NEUROBIOLOGICAL TECHNOLOGIES INC /CA/, DEF 14A, 1999-10-20

NEUROBIOLOGICAL TECHNOLOGIES INC /CA/
DEF 14A, 1999-10-20
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)

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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)

Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12

----------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transactions applies:

(2) Aggregate number of securities to which transactions applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing party:

(4) Date filed:

<PAGE>

[GRAPHIC OMITTED]

NEUROBIOLOGICAL TECHNOLOGIES, INC.
1387 Marina Way South
Richmond, California 94804
(510) 215-8000

October 21, 1999

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders
of Neurobiological Technologies, Inc. The Annual Meeting will be held 10 a.m.,
on November 11, 1999, at the St. Francis Yacht Club, On The Marina, in San
Francisco, California.

The formal notice of the Annual Meeting and the Proxy Statement have
been made a part of this invitation.

At your earliest convenience and after you have read the enclosed Proxy
Statement, please mark, date and sign the Proxy and return in the enclosed
prepaid envelope addressed to ChaseMellon Shareholder Services, our transfer
agent, to ensure that your shares will be represented. YOUR SHARES CANNOT BE
VOTED UNLESS YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL
MEETING IN PERSON.

A copy of the Company's Annual Report on Form 10-KSB is also enclosed.

The Board of Directors and Management look forward to seeing you at the
meeting.

Sincerely yours,

/s/ Paul E. Freiman
Paul E. Freiman
President and Chief Executive Officer

<PAGE>

NEUROBIOLOGICAL TECHNOLOGIES, INC.

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, NOVEMBER 11, 1999

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

THE STOCKHOLDERS OF NEUROBIOLOGICAL TECHNOLOGIES, INC.:

The Annual Meeting of Stockholders of Neurobiological Technologies,
Inc. ("NTI" or the "Company") will be held at the St. Francis Yacht Club, On The
Marina, San Francisco, California, on November 11, 1999 at 10 a.m., local time,
for the following purposes:

1. To elect six directors to hold office until the next Annual Meeting of
Stockholders and until their successors are elected.

2. To approve an amendment to the Company's Amended and Restated 1993
Stock Plan to increase the number of shares issuable under the plan by
500,000 to a total of 2,500,000 shares.

3. To approve an amendment to the Company's Amended and Restated Employee
Stock Purchase Plan to increase the number of shares issuable under the
plan by 50,000 to a total of 150,000 shares.

4. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors.

5. To transact such other business as properly may come before the meeting
or any adjournments or postponements of the meeting.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Only stockholders of record at the close of business on September 16,
1999 are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements of the meeting. A complete list of stockholders
entitled to notice of and to vote at the Annual Meeting will be available at the
Company's offices, 1387 Marina Way South, Richmond, California, for ten days
before the meeting.

All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the postage
prepaid envelope enclosed for that purpose. Any stockholder attending the
meeting may vote in person even if he or she returned a proxy.

By Order of the Board of Directors,

/s/ Paul E. Freiman
Paul E. Freiman
President and Chief Executive Officer
Richmond, California
October 21, 1999

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

IMPORTANT

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POST-PAID
ENVELOPE. THANK YOU FOR ACTING PROMPTLY.
- --------------------------------------------------------------------------------

<PAGE>

NEUROBIOLOGICAL TECHNOLOGIES, INC.
1387 MARINA WAY SOUTH
RICHMOND, CA 94804
(510) 215-8000

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

PROXY STATEMENT

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

The enclosed proxy is solicited on behalf of the Board of Directors
(the "Board") of Neurobiological Technologies, Inc., a Delaware corporation
("NTI" or the "Company"). The proxy is solicited for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the St. Francis Yacht Club,
On The Marina, in San Francisco, California, on November 11, 1999 at 10 a.m.,
local time, and at any and all adjournments or postponements thereof. The
approximate date on which this proxy statement and the accompanying notice and
proxy are being mailed to stockholders is October 21, 1999.

INFORMATION CONCERNING SOLICITATION AND VOTING

Only stockholders of record at the close of business on September 16,
1999 are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof. At the close of business on September 16,
1999, the Company had outstanding 7,797,163 shares of Common Stock, par value
$.001 per share ("Common Stock") and 2,332,000 shares of Series A Preferred
Stock, par value $0.001 per share (the "Preferred Stock"). Holders of Common
Stock are entitled to one vote for each share of Common Stock held. Holders of
Preferred Stock are entitled one vote for each share of Preferred Stock held. In
order to constitute a quorum for the conduct of business at the Annual Meeting,
a majority of the outstanding shares entitled to vote at the Annual Meeting must
be represented at the Annual Meeting.

All shares represented by each properly executed, unrevoked proxy
received in time for the Annual Meeting will be voted in the manner specified in
the proxy. If the manner of voting is not specified in an executed proxy
received by the Company, the proxy will be voted for the election of the
directors listed in the proxy for election to the Board and for approval of the
other proposals described in this proxy statement.

Directors are elected by a plurality vote. The other matters submitted
for stockholder approval at this Annual Meeting will be decided by the
affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote on each such matter. Abstentions with respect to any
matter are treated as shares present or represented and entitled to vote on that
matter and thus have the same effect as negative votes. If shares are not voted
by the broker who is the record holder of the shares, or if shares are not voted
in other circumstances in which proxy authority is defective or has been
withheld with respect to any matter, these non-voted shares are not deemed to be
present or represented for purposes of determining whether stockholder approval
of that matter has been obtained.

Any stockholder giving a proxy in the form accompanying this proxy
statement has the power to revoke the proxy prior to its exercise. A proxy can
be revoked by delivering an instrument of revocation prior to the Annual Meeting
to the Company, by presenting at the Annual Meeting a duly executed proxy
bearing a later date or time than the date or time of the proxy being revoked,
or at the Annual Meeting if the stockholder is present and elects to vote in
person. Mere attendance at the Annual Meeting will not serve to revoke a proxy.

The expense of printing and mailing proxy materials will be borne by
the Company. In addition to the solicitation of proxies by mail, solicitation
may be made by certain directors, officers and other employees of the Company by
personal interview, telephone or facsimile. No additional compensation will be
paid to such persons for such solicitation. The Company will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
materials to beneficial owners of the Company's stock.

<PAGE>

PROPOSAL 1

ELECTION OF DIRECTORS

Nominees

The Board of Directors proposes the election of the following six
directors of the Company. Directors are elected to serve until the next annual
meeting of stockholders and until their successors are elected and qualified.
The nominees securing the highest number of votes, up to the number of directors
to be elected, will be elected as directors. It is intended that proxies
received will be voted FOR the election of the nominees named below unless
marked to the contrary. In the event any such person is unable or unwilling to
serve as a director, proxies may be voted for substitute nominees designated by
the present Board. The Board has no reason to believe that any of the persons
named below will be unable or unwilling to serve as a director if elected.

<TABLE>
All six nominees are currently serving as directors of the Company. The
following table indicates the name and age of each nominee as of the date of
this proxy statement, all positions with the Company held by the nominee, and
the year during which the nominee first was elected or appointed a director.

<CAPTION>
Director
Name Age Position with NTI Continuously Since
- -------------------------- --- ---------------------------------------------- ------------------
<S> <C> <C> <C>
Paul E. Freiman 65 President, Chief Executive Officer and 1997
Director

Abraham E. Cohen 63 Chairman of the Board of Directors 1993

Enoch Callaway, M.D. 75 Director 1987

Theodore L. Eliot, Jr. 71 Director 1992

Abraham D. Sofaer 61 Director 1997

John B. Stuppin 66 Director 1988

</TABLE>
Paul E. Freiman joined the Company as a director in April 1997 and was
elected President and Chief Executive Officer in May 1997. He is the former
chairman and chief executive officer of Syntex Corporation ("Syntex"), where he
had a long and successful career and was instrumental in the sale of Syntex to
Roche Holdings for $5.3 billion. He is credited with much of the marketing
success of Syntex's lead product Naprosyn(R) and was responsible for moving the
product to over-the-counter status, marketed by Proctor & Gamble as Aleve(R).
Mr. Freiman currently serves as chairman of the boards of two private companies:
Digital GeneTechnologies, Inc. and SciGen Pte. Ltd. Mr. Freiman currently serves
on the boards of Penwest Pharmaceutical Co., Calypte Biomedical Corporation and
Otsuka America Pharmaceuticals, Inc. He has been chairman of the Pharmaceutical
Manufacturers Association of America (PhARMA) and has also chaired a number of
key PhARMA committees. Mr. Freiman is also an advisor to Burrill & Co., a San
Francisco merchant bank. Mr. Freiman holds a B.S. degree from Fordham University
and an honorary doctorate from the Arnold & Marie Schwartz College of Pharmacy.

Abraham E. Cohen has been a director of the Company since March 1993
and has been Chairman of the Board of Directors since August 1993. From 1982 to
1992, Mr. Cohen served as Senior Vice President of Merck & Co. ("Merck") and
from 1977 to 1988 as President of the Merck Sharp & Dohme International Division
("MSDI"). While at Merck, he played a key role in the development of Merck's
international business, initially in Asia, then in Europe and, subsequently, as
President of MSDI, which manufactures and markets human health products outside
the United States. Since his retirement from Merck and MSDI in January 1992, Mr.
Cohen has been active as an international business consultant. He was a director
of Agouron Pharmaceuticals, Inc. until its merger with Warner-Lambert Company.
He is a director of six public companies: Akzo Nobel N.V., Chugai Pharmaceutical
Co., Pharmaceutical Product Development, Smith Barney, Teva Pharmaceutical
Industries, Ltd. and Vasomedical, Inc.

Enoch Callaway, M.D. is a founder and former employee of the Company
and has served as a director of the Company since September 1987. Dr. Callaway
previously served as Chairman of the Board of Directors of the Company from
September 1987 to November 1990, as Co-Chairman of the Board from November 1990
until August 1993, as Vice President of the Company from September 1988 until
August 1993 and as Company

<PAGE>

Secretary from September 1988 until September 1991. Dr. Callaway has been
Emeritus Professor of Psychiatry at the University of California, San Francisco
since 1986, where he also served as Director of Research at the Langley Porter
Psychiatric Institute from 1959 to 1988. Dr. Callaway is a director of Candide,
Inc. He holds A.B. and M.D. degrees from Columbia University.

Theodore L. Eliot, Jr. has served as a director of the Company since
August 1992. Previously, he served as a director of the Company from September
1988 until April 1992 and as a Vice President of the Company from September 1988
until September 1991. Mr. Eliot retired from the United States Department of
State in 1978 with the rank of Ambassador. He served as Dean of the Fletcher
School of Law and Diplomacy from 1979 to 1985 and as Secretary General for the
United States of the Bilderberg Meetings from 1981 to October 1993. Mr. Eliot is
a director of Fiberstars, Inc., a publicly held company. Mr. Eliot holds B.A.
and M.P.A. degrees from Harvard University.

Abraham D. Sofaer has served as a director of the Company since April
1997. Mr. Sofaer is the first George P. Shultz Distinguished Scholar & Senior
Fellow at the Hoover Institution, Stanford University, appointed in 1994. From
1990 to 1994, Mr. Sofaer was a partner at the legal firm of Hughes, Hubbard and
Reed in Washington, D.C., where he represented several major U.S. public
companies. From 1985 to 1990, he served as the Legal Adviser to the United
States Department of State, where he was principal negotiator on several key
international disputes. From 1979 to 1985, he served as a federal judge in the
Southern District of New York. Mr. Sofaer is registered as a qualified
arbitrator with the American Arbitration Association and is a member of the
National Panel of the Center for Public Resolution of Disputes (CPR), a leading
organization in the area of resolution of disputes outside litigation. He has
mediated or is now mediating merger-acquisition arbitrations, commercial cases
involving valuation of commercial technology and major securities class action
suits. Mr. Sofaer is on the International Advisory Board of Chugai
Biopharmaceuticals, Inc. Mr. Sofaer holds a B.A. degree from Yeshiva College and
a L.L.B. from New York University.

John B. Stuppin is a founder and employee of the Company and has served
as a director of the Company since September 1988. From September 1987 until
October 1990, Mr. Stuppin served as President of the Company, from November 1990
to August 1993 as Co-Chairman of the Board of Directors, from October 1990 until
September 1991 as Executive Vice President, and from April 1991 until July 1994
as Treasurer. He also served as acting Chief Financial Officer of the Company
from the Company's inception through December 1993. Mr. Stuppin is an investment
banker and a venture capitalist. He has over 25 years experience in the start up
and management of companies active in emerging technologies and has been the
president of a manufacturing company. He is a director of Fiberstars, Inc. Mr.
Stuppin holds an A.B. degree from Columbia College.

The Board of Directors recommends a vote "FOR" election for director of
the nominees set forth above.

Board Meetings and Committees

The Board of Directors held five meetings during the fiscal year ended
June 30, 1999. All directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and of committees on which such directors
serve.

The Board of Directors has appointed a Compensation Committee, an Audit
Committee and a Nominating Committee.

The members of the Compensation Committee are Theodore L. Eliot, Jr.
and Abraham D. Sofaer. The Compensation Committee held four meetings during
fiscal 1999. The Compensation Committee's functions are to assist in the
implementation of, and provide recommendations with respect to, general and
specific compensation policies and practices of the Company, including the
administration of and granting of options under the Company's 1993 Stock Plan.

The members of the Audit Committee are Theodore L. Eliot, Jr. and
Abraham D. Sofaer. The Audit Committee held no meetings during fiscal 1999. The
Audit Committee's functions are to review the scope of the annual audit, monitor
the independent auditor's relationship with the Company, advise and assist the
Board of Directors in evaluating the auditor's examination, supervise the
Company's financial and accounting organization

<PAGE>

and financial reporting and nominate for stockholder approval at the Annual
Meeting, with the approval of the Board of Directors, a firm of certified public
accountants whose duty it is to audit the financial records of the Company for
the fiscal year for which it is appointed.

The members of the Nominating Committee are Dr. Enoch Callaway and John
B. Stuppin. The Nominating Committee held no meetings during fiscal 1999. The
Nominating Committee is responsible for matters relating to the composition of
the Board of Directors, including recruitment, nomination and succession. No
nominations were received from, and no procedures have been established for, the
nominees recommended by stockholders.

Directors' Compensation

Dr. Callaway was paid $15,000 during fiscal 1999 for consulting
services rendered to the Company pursuant to a consulting agreement. Mr. Stuppin
was paid $13,008 during fiscal 1999 as an employee of the Company. Mr. Cohen is
reimbursed for his expenses for each meeting attended.

Non-employee directors are currently eligible to participate in the
Company's 1993 Stock Plan. Subject to the 1993 Stock Plan, each new non-employee
director of the Company will receive an option to purchase 5,000 shares of
common stock on the date of his or her election to the Board at the fair market
value on the date of grant. In addition, each non-employee director continuing
to serve on the Board will also receive an automatic annual grant of an option
to purchase 1,000 shares of the Company's Common Stock at the Annual Meeting of
the Company's stockholders. On November 12, 1998, Dr. Callaway, Mr. Eliot, Mr.
Sofaer and Mr. Cohen were each granted an option to purchase 1,000 shares of
Common Stock at an exercise price of $0.672 per share. The options will vest
fully on November 12, 1999.

In March 1999, Dr. Callaway, Mr. Eliot, Mr. Sofaer, and Mr. Stuppin
were each granted an option to purchase 15,000 shares of Common Stock. In March
1999, Mr. Cohen was granted an option to purchase 25,000 shares of Common Stock.
These options have an exercise price of $0.625 per share and were fully
exercisable at the grant date.

<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

<TABLE>
The following table sets forth information regarding the Company's
outstanding shares of each class of equity securities beneficially owned as of
September 15, 1999 by: (1) each person who is known to the Company to own
beneficially more than five percent of each class of the outstanding equity
securities; (2) each of the Company's directors; (3) all officers named in the
Summary Compensation Table below; and (4) all directors and executive officers
as a group. The information relating to share ownership is based upon
information furnished to the Company. The number of shares of Common Stock shown
includes shares subject to warrants or options exercisable within 60 days after
September 15, 1999 as if such shares were outstanding on September 15, 1999 and
assumes that no other person has exercised any outstanding warrants or options.
The Company believes that the beneficial owners of each class of equity
securities, based on information supplied by such owners, have sole investment
and voting power with respect to the shares of each class of equity securities
shown as being beneficially owned by them, except as otherwise set forth in the
footnotes to the table.

<CAPTION>
Number Subject
to Options and Number of Percentage
Number of Shares Warrants Shares of of Series A
of Common Exercisable Percentage of Series A Preferred
Name and Address Stock Within 60 days Common Stock Preferred Stock Stock
---------------- ----- -------------- ------------ --------------- -----
<S> <C> <C> <C> <C> <C>
New York Life Insurance Company (1) ..................... 553,750 160,000 7.0% 400,000 17.2%
51 Madison Avenue, Room 206
New York, NY 10010

Merz + Co. GmbH & Co (2) ................................ 650,419 650,419 7.7 -- --
Eckenheimer Landstrasse 100-104
Frankfurt/Main Germany

Arthur Rock (3) ......................................... 689,564 315,071 8.5 500,000 21.4

Enoch Callaway, M.D. (4) ................................ 130,490 47,714 1.7 4,000 *

Abraham E. Cohen ........................................ 382,891 238,054 4.8 100,000 4.3

Theodore L. Eliot, Jr. (5) .............................. 71,410 50,116 * -- --

Paul E. Freiman (6) ..................................... 296,000 295,000 3.7 -- --

Lisa U. Carr, M.D., Ph.D ................................ 32,089 29,875 * -- --

Abraham D. Sofaer ....................................... 360,004 235,004 4.5 100,000 4.3

John B. Stuppin (7) ..................................... 516,181 161,428 6.5 100,000 4.3

Calvert Y. Yee .......................................... 94,710 89,763 1.2 -- --

All directors and executive officers
as a group (8 persons)(8) ............................... 1,883,775 1,146,954 21.1 304,000 13.0

<FN>
- ---------

*Less than 1%

(1) According to Schedule 13G filed by New York Life Insurance Company.

(2) According to Schedule 13G filed by Merz + Co. GmbH & Co. Merz has the right
to convert certain loans, including interest thereon, up to 650,419 shares
of Common Stock.

(3) According to Schedule 13D filed by Arthur Rock.

(4) The number of shares of Common Stock shown includes 83,176 shares held by
Enoch Callaway and Dorothy C. Callaway, Trustees or Successor Trustees of
the Callaway 1989 Trust, executed May 20, 1989 (the "Callaway Trust"). Dr.
Callaway may be deemed to have a beneficial interest in the shares held by
the Callaway Trust.

(5) The number of shares of Common Stock shown includes 21,294 shares held by
Theodore L. Eliot, Jr. and Patricia P. Eliot, Trustees, the Eliot Trust,
February 27, 1987 (the "Eliot Trust"). Mr. Eliot may be deemed to have a
beneficial interest in the shares held by the Eliot Trust.

(6) The number of shares of Common Stock shown includes 1,000 shares held in
the estate of Paul E. Freiman and Anna Mazzuchi Freiman.

(7) The number of shares of Common Stock shown includes 352,753 shares held by
John B. Stuppin and Jane K. Stuppin, Trustees UTD dated March 11, 1991 (the
"Stuppin Trust") and 500 shares held by Mrs. Stuppin. Mr. Stuppin may be
deemed to have a beneficial interest in the shares held by the Stuppin
Trust and Mrs. Stuppin.

(8) The number of shares of Common Stock shown includes shares included
pursuant to notes 4-7.
</FN>
</TABLE>

<PAGE>

Certain Relationships and Related Transactions

During the fiscal year ended June 30, 1998 Paul Freiman, the Company's
Chief Executive Officer and President, was a member of the board of directors of
Life Science Economics, Inc. ("LSE"). The Company had a consulting arrangement
with LSE under which the Company paid an aggregate of $409,000 in fiscal 1998.
The Company did not pay LSE any consulting fees in fiscal 1999.

Executive Compensation

<TABLE>
The following table sets forth information regarding compensation for
the fiscal years ended June 30, 1997, 1998 and 1999 received by the individual
who served as the Company's Chief Executive Officer during 1999 and the
Company's two other most highly compensated executive officers whose total
annual salary and bonus for fiscal year 1999 exceeded $100,000 (the "Named
Officers").

<CAPTION>
Summary Compensation Table

Annual Compensation
------------------- Long-Term
Name and Principal Position as of Compensation Awards
June 30, 1999 Year Salary ($) Bonus($) Options(#)
- ------------------------------------------------ --------- ------------ ---------- ---------------------
<S> <C> <C> <C> <C>
Paul E. Freiman (1) 1999 $152,527 $0 200,000
President and Chief Executive Officer 1998 92,533 0 250,000
1997 27,280 0 145,000

Lisa U. Carr, M.D., Ph.D.(2) 1999 104,360 0 100,000
Vice President, Medical Affairs 1998 8,333 0 0

Calvert Y. Yee 1999 105,625 0 10,000
Vice President, Operations and Administration 1998 97,985 0 74,763
1997 96,277 0 0
<FN>
- ---------

(1) 1997 salary shown for Mr. Freiman includes $5,068 for consulting services
earned prior to joining the Company as its President and Chief Executive
Officer on May 8, 1997.

(2) Dr. Carr joined the Company on June 1, 1998.
</FN>
</TABLE>

<PAGE>

<TABLE>

The following table sets forth further information regarding the grants
of stock options during the fiscal year ended June 30, 1999 to the Named
Officers. Since inception, the Company has not granted any stock appreciation
rights.

Option Grants in Fiscal 1999

<CAPTION>
Individual Grant
--------------------------------------------------------------
Percent of
Number of Total Options
Securities Granted to
Underlying Employees in Exercise or
Options Fiscal Base Price Expiration
Name Granted (#)(1) 1999(%)(2) ($/Share)(1) Date
- -------------------------------------- --------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Paul E. Freiman 50,000(3) 14.5% $0.625 3/17/09
150,000(4) 43.5 0.70 9/22/08

Lisa U. Carr, M.D., Ph.D. 100,000(5) 29.0 0.625 1/20/09

Calvert Y. Yee 10,000(6) 2.9 0.625 2/28/09

<FN>
- ---------

(1) The options were granted under the Company's Amended and Restated 1993
Stock Plan. The exercise price on the date of grant was equal to 100% of
the fair market value on such date.

(2) Based on a total of 344,500 stock options granted to employees during
fiscal year ended June 30, 1999.

(3) These options were fully exercisable upon the date of grant.

(4) The options become exercisable at a rate of 20% per year over a period of
five years.

(5) 15% of these options were exercisable on the grant date. The remainder of
the options become exercisable at a rate of 2.125% per month until May 30,
2002.

(6) These options become exercisable at a rate of 2.083% per month over a
period of four years.
</FN>
</TABLE>

<TABLE>
None of the Named Officers exercised any options during fiscal 1999.
The following table sets forth information regarding the number and value of
unexercised options held by the Named Officers at fiscal year-end.

Aggregated Option Exercises and Fiscal Year-End Option Values in Last Fiscal Year

<CAPTION>
Value of Unexercised
Number of Unexercised Options In-the-Money Options
Held at Fiscal Year End(#) at Fiscal Year End($)(1)
------------------------------ ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Paul E. Freiman 245,000 350,000 $21,610 $63,690
Lisa U. Carr, M.D., Ph.D. 29,875 70,125 7,319 17,181
Calvert Y. Yee 79,763 4,000 22,528 248

<FN>
- ---------

(1) Based on the amount, if any, by which the last per share quote of the
Common Stock on the OTC-Bulletin Board(R) June 30, 1999 ($0.875) exceeds
the exercise price.
</FN>
</TABLE>

<PAGE>

Employment Agreements

In March 1999, the Company entered into a retention agreement with Lisa
U. Carr, M.D., Ph.D. which provides for additional compensation of $100,000,
payable on February 1, 2001, provided Dr. Carr continues to serve as the
Company's Vice President, Medical Affairs through February 1, 2001. In the event
of a change of control of the Company and subsequent involuntary termination of
Dr. Carr prior to February 1, 2001, Dr. Carr will be entitled to receive the
additional compensation of $100,000.

Pension and Long-Term Incentive Plans

The Company has no pension or long-term incentive plans.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Under the Securities Exchange Act of 1934, as amended, the Company's
directors, executive officers and any persons holding more than 10% of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to identify in this Proxy Statement
those persons who failed to timely file these reports. The Company believes all
required reports have been timely filed. In making this disclosure, the Company
has relied solely on written representations of its directors and executive
officers and copies of the reports that have been filed with the Commission.

PROPOSAL 2

APPROVAL OF AMENDMENT OF THE
AMENDED AND RESTATED 1993 STOCK PLAN

The 1993 Stock Plan of Neurobiological Technologies, Inc. (the "1993
Stock Plan") was adopted by the Company's Board of Directors on November 18,
1993 and was subsequently amended and restated, with stockholder approval, on
February 15, 1994. The 1993 Stock Plan was amended again, with stockholder
approval on November 16, 1994 and November 4, 1997. The proposed amendment of
the 1993 Stock Plan was adopted by the Board of Directors on October 12, 1999,
subject to the approval of the Company's stockholders at the Annual Meeting.

Summary of Amendment

The amendment to the 1993 Stock Plan approved by the Board of Directors
and submitted for stockholder approval will increase the number of shares of
Common Stock reserved for issuance under the 1993 Stock Plan by 500,000 shares
to a total of 2,500,000 shares. As of June 30, 1999, a total of 140,392 shares
of Common Stock were available for future option grants or direct sales under
the 1993 Stock Plan.

Description of Amended and Restated 1993 Stock Plan

Purpose

The purpose of the 1993 Stock Plan is to offer selected directors,
employees, consultants and advisors of the Company an opportunity to acquire a
proprietary interest in the success of the Company or to increase such interest
by purchasing shares of the Company's Common Stock.

Administration

The 1993 Stock Plan is administered by the Company's Compensation
Committee. Subject to the limitations set forth in the 1993 Stock Plan, the
Compensation Committee has the authority to determine to whom the options will
be granted and shares will be sold, the number of shares to be offered for sale
and the number of options to be granted, the price and other terms and
conditions of each sale of shares and the exercise price and terms and
conditions of each option and the type of option (ISO or NSO, as described
below) to be granted, to

<PAGE>

interpret the 1993 Stock Plan and adopt rules thereunder, and to make all other
decisions relating to the operation of the 1993 Stock Plan.

Eligibility and Shares Subject to the 1993 Stock Plan

Under the 1993 Stock Plan, 2,500,000 shares of Common Stock have been
reserved for issuance (500,000 shares of which are subject to stockholder
approval at the Annual Meeting) by direct sale or upon exercise of options
granted to directors, employees, consultants and advisors of the Company. The
1993 Stock Plan provides for the grant of both incentive stock options ("ISOs")
intended to qualify as such under section 422 of the Internal Revenue Code, as
amended (the "Code"), and nonstatutory stock options ("NSOs"). ISOs may be
granted only to employees of the Company. NSOs may be granted, and Common Stock
may be sold directly, to directors, employees, consultants and advisors of the
Company. Pursuant to the 1993 Stock Plan, each non-employee director receives a
one-time grant of an NSO on the date such director first joins the Board and
each continuing non-employee director receives an annual grant covering 1,000
shares at the conclusion of each Annual Meeting. Non-employee directors are also
eligible to receive discretionary grants as determined by the Compensation
Committee. The 1993 Stock Plan further provides that options to any optionee in
any fiscal year shall not cover more than 250,000 shares in a single fiscal
year. If the options granted under the 1993 Stock Plan shall for any reason
expire or be canceled or otherwise terminated without having been exercised in
full, the shares allocable to the unexercised portion of such options shall
again become available for the 1993 Stock Plan. If shares issued under the 1993
Stock Plan are forfeited, they also become available for new grants.

As of June 30, 1999, there were 11 employees and 4 non-employee
directors eligible to participate in the 1993 Stock Plan. As of June 30, 1999,
options to purchase an aggregate of 1,803,798 shares of Common Stock at an
average exercise price of $1.93 per share were outstanding under the 1993 Stock
Plan. As of June 30, 1999, a total of 140,392 shares of Common Stock were
available for future option grants or direct sales under the 1993 Stock Plan.

With the exception of the annual grants of NSOs which will be made to
non-employee directors as described above, the allocation of the additional
shares of stock which the stockholders are being asked to approve has not been
determined. The Compensation Committee will determine the number of options (and
any other awards) to be allocated to participants in the 1993 Stock Plan in the
future, and such allocation may only be made in accordance with the provisions
of the 1993 Stock Plan.

The following table shows the number of shares of Common Stock
currently issuable upon exercise of options granted to the named individuals and
groups under the 1993 Stock Plan during fiscal 1999. All options were granted at
fair market value as of the date of grant.

Plan Benefits
1993 Stock Plan
---------------
Number of Shares
Underlying
Name Options Granted
---- ---------------
Paul E. Freiman, .................................. 200,000
President & CEO

Lisa U. Carr, M.D., Ph.D., ........................ 100,000
Vice President Medical Affairs

Calvert Y. Yee, ................................... 10,000
Vice President, Operations and
Administration

All executive officers as a group ................. 310,000
(3 Persons)

All directors who are not executive ............... 89,000
officers as a group

All employees (other than executive ............... 19,500
officers) as a group

<PAGE>

Terms of Options

Options granted pursuant to the 1993 Stock Plan will vest at the time
or times determined by the Compensation Committee.

The maximum term of each ISO granted under the 1993 Stock Plan is 10
years (five years in the case of an ISO granted to a 10% stockholder). There is
no limit on the term of an NSO, which will be determined by the Compensation
Committee.

The exercise price of ISOs and NSOs granted to non-employee directors
of the Company must not be less than 100% of the fair market value of the Common
Stock on the date of grant (110% in the case of an ISO grant to a 10%
stockholder). The exercise price of NSOs must not be less than the par value of
a share of Common Stock. Under the 1993 Stock Plan, the exercise price is
payable in cash or Common Stock or with a full-recourse promissory note. The
1993 Stock Plan also permits an optionee to pay the exercise price of an option
by delivery (on a form prescribed by the Company) of an irrevocable direction to
a securities broker approved by the Company to sell the optionee's shares and
deliver all or part of the sale proceeds to the Company in payment of all or
part of the exercise price and any withholding taxes, or by delivery of an
irrevocable direction to pledge the optionee's shares to a securities broker or
lender approved by the Company as security for a loan and to deliver all or part
of the loan proceeds to the Company in payment of all or a part of the exercise
price and any withholding taxes.

Terms of Awards or Sales

The terms of any sale of shares of Common Stock under the 1993 Stock
Plan will be set forth in a purchase agreement to be entered into between the
Company and each purchaser. The terms of the stock purchase agreements entered
into under the 1993 Stock Plan need not be identical, and the Compensation
Committee shall determine all terms and conditions of each such agreement, which
shall be consistent with the 1993 Stock Plan. The purchase price for shares sold
under the 1993 Stock Plan shall not be less than the par value of such shares.
The purchase price may be paid, at the Compensation Committee's discretion, with
a full-recourse promissory note secured by the shares, except that the par value
of the shares must be paid in cash. Shares may also be awarded under the 1993
Stock Plan in consideration of services rendered prior to the award, without
cash payment by the recipient.

Shares sold under the 1993 Stock Plan will vest upon satisfaction of
the conditions specified in the stock purchase agreement. Vesting terms are
determined by the Compensation Committee and may be based on the recipient's
service, individual performance, the Company's performance or other such
criteria as the Compensation Committee may adopt. Shares may be subject to
repurchase by the Company at their original purchase price in the event that any
applicable vesting terms are not satisfied. Shares sold under the 1993 Stock
Plan will be subject to restrictions on resale or transfer until they have
vested. Any right to acquire shares under the 1993 Stock Plan (other than an
option) will automatically expire if not exercised within 30 days after the
grant of such right was communicated by the Compensation Committee. A holder of
shares sold under the 1993 Stock Plan has the same voting, dividend and other
rights as the Company's other stockholders.

Duration, Amendment and Termination

The Board of Directors may amend, suspend or terminate the 1993 Stock
Plan at any time, except that any such amendment, suspension, or termination
shall not affect any option previously granted. Any amendment of the 1993 Stock
Plan is subject to approval of the Company's stockholders only to the extent
required by applicable law. Unless sooner terminated by the Board of Directors,
the 1993 Stock Plan will terminate on September 30, 2004 and no further options
may be granted or stock sold pursuant to such plan following the termination
date.

Effect of Certain Corporate Events

Outstanding awards under the 1993 Stock Plan provide for the automatic
vesting of the stock options upon a change in control. Future stock option
agreements and common stock purchase agreements entered into pursuant

<PAGE>

to the 1993 Stock Plan will contain similar provisions, unless otherwise
determined by the Compensation Committee.

For purposes of the 1993 Stock Plan, the term "change in control" means
either of the following events: (1) a change in the composition of the Board of
Directors occurs as a result of which fewer than one-half of the incumbent
directors are directors who either had been directors of the Company 24 months
prior to such change or were elected or nominated for election to the Board of
Directors with the approval of at least a majority of the directors who had been
directors of the Company 24 months prior to such change and who were still in
office at the time of the election or nomination; or (2) any person is or
becomes, by acquisition or aggregation of securities, the direct or indirect
beneficial owner of securities representing 30% or more of the voting power of
the Company's then outstanding securities. A change in the relative beneficial
ownership under (2) above by reason of a reduction in the number of outstanding
securities of the Company will be disregarded.

In the event of a subdivision of the outstanding Common Stock, a
combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a lesser number of shares, a declaration of
a dividend payable in Common Stock or in a form other than Common Stock in an
amount that has a material effect on the price of the shares, a
recapitalization, spin-off, reclassification, or similar occurrence, the
Compensation Committee will make adjustments in the number and/or exercise price
of the options and/or the number of shares available under the 1993 Stock Plan
as appropriate.

In the event of a merger or other reorganization, outstanding options
will be subject to the agreement of merger or reorganization. Such agreement may
provide for the assumption of outstanding options by the surviving corporation
or its parent, for their continuation by the Company (if the Company is the
surviving corporation), for the payment of a cash settlement equal to the
difference between the amount to be paid for one share under the agreement of
merger or reorganization and the exercise price for each option, or for the
acceleration of the exercisability of each option followed by the cancellation
of options not exercised or settled, in all cases without the optionee's
consent.

Federal Income Tax Consequences of Options and Awards under the 1993 Stock Plan

The following summary of United States federal income tax consequences
is based upon existing statutes, regulations and interpretations thereof. The
applicable rules are complex, and income tax consequences may vary depending
upon the particular circumstances of each plan participant. This proxy statement
describes United States federal income tax consequences of general
applicability, but does not purport to describe either particular consequences
to each individual plan participant or foreign, state or local income tax
consequences, which may differ from the United States federal income tax
consequences.

Incentive Stock Options

Awards; Exercise. ISOs are intended to constitute "incentive stock
options" within the meaning of Section 422 of the Code. ISOs may be granted only
to employees of the Company (including directors who are also employees). The
optionee does not recognize taxable income upon either the grant or exercise of
an ISO. However, the excess of the fair market value of the shares purchased
upon exercise over the option exercise price (the "option spread") is includable
in the optionee's "alternative minimum taxable income" ("AMTI") for purposes of
the alternative minimum tax ("AMT"). The option spread is generally measured on
the date of exercise and is includable in AMTI in the year of exercise. Special
rules regarding the time of AMTI inclusion may apply for shares subject to a
repurchase right or other "substantial risk of forfeiture" (including, in the
case of each person subject to the reporting requirements of Section 16 of the
Exchange Act, certain limitations on resale of shares imposed under Section
16(b) of the Exchange Act).

Sale of Option Shares. If an optionee holds the shares purchased under
an ISO for at least two years from the date the ISO was granted and for at least
one year from the date the ISO was exercised, any gain from a sale of the shares
other than to the Company should be taxable as long term capital gain. Under
these circumstances, the Company would not be entitled to a tax deduction at the
time the ISO was exercised or at the time the stock was sold. If an optionee
were to dispose of stock acquired pursuant to an ISO before the end of the
required holding

<PAGE>

periods (a "disqualifying disposition"), the amount by which the market value of
the stock at the time the ISO was exercised exceeded the exercise price (or, if
less, the amount of gain realized on the sale) would be taxable to the optionee
as ordinary income, and the Company would be entitled to a corresponding tax
deduction. Such income is subject to information reporting requirements and may
become subject to withholding. Gain from a disqualifying disposition in excess
of the amount required to be recognized as ordinary income is capital gain.
Optionees are required to notify the Company immediately prior to making a
disqualifying disposition. If stock is sold to the Company rather than to a
third party, the sale may not produce capital gain or loss but will constitute a
redemption of such shares, which could be taxable as a dividend unless the
redemption is "not essentially equivalent to a dividend" within the meaning of
the Code.

Exercise With Stock. If an optionee pays for ISO shares with shares of
the Company acquired under an ISO or a qualified employee stock purchase plan
("statutory option stock"), the tender of shares is a disqualifying disposition
of the statutory option stock if the above described (or other applicable)
holding periods respecting those shares have not been satisfied. If the holding
periods with respect to the statutory option stock are satisfied, or the shares
were not acquired under a statutory stock option of the Company, then any
appreciation in value of the surrendered shares is not taxable upon surrender.
Special basis and holding period rules apply where previously-owned stock is
used to exercise an ISO.

Withholding Taxes. The present position of the Internal Revenue Service
("IRS") appears to be that income and employment withholding taxes are not
imposed upon the exercise of an ISO or the sale of ISO shares, including a
disqualifying disposition. The IRS is studying this position and may change it
at any time, possibly with retroactive effect.

Nonstatutory Stock Options

Award; Exercise. An optionee is not taxable upon the award of a NSO.
Federal income tax consequences upon exercise will depend upon whether the
shares thereby acquired are subject to a "substantial risk of forfeiture." If
the shares are not subject to a substantial risk of forfeiture, or if they are
so restricted and the optionee files an election under Section 83(b) of the Code
(a "Section 83(b) Election") with respect to the shares, the optionee will have
ordinary income at the time of exercise measured by the option spread on the
exercise date. The optionee's tax basis in the shares will be the shares fair
market value on the date of exercise, and the holding period for purposes of
determining whether capital gain or loss upon sale is long-term or short-term
also will begin on that date.

The amount of ordinary income taxable to an optionee who was an
employee at the time of grant constitutes "supplemental wages" subject to
withholding of income and employment taxes by the Company, and the Company
receives a corresponding income tax deduction.

Sale of Option Shares. Upon sale, other than to the Company, of shares
acquired under a NSO, an optionee generally will recognize capital gain or loss
to the extent of the difference between the sale price and the optionee's tax
basis in the shares, which will be long-term gain or loss if the employee's
holding period in the shares is more than one year. If stock is sold to the
Company rather than to a third party, the sale may not produce capital gain or
loss but will constitute a redemption of such shares, which could be taxable as
a dividend unless the redemption is "not essentially equivalent to a dividend"
within the meaning of the Code.

Exercise with Stock. If an optionee tenders common stock (other than
statutory option stock -- see above) to pay all or part of the exercise price of
a NSO, the optionee will not have a taxable gain or deductible loss on the
surrendered shares. Instead, shares acquired upon exercise that are equal in
value to the fair market value of the shares surrendered in payment are treated
as if they had been substituted for the surrendered shares, taking as their
basis and holding period the basis and holding period that the optionee had in
the surrendered shares. As described above, the optionee will have ordinary
income equal to the value of the additional shares, and the additional shares
are treated as newly acquired with a basis equal to their fair market value.

If the surrendered shares are statutory option stock as described above
under "Incentive Stock Options", with respect to which the applicable holding
period requirements for favorable income tax treatment have not expired, then
the newly acquired shares substituted for the statutory option shares should
remain subject to the

<PAGE>

federal income tax rules governing the surrendered shares, but the surrender
should not constitute a disqualifying disposition of the surrendered stock.

Awards

Upon receipt of an award of shares, a recipient generally has taxable
income in the amount of the excess of the then fair market value of the common
stock over any consideration paid for the common stock (the "spread"). However,
if the common stock is subject to a "substantial risk of forfeiture" (described
under "Incentive Stock Options," above) and the recipient does not make a
Section 83(b) Election, the recipient will have taxable income upon lapse of the
risk of forfeiture, rather than at receipt, in an amount equal to the spread on
the date of lapse. The taxable income constitutes supplemental wages subject to
income and employment tax withholding, and the Company receives a corresponding
income tax deduction. Supplemental wages are subject to federal income tax
withholding at a rate of 28 percent. The consequences upon sale or disposition
of the shares awarded or sold generally are the same as for common stock
acquired under a NSO (see above).

Special Federal Income Tax Consideration Due To Short Swing Profit Rule

The potential liability of a person subject to Section 16 of the
Exchange Act to repay short-swing profits from the resale of shares acquired
under a Company plan constitutes a "substantial risk of forfeiture" within the
meaning of the above-described rules, which is treated as lapsing at such time
as the potential liability under Section 16 lapses. Persons subject to Section
16 who would be required by Section 16 to repay profits from the immediate
resale of stock acquired under a Company plan should consider whether to file a
Section 83(b) Election at the time they acquire stock under a Company plan in
order to avoid deferral of the date that they are deemed to acquire shares for
federal income tax purposes.

Required Approval

In order to be adopted, a majority of the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote must vote on
this proposal, and it must receive the affirmative vote of a majority of the
shares voting.

The Board of Directors of the Company recommends a vote "FOR" the
approval of the amendment of the Company's Amended and Restated 1993 Stock Plan.

PROPOSAL 3

APPROVAL OF AMENDMENT OF THE
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

The Amended and Restated Neurobiological Technologies, Inc. Employee
Stock Purchase Plan (the "ESPP") was adopted by the Board of Directors in order
to provide employees of the Company an opportunity to purchase Common Stock
through payroll deductions on December 15, 1993, and approved by the
stockholders in January 1994. Originally, 50,000 shares of Common Stock were
reserved for issuance under ESPP, subject to anti-dilution provisions. On August
22, 1996, the Board of Directors amended and restated the ESPP to reserve an
additional 50,000 shares for issuance, and the increase was approved by the
Company's stockholders on November 14, 1996. The proposed amendment to reserve
an additional 50,000 shares was adopted by the Board of Directors on October 12,
1999, subject to the approval of the Company's stockholders at the Annual
Meeting.

Summary of Amendment

The amendment to the ESPP approved by the Board of Directors and
submitted for stockholder approval will increase the number of shares of Common
Stock reserved for issuance under the ESPP by 50,000 shares to a total of
150,000 shares. As of June 30, 1999, an aggregate of 24,977 shares were
available for issuance under the ESPP.

<PAGE>

Description of Amended and Restated Employee Stock Purchase Plan

Under the ESPP, an aggregate of 150,000 shares of Common Stock (which
number includes the 50,000-share increase that the stockholders are being asked
to approve) have been reserved for issuance, subject to the anti-dilution
provisions. As of June 30, 1999, 10 employees were eligible to participate in
the ESPP. Eligible employees participate in the ESPP by authorizing payroll
deductions of any whole percentage, not less than 1% nor more than 10%, of their
total cash compensation. No employee is permitted to purchase Common Stock under
the ESPP at a rate which exceeds $25,000 of the fair market value of Common
Stock (determined at the time the participant's rights are granted) per year. At
the end of each six month offering period, the Company will apply the amount
contributed by the participant during the offering period to purchase whole
shares of Common Stock, but not more than 2,500 shares.

All employees who have been employed by the Company for three
consecutive months and are customarily employed 20 or more hours a week and five
or more months each year are eligible to participate in the ESPP. Any eligible
employee may enroll in the ESPP by executing the enrollment form no later than
one week prior to the last working day prior to the commencement of the offering
period. The offering period consists of the 24-month period commencing on each
January 1 and July 1. Shares of Common Stock are purchased at 85% of the lower
of (i) the market price of Common Stock immediately before the beginning of the
applicable offering period or (ii) the market price of such Common Stock at the
time of the purchase.

The ESPP is administered by the Compensation Committee. The
Compensation Committee has the right to interpret the ESPP, adopt rules
thereunder and to make all other decisions relating to the operation of the
ESPP. The Board of Directors has the right to amend, suspend or terminate the
ESPP at any time and without notice. All expenses incurred in connection with
the implementation and administration of the ESPP will be paid by the Company.

The following table shows the number of shares of Common Stock
purchased by the named individuals and groups under the ESPP during fiscal 1999
and the "Dollar Value" of those shares. The "Dollar Value" is the difference
between the fair market value of the Common Stock on the dates of purchase and
the participant's purchase price.

Plan Benefits
Employee Stock Purchase Plan
----------------------------

Number
Name of Shares Dollar Value ($)
---- --------- ----------------

Paul E. Freiman, ........................... 0 --
President & CEO

Lisa U. Carr, M.D., Ph.D., ................. 2,214 $ 941
Vice President Medical Affairs

Calvert Y. Yee, ............................ 0 --
Vice President, Operations and
Administration

All executive officers as a group .......... 2,214 $ 941
(3 Persons)

All directors who are not executive ........ 0 --
officers as a group

All employees (other than executive ........ 7,650 $ 3,251
officers) as a group

<PAGE>

Certain Federal Income Tax Consequences

In general, participants will not have taxable income or loss under the
ESPP until they sell or otherwise dispose of shares acquired under the ESPP (or
die holding such shares). If the shares are held, as of the date of sale or
disposition, for longer than both: (i) two years after the beginning of the
offering period during which the shares were purchased; and (ii) one year
following purchase, a participant will have taxable ordinary income equal to 15%
of the fair market value of the shares on the first day of the offering period
(but not in excess of the gain on the sale). The IRS has recently taken the
position that this amount is subject to withholding of employment (but not
income) taxes when the participants purchase the shares. Any additional gain
from the sale will be long-term capital gain. The Company is not entitled to an
income tax deduction if the holding periods are satisfied.

If the shares are disposed of before the expiration of both of the
foregoing holding periods (a "disqualifying disposition"), a participant will
have taxable ordinary income equal to the excess of the fair market value of the
shares on the purchase date over the purchase price. In addition, the
participant will have taxable capital gain (or loss) measured by the difference
between the sale price and the participant's purchase price plus the amount of
ordinary income recognized, which gain (or loss) will be long-term if the shares
have been held as of the date of sale for more than one year. The Company is
entitled to an income tax deduction equal to the amount of ordinary income
recognized by a participant in a disqualifying disposition.

Required Approval

The Board of Directors recommends a vote "FOR" the adoption of the
amendment of the Company's Amended and Restated Employee Stock Purchase Plan.

PROPOSAL 4

RATIFICATION OF INDEPENDENT AUDITORS

The Board of Directors has appointed the firm of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ended June 30, 2000,
subject to ratification by the stockholders. Ernst & Young LLP has audited the
Company's financial statements since fiscal 1992. Representatives of Ernst &
Young LLP are expected to be present at the Company's Annual Meeting. They will
have an opportunity to make a statement, if they desire to do so, and will be
available to respond to appropriate questions.

Required Approval

In order to be adopted, a majority of the shares entitled to vote must
vote on this proposal, and it must receive the affirmative vote of a majority of
the shares voting.

The Board of Directors recommends a vote "FOR" ratification of Ernst &
Young LLP as the Company's independent auditors.

<PAGE>

OTHER INFORMATION

A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1999 is enclosed with this proxy statement.

STOCKHOLDER PROPOSALS

Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 2000 Annual Meeting must be
received by the Secretary of the Company no later than June 9, 2000. Such
proposals may be included in the Company's proxy statement and form of proxy
relating to that meeting if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.

OTHER MATTERS

The Company knows of no other business that will be presented at the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
accordance with the judgment of the persons voting the proxies.

BY ORDER OF THE BOARD OF DIRECTORS,

/s/ Paul E. Freiman
Paul E. Freiman
President and Chief Executive Officer

Richmond, California
October 21, 1999

YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTPAID ENVELOPE.

<PAGE>

APPENDIX A

1993 STOCK PLAN OF
NEUROBIOLOGICAL TECHNOLOGIES, INC.

SECTION 1. ESTABLISHMENT AND PURPOSE.

Its purpose is to offer directors and selected employees, advisors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, by purchasing Shares of the Company's
Common Stock. The Plan provides both for the direct award or sale of Shares and
for the grant of Options to purchase Shares. Options granted under the Plan may
include Nonstatutory Options as well as Incentive Stock Options intended to
qualify under section 422 of the Code.

The Plan is intended to comply in all respects with Rule 16b 3 (or its
successor) under the Exchange Act and shall be construed accordingly.

SECTION 2. DEFINITIONS.

(a) "Board of Directors" shall mean the Board of Directors of the
Company, as constituted from time to time.

(b) "Change in Control" shall mean the occurrence of either of the
following events:

(i) A change in the composition of the Board of Directors, as a
result of which fewer than one-half of the incumbent directors are directors who
either:

(A) Had been directors of the Company 24 months prior to such
change; or

(B) Were elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least a majority of the directors who
had been directors of the Company 24 months prior to such change and who were
still in office at the time of the election or nomination; or

(ii) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) by the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 30 percent or more of the combined voting power of the
Company's then outstanding securities ordinarily (and apart from rights accruing
under special circumstances) having the right to vote at elections of directors
(the "Base Capital Stock"); except that any change in the relative beneficial
ownership of the Company's securities by any person resulting solely from a
reduction in the aggregate number of outstanding shares of Base Capital Stock,
and any decrease thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly,
such person's beneficial ownership of any securities of the Company.

(d) "Committee" shall mean a committee of the Board of Directors, as
described in Section 3(a).

(e) "Company" shall mean Neurobiological Technologies, Inc., a Delaware
corporation.

(f) "Employee" shall mean (i) any individual who is a common-law
employee of the Company or of a Subsidiary, (ii) an Outside Director and (iii)
an independent contractor who performs services for the Company or a Subsidiary
and who is not a member of the Board of Directors. Service as an Outside
Director or independent contractor shall be considered employment for all
purposes of the Plan, except as provided in Subsections (a) and (b) of Section
4.

A-1

<PAGE>

(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

(h) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.

(i) "Fair Market Value" shall mean the market price of Stock,
determined by the Committee as follows:

(i) If Stock was traded over-the-counter on the date in question
but was not traded on the Nasdaq Stock Market or the Nasdaq National Market,
then the Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which Stock is quoted or, if the
Stock is not quoted on any such system, by the "Pink Sheets" published by the
National Quotation Bureau, Inc.;

(ii) If Stock was traded over-the-counter on the date in question
and was traded on the Nasdaq Stock Market or the Nasdaq National Market, then
the Fair Market Value shall be equal to the last-transaction price quoted for
such date by the Nasdaq Stock Market or the Nasdaq National Market;

(iii) If Stock was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite-transactions report for such date; and

(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Western Edition of The
Wall Street Journal. Such determination shall be conclusive and binding on all
persons.

(j) "ISO" shall mean an employee incentive stock option described in
section 422(b) of the Code.

(k) "Nonstatutory Option" shall mean a stock option not described in
sections 422(b) or 423(b) of the Code.

(l) "Offeree" shall mean an individual to whom the Committee has
offered the right to acquire Shares under the Plan (other than upon exercise of
an Option).

(m) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.

(n) "Optionee" shall mean an individual who holds an Option.

(o) "Outside Director" shall mean a member of the Board of Directors
who is not a common-law employee of the Company or of a Subsidiary.

(p) "Plan" shall mean this 1993 Stock Plan of Neurobiological
Technologies, Inc., as amended from time to time.

(q) "Purchase Price" shall mean the consideration for which one Share
may be acquired under the Plan (other than upon exercise of an Option), as
specified by the Committee.

(r) "Service" shall mean service as an Employee.

(s) "Share" shall mean one share of Stock, as adjusted in accordance
with Section 9 (if applicable).

(t) "Stock" shall mean the Common Stock of the Company.

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(u) "Stock Option Agreement" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.

(v) "Stock Purchase Agreement" shall mean the agreement between the
Company and an Offeree who acquires Shares under the Plan which contains the
terms, conditions and restrictions pertaining to the acquisition of such Shares.

(w) "Subsidiary" shall mean any corporation, if the Company and/or one
or more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

(x) "Total and Permanent Disability" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.

SECTION 3. ADMINISTRATION.

(a) Committee Membership. The Plan shall be administered by the
Committee. The Committee shall consist of two or more disinterested directors of
the Company and shall meet such other requirements as may be established from
time to time by the Securities and Exchange Commission for plans intended to
qualify for exemption under Rule 16b 3 (or its successor) under the Exchange
Act. The Board of Directors may appoint a separate committee of the Board of
Directors, composed of one or more directors of the Company who need not be
disinterested directors, who may administer the Plan with respect to Employees
who are not officers or directors of the Company, may grant Shares and Options
under the Plan to such Employees and may determine the timing, number of Shares
and other terms of such grants.

(b) Disinterested Directors. A member of the Board of Directors shall
be deemed "disinterested" only if he or she satisfies:

(i) Such requirements as the Securities and Exchange Commission
may establish for disinterested administrators of plans designed to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and

(ii) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify for
exemption under section 162(m)(4)(C) of the Code.

An Outside Director shall not fail to be "disinterested" solely because
he or she receives the Nonstatutory Options described in Section 4(b).

(c) Committee Procedures. The Committee shall designate one of its
members as chairman. The Committee may hold meetings at such times and places as
it shall determine. The acts of a majority of the Committee members present at
meetings at which a quorum exists, or acts reduced to or approved in writing by
all Committee members, shall be valid acts of the Committee.

(d) Committee Responsibilities. Subject to the provisions of the Plan,
the Committee shall have full authority and discretion to take the following
actions:

(i) To interpret the Plan and to apply its provisions;

(ii) To adopt, amend or rescind rules, procedures and forms
relating to the Plan;

(iii) To authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of the Plan;

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(iv) To determine when Shares are to be awarded or offered for
sale and when Options are to be granted under the Plan;

(v) To select the Offerees and Optionees;

(vi) To determine the number of Shares to be offered to each
Offeree or to be made subject to each Option;

(vii) To prescribe the terms and conditions of each award or sale
of Shares, including (without limitation) the Purchase Price, and to specify the
provisions of the Stock Purchase Agreement relating to such award or sale;

(viii) To prescribe the terms and conditions of each Option,
including (without limitation) the Exercise Price, to determine whether such
Option is to be classified as an ISO or as a Nonstatutory Option, and to specify
the provisions of the Stock Option Agreement relating to such Option;

(ix) To amend any outstanding Stock Purchase Agreement or Stock
Option Agreement, subject to applicable legal restrictions and to the consent of
the Offeree or Optionee who entered into such agreement;

(x) To prescribe the consideration for the grant of each Option or
other right under the Plan and to determine the sufficiency of such
consideration; and

(xi) To take any other actions deemed necessary or advisable for
the administration of the Plan.

All decisions, interpretations and other actions of the Committee shall
be final and binding on all Offerees, all Optionees, and all persons deriving
their rights from an Offeree or Optionee. No member of the Committee shall be
liable for any action that he or she has taken or has failed to take in good
faith with respect to the Plan, any Option, or any right to acquire Shares under
the Plan.

SECTION 4. ELIGIBILITY.

(a) General Rules. Only Employees (including, without limitation,
independent contractors who are not members of the Board of Directors) shall be
eligible for designation as Optionees or Offerees by the Committee. In addition,
only Employees who are common-law employees of the Company or a Subsidiary shall
be eligible for the grant of ISOs. Employees who are Outside Directors shall
only be eligible for the grant of the Nonstatutory Options described in
Subsection (b) below.

(b) Outside Directors. Any other provision of the Plan notwithstanding,
the participation of Outside Directors in the Plan shall be subject to the
following restrictions:

(i) An Outside Director who first becomes a member of the Board of
Directors after February 15, 1994, shall receive a one-time grant of a
Nonstatutory Option (subject to adjustment under Section 9). Such Nonstatutory
Option shall be granted on the date when such Outside Director first joins the
Board of Directors. The foregoing notwithstanding, no grant under this Paragraph
(ii) shall be made to a new Outside Director if he or she replaces a former
Outside Director and the new and former Outside Directors are both affiliated
with the same investment fund or similar entity.

(ii) Upon the conclusion of each regular annual meeting of the
Company's stockholders, each Outside Director who will continue serving as a
member of the Board of Directors thereafter shall receive a Nonstatutory Option
covering 1,000 Shares (subject to adjustment under Section 9), except that such
Nonstatutory Option shall not be granted in the calendar year in which the same
Outside Director received a Nonstatutory Option described in Paragraph (ii)
above.

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(iii) All Nonstatutory Options granted to an Outside Director
under this Subsection (b) shall become exercisable in full on the first
anniversary of the date of grant. All such Nonstatutory Options shall also
become exercisable in full in the event of (A) a Change in Control or (B) the
termination of the Outside Director's service because of death, Total and
Permanent Disability or retirement at or after age 65.

(iv) The Exercise Price under all Nonstatutory Options granted to
an Outside Director under this Subsection (b) shall be equal to 100 percent of
the Fair Market Value of a Share on the date of grant, payable in one of the
forms described in Subsection (a), (b), (c) or (d) of Section 8.

(v) All Nonstatutory Options granted to an Outside Director under
this Subsection (b) shall terminate on the earliest of (A) the 10th anniversary
of the date of grant, (B) the date three months after the termination of such
Outside Director's service for any reason other than death or Total and
Permanent Disability or (C) the date 12 months after the termination of such
Outside Director's service because of death or Total and Permanent Disability.

(vi) A Nonstatutory Option grant to an Outside Director under this
Subsection (b) shall be invalid if such Outside Director declines to execute a
Stock Option Agreement pursuant to Section 7(a).

The Committee may provide that the Nonstatutory Options that otherwise
would be granted to an Outside Director under this Subsection (b) shall instead
be granted to an affiliate of such Outside Director. Such affiliate shall then
be deemed to be an Outside Director for purposes of the Plan, provided that the
service-related vesting and termination provisions pertaining to the
Nonstatutory Options shall be applied with regard to the service of the Outside
Director.

(c) Ten-Percent Stockholders. An Employee who owns more than 10 percent
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless (i) the Exercise Price is at least 110 percent of the Fair Market Value
of a Share on the date of grant and (ii) such ISO by its terms is not
exercisable after the expiration of five years from the date of grant.

(d) Attribution Rules. For purposes of Subsection (c) above, in
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for such Employee's brothers, sisters, spouse,
ancestors and lineal descendants. Stock owned, directly or indirectly, by or for
a corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.

(e) Outstanding Stock. For purposes of Subsection (c) above,
"outstanding stock" shall include all stock actually issued and outstanding
immediately after the grant. "Outstanding stock" shall not include shares
authorized for issuance under outstanding options held by the Employee or by any
other person.

SECTION 5. STOCK SUBJECT TO PLAN.

(a) Basic Limitation. Shares offered under the Plan shall be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares which is
issued under the Plan to all Employees (upon exercise of Options or other rights
to acquire Shares) shall not exceed 2,500,000 Shares, subject to adjustment
pursuant to Section 9. The number of Shares which are subject to Options or
other rights outstanding at any time under the Plan shall not exceed the number
of Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.

(b) Additional Shares. In the event that any outstanding Option or
other right for any reason expires or is canceled or otherwise terminated, the
Shares allocable to the unexercised portion of such Option or other right shall
again be available for the purposes of the Plan. In the event that Shares issued
under the Plan are reacquired by the Company pursuant to a forfeiture provision,
a right of repurchase or a right of first refusal, such Shares shall again be
available for the purposes of the Plan.

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SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.

(a) Stock Purchase Agreement. Each award or sale of Shares under
the Plan (other than upon exercise of an Option) shall be evidenced by a Stock
Purchase Agreement between the Offeree and the Company. Such award or sale shall
be subject to all applicable terms and conditions of the Plan and may be subject
to any other terms and conditions which are not inconsistent with the Plan and
which the Committee deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered into
under the Plan need not be identical.

(b) Duration of Offers and Nontransferability of Rights. Any right
to acquire Shares under the Plan (other than an Option) shall automatically
expire if not exercised by the Offeree within 30 days after the grant of such
right was communicated to the Offeree by the Committee. Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such right was
granted.

(c) Purchase Price. The Purchase Price of Shares to be offered under
the Plan shall not be less than the par value of such Shares. Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee at
its sole discretion. The Purchase Price shall be payable in a form described in
Section 8.

(d) Withholding Taxes. As a condition to the award, sale or vesting of
Shares, the Offeree shall make such arrangements as the Committee may require
for the satisfaction of any federal, state, local or foreign withholding tax
obligations that arise in connection with such Shares. The Committee may permit
the Offeree to satisfy all or part of his or her tax obligations related to such
Shares by having the Company withhold a portion of any Shares that otherwise
would be issued to him or her or by surrendering any Shares that previously were
acquired by him or her. The Shares withheld or surrendered shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. The payment of taxes by assigning Shares to the Company, if permitted by
the Committee, shall be subject to such restrictions as the Committee may
impose, including any restrictions required by rules of the Securities and
Exchange Commission.

(e) Restrictions on Transfer of Shares. Any Shares awarded or sold
under the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Purchase Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS.

(a) Stock Option Agreement. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement executed by the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.

(b) Number of Shares. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 9. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option. Options granted to any Optionee in a single fiscal year shall in no
event cover more than 250,000 Shares, subject to adjustment in accordance with
Section 9.

(c) Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than 100 percent
of the Fair Market Value of a Share on the date of grant, except as otherwise
provided in Section 4(c). The Exercise Price of a Nonstatutory Option shall not
be less than the par value of a Share. Subject to the preceding two sentences,
the Exercise Price under any Option shall be determined by the Committee at its
sole discretion. The Exercise Price shall be payable in a form described in
Section 8.

(d) Withholding Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding

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tax obligations that arise in connection with such exercise. The Optionee shall
also make such arrangements as the Committee may require for the satisfaction of
any federal, state, local or foreign withholding tax obligations that may arise
in connection with the disposition of Shares acquired by exercising an Option.
The Committee may permit the Optionee to satisfy all or part of his or her tax
obligations related to the Option by having the Company withhold a portion of
any Shares th at otherwise would be issued to him or her or by surrendering any
Shares that previously were acquired by him or her. Such Shares shall be valued
at their Fair Market Value on the date when taxes otherwise would be withheld in
cash. The payment of taxes by assigning Shares to the Company, if permitted by
the Committee, shall be subject to such restrictions as the Committee may
impose, including any restrictions required by rules of the Securities and
Exchange Commission.

(e) Exercisability. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. The vesting
of any Option shall be determined by the Committee at its sole discretion. A
Stock Option Agreement may provide for accelerated exercisability in the event
of a Change in Control, in the event of the Optionee's death, Total and
Permanent Disability or retirement or upon other events.

(f) Term. Each Stock Option Agreement shall specify the term of the
Option. The term of an ISO shall not exceed 10 years from the date of grant,
except as otherwise provided in Section 4(c). Subject to the preceding sentence,
the Committee at its sole discretion shall determine when an Option is to
expire. A Stock Option Agreement may provide that the Option will expire before
the end of its normal term in the event that the Optionee's Service terminates.

(g) Nontransferability. During an Optionee's lifetime, such Optionee's
Option(s) shall be exercisable only by him or her and shall not be transferable.
In the event of an Optionee's death, such Optionee's Option(s) shall not be
transferable other than by will, by written beneficiary designation or by the
laws of descent and distribution.

(h) No Rights as a Stockholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustments shall be made, except as provided in
Section 9.

(i) Modification, Extension and Renewal of Options. Within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not
previously exercised) in return for the grant of new Options at the same or a
different price. The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, impair such Optionee's rights or
increase his or her obligations under such Option.

(j) Restrictions on Transfer of Shares. Any Shares issued upon exercise
of an Option may be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.

SECTION 8. PAYMENT FOR SHARES.

(a) General Rule. The entire Purchase Price or Exercise Price of
Shares issued under the Plan shall be payable in lawful money of the United
States of America at the time when such Shares are purchased, except as follows:

(i) In the case of Shares sold under the terms of a Stock Purchase
Agreement subject to the Plan, payment shall be made only pursuant to the
express provisions of such Stock Purchase Agreement. However, the Committee (at
its sole discretion) may specify in the Stock Purchase Agreement that payment
may be made in one or both of the forms described in Subsections (e) and (f)
below.

(ii) In the case of an ISO granted under the Plan, payment shall
be made only pursuant to the express provisions of the applicable Stock Option
Agreement. However, the Committee (at its sole discretion) may specify in the
Stock Option Agreement that payment may be made pursuant to Subsections (b),
(c), (d) or (f) below.

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(iii) In the case of a Nonstatutory Option granted under the Plan,
the Committee (at its sole discretion) may accept payment pursuant to
Subsections (b), (c), (d) or (f) below.

(b) Surrender of Stock. To the extent that this Subsection (b) is
applicable, payment may be made all or in part with Shares which have already
been owned by the Optionee or his or her representative for more than 12 months
and which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.

(c) Exercise/Sale. To the extent that this Subsection (c) is
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by the
Company to sell Shares and to deliver all or part of the sales proceeds to the
Company in payment of all or part of the Exercise Price and any withholding
taxes.

(d) Exercise/Pledge. To the extent that this Subsection (d) is
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

(e) Services Rendered. To the extent that this Subsection (e) is
applicable, Shares may be awarded under the Plan in consideration of services
rendered to the Company or a Subsidiary prior to the award. If Shares are
awarded without the payment of a Purchase Price in cash, the Committee shall
make a determination (at the time of the award) of the value of the services
rendered by the Offeree and the sufficiency of the consideration to meet the
requirements of Section 6(c).

(f) Promissory Note. To the extent that this Subsection (f) is
applicable, a portion of the Purchase Price or Exercise Price, as the case may
be, of Shares issued under the Plan may be payable by a full-recourse promissory
note, provided that (i) the par value of such Shares must be paid in lawful
money of the United States of America at the time when such Shares are
purchased, (ii) the Shares are security for payment of the principal amount of
the promissory note and interest thereon and (iii) the interest rate payable
under the terms of the promissory note shall be no less than the minimum rate
(if any) required to avoid the imputation of additional interest under the Code.
Subject to the foregoing, the Committee (at its sole discretion) shall specify
the term, interest rate, amortization requirements (if any) and other provisions
of such note.

SECTION 9. ADJUSTMENT OF SHARES.

(a) General. In the event of a subdivision of the outstanding
Stock, a declaration of a dividend payable in Shares, a declaration of a
dividend payable in a form other than Shares in an amount that has a material
effect on the value of Shares, a combination or consolidation of the outstanding
Stock (by reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
appropriate adjustments in one or more of (i) the number of Shares available
under Section 5 for future grants to all Employees, (ii) the number of
Nonstatutory Options to be granted to Outside Directors under Section 4(b),
(iii) the number of Shares covered by each outstanding Option or (iv) the
Exercise Price under each outstanding Option.

(b) Reorganizations. In the event that the Company is a party to a
merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding Options by the surviving
corporation or its parent, for their continuation by the Company (if the Company
is a surviving corporation), for payment of a cash settlement equal to the
difference between the amount to be paid for one Share under such agreement and
the Exercise Price, or for the acceleration of their exercisability followed by
the cancellation of Options not exercised, in all cases without the Optionees'
consent. Any cancellation shall not occur until after such acceleration is
effective and Optionees have been notified of such acceleration. In the case of
Options that have been outstanding for less than 12 months, a cancellation need
not be preceded by an acceleration.

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(c) Reservation of Rights. Except as provided in this Section 9,
an Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class.
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

SECTION 10. SECURITIES LAWS.

Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares complies with (or is exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange on which the
Company's securities may then be listed.

SECTION 11. NO RETENTION RIGHTS.

Neither the Plan nor any Option shall be deemed to give any individual
a right to remain an employee, consultant or director of the Company or a
Subsidiary. The Company and its Subsidiaries reserve the right to terminate the
service of any employee, consultant or director at any time, with or without
cause, subject to applicable laws, the Company's certificate of incorporation
and by-laws and a written employment agreement (if any).

SECTION 12. DURATION AND AMENDMENTS.

(a) Term of the Plan. The Plan, as set forth herein, shall become
effective as of November 16, 1994, subject to the approval of the Company's
stockholders. The Plan, if not extended, shall terminate automatically on
September 30, 2004. It may be terminated on any earlier date pursuant to
Subsection (b) below.

(b) Right to Amend or Terminate the Plan. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason, except that
the provisions of Section 4(b) relating to the amount, price and timing of
grants to Outside Directors shall not be amended more than once in any six-month
period. An amendment of the Plan shall be subject to the approval of the
Company's stockholders only to the extent required by applicable laws or
regulations.

(c) Effect of Amendment or Termination. No Shares shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.

SECTION 13. EXECUTION.

To record the amendment and restatement of the Plan by the Board of
Directors, the Company has caused its authorized officer to execute the same.

NEUROBIOLOGICAL TECHNOLOGIES, INC.

By /s/ Paul E. Freiman
-------------------------------------------
President and Chief Executive Officer

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APPENDIX B

AMENDED AND RESTATED
NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN

1. PURPOSE OF THE PLAN.

The Plan was adopted by the Company's Board of Directors on December
15, 1993, approved by the Company's stockholders in January 1994 and amended and
restated by the Company's Board of Directors on August 22, 1996, and approved by
the stockholders on November 14, 1996.

The purpose of the Plan is to provide Eligible Employees with an
opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such
purchases through payroll deductions. The Plan is intended to qualify under
section 423 of the Internal Revenue Code of 1986, as amended.

2. ADMINISTRATION OF THE PLAN.

(a) The Committee. The Plan shall be administered by the Committee. The
interpretation and construction by the Committee of any provision of the Plan or
of any right to purchase Stock granted under the Plan shall be conclusive and
binding on all persons.

(b) Rules and Forms. The Committee may adopt such rules and forms under
the Plan as it considers appropriate.

3. ENROLLMENT AND PARTICIPATION.

(a) Offering Periods. While the Plan is in effect, two overlapping
Offering Periods shall commence in each calendar year. The Offering Periods
shall consist of the 24-month periods commencing on each January 1 and July 1.

(b) Accumulation Periods. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. The Accumulation Periods shall
consist of the six-month periods commencing on each January 1 and July 1.

(c) Enrollment. Any individual who, on the day preceding the first day
of an Offering Period, qualifies as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the enrollment
form prescribed for this purpose by the Committee. The enrollment form shall be
filed with the Company not later than one week prior to the last working day
prior to the commencement of such Offering Period.

(d) Duration of Participation. Once enrolled in the Plan, a Participant
shall continue to participate until he or she ceases to be an Eligible Employee,
withdraws from the Plan or reaches the end of the Accumulation Period in which
he or she discontinued contributions. A Participant who discontinued
contributions under Section 4(d) or withdrew from the Plan under Section 5(a)
may again become a Participant, if he or she then is an Eligible Employee, by
following the procedure described in Subsection (c) above.

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(e) Applicable Offering Period. For purposes of calculating the
Purchase Price under Section 7(b), the applicable Offering Period shall be
determined as follows:

(i) Once a Participant is enrolled in the Plan for an Offering
Period, such Offering Period shall continue to apply to him or her until the
earliest of (A) the end of such Offering Period, (B) the end of his or her
participation under Subsection (d) above or (C) reenrollment in a subsequent
Offering Period under Paragraph (ii) below.

(ii) In the event that the Fair Market Value of Stock on the last
trading day before the commencement of the Offering Period in which the
Participant is enrolled is higher than on the last trading day before the
commencement of any subsequent Offering Period, the Participant shall
automatically be re-enrolled for such subsequent Offering Period.

(iii) When a Participant reaches the end of an Offering Period but
his or her participation is to continue, then such Participant shall
automatically be re-enrolled for the Offering Period that commences immediately
after the end of the prior Offering Period.

4. EMPLOYEE CONTRIBUTIONS.

(a) Frequency of Payroll Deductions. A Participant may purchase shares
of Stock under the Plan solely by means of payroll deductions. Payroll
deductions, as designated by the Participant pursuant to Subsection (b) below,
shall occur on each payday during participation in the Plan.

(b) Amount of Payroll Deductions. An Eligible Employee shall designate
on the enrollment form the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock. Such portion shall be a whole
percentage of the Eligible Employee's Compensation, but not less than 1% nor
more than 10%.

(c) Changing Withholding Rate. If a Participant wishes to change the
rate of payroll withholding, he or she may do so by filing a new enrollment form
with the Company not later than one week prior to the last working day prior to
the commencement of the Accumulation Period for which such change is to be
effective.

(d) Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new
enrollment form at any time. Payroll withholding shall cease as soon as
reasonably practicable after such form has been received by the Company.

5. WITHDRAWAL FROM THE PLAN.

(a) Withdrawal. A Participant may elect to withdraw from the Plan by
filing the prescribed form with the Company at any time before the last day of
an Accumulation Period. As soon as reasonably practicable thereafter, payroll
deductions shall cease and the entire amount credited to the Participant's Plan
Account shall be refunded to him or her in cash, without interest. No partial
withdrawals shall be permitted.

(b) Re-Enrollment After Withdrawal. A former Participant who has
withdrawn from the Plan shall not be a Participant until he or she re-enrolls in
the Plan under Section 3(b).

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6. TERMINATION OF EMPLOYMENT OR DEATH.

(a) Termination of Employment. Termination of employment as an Eligible
Employee for any reason, including death, shall be treated as an automatic
withdrawal from the Plan under Section 5(a). (A transfer from one Participating
Company to another shall not be treated as a termination of employment.)

(b) Death. In the event of the Participant's death, the amount credited
to his or her Plan Account shall be paid to a beneficiary designated by him or
her for this purpose on the prescribed form or, if none, to the Participant's
estate. Such form shall be valid only if it was filed with the Company before
the Participant's death.

7. PLAN ACCOUNTS AND PURCHASE OF SHARES.

(a) Plan Accounts. The Company shall maintain a Plan Account on its
books in the name of each Participant. Whenever an amount is deducted from the
Participant's Compensation under the Plan, such amount shall be credited to the
Participant's Plan Account. No interest shall be credited to Plan Accounts.

(b) Purchase Price. The Purchase Price for each share of Stock
purchased at the close of an Accumulation Period shall be the lower of:

(i) 85% of the Fair Market Value of such share on the last trading
day before the commencement of the applicable Offering Period (as determined
under Section 3(e)); or

(ii) 85% of the Fair Market Value of such share on the last
trading day in such Accumulation Period.

(c) Number of Shares Purchased. As of the last day of each Accumulation
Period, each Participant shall be deemed to have elected to purchase the number
of shares of Stock calculated in accordance with this Subsection (c), unless the
Participant has previously elected to withdraw from the Plan in accordance with
Section 5(a). The amount then in the Participant's Plan Account shall be divided
by the Purchase Price, and the number of shares that results shall be purchased
from the Company with the funds in the Participant's Plan Account. The foregoing
notwithstanding, no Participant shall purchase more than a maximum of 2,500
shares of Stock with respect to any Accumulation Period nor shares of Stock in
excess of the amounts set forth in Sections 8 and 12(a). The Committee may
determine with respect to all Participants that any fractional share, as
calculated under this Subsection (c), shall be rounded down to the next lower
whole share.

(d) Available Shares Insufficient. In the event that the aggregate
number of shares that all Participants elect to purchase during an Accumulation
Period exceeds the maximum number of shares remaining available for issuance
under Section 12(a), then the number of shares to which each Participant is
entitled shall be determined by multiplying the number of shares available for
issuance by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.

(e) Issuance of Stock. Certificates representing the shares of Stock
purchased by a Participant under the Plan shall be issued to him or her as soon
as reasonably practicable after the close of the applicable Accumulation Period,
except that the Committee may determine that such shares shall be held for each
Participant's benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares may
be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property.

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<PAGE>

(f) Unused Cash Balances. An amount remaining in the Participant's Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant's Plan Account to the next Accumulation Period.
Any amount remaining in the Participant's Plan Account that represents the
Purchase Price for whole shares that could not be purchased by reason of
Subsection (c) above or Section 12(a) shall be refunded to the Participant in
cash, without interest.

8. LIMITATIONS ON STOCK OWNERSHIP.

Any other provision of the Plan notwithstanding, no Participant shall be granted
a right to purchase Stock under the Plan if:

(a) Such Participant, immediately after his or her election to purchase
such Stock, would own stock possessing more than 5% of the total combined voting
power or value of all classes of stock of the Company or any parent or
Subsidiary of the Company; or

(b) Under the terms of the Plan, such Participant's rights to purchase
stock under this and all other qualified employee stock purchase plans of the
Company or any parent or Subsidiary of the Company would accrue at a rate that
exceeds $25,000 of the fair market value of such stock (determined at the time
when such right is granted) for each calendar year for which such right or
option is outstanding at any time.

Ownership of stock shall be determined after applying the attribution
rules of section 424(d) of the Internal Revenue Code of 1986, as amended. For
purposes of this Section 8, each Participant shall be considered to own any
stock that he or she has a right or option to purchase under this or any other
plan, and each Participant shall be considered to have the right to purchase
2,500 shares of Stock under this Plan with respect to each Accumulation Period.

9. RIGHTS NOT TRANSFERABLE.

The rights of any Participant under the Plan, or any Participant's
interest in any Stock or moneys to which he or she may be entitled under the
Plan, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or in any other manner other than by beneficiary designation
or the laws of descent and distribution. If a Participant in any manner attempts
to transfer, assign or otherwise encumber his or her rights or interest under
the Plan, other than by beneficiary designation or the laws of descent and
distribution, then such act shall be treated as an election by the Participant
to withdraw from the Plan under Section 5(a).

10. NO RIGHTS AS AN EMPLOYEE.

Nothing in the Plan shall be construed to give any person the right to
remain in the employ of a Participating Company. Each Participating Company
reserves the right to terminate the employment of any person at any time, with
or without cause.

11. NO RIGHTS AS A STOCKHOLDER.

A Participant shall have no rights as a stockholder with respect to any
shares that he or she has purchased, or may have a right to purchase, under the
Plan until the date of issuance of a stock certificate for such shares.

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<PAGE>

12. STOCK OFFERED UNDER THE PLAN.

(a) Authorized Shares. The aggregate number of shares of Stock
available for purchase under the Plan shall be 150,000, subject to adjustment
pursuant to this Section 12.

(b) Anti-Dilution Adjustments. The aggregate number of shares of Stock
offered under the Plan, the 2,500-share limitation described in Section 7(c) and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or
consolidation of shares, the payment of a stock dividend, any other increase or
decrease in such shares effected without receipt or payment of consideration by
the Company or the distribution of the shares of a Subsidiary to the Company's
stockholders.

(c) Reorganizations. In the event of a dissolution or liquidation of
the Company, or a merger or consolidation to which the Company is a constituent
corporation, the Plan shall terminate unless the plan of merger, consolidation
or reorganization provides otherwise, and all amounts that have been withheld
but not yet applied to purchase Stock hereunder shall be refunded, without
interest. The Plan shall in no event be construed to restrict in any way the
Company's right to undertake a dissolution, liquidation, merger, consolidation
or other reorganization.

13. AMENDMENT OR DISCONTINUANCE.

The Board of Directors shall have the right to amend, suspend or
terminate the Plan at any time and without notice. Except as provided in Section
12, any increase in the aggregate number of shares of Stock to be issued under
the Plan shall be subject to approval by a vote of the stockholders of the
Company. In addition, any other amendment of the Plan shall be subject to
approval by a vote of the stockholders of the Company to the extent required by
an applicable law or regulation.

14. DEFINITIONS.

(a) "Accumulation Period" means a six-month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).

(b) "Board of Directors" means the Board of Directors of the Company,
as constituted from time to time.

(c) "Committee" means a committee of the Board of Directors, consisting
of one or more directors appointed by the Board of Directors.

(d) "Company" means Neurobiological Technologies, Inc., a Delaware
corporation.

(e) "Compensation" means the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses,
incentive compensation, commissions and overtime pay, but excluding moving or
relocation allowances, car allowances, imputed income attributable to cars or
life insurance, taxable fringe benefits and similar items, all as determined by
the Committee.

(f) "Eligible Employee" means any employee of a Participating Company:

(i) Whose customary employment is for more than five months per
calendar year and for more than 20 hours per week; and

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<PAGE>

(ii) Who has been an employee of a Participating Company for not
less than three consecutive months.

(g) "Fair Market Value" shall mean the market price of Stock,
determined by the Committee as follows:

(iii) If the Stock was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; and

(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of The Wall Street
Journal. Such determination shall be conclusive and binding on all persons.

(h) "Offering Period" means a 24-month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant to
Section 3(a).

(i) "Participant" means an Eligible Employee who elects to participate
in the Plan, as provided in Section 3(c).

(j) "Participating Company" means the Company and each present or
future Subsidiary, except Subsidiaries excluded by the Committee.

(k) "Plan" means this Neurobiological Technologies, Inc. Employee Stock
Purchase Plan, as amended from time to time.

(l) "Plan Account" means the account established for each Participant
pursuant to Section 6(a).

(m) Purchase Price" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 7(b).

(n) "Stock" means the Common Stock of the Company.

(o) "Subsidiary" means a corporation, 50% or more of the total combined
voting power of all classes of stock of which is owned by the Company or by
another Subsidiary.

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15. EXECUTION.

To record the amendment and restatement of the Plan by the Board of
Directors, the Company has caused its duly authorized officer to affix the
corporate name and seal hereto.

NEUROBIOLOGICAL TECHNOLOGIES, INC.

By /s/ Paul E. Freiman
-------------------------------------------
President and Chief Executive Officer

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APPENDIX C

PROXY NEUROBIOLOGICAL TECHNOLOGIES, INC. PROXY

P R O X Y

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Paul E. Freiman and Stephen C. Ferruolo
proxies, and hereby authorizes each of them to represent and vote as designated
on the other side, all the shares of stock of Neurobiological Technologies,
Inc. standing in the name of the undersigned with all powers which the
undersigned would possess if present at the Annual Meeting of Stockholders of
the company to be held November 11, 1999 or any adjournment thereof.

(Continued, and to be marked, dated and signed, on the other side)

- FOLD AND DETACH HERE -

<PAGE>

[X] Please mark
your votes
as this

WITHHOLD
FOR FOR ALL

ITEM 1--ELECTION OF [ ] [ ]
DIRECTORS
Nominees:
Paul E. Freiman,
Theodore L. Eliot, Jr., Abraham E. Cohen,
Abraham D. Solaer, Enoch Callaway, M.D.,
John B. Stuppin

WITHHELD FOR: (Write that nominee's name in the space
provided below.)

_____________________________

FOR AGAINST ABSTAIN

ITEM 2--APPROVAL OF AN AMENDMENT TO 1993 STOCK PLAN [ ] [ ] [ ]

ITEM 3--APPROVAL OF AN AMENDMENT TO [ ] [ ] [ ]
EMPLOYEE STOCK PURCHASE PLAN

ITEM 4--APPOINTMENT OF INDEPENDENT AUDITORS [ ] [ ] [ ]

Signature(s) ______________________________________ Date ______________ , 1999
Please date and sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.

- FOLD AND DETACH HERE -