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2006 Stock Option Plan

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Sectors: Biotechnology / Pharmaceuticals
Effective Date: January 01, 2006
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Exhibit 10.28

ANGIOTECH PHARMACEUTICALS, INC. 2006


STOCK INCENTIVE PLAN


1.

PURPOSE OF THE PLAN


Angiotech Pharmaceuticals, Inc. (the " Company" ) hereby establishes a stock incentive plan for directors, officers and Service Providers (as defined below) of the Company and its Related Entities, to be known as the " Angiotech Stock Incentive Plan" (the " Plan" ). The purpose of the Plan is to promote the long-term success of the Company by providing Participants a proprietary interest in the Company and thereby encourage those people to perform their duties to the best of their abilities and to devote their business time and efforts to further the growth and development of the Company. The Plan is also intended to assist the Company in attracting and retaining individuals with superior experience and ability.


2.

DEFINITIONS


In this Plan, the following terms shall have the following meanings:


2.1

" Associate" means an associate as defined in the Securities Act.


2.2

" Award" means an award of Options or Tandem SARs granted to a Participant under the Plan.


2.3

" Award Agreement" means an agreement, in the form attached hereto as Schedule " A" , whereby the Company grants to a Participant an Option and a Tandem SAR.


2.4

" Award Shares" means the aggregate number of Shares which a Participant may purchase under an Award.


2.5

" Blackout Period" means an interval of time during which the Company has determined that one or more Participants may not trade any securities of the Company because they may be in possession of confidential information pertaining to the Company.


2.6

" Board" means the board of directors of the Company and any committees of the board of directors to which any or all authority, rights, powers, and discretion with respect to the Plan has been delegated.


2.7

" Change of Control" means the acquisition by any person or by any person and a Joint Actor, whether directly or indirectly, of voting securities of the Company, which, when added to all other voting securities of the Company at the time held by such person or by such person and a Joint Actor, totals for the first time not less than twenty percent (20%) of the outstanding voting securities of the Company.


2.8

" Code" means the U.S. Internal Revenue Code of 1986, as amended.


2.9

" Company" means Angiotech Pharmaceuticals, Inc. and its successors.


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2.10

" Disability" means any disability with respect to a Participant which the Board, in its sole and unfettered discretion, considers likely to prevent permanently the Participant from:


(a)

being employed or engaged by the Company, its Related Entities or another employer, in a position the same as or similar to that in which he was last employed or engaged by the Company or its Related Entities; or


(b)

acting as a director or officer of the Company or its Related Entities, or


(c)

engaging in any substantial gainful activity by reason of any medically determinable mental or physical impairment that can be expected to result in death or which has lasted or can be expected to last a continual period of not less than 12 months.


2.11

" Effective Date" means the date specified in an Award Agreement as the date on which an Award shall take effect, provided that the Effective Date shall not be a date prior to the date the Board determines an Award shall be made and, unless otherwise specified by the board, the Effective Date shall be the date the board determines an Award shall be made.


2.12

" Employee" means any person, including officers and directors, who is or is deemed to be an employee of the Company or any parent or subsidiary corporation of the Company.


2.13

" Expiry Date" means the date set by the Board under Section 5.2 of the Plan as the last date on which an Option may be exercised.


2.14

" Good Reason" means a situation where a Participant:


(a)

has incurred a material reduction in his or her authority or responsibility;


(b)

has incurred one or more reductions in his or her base compensation in the cumulative amount of five percent (5%) or more; or


(c)

has been notified that his principal place of work will be relocated by a distance of 80 kilometers or more, unless such new principal place of work is within 80 kilometers from his or her then current residence.


2.15

" Incentive Stock Option" means an Option intended to qualify as an incentive stock Option within the meaning of Section 422 of the Code (or any successor provision).


2.16

" Insider" means:


(a)

an insider as defined in the Securities Act, other than a person who is an insider solely by virtue of being a director or senior officer of a subsidiary of the Company; and


(b)

an Associate of any person who is an insider under Subsection 2.16(a).


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2.17

" Involuntary Termination" means:


(a)

the termination of a Participant' s employment or engagement by the Company, for any reason other than Cause or Disability, within the first 12 month period following a Change of Control; or


(b)

the voluntary resignation of a Participant for Good Reason within the first 12 month period following a Change of Control.


2.18

" Joint Actor" means a person acting jointly or in concert with an offeror, as defined in Section 91 of the Securities Act.


2.19

" Market Price" of Shares at any relevant date means, at the election of the Board (i) the Canadian dollar closing price per Share on the TSX for the last day Shares were traded prior to that relevant date; or (ii) the United States dollar closing price per Share on NASDAQ for the last day Shares were traded prior to that relevant date. If the Shares are not listed on the TSX or NASDAQ, the closing price per Share on such stock exchange with the largest trading volume of Shares on the relevant date for the last day Shares were traded prior to that relevant date.


2.20

" NASDAQ" means The Nasdaq Stock Market.


2.21

" Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option.


2.22

" Option" means an incentive stock option to purchase a Share granted pursuant to this Plan.


2.23

" Participant" means each of the directors, officers and Service Providers granted an Award pursuant to this Plan and their heirs, executors and administrators and, subject to the policies of the TSX, a Participant may also be a corporation wholly-owned by an individual eligible for an Award grant pursuant to this Plan.


2.24

" Plan" means this Angiotech 2006 Stock Incentive Plan, as it may be amended and in effect from time to time.


2.25

" Prior Plans" means the Company' s 2001 Stock Option Plan adopted by the shareholders of the Company on March 6, 2001 and the Company' s 2004 Stock Option Plan adopted by the shareholders of the Company on January 20, 2004.


2.26

" Prior Plans Available Shares" means the 8,937,756 Shares issued and issuable as at April 28, 2006 under the Prior Plans.


2.27

" Related Entities" means those persons that control or are controlled by the Company or that are controlled by the same person that controls the Company;


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2.28

" Securities Act" means the Securities Act, R.S.O. 1990, c.S.5, as amended, as at the date hereof.


2.29

" Service Provider" means:


(a)

an employee or Insider of the Company or any of its Related Entities;


(b)

any other person or company engaged to provide ongoing management or consulting services for the Company, or for any entity controlled by the Company; and


(c)

any person who is providing ongoing management or consulting services to the Company or to any entity controlled by the Company indirectly through a company that is a Service Provider under Subsection 2.29(b); and


" Service Providers" means more than one (1) Service Provider.


2.30

" Shares" means the Common shares in the capital stock of the Company as constituted on the date of this Plan provided that, in the event of any adjustment pursuant to Section 7, " Shares" shall thereafter mean the shares or other property resulting from the events giving rise to the adjustment.


2.31

" Subscription Price" means, (i) with respect to an Option, the price payable by a Participant to purchase one Share on exercise of such Option, which shall not be less than 100 percent of the Market Price of a Share on the Effective Date of the grant of the Option and (ii) with respect to a Tandem SAR, the Subscription Price applicable to the Option to which the Tandem SAR relates, in each such case, subject to adjustment pursuant to Section 7.


2.32

" Tandem SAR" means a right, granted pursuant to Section 6, representing the right, granted in tandem with an Option, to receive upon the exercise thereof payment Shares or a portion thereof on the terms and conditions and calculated in accordance with the provisions of Section 6.


2.33

" TSX" means The Toronto Stock Exchange.


2.34

" Unissued Award Shares" means the number of Shares, at a particular time, which has been allotted for issuance upon the exercise of an Award but which have not been issued, as adjusted from time to time in accordance with the provisions of Section 7, such adjustments to be cumulative.


2.35

" Vested" means that an Option has become exercisable in respect of a number of Award Shares by the Participant pursuant to the terms of the Award Agreement, subject to any confidentiality, non-competition or non-solicitation obligations or severance agreements.


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3.

SHARES SUBJECT TO THE PLAN


3.1

Aggregate Plan Limits


The maximum number of Shares which may be issuable pursuant to Awards granted under the Plan shall be the sum of (i) 5,000,000 and (ii) the Prior Plan Available Shares (being 8,937,756 Shares), subject to adjustment pursuant to Section 7, or such additional amount as may be approved from time to time by the shareholders of the Company. Any adjustment pursuant to Section 7 to the limitation on the number of Shares available for Awards of Incentive Stock Options shall be consistent with the requirements of Section 425 of the Code (or any successor provision).


3.2

Certain Additional Limits


The number of Shares issuable to any one Participant under the Plan, together with all of the Company's other previously established or proposed share compensation arrangements, shall not exceed 5% of the total number of issued and outstanding shares on a non-diluted basis. The number of Shares which may be reserved for issue pursuant to Options granted to Insiders under the Plan, together with all of the Company's other previously established and outstanding or proposed share compensation arrangements, in aggregate, shall not exceed 20 % of the total number of issued and outstanding Shares on a non-diluted basis. The number of Shares which may be issuable under the Plan, together with all of the Company's other previously established and outstanding or proposed share compensation arrangements, within a one-year period:


(a)

in aggregate shall not exceed 20 % of the outstanding issue; and


(b)

to any one Participant who is an Insider and any Associates of such Insider, shall not exceed 5% of the outstanding issue.


For the purposes of this Section 3.2, Shares issued pursuant to an entitlement granted prior to the grantee becoming an Insider may be excluded in determining the number of Shares issuable to Insiders. For the purposes of Subsections 3.1(a) and 3.1(b) above, " outstanding issue" is determined on the basis of the number of Shares that are outstanding immediately prior to the Share issuance in question, excluding Shares issued pursuant to Share compensation arrangements over the preceding one-year period.


3.3

Computation of Available Shares.


For purposes of computing the total number of Shares available for grant under the Plan, Shares subject to any Award (or any portion thereof) that has expired or is forfeited, surrendered, cancelled or otherwise terminated prior to the issuance or transfer of such Shares and Shares subject to an Award (or any portion thereof) that is settled in cash in lieu of settlement in Shares shall again be available for grant under the Plan. Notwithstanding the foregoing, any Shares subject to an Award that are withheld or otherwise not issued (upon either an exercise of any Option or Tandem SAR or any settlement of any Award) in order to satisfy the Participant' s withholding obligations or in payment of any Subscription Price shall reduce the number of Shares available for grant under the limitations set forth in this Section 3.


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3.4

Source of Shares.


Shares delivered to Participants in connection with the exercise or settlement of Awards shall be Shares allotted but unissued by the Board. From time to time, the Board shall allot for issuance such number of Shares as may be necessary to permit the Company to meet its obligations under the Plan.


4.

TERMS OF AWARDS IN GENERAL


4.1

Award Agreements


Each Award shall be confirmed by the execution of an Award Agreement, substantially in the form attached as Schedule " A" to this Plan, as amended by the Board from time to time. Each Participant shall have the right to purchase from the Company the Award Shares at the time and in the manner set out in the Plan and in the Award Agreement applicable to that Participant. The execution of an Award Agreement shall constitute conclusive evidence that it has been completed in compliance with this Plan.


4.2

Vesting Conditions


The Board may determine and impose terms upon which each Award shall become Vested. If at any time there is an Involuntary Termination of a Participant, the terms of Vesting applicable to any Awards granted to the Participant shall be deemed to be satisfied and the Awards shall be deemed to have been Vested. The Company may, by resolution of the Board, reduce or eliminate the terms of Vesting on any existing Awards.


4.3

No Repricing .


The Subscription Price for Shares subject to any Award of Options and any related Tandem SARs may not be reduced after the Effective Date of the Award thereof, either directly or indirectly, without prior shareholder approval, except for adjustments pursuant to Section 7 of the Plan.


4.4

Exclusion From Severance Allowance, Retirement Allowance or Termination Settlement


If the Participant, or the Participant' s employer in the case of an Award granted to a Participant who falls under the definition of Service Provider set out in Subsection 2.29(c), retires, resigns or is terminated from employment or engagement with the Company or any subsidiary of the Company, the loss or limitation, if any, pursuant to the Award Agreement with respect to the right to purchase Award Shares which were not Vested at that time or which, if Vested, were cancelled, shall not give rise to any right to damages and shall not be included in the calculation of nor form any part of any severance allowance, retiring allowance or termination settlement of any kind whatsoever in respect of such Participant.


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4.5

Deferral of Payment or Other Settlement of Vested Awards.


The terms and conditions applicable to any Award (or portion thereof) granted to a Participant who is subject to taxation under the Code and that constitutes " deferred compensation" subject to Section 409A of the Code are intended to comply with Section 409A of the Code (or any successor provision). The terms of any such Award (or portion thereof) permitting the deferral of payment or other settlement thereof or providing for settlement i
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