8-K

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 Report (Date of earliest event reported): March 20, 2007 (March 14, 2007)

Encysive Pharmaceuticals Inc.

(Exact name of registrant as specified in its charter)

Delaware
  (State or other jurisdiction
of incorporation) 0-20117
  (Commission
File Number) 13-3532643
  (IRS Employer
Identification No.)

4848 Loop Central Drive, Suite 700, Houston, Texas
  (Address of principal executive offices) 77081
  (Zip Code)

Registrant’s telephone number, including area code: 713-796-8822

Not Applicable

(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):

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

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

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

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

TABLE OF CONTENTS

	Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
INDEX TO EXHIBITS
Forms of Incentive Stock Option Award Agreement
Forms of Nonqualified Stock Option Award Agreement
Form of Restricted Stock Awards for Employees With Termination Agreement
Form of Restricted Stock Awards for Employees Without Termination Agreement

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 14, 2007, the Compensation and Corporate Governance Committee of Encysive Pharmaceuticals Inc.’s Board of Directors (the “Committee”) awarded annual incentive awards to executive officers and all other employees in accordance with the provisions of our compensation plan (the “Compensation Plan”). The Committee reviewed the performance of the Company for 2006 to determine the corporate performance rating under the Compensation Plan. The Committee also reviewed the performance of each officer other than the President and Chief Executive Officer against pre-established individual performance objectives. Based on the extent of achievement of those individual performance objectives, the Committee (or the Board of Directors in the case of our President and Chief Executive Officer) awarded the incentive awards to the officers named below in the amounts recited:

	No. of Shares of		No. of		Exercise
	Restricted Stock		Options		Price
Name	(#)		(#)		($/sh)
Bruce D. Given, M.D., President and Chief Executive Officer		31,303		47,349		2.995
Gordon H. Busenbark, Chief Financial Officer		33,389		50,506		2.995
George W. Cole, Chief Operating Officer		39,066		59,091		2.995
Richard A.F. Dixon, Ph.D., Chief Scientific Officer		43,573		65,910		2.995
D. Jeffrey Keyser, Vice President of Regulatory Affairs		13,523		20,455		2.995

All of the shares of restricted stock were granted under the previously approved Amended and Restated 1999 Stock Incentive Plan. All of the terms and provisions applicable to the restricted stock awards are as provided in the Amended and Restated 1999 Stock Incentive Plan and as are contained in the forms of restricted stock award agreements previously filed in our Current Report on Form 8-K filed December 12, 2005 as Exhibit 10.2 (for Employees with Termination Agreements) and Exhibit 10.3 (for Employees without Termination Agreement).

Because there were insufficient shares remaining in the Amended and Restated 1999 Stock Incentive Plan, all of the options awards were granted under the new 2007 Incentive Plan. The 2007 Incentive Plan was approved by the Board of Directors on March 9, 2007 and permits the grant of incentive awards covering up to 2,600,000 shares. The 2007 Incentive Plan will be presented to the stockholders for adoption at the upcoming 2007 annual meeting. All incentive awards made under the 2007 Incentive Plan prior to the 2007 annual meeting are expressly subject to stockholder approval of the 2007 Incentive Plan. The terms and provisions applicable to the option awards are as provided in the 2007 Incentive Plan and the forms of incentive stock option award agreement and nonqualified stock option award agreement.

All restrictions on these grants of restricted stock lapse, and these option awards vest, in two equal amounts on November 30, 2008 and November 30, 2009. Copies of the forms of incentive stock option awards agreement, nonqualified stock option agreement, restricted stock awards for employees with a termination agreement and restricted stock awards for employees without a termination agreement are attached as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

10.1	Forms of Incentive Stock Option Award Agreement
10.2	Forms of Nonqualified Stock Option Award Agreement
10.3	Form of Restricted Stock Awards for Employees With a Termination Agreement
10.4	Form of Restricted Stock Awards for Employees Without a Termination Agreement

[SIGNATURE PAGE FOLLOWS]

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.

	ENCYSIVE PHARMACEUTICALS INC. (Registrant)
Date: March 20, 2007	/s/ Paul S. Manierre
	Paul S. Manierre,
	Vice President, General Counsel and Secretary

INDEX TO EXHIBITS

Exhibit	Description of Exhibit
10.1	Forms of Incentive Stock Option Award Agreement
10.2	Forms of Nonqualified Stock Option Award Agreement
10.3	Form of Restricted Stock Awards for Employees With a Termination Agreement
10.4	Form of Restricted Stock Awards for Employees Without a Termination Agreement

EX-10.1

Exhibit 10.1

Encysive Pharmaceuticals Inc.
ID: 13-3532643
4848 Loop Central Drive, Suite 700
Houston, Texas 77081

Notice of Grant of Stock Options
and Option Agreement

Individual	Option Number:	00xxxx
Address	Plan:	2007 Incentive Plan
City State Zip	ID:	xxxxx

Effective                     ,       (the “Grant Date”), you have been granted an Incentive Stock Option (“Options”) to buy                  shares of Encysive Pharmaceuticals Inc. (the “Company”) Common Stock at an Option Price of $           per share, which is the Fair Market Value per share of Common Stock on the Grant Date, pursuant to the Encysive Pharmaceuticals Inc. 2007 Incentive Plan (the “Plan”).

The total Option Price of the shares granted is $                    .

Shares in each period will become fully vested on the date shown.

Shares Vest Type Full Vest Expiration

[This grant of Options will expire 10 years from the Grant Date and, based on the Grant Date, will vest 50% on the vesting day (“Vesting Day”) in each applicable vesting year (“Vesting Year”):

Grant Date	Vesting Day	Vesting Year
March 1 — August 31	May 31	Grant Year +2 yrs and +3 yrs
September 1 — December meeting of compensation committee	November 30	Grant Year +2 yrs and +3 yrs
After December meeting of compensation committee — last day of February]	November 30	Grant Year +1 yr and +2 yrs

By your signature and the Company’s signature below, you and the Company agree that these Options are granted under and governed by this Notice of Grant of Stock Options and Option Agreement and the terms and conditions of the Plan, all of which are attached and made a part of this document. Also attached hereto is an Information Memorandum about the Company’s Prospectus covering the Plan. Any capitalized term not otherwise defined herein shall have the meaning given such term in the Plan.

[This grant of Options is subject to the terms and conditions of that certain Termination Agreement executed between the Grantee and Encysive Pharmaceuticals Inc. on                     ,        , (the “Termination Agreement”) and is granted pursuant to Section           of the Termination Agreement. To the extent that there is a conflict between a term in this Notice of Grant of Stock Options and Option Agreement and the Termination Agreement, the Termination Agreement shall control. However, if there is a conflict between the Termination Agreement and the Plan, the Plan document shall control. The terms of the Termination Agreement are hereby incorporated by reference.] [This paragraph inserted only if the Company and the Grantee are a party to a Termination Agreement, which must be dated on or prior to the Grant Date]

These Options are considered to be Incentive Stock Options under Section 422 of the Internal Revenue Code of 1986. This letter shall constitute a grant of Incentive Stock Options and an Incentive Agreement under the Plan.

This Notice of Grant of Stock Options and Option Agreement are also subject to the further condition that you return to us within thirty (30) days from the date of this letter a signed copy of this letter to indicate your receipt of the above referenced documents. Please retain this original letter as your documentation of this grant of Incentive Stock Options and Incentive Agreement under the Plan.

[By execution of this document, you agree that this award fulfills all of the requirements of Section       of the Termination Agreement.] [This paragraph inserted only if the Company and the Grantee are a party to a Termination Agreement, which must be dated on or prior to the Grant Date]

Encysive Pharmaceuticals Inc.	Date
xxxxx	Date

EX-10.2

Exhibit 10.2

Encysive Pharmaceuticals Inc.
ID: 13-3532643
4848 Loop Central Drive, Suite 700
Houston, Texas 77081

Notice of Grant of Stock Options
and Option Agreement

Individual	Option Number:	00xxxx
Address	Plan:	2007 Incentive Plan
City State Zip	ID:	xxxxx

Effective                     ,       (the “Grant Date”), you have been granted a Nonstatutory Stock Option (“Options”) to buy                  shares of Encysive Pharmaceuticals Inc. (the “Company”) Common Stock at an Option Price of $           per share, which is the Fair Market Value per share of Common Stock on the Grant Date, pursuant to the Encysive Pharmaceuticals Inc. 2007 Incentive Plan (the “Plan”).

The total Option Price of the shares granted is $                    .

Shares in each period will become fully vested on the date shown.

Shares Vest Type Full Vest Expiration

[This grant of Options will expire 10 years from the Grant Date and, based on the Grant Date, will vest 50% on the vesting day (“Vesting Day”) in each applicable vesting year (“Vesting Year”):

Grant Date	Vesting Day	Vesting Year
March 1 — August 31	May 31	Grant Year +2 yrs and +3 yrs
September 1 — December meeting of compensation committee	November 30	Grant Year +2 yrs and +3 yrs
After December meeting of compensation committee — last day of February]	November 30	Grant Year +1 yr and +2 yrs

By your signature and the Company’s signature below, you and the Company agree that these Options are granted under and governed by this Notice of Grant of Stock Options and Option Agreement and the terms and conditions of the Plan, all of which are attached and made a part of this document. Also attached hereto is an Information Memorandum about the Company’s Prospectus covering the Plan. Any capitalized term not otherwise defined herein shall have the meaning given such term in the Plan.

[This grant of Options is subject to the terms and conditions of that certain Termination Agreement executed between the Grantee and Encysive Pharmaceuticals Inc. on                     ,        , (the “Termination Agreement”) and is granted pursuant to Section           of the Termination Agreement. To the extent that there is a conflict between a term in this Notice of Grant of Stock Options and Option Agreement and the Termination Agreement, the Termination Agreement shall control. However, if there is a conflict between the Termination Agreement and the Plan, the Plan document shall control. The terms of the Termination Agreement are hereby incorporated by reference.] [This paragraph inserted only if the Company and the Grantee are a party to a Termination Agreement, which must be dated on or prior to the Grant Date]

These Options are considered to be Nonstatutory Stock Options under Section 422 of the Internal Revenue Code of 1986. This letter shall constitute a grant of Nonstatutory Stock Options and an Incentive Agreement under the Plan.

This Notice of Grant of Stock Options and Option Agreement are also subject to the further condition that you return to us within thirty (30) days from the date of this letter a signed copy of this letter to indicate your receipt of the above referenced documents. Please retain this original letter as your documentation of this grant of Nonstatutory Stock Options and Incentive Agreement under the Plan.

[By execution of this document, you agree that this award fulfills all of the requirements of Section       of the Termination Agreement.] [This paragraph inserted only if the Company and the Grantee are a party to a Termination Agreement, which must be dated on or prior to the Grant Date]

Encysive Pharmaceuticals Inc.	Date
xxxxx	Date

EX-10.3

Exhibit 10.3

RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made and entered into by and between Encysive Pharmaceuticals Inc., a Delaware corporation (the “Company”) and __________________, an individual (“Grantee”) on the ______day of _________, 20___, (the “Grant Date”), pursuant to the Encysive Pharmaceuticals Inc. 2007 Incentive Plan (the “Plan”). The Plan is incorporated by reference herein in its entirety. Capitalized terms not otherwise defined in this agreement shall have the meaning given to such terms in the Plan.

     WHEREAS, Grantee is an employee of the Company, and in connection therewith, the Company desires to grant to Grantee a Restricted Stock Award for ____________ shares of the Company’s common stock, par value $.005 per share (the “Common Stock”), subject to the terms and conditions of this Agreement, with a view to increasing Grantee’s interest in the Company’s welfare and growth; and

     WHEREAS, Grantee desires to have the opportunity to be a holder of shares of the Company’s Common Stock subject to the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

     1. Grant of Common Stock. Subject to the restrictions, forfeiture provisions and other terms and conditions set forth herein (i) the Company grants to Grantee ____________ (___) shares of Common Stock (“Grant Shares”), and (ii) Grantee shall have and may exercise all rights and privileges of ownership of such shares, including, without limitation, the voting rights of such shares and the right to receive any dividends declared in respect thereof. This Agreement is subject to, and the Company shall have the right to, require Grantee to reimburse the Company for, or the Company may withhold from any amounts which it may owe Grantee, all amounts required by applicable federal, state and local law in respect of the issuance or vesting of the Grant Shares.

     2. Transfer Restrictions.

          (a) Generally. Grantee shall not sell, assign, transfer, exchange, pledge, encumber, gift, devise, hypothecate or otherwise dispose of (collectively, “Transfer”) any Grant Shares. The transfer restrictions imposed by this Section 2 shall lapse as to approximately fifty percent (50%) of the Grant Shares on _________, 20___, and _________, 20___, until all Grant Shares are fully vested; provided, however, that, subject to Section 3, Grantee then is, and continuously since the Grant Date has been, an employee of the Company. The Grant Shares as to which such restrictions so lapse are referred to as “Vested Shares.”

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[Based on the Grant Date, transfer restrictions will vest 50% on the lapse day (“Lapse Day”) in each applicable lapse year (“Lapse Year”):

Grant Date	Lapse Day	Lapse Year
March 1 — August 31	May 31	Grant Year +2 yrs and +3 yrs
September 1 — December meeting of	November 30	Grant Year +2 yrs and +3 yrs
compensation committee
After December meeting of compensation	November 30	Grant Year +1 yr and +2 yrs
committee — last day of February]

          (b) Change in Control. If there is a Change in Control of the Company (as defined in the Plan), the transfer restrictions of this Section 2 shall automatically cease as of the effective date of such Change in Control, and all the Grant Shares shall thereafter be 100 percent (100%) vested.

     3. Forfeiture.

          (a) Termination of Employment. Except as otherwise provided for herein, if Grantee’s employment with the Company is terminated by the Company or Grantee for any reason, then Grantee shall immediately forfeit all Grant Shares which are not Vested Shares unless the Committee, in its discretion, determines that any or all of such Grant Shares shall not be so forfeited; provided, however, that if the employment of the Grantee is terminated by the Company Without Cause (as defined below) or by the Grantee for Good Reason (as defined below), then during the 12-month period after the date of termination for Good Reason or Without Cause, all Grant Shares which are not Vested Shares shall continue to vest in accordance with the terms hereof during said 12-month period, and at the conclusion of said 12-month period, all Grant Shares which are not Vested Shares will be fully vested and will become Vested Shares. For purposes hereof, “Good Reason” and “Without Cause” shall have the meanings given to such terms in that certain Termination Agreement dated _________, 20___, entered into by the Grantee and the Company, which definitions are incorporated herein by this reference.

          (b) Forfeited Shares. All shares of Common Stock forfeited hereunder automatically shall revert to the Company and become canceled. Any certificate(s) representing Grant Shares which include forfeited shares shall only represent that number of Grant Shares which have not been forfeited hereunder. Upon the Company’s request, Grantee agrees for himself and any other holder(s) to tender to the Company any certificate(s) representing Grant Shares which include forfeited shares for a new certificate representing the unforfeited number of Grant Shares.

     4. Issuance of Certificate.

          (a) The Grant Shares may not be transferred until they become Vested Shares. Further, the Vested Shares may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws in the opinion of counsel satisfactory to the Company. The Company shall issue the shares in the name of the Grantee in

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“book-entry form” and held with the transfer agent that is responsible for issuance of securities for the Company. The transferability of the shares shall be restricted pursuant to the restrictions, terms and conditions (including forfeiture and restrictions against transfer) contained herein and in the Plan. A copy of the Plan and Agreement are on file in the office of the Secretary of Encysive Pharmaceuticals Inc., 4848 Loop Central Drive, Suite 700, Houston, Texas 77081. The transfer agent will be notified to place appropriate designations on the “book entry” shares to reflect these restrictions on transfer.

          (b) The shares issued pursuant to this Section 4, held in “book-entry” form, together with the stock powers relating to the Grant Shares, shall be held by the Company. The Company shall issue to the Grantee a receipt evidencing the “book-entry” form of shares held by it.

     5. Miscellaneous.

          (a) Certain Transfers Void. Any purported Transfer of shares of Common Stock in breach of any provision of this Agreement shall be void and ineffectual, and shall not operate to Transfer any interest or title in the purported transferee.

          (b) No Fractional Shares. All provisions of this Agreement concern whole shares of Common Stock. If the application of any provision hereunder would yield a fractional share, such fractional share shall be rounded down to the next whole share if it is less than 0.5 and rounded up to the next whole share if it is 0.5 or more.

          (c) Not an Employment or Service Agreement. This Agreement is not an employment agreement, and this Agreement shall not be, and no provision of this Agreement shall be construed or interpreted to create (i) any employment relationship between Grantee and the Company or (ii) any agreement by the Company to continue the directorship of the Grantee for any time period.

          (d) Notices. Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, or by courier or delivery service, addressed to the Company at the address indicated beneath its signature on the execution page of this Agreement, and to Grantee at his address indicated on the Company’s stock records, or at such other address and number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered and receipted for (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested.

          (e) Amendment and Waiver. This Agreement may be amended, modified or superseded only by written instrument executed by the Company and Grantee. Any waiver of the terms or conditions hereof shall be made only by a written instrument executed and delivered

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by the party waiving compliance. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company other than Grantee. The failure of any party at any time or times to require performance of any provisions hereof, shall in no manner effect the right to enforce the same. No waiver by any party of any term or condition, or the breach of any term or condition contained in this Agreement in one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such condition or breach or a waiver of any other condition or the breach of any other term or condition.

          (f) Governing Law and Severability. This Agreement shall be governed by the internal laws, and not the laws of conflict, of the State of Texas. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

          (g) Successors and Assigns. Subject to the limitations which this Agreement imposes upon transferability of shares of Common Stock, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and Grantee, and Grantee’s permitted assigns and upon death, estate and beneficiaries thereof (whether by will or the laws of descent and distribution), executors, administrators, agents, legal and personal representatives.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first above written.

COMPANY:
ENCYSIVE PHARMACEUTICALS INC.
By:
Name:
Title:
Address:	Encysive Pharmaceuticals Inc.
	4848 Loop Central Drive, Suite 700
	Houston, Texas 77081
Facsimile No.: (713) 796-8232
Attention: Chief Executive Officer
GRANTEE:
Signature
Printed Name
GRANTEE’S SPOUSE:
Signature
Printed Name

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EX-10.4

Exhibit 10.4

RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT (this “Agreement") is made and entered into by and between Encysive Pharmaceuticals Inc., a Delaware corporation (the “Company") and                                         , an individual (“Grantee") on the day of                     , 20     , (the “Grant Date"), pursuant to the Encysive Pharmaceuticals Inc. 2007 Incentive Plan (the “Plan"). The Plan is incorporated by reference herein in its entirety. Capitalized terms not otherwise defined in this agreement shall have the meaning given to such terms in the Plan.

     WHEREAS, Grantee is an employee of the Company, and in connection therewith, the Company desires to grant to Grantee a Restricted Stock Award for                       shares of the Company’s common stock, par value $.005 per share (the “Common Stock"), subject to the terms and conditions of this Agreement, with a view to increasing Grantee’s interest in the Company’s welfare and growth; and

     WHEREAS, Grantee desires to have the opportunity to be a holder of shares of the Company’s Common Stock subject to the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

     1. Grant of Common Stock. Subject to the restrictions, forfeiture provisions and other terms and conditions set forth herein (i) the Company grants to Grantee                      (          ) shares of Common Stock (“Grant Shares"), and (ii) Grantee shall have and may exercise all rights and privileges of ownership of such shares, including, without limitation, the voting rights of such shares and the right to receive any dividends declared in respect thereof. This Agreement is subject to, and the Company shall have the right to, require Grantee to reimburse the Company for, or the Company may withhold from any amounts which it may owe Grantee, all amounts required by applicable federal, state and local law in respect of the issuance or vesting of the Grant Shares.

     2. Transfer Restrictions.

     (a) Generally. Grantee shall not sell, assign, transfer, exchange, pledge, encumber, gift, devise, hypothecate or otherwise dispose of (collectively, “Transfer") any Grant Shares. The transfer restrictions imposed by this Section 2 shall lapse as to approximately fifty percent (50%) of the Grant Shares on                     , 20     , and                                         , 20     , until all Grant Shares are fully vested; provided, however, that, subject to Section 3, Grantee then is, and continuously since the Grant Date has been, an employee of the Company. The Grant Shares as to which such restrictions so lapse are referred to as “Vested Shares.”

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     [Based on the Grant Date, transfer restrictions will vest 50% on the lapse day (“Lapse Day”) in each applicable lapse year (“Lapse Year”):

Grant Date	Lapse Day	Lapse Year
March 1 — August 31	May 31	Grant Year +2 yrs and +3 yrs
September 1 — December meeting of           compensation committee	November 30	Grant Year +2 yrs and +3 yrs
After December meeting of compensation           committee — last day of February]	November 30	Grant Year +1 yr and +2 yrs

          (b) Change in Control. If there is a Change in Control of the Company (as defined in the Plan), the transfer restrictions of this Section 2 shall automatically cease as of the effective date of such Change in Control, and all the Grant Shares shall thereafter be 100 percent (100%) vested.

     3. Forfeiture.

          (a) Termination of Employment. If Grantee’s employment with the Company is terminated by the Company or Grantee for any reason, then Grantee shall immediately forfeit all Grant Shares which are not Vested Shares unless the Committee, in its discretion, determines that any or all of such Grant Shares shall not be so forfeited.

          (b) Forfeited Shares. All shares of Common Stock forfeited hereunder automatically shall revert to the Company and become canceled. Any certificate(s) representing Grant Shares which include forfeited shares shall only represent that number of Grant Shares which have not been forfeited hereunder. Upon the Company’s request, Grantee agrees for himself and any other holder(s) to tender to the Company any certificate(s) representing Grant Shares which include forfeited shares for a new certificate representing the unforfeited number of Grant Shares.

     4. Issuance of Certificate.

          (a) The Grant Shares may not be transferred until they become Vested Shares. Further, the Vested Shares may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws in the opinion of counsel satisfactory to the Company. The Company shall issue the shares in the name of the Grantee in “book-entry form” and held with the transfer agent that is responsible for issuance of securities for the Company. The transferability of the shares shall be restricted pursuant to the restrictions, terms and conditions (including forfeiture and restrictions against transfer) contained herein and in the Plan. A copy of the Plan and Agreement are on file in the office of the Secretary of Encysive Pharmaceuticals Inc., 4848 Loop Central Drive, Suite 700, Houston, Texas 77081. The transfer agent will be notified to place appropriate designations on the “book entry” shares to reflect these restrictions on transfer.

          (b) The shares issued pursuant to this Section 4, held in “book-entry” form, together with the stock powers relating to the Grant Shares, shall be held by the Company. The Company shall issue to the Grantee a receipt evidencing the “book-entry” form of shares held by it.

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     5. Miscellaneous.

          (a) Certain Transfers Void. Any purported Transfer of shares of Common Stock in breach of any provision of this Agreement shall be void and ineffectual, and shall not operate to Transfer any interest or title in the purported transferee.

          (b) No Fractional Shares. All provisions of this Agreement concern whole shares of Common Stock. If the application of any provision hereunder would yield a fractional share, such fractional share shall be rounded down to the next whole share if it is less than 0.5 and rounded up to the next whole share if it is 0.5 or more.

          (c) Not an Employment or Service Agreement. This Agreement is not an employment agreement, and this Agreement shall not be, and no provision of this Agreement shall be construed or interpreted to create (i) any employment relationship between Grantee and the Company or (ii) any agreement by the Company to continue the directorship of the Grantee for any time period.

          (d) Notices. Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, or by courier or delivery service, addressed to the Company at the address indicated beneath its signature on the execution page of this Agreement, and to Grantee at his address indicated on the Company’s stock records, or at such other address and number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered and receipted for (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested.

          (e) Amendment and Waiver. This Agreement may be amended, modified or superseded only by written instrument executed by the Company and Grantee. Any waiver of the terms or conditions hereof shall be made only by a written instrument executed and delivered by the party waiving compliance. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company other than Grantee. The failure of any party at any time or times to require performance of any provisions hereof, shall in no manner effect the right to enforce the same. No waiver by any party of any term or condition, or the breach of any term or condition contained in this Agreement in one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such condition or breach or a waiver of any other condition or the breach of any other term or condition.

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          (f) Governing Law and Severability. This Agreement shall be governed by the internal laws, and not the laws of conflict, of the State of Texas. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

          (g) Successors and Assigns. Subject to the limitations which this Agreement imposes upon transferability of shares of Common Stock, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and Grantee, and Grantee’s permitted assigns and upon death, estate and beneficiaries thereof (whether by will or the laws of descent and distribution), executors, administrators, agents, legal and personal representatives.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first above written.

COMPANY:
ENCYSIVE PHARMACEUTICALS INC.
By:
Name:
Title:
Address:	Encysive Pharmaceuticals Inc.
	4848 Loop Central Drive, Suite 700
	Houston, Texas 77081
Facsimile No.: (713) 796-8232
Attention: Chief Executive Officer
GRANTEE:
Signature
Printed Name
GRANTEE’S SPOUSE:
Signature
Printed Name

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