For Howard W. Robin, President and Chief Executive Officer, effective February 1, 2008, the Board increased his 2008 annual performance-based bonus compensation target ("Target Annual Bonus") from 59% to 65% of his base salary and increased the range of his performance-based bonus award from 0-150% to 0-200% to be in line with the 0-200% bonus award range of the other executive officers of Nektar. The actual amount of Mr. Robin's 2008 annual performance bonus will range from 0% to 200% of the Target Annual Bonus based on the Board's assessment of his achievement of a combination of corporate and personal objectives.

    For Nevan C. Elam, Senior Vice President and Head of the Pulmonary Business Unit, effect ive February 1, 2008, the Committee increased his annual base salary from $376,971 to $393,935. The Committee set his 2008 Target Annual Bonus at 60% of his adjusted base salary and set the range of his bonus award at 0-200%. The actual amount of Mr. Elam's 2008 annual performance bonus will range from 0-200% of the Target Annual Bonus based on the Committee's assessment of his achievement of a combination of corporate and personal objectives.

    On February 25, 2008, the Board awarded Mr. Robin a cash bonus of $601,800 for the 2007 annual performance period, which represented 150% of his 2007 annual performance-based bonus compensation target (the "Target Annual Bonus"), the maximum bonus award under the terms of Mr. Robin's offer letter agreement with Nektar dated January 7, 2007. In addition, on December 21, 200 7 and February 25, 2008, Mr. Robin was granted stock options to purchase 700,000 shares (the "December Grant") and 400,000 shares (the "February Grant"), respectively, of Nektar's common stock, pursuant to the terms and conditions of Nektar's 2000 Equity Incentive Plan. The exercise prices of the stock options were set at the respective closing prices of Nektar's common stock on the NASDAQ Global Select Market on the respective grant dates. The shares subject to the December Grant will vest according to a 4-year vesting schedule with 25% of the shares subject to the stock option vesting on the one-year anniversary of the grant date, with the remaining vesting monthly on a pro rata basis over the remaining 3 years. The shares subject to the February Grant will vest according to a 4-year vesting schedule on a monthly pro rata basis. Rather than increase Mr. Robin's base compensation, the Board determined that the compensation adjustments described in Item 5.02(e) and in this Item 7.01 recognized Mr. Robin' s 2007 performance and would further link Mr. Robin's compensation to his individual performance and Nektar's long-term performance and further align his incentives with the interests of Nektar's stockholders.