
<PAGE>

                                                                    EXHIBIT 10.5

                                  AEROGEN, INC.

                 2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                           ADOPTED [AUGUST 24, 2000]
                  APPROVED BY STOCKHOLDERS [_______ ___, 2000]

                      EFFECTIVE DATE: [_________ ___, 2000]
                             TERMINATION DATE: NONE

1.       PURPOSES.

         (a)      ELIGIBLE OPTION RECIPIENTS. The persons eligible to receive
Options are the Non-Employee Directors of the Company.

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

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

2.       DEFINITIONS.

         (a)      "ACCOUNTANT" means the independent public accountants of the
Company.

         (b)      "AFFILIATE" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.

         (c)      "ANNUAL GRANT" means an Option granted annually to all
Non-Employee Directors who meet the specified criteria pursuant to subsection
6(b) of the Plan.

         (d)      "ANNUAL MEETING" means the annual meeting of the stockholders
of the Company.

         (e)      "BOARD" means the Board of Directors of the Company.

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

         (g)      "COMMON STOCK" means the common stock of the Company.

         (h)      "COMPANY" means AeroGen, Inc., a Delaware corporation.


                                       1.
<PAGE>

         (i)      "CONSULTANT" means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or advisory services
and who is compensated for such services or (ii) who is a member of the Board of
Directors of an Affiliate. However, the term "Consultant" shall not include
either Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a
director's fee by the Company for their services as Directors.

         (j)      "CONTINUOUS SERVICE" means that the Optionholder's service
with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Optionholder's Continuous
Service shall not be deemed to have terminated merely because of a change in the
capacity in which the Optionholder renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for
which the Optionholder renders such service, provided that there is no
interruption or termination of the Optionholder's Continuous Service. For
example, a change in status from a Non-Employee Director of the Company to a
Consultant of an Affiliate or an Employee of the Company will not constitute an
interruption of Continuous Service. The Board or the chief executive officer of
the Company, in that party's sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any other
personal leave.

         (k)      "DIRECTOR" means a member of the Board of Directors of the
Company.

         (l)      "DISABILITY" means the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties
of that person's position with the Company or an Affiliate of the Company
because of the sickness or injury of the person.

         (m)      "EMPLOYEE" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee by the
Company or an Affiliate shall not be sufficient to constitute "employment" by
the Company or an Affiliate.

         (n)      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (o)      "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock determined as follows:

                  (i)      If the Common Stock is listed on any established
stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading day prior to
the day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.

                  (ii)     In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.


                                       2.
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         (p)      "INITIAL GRANT" means an Option granted to a Non-Employee
Director who meets the specified criteria pursuant to subsection 6(a) of the
Plan.

         (q)      "IPO DATE" means the effective date of the initial public
offering of the Common Stock.

         (r)      "NON-EMPLOYEE DIRECTOR" means a Director who is not an
Employee.

         (s)      "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

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

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

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

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

         (x)      "PLAN" means this AeroGen, Inc. 2000 Non-Employee Directors'
Stock Option Plan.

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

         (z)      "SECURITIES ACT" means the Securities Act of 1933, as amended.

3.       ADMINISTRATION.

         (a)      ADMINISTRATION BY BOARD. The Board shall administer the Plan.
The Board may not delegate administration of the Plan to a committee.

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

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

                  (ii)     To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any


                                       3.
<PAGE>

Option Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.

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

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

         (c)      EFFECT OF BOARD'S DECISION. All determinations,
interpretations and constructions made by the Board in good faith shall not be
subject to review by any person and shall be final, binding and conclusive on
all persons.

4.       SHARES SUBJECT TO THE PLAN.


         (a)      SHARE RESERVE. Subject to the provisions of Section 11
relating to adjustments upon changes in the Common Stock, the Common Stock that
may be issued pursuant to Options shall not exceed in the aggregate seven
hundred fifty thousand (750,000) shares of Common Stock.

         (b)      REVERSION OF SHARES TO THE SHARE RESERVE. If any Option shall
for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the shares of Common Stock not acquired under
such Option shall revert to and again become available for issuance under the
Plan.

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

5.       ELIGIBILITY.

         The Options as set forth in section 6 automatically shall be granted
under the Plan to all Non-Employee Directors.

6.       NON-DISCRETIONARY GRANTS.

         (a)      INITIAL GRANTS. Without any further action of the Board,
each person who after the IPO Date is elected or appointed for the first time
to be a Non-Employee Director automatically shall, upon the date of his or
her initial election or appointment to be a Non-Employee Director, be granted
an Initial Grant to purchase forty five thousand (45,000) shares of Common
Stock on the terms and conditions set forth herein.

         (b)      ANNUAL GRANTS. Without any further action of the Board, on
the day of each Annual Meeting, commencing with the Annual Meeting in 2001,
each person who is then a Non-Employee Director, automatically shall be
granted an Annual Grant to purchase fifteen thousand (15,000) shares of
Common Stock on the terms and conditions set forth herein.


                                       4.
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7.       OPTION PROVISIONS.

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

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

         (b)      EXERCISE PRICE. The exercise price of each Option shall be one
hundred percent (100%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

         (c)      CONSIDERATION. The purchase price of stock acquired pursuant
to an Option may be paid, to the extent permitted by applicable statutes and
regulations, in any combination of (i) cash or check, (ii) delivery to the
Company of other Common Stock or (iii) pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds. The purchase price of
Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the Company,
shall be paid only by shares of the Common Stock of the Company that have been
held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes).

         (d)      TRANSFERABILITY. An Option is transferable by will or by the
laws of descent and distribution. An Option also may be transferable upon
written consent of the Company if, at the time of transfer, a Form S-8
registration statement under the Securities Act is available for the exercise of
the Option and the subsequent resale of the underlying securities. In addition,
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

         (e)      VESTING. Options shall vest as follows:

                  (i)      Initial Grants: 1/3rd of the shares shall vest on
the first anniversary of the date of grant and 1/36th of the shares shall
vest monthly for two (2) years thereafter.

                  (ii)     Annual Grants: 1/36th of the shares shall vest
monthly for three (3) years thereafter.

                                       5.
<PAGE>

         (f)      EARLY EXERCISE. The Option may, but need not, include a
provision where by the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Any unvested shared of Common Stock so purchased may
be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate.

         (g)      TERMINATION OF CONTINUOUS SERVICE. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise it as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service, or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Option Agreement,
the Option shall terminate.

         (h)      EXTENSION OF TERMINATION DATE. If the exercise of the Option
following the termination of the Optionholder's Continuous Service (other than
upon the Optionholder's death or Disability) would be prohibited at any time
solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in subsection
7(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

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

         (j)      DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the three-month period after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise the
Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionholder's death, but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death or (2) the expiration of the term of such Option as
set forth in the Option Agreement. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.


                                       6.
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8.       COVENANTS OF THE COMPANY.

         (a)      AVAILABILITY OF SHARES. During the terms of the Options, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Options.

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

9.       USE OF PROCEEDS FROM STOCK.

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

10.      MISCELLANEOUS.

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

         (b)      NO SERVICE RIGHTS. Nothing in the Plan or any instrument
executed or Option granted pursuant thereto shall confer upon any Optionholder
any right to continue to serve the Company as a Non-Employee Director or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

         (c)      INVESTMENT ASSURANCES. The Company may require an
Optionholder, as a condition of exercising or acquiring stock under any Option,
(i) to give written assurances satisfactory to the Company as to the
Optionholder's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to give
written assurances satisfactory to the Company stating that the Optionholder is
acquiring the stock subject to the Option for the Optionholder's own account and
not with any present intention of selling or otherwise distributing the stock.


                                       7.
<PAGE>

The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares upon the
exercise or acquisition of stock under the Option has been registered under a
then currently effective registration statement under the Securities Act or (2)
as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

         (d)      WITHHOLDING OBLIGATIONS. The Optionholder may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in addition
to the Company's right to withhold from any compensation paid to the
Optionholder by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares of
the Common Stock otherwise issuable to the Optionholder as a result of the
exercise or acquisition of stock under the Option, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock.

11.      ADJUSTMENTS UPON CHANGES IN COMMON STOCK.

         (a)      CAPITALIZATION ADJUSTMENTS. If any change is made in the stock
subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the nature, class(es) and maximum number of securities subject both
to the Plan pursuant to Section 4 and to the nondiscretionary Options specified
in Section 6, and the outstanding Options will be appropriately adjusted in the
nature, class(es) and number of securities and price per share of stock subject
to such outstanding Options. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

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

         (c)      ASSET SALE, MERGER, CONSOLIDATION OR REVERSE MERGER. In the
event of (i) a sale, lease or other disposition of all or substantially all of
the assets of the Company, (ii) a merger or consolidation in which the Company
is not the surviving corporation or (iii) a reverse merger in which the Company
is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise,


                                       8.
<PAGE>

then with respect to Options held by Optionholders whose Continuous Service
has not terminated, the vesting of such Options (and, if applicable, the time
during which such Options may be exercised) shall be accelerated in full, and
the Options shall terminate if not exercised (if applicable) at or prior to
such event. With respect to any other Options outstanding under the Plan,
such Options shall terminate if not exercised (if applicable) prior to such
event.

         (d)      PARACHUTE PAYMENTS. In the event that the acceleration of the
vesting and exercisability of the Options provided for in subsection 11(c) and
benefits otherwise payable to a Optionholder (i) constitute "parachute payments"
within the meaning of Section 280G of the Code, or any comparable successor
provisions, and (ii) but for this subsection would be subject to the excise tax
imposed by Section 4999 of the Code, or any comparable successor provisions (the
"Excise Tax"), then such Optionholder's benefits hereunder shall be either

                  (i)      provided to such Optionholder in full, or

                  (ii)     provided to such Optionholder as to such lesser
extent which would result in no portion of such benefits being subject to the
Excise Tax,

whichever of the foregoing amounts, when taking into account applicable federal,
state, local and foreign income and employment taxes, the Excise Tax, and any
other applicable taxes, results in the receipt by such Optionholder, on an
after-tax basis, of the greatest amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under the Excise Tax. Unless the
Company and such Optionholder otherwise agree in writing, any determination
required under this subsection shall be made in writing in good faith by the
Accountants. In the event of a reduction of benefits hereunder, the Optionholder
shall be given the choice of which benefits to reduce. For purposes of making
the calculations required by this subsection, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of the
Code, and other applicable legal authority. The Company and the Optionholder
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
subsection. The Company shall bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this subsection.

                  If, notwithstanding any reduction described in this
subsection, the Internal Revenue Service (the "IRS") determines that the
Optionholder is liable for the Excise Tax as a result of the receipt of the
payment of benefits as described above, then the Optionholder shall be obligated
to pay back to the Company, within thirty (30) days after a final IRS
determination or in the event that the Optionholder challenges the final IRS
determination, a final judicial determination, a portion of the payment equal to
the "Repayment Amount." The Repayment Amount with respect to the payment of
benefits shall be the smallest such amount, if any, as shall be required to be
paid to the Company so that the Optionholder's net after-tax proceeds


                                       9.
<PAGE>

with respect to any payment of benefits (after taking into account the payment
of the Excise Tax and all other applicable taxes imposed on such payment) shall
be maximized. The Repayment Amount with respect to the payment of benefits shall
be zero if a Repayment Amount of more than zero would not result in the
Optionholder's net after-tax proceeds with respect to the payment of such
benefits being maximized. If the Excise Tax is not eliminated pursuant to this
paragraph, the Optionholder shall pay the Excise Tax.

                  Notwithstanding any other provision of this subsection 11(d),
if (i) there is a reduction in the payment of benefits as described in this
subsection, (ii) the IRS later determines that the Optionholder is liable for
the Excise Tax, the payment of which would result in the maximization of the
Optionholder's net after-tax proceeds (calculated as if the Optionholder's
benefits had not previously been reduced), and (iii) the Optionholder pays the
Excise Tax, then the Company shall pay to the Optionholder those benefits which
were reduced pursuant to this subsection contemporaneously or as soon as
administratively possible after the Optionholder pays the Excise Tax so that the
Optionholder's net after-tax proceeds with respect to the payment of benefits is
maximized.

         If the Optionholder either (i) brings any action to enforce rights
pursuant to this subsection 11(d), or (ii) defend any legal challenge to his or
her rights hereunder, the Optionholder shall be entitled to recover attorneys'
fees and costs incurred in connection with such action, regardless of the
outcome of such action; provided, however, that in the event such action is
commenced by the Optionholder, the court finds the claim was brought in good
faith.

12.      AMENDMENT OF THE PLAN AND OPTIONS.

         (a)      AMENDMENT OF PLAN. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.

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

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

         (d)      AMENDMENT OF OPTIONS. The Board at any time, and from time to
time, may amend the terms of any one or more Options; provided, however, that
the rights under any Option shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.


                                      10.
<PAGE>

13.      TERMINATION OR SUSPENSION OF THE PLAN.

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

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

14.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective on the IPO Date, but no Option shall be
exercised unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

15.      CHOICE OF LAW.

         All questions concerning the construction, validity and interpretation
of this Plan shall be governed by the law of the State of California, without
regard to such state's conflict of laws rules.


                                      11.
<PAGE>



                                  AEROGEN, INC.
                 2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT
                           (NONSTATUTORY STOCK OPTION)


Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock
Option Agreement, AeroGen, Inc. (the "Company") has granted you an option under
its 2000 Non-Employee Directors' Stock Option Plan (the "Plan") to purchase the
number of shares of the Company's Common Stock indicated in your Grant Notice at
the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.

The details of your option are as follows:

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

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

         3.       EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in
your Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise"
of your option is permitted) and subject to the provisions of your option, you
may elect at any time that is both (i) during the period of your Continuous
Service and (ii) during the term of your option, to exercise all or part of your
option, including the nonvested portion of your option; provided, however, that:

         (a)      a partial exercise of your option shall be deemed to cover
first vested shares of Common Stock and then the earliest vesting installment of
unvested shares of Common Stock;

         (b)      any shares of Common Stock so purchased from installments that
have not vested as of the date of exercise shall be subject to the purchase
option in favor of the Company as described in the Company's form of Early
Exercise Stock Purchase Agreement; and

         (c)      you shall enter into the Company's form of Early Exercise
Stock Purchase Agreement with a vesting schedule that will result in the same
vesting as if no early exercise had occurred.

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


                                      1.
<PAGE>

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

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

         (c)      Pursuant to the following deferred payment alternative:

                  (i)      Not less than one hundred percent (100%) of the
aggregate exercise price, plus accrued interest, shall be due four (4) years
from date of exercise or, at the Company's election, upon termination of your
Continuous Service.

                  (ii)     Interest shall be compounded at least annually and
shall be charged at the minimum rate of interest necessary to avoid the
treatment as interest, under any applicable provisions of the Code, of any
portion of any amounts other than amounts stated to be interest under the
deferred payment arrangement.

                  (iii)    At any time that the Company is incorporated in
Delaware, payment of the Common Stock's "par value," as defined in the Delaware
General Corporation Law, shall be made in cash and not by deferred payment.

                  (iv)     In order to elect the deferred payment alternative,
you must, as a part of your written notice of exercise, give notice of the
election of this payment alternative and, in order to secure the payment of the
deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a security agreement
covering the purchased shares of Common Stock, both in form and substance
satisfactory to the Company, or such other or additional documentation as the
Company may request.

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


                                      2.
<PAGE>

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

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

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

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

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

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

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

         8.       EXERCISE.

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

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


                                       3.
<PAGE>

         9.       TRANSFERABILITY. Your option is not transferable, except by
will or by the laws of descent and distribution, and is exercisable during your
life only by you. Notwithstanding the foregoing, by delivering written notice to
the Company, in a form satisfactory to the Company, you may designate a third
party who, in the event of your death, shall thereafter be entitled to exercise
your option.

         10.      RIGHT OF REPURCHASE. To the extent provided in the Company's
bylaws as amended from time to time, the Company shall have the right to
repurchase all or any part of the shares of Common Stock you acquire pursuant to
the exercise of your option.

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

         12.      WITHHOLDING OBLIGATIONS.

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

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

         (c)      You may not exercise your option unless the tax withholding
obligations of the Company and/or any Affiliate are satisfied. Accordingly, you
may not be able to exercise your


                                       4.
<PAGE>

option when desired even though your option is vested, and the Company shall
have no obligation to issue a certificate for such shares of Common Stock or
release such shares of Common Stock from any escrow provided for herein.

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

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

                                       5.
<PAGE>

                                  AEROGEN, INC.
                            STOCK OPTION GRANT NOTICE
                                  INITIAL GRANT
                (2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN)


AeroGen, Inc. (the "Company"), pursuant to its 2000 Non-Employee Directors'
Stock Option Plan (the "Plan"), hereby grants to Optionholder an option to
purchase the number of shares of the Company's Common Stock set forth below.
This option is subject to all of the terms and conditions as set forth herein
and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of
which are attached hereto and incorporated herein in their entirety.

<TABLE>
<S>                                               <C>
Optionholder:
Date of Grant:                                    ______________________________________________
Vesting Commencement Date:                        ______________________________________________
Number of Shares Subject to Option:               ______________________________________________
Exercise Price (Per Share):                       ______________________________________________
Total Exercise Price:                             ______________________________________________
Expiration Date:                                  ______________________________________________
</TABLE>

<TABLE>
<S>                   <C>                                       <C>
TYPE OF GRANT:        Nonstatutory Stock Option

EXERCISE SCHEDULE:    / /  Same as Vesting Schedule             / /  Early Exercise Permitted

VESTING SCHEDULE:     1/3rd of the shares vest one year after the Vesting Commencement Date.
                      1/36th of the shares vest monthly thereafter over the next two years.

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

                               By cash or check
                               Pursuant to a Regulation T Program if the Shares are publicly traded
                               By delivery of already-owned shares if the Shares are publicly traded
</TABLE>

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

         OTHER AGREEMENTS:                   ___________________________________
                                             ___________________________________

AEROGEN, INC.                                   OPTIONHOLDER:

By:_________________________________________    ________________________________
                  Signature                                 Signature

Title: _____________________________________    Date: __________________________

Date: ______________________________________

ATTACHMENTS: Stock Option Agreement, 2000 Non-Employee Directors' Stock Option
             Plan and Notice of Exercise

<PAGE>

                                  AEROGEN, INC.
                            STOCK OPTION GRANT NOTICE
                                  ANNUAL GRANT
                (2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN)


AeroGen, Inc. (the "Company"), pursuant to its 2000 Non-Employee Directors'
Stock Option Plan (the "Plan"), hereby grants to Optionholder an option to
purchase the number of shares of the Company's Common Stock set forth below.
This option is subject to all of the terms and conditions as set forth herein
and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of
which are attached hereto and incorporated herein in their entirety.

<TABLE>

<S>                                               <C>
Optionholder:
Date of Grant:                                    ______________________________________________
Vesting Commencement Date:                        ______________________________________________
Number of Shares Subject to Option:               ______________________________________________
Exercise Price (Per Share):                       ______________________________________________
Total Exercise Price:                             ______________________________________________
Expiration Date:                                  ______________________________________________
</TABLE>

<TABLE>
<S>                   <C>                                       <C>
TYPE OF GRANT:        Nonstatutory Stock Option

EXERCISE SCHEDULE:    / /  Same as Vesting Schedule             / /  Early Exercise Permitted

VESTING SCHEDULE:     1/3rd of the shares vest one year after the Vesting Commencement Date.
                      1/36th of the shares vest monthly thereafter over the next two years.

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

                               By cash or check
                               Pursuant to a Regulation T Program if the Shares are publicly traded
                               By delivery of already-owned shares if the Shares are publicly traded
</TABLE>

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

         OTHER AGREEMENTS:                   ___________________________________
                                             ___________________________________

AEROGEN, INC.                                   OPTIONHOLDER:

By:_________________________________________    ________________________________
                  Signature                                 Signature

Title: _____________________________________    Date: __________________________

Date: ______________________________________

ATTACHMENTS: Stock Option Agreement, 2000 Non-Employee Directors' Stock Option
             Plan and Notice of Exercise


<PAGE>

                               NOTICE OF EXERCISE



AeroGen, Inc
1310 Orleans Drive
Sunnyvale, California  94089                  Date of Exercise: _______________

Ladies and Gentlemen:

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

         Type of option (check one):                 Nonstatutory

         Stock option dated:                         _______________

         Number of shares as
         to which option is
         exercised:                                  _______________

         Certificates to be
         issued in name of:                          _______________

         Total exercise price:                       $______________

         Cash payment delivered
         herewith:                                   $______________

         Value of ________ shares of
         AeroGen, Inc. common
         stock delivered herewith(1):                $______________

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the 2000 Non-Employee Directors' Stock Option
Plan and (ii) to provide for the payment by me to you (in the manner designated
by you) of your withholding obligation, if any, relating to the exercise of this
option.

                                            Very truly yours,

                                            ------------------------------------

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


                                       1.
