned to them in the Plan. The Plan shall otherwise be unchanged by this Amendment.

* * * * *

This Amendment was duly adopted by the board of directors of ARCA Discovery, Inc. by resolution of the Board of Directors of the of the Corporation adopted at a meeting held on February 1, 2008, and approved by the written consent of the stockholders of ARCA Discovery, Inc. on February 27, 2008, in accordance with Section 16.2 of the Plan.


ARCA DISCOVERY, INC.

By:		/s/ Christopher D. Ozeroff
		Christopher D. Ozeroff, Secretary

- 2 -

Exhibit 10.7

AMENDMENT NO. 6

TO THE ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

The ARCA Discovery, Inc. 2004 Stock Incentive Plan (as amended, the “ Plan ”) is hereby amended as set forth below:

1. The first sentence of Section 4 is hereby deleted and replaced with the following sentence:

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 6,756,550.

The remaining sentences of Section 4 shall not be amended.

2. Capitalized terms as used in this Amendment No. 6 (this “ Amendment ”) and not otherwise defined in this Amendment, shall have the meanings assigned to them in the Plan. The Plan shall otherwise be unchanged by this Amendment.

* * * * *

This Amendment was duly adopted by the board of directors of ARCA biopharma, Inc. by unanimous written consent on January 22, 2009, and approved by the written consent of the stockholders of ARCA biopharma, Inc. on January 22, 2009, in accordance with Section 16.2 of the Plan.


ARCA biopharma, Inc.

By:		/s/ Christopher D. Ozeroff
		Christopher D. Ozeroff, Secretary

Exhibit 10.8

Option No.:

ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

ARCA Discovery, Inc., a Delaware corporation (the “ Company ”), hereby grants an option (the “ Option ”) to purchase shares of its common stock, $0.001 par value, (the “ Stock ”) to the optionee named below. The terms and conditions of the Option are set forth in this Incentive Stock Option Agreement, consisting of this cover sheet and the attached terms (the “Option Agreement”) and in the Company’s 2004 Stock Incentive Plan (the “ Plan ”). Capitalized terms not defined in the Option Agreement are as defined in the Plan.

Grant Date: , 200

Name of Optionee:

Optionee’s Social Security Number: - -

Number of Shares Covered by Option:

Option Price per Share: $ . (At least 100% of Fair Market Value)

Vesting Start Date: ,

By signing this cover sheet, you agree to all of the terms and conditions described in the Option Agreement (including the attached terms) and in the Plan, a copy of which is also attached. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Option Agreement should appear to be inconsistent.


Optionee:
		(Signature)

Company:	By:
		(Signature)

	Title:

Attachment

This is not a stock certificate or a negotiable instrument

ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT


Incentive Stock Option		This Option applies to the number of shares of Stock set forth on the cover sheet of this Option Agreement (the “ Option Shares ”), and gives you certain rights, as set forth herein, to purchase the Option Shares, at a price per share equal to the Option price set forth on the cover sheet. This Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary (“ Employee ”) but continue to provide Service, this Option will be deemed a nonstatutory stock option ninety (90) days after you cease to be an Employee. In addition, to the extent that all or part of this Option exceeds the $100,000 rule of section 422(d) of the Internal Revenue Code, this Option or the lesser excess part will be deemed to be a nonstatutory stock option.

Vesting		This Option is only exercisable before it expires and then only with respect to the vested portion of the Option. Subject to the preceding sentence, you may exercise this Option, in whole or in part, to purchase a whole number of vested shares not less than one hundred (100) shares (unless the total number of vested shares under the Option is less than 100 shares, in which case you may purchase such total) by following the procedures set forth in the Plan and below in this Option Agreement. Your right to purchase the Option Shares vests as follows: twenty-five percent (25%) vests one year after Vesting Start Date and 6.25% vests at the end of each three (3) month period thereafter. The resulting aggregate number of vested shares will be rounded to the nearest whole number, and you cannot vest in more than the number of Option Shares. Notwithstanding the foregoing vesting schedule, if a Change of Control (as defined in the Plan) occurs prior to expiration of this Option and at a time when you remain in Service as an Employee, then fifty percent (50%) of your unvested Option Shares shall become fully and immediately vested upon the closing date of such Change of Control (to the extent such Option Shares have not yet then vested), and any remaining unvested Option Shares shall continue to vest according to the vesting schedule set forth herein; provided, however, that on the earlier to occur of (i) the one-year anniversary of the closing date of such Change of Control and (ii) your Involuntary Termination Date (as defined below), any Option Shares that remain unvested on such earlier date shall become fully and immediately vested (provided further, that, in the case of clause (i), you remain in continuous Service as an Employee during such one-year period). You will experience an “ Involuntary Termination Date ” on your employment termination date if your Service is terminated by the Company or its successor without Cause or by you for Good Reason. For purposes of this Option Agreement, “ Cause ” means that you have committed or engaged in: (i) willful misconduct, gross negligence, theft, fraud, or other illegal or dishonest conduct,


		any of which are considered to be materially harmful to the Company; (ii) refusal, unwillingness, failure, or inability to perform material job duties or habitual absenteeism; or (iii) violation of fiduciary duty, violation of any duty of loyalty, or material breach of any material term of any contract between you and the Company; and, “ Good Reason ” means (i) the relocation of your normal principal place of work greater than thirty (30) miles from your then current normal work location; (ii) a decrease in your then current base salary of more than fifteen percent (15%), other than any such decrease resulting from a general reduction by the Company in the base salary of all similarly situated employees; or (iii) the Company unilaterally makes significant detrimental reductions in your job responsibilities; provided, that you shall give written notice to the Chairman of the Company’s Board of Directors setting forth your intent to resign for Good Reason and the facts in support of your claim that Good Reason exists; and the Company shall have twenty (20) days after the applicable party has received such notice to take such actions, if any, as the Company may deem appropriate to eliminate such claimed Good Reason (without thereby admitting that such Good Reason had occurred). If the Company so acts to eliminate such claimed Good Reason, then you shall not be deemed to be resigning for Good Reason under such facts. No additional Option Shares will vest after your Service has terminated for any reason. As described below, in certain cases this Option will expire after your Service, and the vesting of this Option has already terminated.

Term		This Option will expire in any event at the close of business at Company headquarters on the day before the tenth (10 ^th ) anniversary of the Grant Date, as shown on the cover sheet. This Option will expire earlier if your Service terminates, as described below.

Regular Termination		If your Service terminates for any reason, other than death, Disability or Cause, then this Option will expire at the close of business at Company headquarters on the ninetieth (90 ^th ) day after your termination date.

Termination for Cause		If your Service is terminated for Cause, then you shall immediately forfeit all rights to this Option and the Option, including any vested portion, shall immediately expire.

Death		If your Service terminates because of your death, then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During that twelve (12) month period, your estate or heirs may exercise the vested portion of this Option. In addition, if you die during the ninety (90) day period described in connection with a regular termination (i.e., a termination of your Service not on account of your death, Disability or Cause), and a vested portion of this Option has not yet been exercised, then this Option will instead expire on the date twelve (12) months after your termination date. In such a case, during the period following your death up to the date twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of this Option.

Disability		If your Service terminates because of your Disability, then this Option will


		expire at the close of business at Company headquarters on the date twelve (12) months after your termination date.

Leaves of Absence		For purposes of this Option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.

Notice of Exercise		When you wish to exercise this Option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least one hundred (100) shares generally). Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

Form of Payment		When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms: • Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company. • Shares of Stock which have already been owned by you for more than six (6) months and that are owned free of any liens, claims, encumbrances or securities interests and which are surrendered to the Company; provided, that such tender would not violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The value of the shares, as determined in good faith by the Company’s Board of Directors as of the effective date of the Option exercise, will be applied to the option price. • To the extent a public market for the Stock exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes.

Withholding Taxes		You will not be allowed to exercise this Option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result


		of the Option exercise or sale of Stock acquired under this Option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate.

Transfer of Option		During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise this Option. You cannot transfer or assign this Option. For instance, you may not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may, however, dispose of this Option in your will or it may be transferred upon your death by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in this Option in any other way.

Market Stand-off Agreement		In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Option Shares without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length (or such longer period, not to exceed eighteen (18) days after the expiration of the one hundred eighty (180) day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711)) provided, however , that nothing contained in this section shall prevent the exercise of a repurchase option, if any, in favor of the Company during such period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your Option Shares until the end of such period.

Investment Representation; Securities Law Compliance		If the sale of Stock under the Plan is not registered under the Securities Act, but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Stock being acquired upon exercise of this Option is being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel. Notwithstanding anything to the contrary contained herein, you may not exercise this Option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act of 1933, as amended, 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 this Option also must comply with other applicable laws and regulations governing this Option, and you may not exercise this Option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

The Company’s Right of First Refusal		In the event that you propose to sell, pledge or otherwise transfer to a third party any Option Shares, or any interest in such Option Shares, the Company shall have the “ Right of First Refusal ” with respect to all (and not less than all) of such Option Shares. If you desire to transfer any Option Shares, you must give a written notice (a “ Transfer Notice ”) to the Company describing fully the proposed transfer, including the number of shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee. The Transfer Notice shall be signed both by you and by the proposed new transferee and must constitute a binding commitment of both parties to the transfer of the shares. The Company shall have the right to purchase all, and not less than all, of such Option Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted in the next paragraph) by delivery of a notice of exercise of the Right of First Refusal within thirty (30) days after the date when the Transfer Notice was received by the Company. If the Company fails to exercise its Right of First Refusal within thirty (30) days after the date when it received the Transfer Notice, you may, not later than ninety (90) days following receipt of the Transfer Notice by the Company, conclude a transfer of the Stock subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by you, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in the paragraph above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Stock on the terms set forth in the Transfer Notice within sixty (60) days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Stock was to be made in a form other than lawful money paid at the time of transfer, the Company shall have the option of paying for the Stock with lawful money equal to the present value of the consideration described in the Transfer Notice. In the case of any purchase of Stock under this Right of First Refusal, at the option of the Company, the Company may pay you the purchase price in three or fewer annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. The Company shall pay at least one-third of the total purchase price each year, plus interest on the unpaid balance, with the first payment being made on or before the sixtieth (60 ^th ) day after the purchase. The Company’s rights under this subsection shall be freely assignable, in whole or in part, shall inure to the benefit of its successors and assigns and shall be


		binding upon any transferee of the Option Shares. The Company’s Right of First Refusal shall terminate in the event that the Stock is listed on an established national or regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly traded in an established securities market.

Retention Rights		Neither this Option nor this Option Agreement gives you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.

Stockholder Rights		You, or your estate or heirs, have no rights as a stockholder of the Company until a certificate for your Option’s shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.

Adjustments		In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this Option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. This Option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.

Legends		All certificates representing the Stock issued upon exercise of this Option shall, where applicable, have endorsed thereon the following legends: “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

		“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION’S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.”

Applicable Law		This Option Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Option Agreement to the substantive law of another jurisdiction.

The Plan		The text of the Plan is incorporated in this Option Agreement by reference.


		Certain capitalized terms used in this Option Agreement are defined in the Plan, and have the meaning set forth in the Plan. This Option Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded.

Other Agreements		You agree, as a condition of the grant of this Option, that in connection with the exercise of the Option, you will execute such document(s) as necessary to become a party to any stockholder agreement or voting trust as the Company may require.

Certain Dispositions		If you sell or otherwise dispose of any Option Shares following termination of the Company’s Right of First Refusal and sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within thirty (30) days of such sale or disposition.

By signing the cover sheet of this Option Agreement, you agree to all of the terms and conditions described above and in the Plan.

Exhibit 10.9

Option No.:

ARCA BIOPHARMA, INC.

2004 STOCK INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

ARCA biopharma, Inc., a Delaware corporation (the “ Company ”), hereby grants an option (the “Option”) to purchase shares of its common stock, $0.001 par value, (the “ Stock ”) to the optionee named below. The terms and conditions of the Option are set forth in this Incentive Stock Option Agreement, consisting of this cover sheet and the attached terms (the “Option Agreement”) and in the Company’s 2004 Stock Incentive Plan (the “ Plan ”). Capitalized terms not defined in the Option Agreement are as defined in the Plan.

Grant Date: , 200

Name of Optionee:

Optionee’s Social Security Number: - -

Number of Shares Covered by Option:

Option Price per Share: $ . (At least 100% of Fair Market Value)

Vesting Start Date: ,


Optionee:
		(Signature)

Company:		By:
		(Signature)
		Title:

Attachment

This is not a stock certificate or a negotiable instrument

ARCA BIOPHARMA, INC.

2004 STOCK INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT


Incentive Stock Option		This Option applies to the number of shares of Stock set forth on the cover sheet of this Option Agreement (the “ Option Shares ”). This Option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary (“ Employee ”) but continue to provide Service, this Option will be deemed a nonstatutory stock option ninety (90) days after you cease to be an Employee. In addition, to the extent that all or part of this Option exceeds the $100,000 rule of section 422(d) of the Internal Revenue Code, this Option or the lesser excess part will be deemed to be a nonstatutory stock option.

Vesting		This Option is only exercisable before it expires and then only with respect to the vested portion of the Option. Subject to the preceding sentence, you may exercise this Option, in whole or in part, to purchase a whole number of vested shares not less than one hundred (100) shares (unless the total number of vested shares under the Option is less than 100 shares, in which case you may purchase such total) by following the procedures set forth in the Plan and below in this Option Agreement. Your right to purchase the Option Shares vests as follows: twenty-five percent (25%) vests one year after Vesting Start Date and 6.25% vests at the end of each three (3) month period thereafter. The resulting aggregate number of vested shares will be rounded to the nearest whole number, and you cannot vest in more than the number of Option Shares. No additional Option Shares will vest after your Service has terminated for any reason. As described below, in certain cases this Option will expire after your Service, and the vesting of this Option has already terminated.

Term		This Option will expire in any event at the close of business at Company headquarters on the day before the tenth (10 ^th ) anniversary of the Grant Date, as shown on the cover sheet. This Option will expire earlier if your Service terminates, as described below.

Regular Termination		If your Service terminates for any reason, other than death, Disability or Cause, then this Option will expire at the close of business at Company headquarters on the ninetieth (90 ^th ) day after your termination date.

Termination for Cause		If your Service is terminated for Cause, then you shall immediately forfeit all rights to this Option and the Option, including any vested portion, shall immediately expire.

Death		If your Service terminates because of your death, then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During that twelve (12) month period, your estate or


		heirs may exercise the vested portion of this Option. In addition, if you die during the ninety (90) day period described in connection with a regular termination (i.e., a termination of your Service not on account of your death, Disability or Cause), and a vested portion of this Option has not yet been exercised, then this Option will instead expire on the date twelve (12) months after your termination date. In such a case, during the period following your death up to the date twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of this Option.

Disability		If your Service terminates because of your Disability, then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after your termination date.

Leaves of Absence		For purposes of this Option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.

Notice of Exercise		When you wish to exercise this Option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least one hundred (100) shares generally). Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company. If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

Form of Payment		When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms: • Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company. • Shares of Stock which have already been owned by you for more than six (6) months and that are owned free of any liens, claims, encumbrances or securities interests and which are surrendered to the Company; provided, that such tender would not violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The value of the shares, as determined in good faith by the Company’s Board of Directors as of the effective date of the Option exercise, will be applied to the option


		price. • To the extent a public market for the Stock exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes.

Withholding Taxes		You will not be allowed to exercise this Option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or sale of Stock acquired under this Option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate.

Transfer of Option		During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise this Option. You cannot transfer or assign this Option. For instance, you may not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may, however, dispose of this Option in your will or it may be transferred upon your death by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in this Option in any other way.

Market Stand-off Agreement		In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Option Shares without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length (or such longer period, not to exceed eighteen (18) days after the expiration of the one hundred eighty (180) day period, as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711)) provided, however , that nothing contained in this section shall prevent the exercise of a repurchase option, if any, in favor of the Company during such period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your Option Shares until the end of such period.


Investment Representation; Securities Law Compliance		If the sale of Stock under the Plan is not registered under the Securities Act, but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Stock being acquired upon exercise of this Option is being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel. Notwithstanding anything to the contrary contained herein, you may not exercise this Option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act of 1933, as amended, 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 this Option also must comply with other applicable laws and regulations governing this Option, and you may not exercise this Option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

The Company’s Right of First Refusal		In the event that you propose to sell, pledge or otherwise transfer to a third party any Option Shares, or any interest in such Option Shares, the Company shall have the “ Right of First Refusal ” with respect to all (and not less than all) of such Option Shares. If you desire to transfer any Option Shares, you must give a written notice (a “ Transfer Notice ”) to the Company describing fully the proposed transfer, including the number of shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee. The Transfer Notice shall be signed both by you and by the proposed new transferee and must constitute a binding commitment of both parties to the transfer of the shares. The Company shall have the right to purchase all, and not less than all, of such Option Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted in the next paragraph) by delivery of a notice of exercise of the Right of First Refusal within thirty (30) days after the date when the Transfer Notice was received by the Company. If the Company fails to exercise its Right of First Refusal within thirty (30) days after the date when it received the Transfer Notice, you may, not later than ninety (90) days following receipt of the Transfer Notice by the Company, conclude a transfer of the Stock subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by you, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in the paragraph above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Stock on the terms set forth in the Transfer Notice within sixty (60) days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Stock was to be made in a form other than lawful money paid at the time of transfer, the Company shall have the option of paying for the Stock with lawful money equal to the present value of the consideration described in the Transfer Notice.


		In the case of any purchase of Stock under this Right of First Refusal, at the option of the Company, the Company may pay you the purchase price in three or fewer annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. The Company shall pay at least one-third of the total purchase price each year, plus interest on the unpaid balance, with the first payment being made on or before the sixtieth (60 ^th ) day after the purchase. The Company’s rights under this subsection shall be freely assignable, in whole or in part, shall inure to the benefit of its successors and assigns and shall be binding upon any transferee of the Option Shares. The Company’s Right of First Refusal shall terminate in the event that the Stock is listed on an established national or regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly traded in an established securities market.

Retention Rights		Neither this Option nor this Option Agreement gives you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.

Stockholder Rights		You, or your estate or heirs, have no rights as a stockholder of the Company until a certificate for your Option’s shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.

Adjustments		In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this Option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. This Option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.

Legends		All certificates representing the Stock issued upon exercise of this Option shall, where applicable, have endorsed thereon the following legends: “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

		“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN


		EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION’S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.”

Applicable Law		This Option Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Option Agreement to the substantive law of another jurisdiction.

The Plan		The text of the Plan is incorporated in this Option Agreement by reference. Certain capitalized terms used in this Option Agreement are defined in the Plan, and have the meaning set forth in the Plan. This Option Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option are superseded.

Other Agreements		You agree, as a condition of the grant of this Option, that in connection with the exercise of the Option, you will execute such document(s) as necessary to become a party to any stockholder agreement or voting trust as the Company may require.

Certain Dispositions		If you sell or otherwise dispose of any Option Shares following termination of the Company’s Right of First Refusal and sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within thirty (30) days of such sale or disposition.

By signing the cover sheet of this Option Agreement, you agree to all of the terms and conditions described above and in the Plan.

Exhibit 10.10

Option No.:

ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

ARCA Discovery, Inc., a Delaware corporation (the “ Company ”), hereby grants an option to purchase shares of its common stock, $0.001 par value, (the “ Stock ”) to the optionee named below. The terms and conditions of the option are set forth in this cover sheet, in the attachment and in the Company’s 2004 Stock Incentive Plan (the “ Plan ”).

Grant Date: , 200

Name of Optionee:

Optionee’s Social Security Number: - -

Number of Shares Covered by Option:

Option Price per Share: $ .

Vesting Start Date: , 20

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which is also attached. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.


Optionee:
		(Signature)

Company:		By:
		(Signature)
		Title:

Attachment

This is not a stock certificate or a negotiable instrument

ARCA DISCOVERY, INC.

2004 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT


Nonqualified Stock Option		This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.

Vesting		This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares not less than one hundred (100) shares, unless the number of shares purchased is the total number available for purchase under the option, by following the procedures set forth in the Plan and below in this Agreement. Your right to purchase shares of Stock under this option vests as to the total number of shares covered by this option, as shown on the cover sheet (the “ Option Shares ”), on the one-year anniversary of the Vesting Start Date (“ Anniversary Date ”), provided you then continue in Service. No shares of Stock will vest after your Service has terminated for any reason.

Term		Your option will expire in any event at the close of business at Company headquarters on the day before the tenth (10 ^th ) anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier if your Service terminates, as described below.

Regular Termination		If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire at the close of business at Company headquarters on the ninetieth (90 ^th )day after your termination date.

Termination for Cause		If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.

Death		If your Service terminates because of your death, then your option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During that twelve (12)-month period, your estate or heirs may exercise the vested portion of your option. In addition, if you die during the ninety (90)-day period described in connection with a regular termination (i.e., a termination of your Service not on account of your death, Disability or Cause), and a vested portion of your option has not yet been exercised, then your option will instead expire on the date twelve (12) months after your termination date. In such a case, during the period following your death up to the date twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of your option.

Disability		If your Service terminates because of your Disability, then your option will expire at the close of business at Company headquarters on the date twelve (12) months after your termination date.


Leaves of Absence		For purposes of this option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.

Notice of Exercise		When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least one hundred (100) shares generally). Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

Form of Payment		When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms: • Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company. • Shares of Stock which have already been owned by you for more than six (6) months and that are owned free of any liens, claims, encumbrances or securities interests and which are surrendered to the Company; provided , that such tender would not violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The value of the shares, as determined in good faith by the Company’s Board of Directors as of the effective date of the option exercise, will be applied to the option price. • To the extent a public market for the Stock exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes.

Withholding Taxes		You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option exercise or sale of Stock acquired under this option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares


		arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate.

Transfer of Option		During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or it may be transferred upon your death by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in your option in any other way.

Market Stand-off Agreement		In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any shares of Stock without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length) provided , however , that nothing contained in this section shall prevent the exercise of a repurchase option, if any, in favor of the Company during such period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to your shares of Common Stock until the end of such period.

Investment Representation		If the sale of Stock under the Plan is not registered under the Securities Act, but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Stock being acquired upon exercise of this option is being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel. 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 of 1933, as amended, 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.

The Company’s Right of First Refusal

In the event that you propose to sell, pledge or otherwise transfer to a third party any Stock acquired under this Agreement, or any interest in such Stock, the Company shall have the “ Right of First Refusal ” with respect to all (and not less than all) of such shares of Stock. If you desire to transfer Stock acquired under this Agreement, you must give a written notice (a “ Transfer Notice ”) to the Company describing fully the proposed transfer, including the number of shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee.

The Transfer Notice shall be signed both by you and by the proposed new transferee and must constitute a binding commitment of both parties to the transfer of the shares. The Company shall have the right to purchase all, and not less than all, of the shares of Stock on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted in the next paragraph) by delivery of a notice of exercise of the Right of First Refusal within thirty (30) days after the date when the Transfer Notice was received by the Company.

If the Company fails to exercise its Right of First Refusal within thirty (30) days after the date when it received the Transfer Notice, you may, not later than ninety (90) days following receipt of the Transfer Notice by the Company, conclude a transfer of the Stock subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by you, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in the paragraph above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Stock on the terms set forth in the Transfer Notice within sixty (60) days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Stock was to be made in a form other than lawful money paid at the time of transfer, the Company shall have the option of paying for the Stock with lawful money equal to the present value of the consideration described in the Transfer Notice.

In the case of any purchase of Stock under this Right of First Refusal, at the option of the Company, the Company may pay you the purchase price in three or fewer annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. The Company shall pay at least one-third of the total purchase price each year, plus interest on the unpaid balance, with the first payment being made on or before the sixtieth (60 ^th ) day after the purchase.

The Company’s rights under this subsection shall be freely assignable, in whole or in part, shall inure to the benefit of its successors and assigns and shall be binding upon any transferee of the shares of Stock.

The Company’s Right of First Refusal shall terminate in the event that the


		Stock is listed on an established national or regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly traded in an established securities market.

Right to Repurchase		Following termination of your Service for any reason, the Company shall have the right to purchase all of those shares of Stock that you have or will acquire under this option. If the Company exercises its right to purchase the shares, the Company will notify you of its intention to purchase such shares, and will consummate the purchase within one year (or 90 days to the extent required by applicable law) of your termination of Service or, in the case of Stock acquired after your termination of Service, within one year (or 90 days to the extent required by applicable law) of the date of exercise. The purchase price shall be the Fair Market Value of the shares on the date of your termination of Service if the Company exercises its right to purchase such shares within 90 days of your termination of Service or exercises its right within 90 days of the date of your exercise of the option following termination of Service; otherwise the purchase price shall be the Fair Market Value of the shares on the date the Company gives you notice of its intent to exercise its right to purchase the shares; provided , however , that if your Service is terminated for Cause, the purchase price shall be the exercise price paid by you for such shares of Stock. The Company’s rights of repurchase shall terminate in the event that the Stock is listed on an established national or regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly traded in an established securities market.

Retention Rights		Neither your option nor this Agreement give you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.

Shareholder Rights		You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option’s shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.

Adjustments		In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.

Legends		All certificates representing the Stock issued upon exercise of this option shall, where applicable, have endorsed thereon the following legends: “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE


		SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.” “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION’S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.”

Applicable Law		This Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

The Plan		The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.

Other Agreements		You agree, as a condition of the grant of this option, that in connection with the exercise of the option, you will execute such document(s) as necessary to become a party to any shareholder agreement or voting trust as the Company may require.

Certain Dispositions		If you sell or otherwise dispose of Stock acquired pursuant to the exercise of this option following termination of the Company’s Right of First Refusal and sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within thirty (30) days of such sale or disposition.

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.

Exhibit 99.1




Contact:
Derek Cole				Danielle Bertrand
ARCA biopharma				WeissComm Partners
720-940-2163				415-946-1056
derek.cole@arcabiopharma.com				dbertrand@wcpglobal.com

ARCA biopharma and Nuvelo Complete Merger

Creating Late-Stage Cardiovascular Company

Combined Company to Begin Trading as

ARCA biopharma, Inc. (Nasdaq: ABIO) on January 28, 2009

Broomfield, Colorado and San Carlos, California, January 27, 2009 – ARCA biopharma, Inc., a biopharmaceutical company developing genetically-targeted therapies for heart failure and other cardiovascular diseases, and Nuvelo, Inc. (Nasdaq: NUVO) today announced the completion of their business combination creating a Colorado-headquartered, cardiovascular focused biotechnology company with an experienced cardiovascular leadership team, a near-term commercial opportunity, Gencaro (bucindolol hydrochloride), and a development pipeline, including the novel, short-acting anticoagulant NU172, which recently completed a successful Phase 1b study.

“The merger of ARCA and Nuvelo creates a late-stage company with multiple significant milestones and a near-term commercialization opportunity in Gencaro, potentially the first genetically-targeted heart failure treatment, followed by a cardiovascular development pipeline,” commented Richard B. Brewer, president and chief executive officer of ARCA. “With our significant cardiovascular drug development and commercialization expertise, and financial resources expected to fund operations beyond the anticipated FDA response to the Gencaro NDA, we believe we are well-positioned to provide both near- and longer-term value to our stockholders.”

The combined Company is named ARCA biopharma, Inc. ARCA’s common stock will be traded on the Nasdaq Global Market under the stock ticker symbol ABIO, beginning January 28, 2009.

In connection with the merger, Richard B. Brewer was appointed as president, chief executive officer and a board member of the combined Company. Michael R. Bristow, M.D., Ph.D., and a founder of the pre-merger ARCA, will assume the chairmanship of the new board and was appointed as chief science and medical officer of the combined Company. In addition, the following directors were appointed as members of ARCA’s board of directors: Dr. J. William Freytag, Dr. Jean-François Formela, John Zabriskie, Dr. David Lowe, and Dr. Linda Grais from

ARCA’s board prior to the closing of the transaction, with Dr. Ted W. Love, Dr. Burton E. Sobel, and Mary K. Pendergast continuing from Nuvelo’s board prior to the closing of the transaction.

Under the terms of the merger transaction, Nuvelo issued approximately 4.87 million new shares of common stock to shareholders of pre-merger ARCA. As a result, former ARCA pre-merger equity holders now hold approximately 67 percent, and former Nuvelo stockholders now own approximately 33 percent, of the common stock of the combined Company after giving effect to the issuance of shares under the pre-merger ARCA options and warrants assumed by the combined Company, primarily on a treasury method basis, and without giving effect to issuance of stock pursuant to Nuvelo’s outstanding options and warrants.

Effective January 27, 2009, prior to completion of the merger, Nuvelo implemented a 20-for-1 reverse stock split so that every 20 shares of Nuvelo common stock were exchanged for 1 share of Nuvelo common stock.

About ARCA biopharma

The combined company following the merger, ARCA biopharma, Inc., is dedicated to developing and commercializing genetically targeted therapies for heart failure and other cardiovascular disease. The combined Company’s lead product candidate, Gencaro(TM) (bucindolol hydrochloride), is an investigational, pharmacologically unique beta-blocker and mild vasodilator being developed for heart failure and other indications. ARCA has identified common genetic variations that it believes predict individual patient response to Gencaro, giving it the potential to be the first genetically-targeted heart failure treatment. The New Drug Application for approval of Gencaro for the indication of chronic heart failure, including the proposed brand name, is currently under review by the U.S. Food and Drug Administration with a Prescription Drug User Fee Act (PDUFA) date of May 31, 2009. ARCA is collaborating with Laboratory Corporation of America to develop the companion genetic test for Gencaro. The combined Company’s second compound in development, NU172, is a direct thrombin inhibitor which has completed Phase 1b development for use as a potential short-acting anticoagulant during medical or surgical procedures. For more information please visit www.arcabiopharma.com.

Forward-looking statements

This press release contains “forward-looking statements” which include, without limitation, statements regarding the anticipated benefits of the completion of the business combination transaction between Nuvelo and ARCA and Dawn Acquisition Sub, Inc., the combined Company’s ability to fund future operations, the progress of ARCA’s clinical stage and research programs, commercialization opportunities for Gencaro, and ARCA’s developmental pipeline, which statements are hereby identified as “forward-looking statements” for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, the risk that Nuvelo’s and ARCA’s business operations will not be integrated successfully; the combined Company’s inability to further identify, develop and achieve commercial success for products and technologies; the risk

that the combined Company’s financial resources will be insufficient to meet its business objectives; uncertainties relating to drug discovery and the regulatory approval process; clinical development processes; enrollment rates for patients in the companies’ clinical trials; changes in relationships with strategic partners and dependence upon strategic partners for the performance of critical activities under collaborative agreements; and the impact of competitive products and technological changes. These and other factors are identified and described in more detail in ARCA’s filings with the SEC, including without limitation ARCA’s quarterly report on Form 10-Q for the quarter ended September 30, 2008 and subsequent filings. We disclaim any intent or obligation to update these forward-looking statements.

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Exhibit 99.2

LOGO

Contact:

Derek Cole

Vice President, Investor Relations

and Corporate Communications

720.940.2163

derek.cole@arcabiopharma.com

ARCA biopharma, Inc. Announces Commencement of Trading on the NASDAQ Global

Market under the Symbol “ABIO”

Experienced Cardiovascular Team Developing the First Genetically-Targeted Treatment for

Heart Failure

Broomfield, Colorado, January 28, 2009 – ARCA biopharma, Inc. (Nasdaq: ABIO), a biopharmaceutical company developing genetically-targeted therapies for heart failure and other cardiovascular diseases, announced that on January 28, 2009, its common stock will commence trading on the NASDAQ Global Market under the symbol “ABIO.” This follows the merger on January 27, 2009 of a wholly-owned subsidiary of Nuvelo, Inc. with the company formerly known as ARCA biopharma, Inc. The combined Company is named ARCA biopharma, Inc. (“ARCA”).

“This is an exciting milestone in the history of ARCA which we believe will provide greater market visibility and increased liquidity for our current and potential future investors,” said Richard B. Brewer, ARCA’s President and Chief Executive Officer. “We believe the listing of ARCA common shares on Nasdaq will support our business strategy and reinforces our commitment to enhancing shareholder value as we build a company focused on improving the lives of patients with cardiovascular disease. With known industry leaders that have significant cardiovascular drug development and commercialization expertise, we believe we have the right team to lead the development of potentially the first personalized heart failure medicine, Gencaro.”

Cardiovascular Product Portfolio

ARCA is positioned to bring personalized medicine to cardiovascular therapy. The Company’s business strategy combines expertise in cardiovascular pathophysiology, molecular genetics, clinical development and product commercialization.

•

Gencaro(TM), (trade name pending FDA approval): an investigational, genetically-targeted beta-blocker with a unique pharmacologic profile being developed for the treatment of chronic heart failure. ARCA has identified common genetic variations that interact with Gencaro’s novel pharmacologic properties and which the Company believes predict individual patient responses to Gencaro. The New Drug Application (NDA) for Gencaro is currently under review by the U.S. Food and Drug Administration (FDA) with a Prescription Drug User Fee Act (PDUFA) date of May 31, 2009. ARCA is

collaborating with Laboratory Corporation of America (LabCorp) to develop the companion genetic test for Gencaro. The PMA for this companion diagnostic test is also under FDA review.

•

NU172: a short-acting anticoagulant that is being tested as a potential new therapy in indications where heparin and protamine are the current standard of care, such as coronary artery bypass graft (CABG) surgery, kidney dialysis and a variety of vascular surgical and coronary interventions. NU172 recently completed a successful Phase 1b study.

Experienced Leadership Capable of Driving Value

•

Chief Executive Officer: Richard B. Brewer, former president and CEO of Scios and senior vice president of sales and marketing of Genentech;

•

Chief Science and Medical Officer: Michael R. Bristow, MD, PhD, former CSMO of Myogen and Professor of Medicine and the former Division Head of Cardiology at the University of Colorado Health Sciences Center;

•

Executive Vice President of Commercial Operations: Randall St. Laurent, former vice president of commercial development at Scios;

•

Vice President of Marketing: James Carr, instrumental in the successful commercialization of Coreg, a leading beta-blocker treatment for heart failure; and

•

The Company’s Board of Directors, which includes:

•

Mr. Brewer

•

Dr. Bristow (Chairman)

•

Dr. Jean-Francois Formela, Partner at Atlas Ventures

•

Dr. J. William Freytag, former CEO of Myogen, Inc.

•

Dr. Linda Grais, Partner at InterWest and founder of SGX Pharmaceuticals

•

Dr. Ted W. Love, former CEO of Nuvelo

•

Dr. David Lowe, Managing Director of Skyline Ventures and former Director of Cardiovascular Research at Genentech

•

Mary K. Pendergast, President, Pendergast Consulting and former deputy commissioner and senior advisor to the Commissioner, FDA

•

Dr. Burton E. Sobel, professor of medicine and biochemistry and former chair of the department of medicine at the University of Vermont and Fletcher Allen Health Care

•

Dr. John Zabriskie, co-founder of Puretech Ventures and former President and CEO of Pharmacia and Upjohn

Resources to Execute Strategy

•

Experienced cardiovascular workforce; approximately 50 employees

•

Offices in Broomfield, Colorado (headquarters) and San Carlos, California

•

The Company believes its current cash is sufficient to fund operations beyond the anticipated FDA response to the Gencaro NDA.

For more information about ARCA and its development programs, please visit http://www.arcabiopharma.com .

Forward Looking Statement

This press release contains “forward-looking statements” which include, without limitation, statements regarding the anticipated benefits of the completion of the business combination transaction between Nuvelo and ARCA, the potential for Gencaro to be the first genetically targeted treatment for heart failure, the benefits of listing ARCA common stock on the NASDAQ Global Market and the clinical, regulatory and commercial potential of ARCA’s development compounds, Gencaro and NU172, which statements are hereby identified as “forward-looking statements” for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Such statements are based on the companies’ managements’ current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, the risk that ARCA does not successfully integrate the business operations of Nuvelo; the company’s inability to further identify, develop and achieve commercial success for products and technologies; the risk that the company’s financial resources will be insufficient to meet the company’s business objectives; uncertainties relating to drug discovery and the regulatory approval process; clinical development processes; enrollment rates for patients in the companies’ clinical trials; changes in relationships with strategic partners and dependence upon strategic partners for the performance of critical activities under collaborative agreements; and the impact of competitive products and technological changes. These and other factors are identified and described in more detail in ARCA’s filings with the SEC, including without limitation ARCA’s quarterly report on Form 10-Q for the quarter ended September 30, 2008 and subsequent filings. We disclaim any intent or obligation to update these forward-looking statements.

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