Exhibit 10.1

Pharmacopeia, Inc.
2008 Incentive Compensation Plan

 

Purpose

 

This plan is designed to provide Pharmacopeia, Inc. (Pharmacopeia) employees
with an incentive to achieve the Company’s annual corporate objectives.

 

Corporate Goals

 

Major corporate goals for each year will be established by the Board of
Directors.

 

Evaluation of Corporate Performance

 

The Compensation Committee will evaluate corporate performance against each goal
as follows:

 

Description of Performance

 

Performance Rating

 

 

 

 

 

Made significant progress toward achieving the objective

 

0 to 94%

 

Achieved objective

 

95% to 105%

 

Exceeded objective

 

106% to 150%

 

Outstanding achievement

 

151% to 200%

 

 

Overall Corporate Rating and Bonus Pool

 

An overall corporate rating will be determined by multiplying each goal’s
weighting by each goal’s performance rating.

 

Determination of the Bonus Pool

 

The Compensation Committee will determine the bonus pool.  The bonus pool will
be based upon the overall corporate rating, as determined by the Board of
Directors, multiplied by the salaries of bonus eligible employees, and
multiplied by their individual bonus targets.

 

Bonus Pool Allocation

 

The Compensation Committee shall annually review and approve bonus awards for
the Chief Executive Officer (CEO) and his executive direct reports.  For all
other employees, the CEO will review and approve the allocations of the bonus
pool based upon the achievement of overall corporate performance and the
contribution of each group to the corporate goals.

 

 

 

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Determination of Individual Bonuses

 

Each employee has individual objectives for each year.  These relate directly
back to the corporate goals.  Individual bonuses will be based on the overall
corporate rating, the individual’s achievement of each objective, performance of
relevant teams and departments, and individual bonus eligibility.  Each of these
factors will impact any individual bonus awards.  The Compensation Committee may
also consider individual discretionary bonus payments for exceptional individual
or team performance.

 

Criteria

 

Bonus payments, if awarded, will be distributed no later than March 15 of the
subsequent year.

 

Employees must be actively employed on the day the bonus payout is distributed
in order to receive that bonus payout.

 

New hires are eligible to participate in the Incentive Program after completion
of 90 days of employment, and bonus payments will be prorated for the year’s
length of service.

 

Employees must have attended all mandatory training and acknowledged compliance
with all policies and required SOPs in order to receive the bonus payout.

 

Managers must have completed performance reviews for all of their employees in
order to receive the bonus payout.

 

Bonus eligibility will be prorated for any time during the year that an employee
is on a Performance Improvement Plan or under any formal disciplinary action. 
In addition, an employee will be ineligible to receive a bonus if they are on a
Performance Improvement Plan or under any formal disciplinary action at the time
of bonus payout.

 

Pharmacopeia reserves the right to modify this plan at any time.

 

Adopted by the Compensation Committee of the Board of Directors on February 6,
2008.

 

 

 

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