Exhibit 10.4

Arena Pharmaceuticals, Inc., 2013 Long-Term Incentive Plan

Restricted Stock Unit Grant Agreement

THIS GRANT AGREEMENT (this “Agreement”), effective as of                     
(the “Grant Date”), is entered into by and between Arena Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), and                      (the
“Participant”).

1. Grant of Restricted Stock Units. The Company hereby grants to the Participant
             Restricted Stock Units. Each Restricted Stock Unit shall be deemed
to be the equivalent of one Share.

2. Subject to the Plan. This Agreement is subject to the provisions of the Arena
Pharmaceuticals, Inc., 2013 Long-Term Incentive Plan (the “Plan”). Certain terms
are defined in this Agreement, and, unless the context requires otherwise, other
capitalized terms used herein shall have the same meaning as in the Plan. Except
as provided herein, in the event of a conflict between the provisions of the
Plan and this Agreement, the Plan shall control.

3. Account. The Company shall credit to a bookkeeping account (the “Account”)
maintained by the Company for the Participant’s benefit the Restricted Stock
Units. On each date that cash dividends are paid on the Shares, the Company will
credit the Account with a number of additional Restricted Stock Units equal to
the result of dividing (i) the product of the total number of Restricted Stock
Units credited to the Account on the record date for such dividend and the per
Share amount of such dividend by (ii) the Fair Market Value of one Share on the
date such dividend is paid by the Company to stockholders. The additional
Restricted Stock Units shall be or become vested to the same extent as the
Restricted Stock Units that resulted in the crediting of such additional
Restricted Stock Units.

4. Vesting. Except as otherwise provided in this Agreement, provided the
Participant is then an Employee, a Consultant or a Director, the Restricted
Stock Units shall become vested on the following dates:

 

Vest Date

  

Vested Restricted

Stock Units

5. Capitalization Adjustments. The number of Restricted Stock Units credited to
the Account shall be equitably and appropriately adjusted as provided in
Section 12.2 of the Plan.

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6. Termination of Employment or Service.

(a) Termination of Employment or Service Other Than Due to [Retirement,
]Disability or Death. In the event the Participant ceases to be in the
continuous service of the Company or an Affiliate as any of an Employee, a
Consultant or a Director for any reason other than as a result of [Retirement,
]Disability or death, the Restricted Stock Units credited to the Account that
were not vested at the time the Participant ceases to be in the continuous
service of the Company or an Affiliate as any of an Employee, a Consultant or a
Director shall be immediately forfeited.

(b) [Retirement or ]Disability. [Upon the Retirement of the Participant or
][in/In] the event that the Participant ceases to be in the continuous service
of the Company or an Affiliate as any of an Employee, a Consultant or a Director
by reason of Disability, to the extent the Restricted Stock Units are not fully
vested, the Restricted Stock credited to the Account that were scheduled to vest
on or before the next anniversary of the Grant Date following the Participant’s
[Retirement or ]Disability shall become vested based on a fraction, the
numerator of which is the number of whole months elapsed since the prior
anniversary of the Grant Date (or, if applicable, the Grant Date) and the
denominator of which is 12.

[For purposes of this Agreement, “Retirement” shall mean termination of the
Participant’s continuous service for the Company or an Affiliate as any of an
Employee, a Consultant or a Director for any reason other than the Participant’s
Disability or death or termination by the Company for Cause if (i) the
Participant is then at least age 60 and (ii) the Participant has provided at
least ten (10) years of continuous service as an Employee to the Company and its
Affiliates.]

For purposes of this Agreement, “Disability” shall mean the Participant’s
becoming disabled within the meaning of Section 22(e)(3) of the Code, or as
otherwise determined by the Committee in its discretion. The Committee may
require such proof of Disability as the Committee in its sole and absolute
discretion deems appropriate and the Committee’s determination as to whether the
Participant has incurred a Disability shall be final and binding on all parties
concerned.

(c) Death. Upon the Participant’s death, to the extent the Restricted Stock
Units are not fully vested, the Restricted Stock Units credited to the Account
that were scheduled to vest on or before the next anniversary of the Grant Date
following the Participant’s death shall become vested based on a fraction, the
numerator of which is the number of whole months elapsed since the prior
anniversary of the Grant Date (or, if applicable, the Grant Date) and the
denominator of which is 12.

7. Payment of Shares. The Company shall make a payment to the Participant of
Shares based on the number of the vested Restricted Stock Units credited to the
Participant’s Account upon each applicable Vest Date of the Restricted Stock
Units as provided in Section 4 above, or other date that the Restricted Stock
Units earlier vest. However, if a scheduled delivery date falls on a date that
is not a trading day, such delivery date shall instead fall on the next
following trading day. Notwithstanding the foregoing, in the event that the
Company

 

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determines that any Shares are scheduled under this Agreement to be delivered on
a day (the “Original Distribution Date”) on which the Company determines that a
sale by the Participant of such Shares would (a) (i) violate the registration
requirements under the Securities Act or (ii) violate any of the provisions of
the federal securities laws (or any Company or, if applicable, Affiliate policy
related thereto) or (iii) violate a “lock-up” agreement undertaken in connection
with an issuance of securities by the Company or (iv) not be permitted under
applicable securities laws or Company policies by the Participant on the open
market and (b) the Company elects, prior to the Original Distribution Date, not
to satisfy its tax withholding obligation by withholding Shares from the Shares
otherwise due to the Participant on the Original Distribution Date under this
Agreement, then such Shares shall not be delivered on such Original Distribution
Date and shall instead be delivered as soon as practicable on the date on which
the sale of such Shares would not be in violation of any of such registration
requirements, the federal securities laws (or any Company or, if applicable,
Affiliate policy related thereto), lock-up agreement or would otherwise be
permitted under applicable securities laws or Company policies by the
Participant on the open market; provided, however, that in no event shall the
delivery of the Shares be delayed pursuant to this provision beyond the later of
(a) December 31 of the calendar year in which the Original Issuance Date occurs
(that is, the last day of the Participant’s taxable year in which the Original
Issuance Date occurs), and (b) if and only if permitted in a manner that
complies with U.S. Treasury Regulation Section 1.409A-1(b)(4), the date that is
the 15th day of the third calendar month of the year following the year in which
the Shares under this Agreement are no longer subject to a “substantial risk of
forfeiture” within the meaning of U.S. Treasury Regulation Section 1.409A-1(d).

8. Form of Payment. Payments pursuant to Section 7 shall be made in Shares equal
to the number of vested Restricted Stock Units credited to the Account.

9. Beneficiary. In the event of the Participant’s death prior to payment of the
Restricted Stock Units credited to the Account, payment shall be made to the
last beneficiary designated in writing that is received by the Company prior to
the Participant’s death or, if no designated beneficiary survives the
Participant, such payment shall be made to the Participant’s estate.

10. Change in Control; Corporate Transaction.

(a) Effect of Change in Control on Restricted Stock Units. In the event of a
Change in Control, the Surviving Corporation or the Parent Corporation, if
applicable, may assume, continue or substitute for the Restricted Stock Units
credited to the Account on substantially the same terms and conditions (which
may include settlement in the same consideration paid to the stockholders of the
Company pursuant to the Change in Control). In the event of a Change in Control,
to the extent the Surviving Corporation or the Parent Corporation, if
applicable, does not assume, continue or substitute for the Restricted Stock
Units credited to the Account on substantially the same terms and conditions
(which may include settlement in the same consideration paid to the stockholders
of the Company pursuant to the Change in Control), all such Restricted Stock
Units shall become fully vested immediately prior to the Change in Control if
the Participant is then an Employee, a Consultant or a Director. In the event of
a

 

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Change in Control, to the extent the Surviving Corporation or the Parent
Corporation, if applicable, assumes, continues or substitutes for the Restricted
Stock Units credited to the Account on substantially the same terms and
conditions (which may include settlement in the same consideration paid to the
stockholders of the Company pursuant to the Change in Control), if within 24
months following the date of the Change in Control the Participant ceases to be
in the continuous service of the Company or an Affiliate as either of an
Employee or a Consultant by reason of (i) an involuntary termination without
Cause, or (ii) a voluntary termination in connection with a Relocation
Requirement, all such Restricted Stock Units shall become fully vested.

For purposes of this Agreement (i) if the Company is the Surviving Corporation
or the Parent Corporation, if applicable, it shall be deemed to have assumed the
Restricted Stock Units unless it takes explicit action to the contrary;
(ii) “Relocation Requirement” shall mean a requirement by the Company, the
Surviving Corporation or an affiliate thereof that the Participant be based
anywhere more than fifty (50) miles from both the Participant’s primary office
location immediately prior to the time of the Change in Control and the
Participant’s principal residence at the time of the Change in Control; and
(iii) “Change in Control” shall have the same meaning set forth in Section 11.3
of the Plan, except that it shall also include the occurrence of any other event
that the Board determines by an approved resolution constitutes a Change in
Control. In addition, for purposes of this Agreement, except as otherwise
provided in another agreement between the Participant and the Company or an
Affiliate or a plan maintained by the Company or an Affiliate in which the
Participant participates, “Cause” shall mean: a determination by the Committee
that the Participant has breached his or her employment or service contract with
the Company (or an Affiliate), or has been engaged in disloyalty to the Company,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his or her employment or service,
or has disclosed trade secrets or confidential information of the Company to
persons not entitled to receive such information, or has breached any written
noncompetition or nonsolicitation agreement between the Participant and the
Company (or an Affiliate) or has engaged in such other behavior detrimental to
the interests of the Company (or an Affiliate) as the Committee determines in
its sole discretion. Any determination of “cause” for purposes of this Agreement
shall have no effect upon any determination of the rights or obligations of the
Company (or an Affiliate) or the Participant for any other purpose.

(b) Effect of Corporate Transaction on Restricted Stock Units. In the event of a
Corporate Transaction that is not a Change in Control, any surviving corporation
or acquiring corporation (or the surviving or acquiring corporation’s parent
company) may assume, continue or substitute for the Restricted Stock Units
credited to the Account on substantially the same terms and conditions (which
may include settlement in the same consideration paid to the stockholders of the
Company pursuant to the Corporate Transaction). In the event of a Corporate
Transaction that is not a Change in Control, then notwithstanding Section 11 of
the Plan and paragraph (a) of this Section, to the extent that the surviving
corporation or acquiring corporation (or its parent company) does not assume,
continue or substitute for the Restricted Stock Units credited to the Account on
substantially the same terms and conditions (which may include settlement in the
same consideration paid to the stockholders of the Company pursuant to the
Corporate Transaction), then all of such Restricted Stock Units shall become
fully vested immediately prior to the Corporate Transaction if the Participant
is then an Employee, a Consultant or a Director.

 

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For purposes of this Agreement, “Corporate Transaction” means (i) the
consummation of a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or (ii) the consummation of a
merger, consolidation or similar transaction following which the Company is the
surviving corporation but the Shares outstanding immediately preceding the
merger, consolidation or similar transaction are converted or exchanged by
virtue of the merger, consolidation or similar transaction into other property,
whether in the form of securities, cash or otherwise. Notwithstanding the
foregoing, a “Corporate Transaction” shall not include a transaction that is
effected exclusively for the purpose of changing the domicile of the Company.

(c) Payment of Restricted Stock Units. Payment of Restricted Stock Units that
vest pursuant to this Section shall be made in Shares (or, if applicable,
settlement in the same consideration paid to the stockholders of the Company
pursuant to the Change in Control), as soon as practicable following the
applicable vesting date. The Restricted Stock Units are intended to be exempt
from application of Section 409A of the Code [to the maximum extent an exemption
is available, or compliant with the requirements of Section 409A of the Code to
the extent an exemption is not available], and any ambiguities set forth herein
shall be interpreted accordingly. [However, ][to/To] the extent that an
exemption is not available and the Restricted Stock Units are “deferred
compensation” subject to the requirements of Section 409A of the Code, the
following provisions shall apply and shall supersede anything to the contrary
set forth herein and in the Plan to the extent required for the settlement of
the Restricted Stock Units to comply with the requirements of Section 409A of
the Code. In a Change in Control or Corporate Transaction the Award must be
assumed, continued or substituted by the Surviving Corporation or the Parent
Corporation and any Shares scheduled to be issued upon an applicable scheduled
Vest Date may not be earlier issued unless the Change in Control or Corporate
Transaction is also a change in the ownership or effective control of the
Company or a change in the ownership of a substantial portion of the assets of
the Company as described in Code Section 409A(a)(2)(A)(iv) and an exemption is
available and elected under Treasury Regulation 1.409A-3(j)(4)(ix)(B) or such
earlier issuance of the Shares is otherwise permitted by Section 409A of the
Code. The Company retains the right to provide for earlier issuance of Shares in
settlement of the Restricted Stock Units to the extent permitted by Section 409A
of the Code.

11. Source of Payments. The Participant’s right to receive payment under this
Agreement shall be an unfunded entitlement and shall be an unsecured claim
against the general assets of the Company. The Participant has only the status
of a general unsecured creditor hereunder, and this Agreement constitutes only a
promise by the Company to pay the value of the Account on the payment date.

 

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12. Miscellaneous.

(a) Withholding. The Participant agrees to pay to the Company, or to make
satisfactory arrangement with the Company for payment of, any federal, state or
local taxes, if any, required by law to be withheld in respect of the Restricted
Stock Units. The Participant hereby agrees that the Company or an Affiliate, as
applicable, may withhold the applicable taxes from the Participant’s wages or
other remuneration. At the discretion of the Company, the applicable taxes may
be withheld in kind from the Shares otherwise deliverable to the Participant on
the payment in settlement of the Restricted Stock Units, up to the lesser of
Participant’s minimum required withholding rate or such other rate that will not
trigger a negative accounting impact. Unless the tax withholding obligations of
the Company and/or any Affiliate are satisfied, the Company shall have no
obligation to deliver to the Participant any Shares. In the event the Company’s
obligation to withhold arises prior to the delivery to the Participant of the
Shares or it is determined after the delivery of Shares to the Participant that
the amount of the Company’s withholding obligation was greater than the amount
withheld by the Company, the Participant agrees to indemnify and hold the
Company harmless from any failure by the Company to withhold the proper amount.

(b) No Rights of a Stockholder. The Participant shall not have any of the rights
of a stockholder with respect to the Shares subject to the Restricted Stock
Units until such Shares have been issued.

(c) Nontransferability of Restricted Stock Units. Except to the extent and under
such terms and conditions as determined by the Committee, the Restricted Stock
Units shall not be transferable otherwise than by will or the laws of descent
and distribution or as provided in Section 9.

(d) Severability. The provisions of this Agreement shall be deemed severable. If
any provision of this Agreement shall be held unlawful or otherwise invalid or
unenforceable in whole or in part by a court of competent jurisdiction or by
reason of a change in a law or regulation, such provision shall (i) be deemed
limited to the extent that such court of competent jurisdiction deems it lawful,
valid and/or enforceable (or, if applicable, to the extent necessary to comply
with the change in the law or regulation), and as so limited shall remain in
full force and effect, and (ii) not affect any other provision of this Agreement
or part thereof, each of which shall remain in full force and effect.

(e) Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware, other than its conflict of
laws principles.

(f) Headings. The headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

(g) Notices. All notices required or permitted under this Agreement shall be in
writing and shall be sufficiently made or given if hand delivered or mailed by
registered or certified mail, postage prepaid. Notice by mail shall be deemed
delivered at the time and on the date on which the same is postmarked.

 

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Notices to the Company should be addressed to:

Arena Pharmaceuticals, Inc.

6154 Nancy Ridge Drive

San Diego, California 92121

Attention: Chief Financial Officer

With a copy to: General Counsel

Notices to the Participant should be addressed to the Participant at the
Participant’s address as it appears on the Company’s records. The Company or the
Participant may by writing to the other party, designate a different address for
notices. If the receiving party consents in advance, notice may be transmitted
and received via facsimile or via such other electronic transmission mechanism
as may be available to the parties. Such notices shall be deemed delivered when
received.

(h) Agreement Not a Contract. This Agreement (and the grant of Restricted Stock
Units) is not an employment or service contract, and nothing in this Agreement
shall be deemed to create in any way whatsoever any obligation on the
Participant’s part to continue as an Employee, a Consultant or a Director, or of
the Company or an Affiliate to continue the Participant’s service as an
Employee, a Consultant or a Director. The Participant’s employment shall remain
at-will, if applicable, and subject to termination by the Company or an
Affiliate, as applicable, at any time, with or without cause or notice.

(i) Entire Agreement; Modification. Except as provided in the next sentence,
this Agreement and the Plan constitute the entire agreement between the parties
with respect to the subject matter contained herein and may not be modified,
except as provided in the Plan or in a written document signed by each of the
parties hereto, and may be rescinded only by a written agreement signed by both
parties. This Agreement and Plan may be modified or superseded by the specific
provisions, if any, of a written agreement, plan or other arrangement
(regardless of whether entered into or established before, concurrently or after
the date of this Agreement) of the Company or an Affiliate that is applicable to
the Participant, to the extent such an agreement, plan or other arrangement
provides a greater benefit to the Participant and otherwise does not cause the
payments hereunder to fail to comply with the provisions of Section 409A of the
Code.

(j) Compliance with Section 409A of the Code.

(i) Automatic Delay of Payment. To the extent that the Restricted Stock Units
are “deferred compensation” subject to the requirements of Section 409A of the
Code, then notwithstanding anything contained in this Agreement to the contrary,
if the Company determines that as of the date of payment the Participant is a
“specified employee” (as such term is defined under Section 409A of the Code),
any Shares (or shares of the common stock of the successor company in the event
of a Change in Control) payable by reason of the Participant’s “separation from
service” for purposes of Section 409A of the Code (“Separation from Service”)
with the Company (or an Affiliate) for any reason

 

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other than death or “disability” (as such term is defined under Section 409A of
the Code), if applicable, will not be paid until the date that is six months
following the date of Separation from Service (or such earlier time permitted
under Section 409A of the Code without the imposition of any accelerated or
additional taxes under Section 409A of the Code).

(ii) General. This Agreement is intended to be exempt from or comply with the
requirements of Section 409A of the Code and shall be construed and interpreted
in accordance with such intent. Payment under this Agreement shall be made in a
manner that will be exempt from or comply with Section 409A of the Code,
including regulations or other guidance issued with respect thereto, as
determined by the Committee. Any provision of this Agreement that would cause
the payment or settlement thereof to fail to satisfy Section 409A of the Code
shall be amended to comply with Section 409A of the Code on a timely basis,
which may be made on a retroactive basis, in accordance with regulations and
other guidance issued under Section 409A of the Code.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
Grant Date.

 

ARENA PHARMACEUTICALS, INC. By:           Participant

 

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