Exhibit 10.27

 

AMENDED AND RESTATED

SEVERANCE AGREEMENT

 

This AMENDED AND RESTATED SEVERANCE AGREEMENT (the “Agreement”) is made and
entered into as of the 18th day of December, 2007, by and between PHARMACOPEIA,
INC., a Delaware corporation (hereinafter, the “Company”), and Brian M. Posner,
an individual (hereinafter, “Employee”).

 

RECITALS

 

WHEREAS, Employee is presently employed by the Company the capacity of Executive
Vice President, Chief Financial Officer and Treasurer of the Company, pursuant
to a Letter Agreement between the Company and Employee, dated May 4, 2006 (the
“Letter Agreement”).

 

WHEREAS, the Company and Employee previously entered into a Severance Agreement,
dated May 4, 2006 (as subsequently amended, the “Existing Severance Agreement”),
pursuant to which Employee is entitled to certain payments and benefits in the
event of a covered termination of Employee’s employment with the Company.

 

WHEREAS, the Company and Employee wish to amend and restate the Existing
Severance Agreement to comply with section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) and to make other appropriate changes.

 

NOW, THEREFORE, in consideration of their mutual promises and intending to be
legally bound, the parties agree as follows:

 

1.                                      TERMINATION AND EFFECT OF TERMINATION. 
Employee’s employment hereunder is AT WILL and may be terminated at any time by
the Company for any reason.  In the event of termination of Employee’s
employment, the Company shall have no liability to Employee for compensation or
benefits except as specified in this Section 1 or as required by the Company’s
benefits policy.

 

(a)                                  Termination By The Company For Cause. 
Employee’s employment may be terminated by the Company for Cause (as defined
below) at any time upon delivery of written notice to Employee.  Upon such a
termination, the Company shall have no obligation to Employee other than the
payment of all accrued, but unpaid, base salary and any unpaid expenses or
expense reimbursements prior to the effective date of such termination.  For
purposes of this Agreement, “Cause” means the occurrence of any one or more of
the following events or conditions:

 

(i)                                     any gross failure on the part of
Employee (other than by reason of disability as provided in Section 1(e) below)
to faithfully and professionally carry out Employee’s duties or to comply with
any other material provision of this Agreement, which failure continues for
thirty (30) days after written notice detailing such failure is delivered by the
Company; provided, that the Company shall not be required to provide such notice
in the event that such failure (A) is not susceptible to remedy or (B) relates
to the same type of acts or omissions as to which notice has been given on a
prior occasion;

 

(ii)                                  Employee’s dishonesty (which shall include
without limitation any misuse or misappropriation of the Company’s assets), or
other willful misconduct (including without limitation, any conduct on the part
of Employee intended to or likely to injure the business of the Company);

 

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(iii)                               Employee’s conviction of any felony or of
any other crime involving moral turpitude, whether or not relating to Employee’s
employment;

 

(iv)                              Employee’s insobriety or use of drugs,
chemicals or controlled substances either (A) in the course of performing
Employee’s duties and responsibilities under this Agreement, or (B) otherwise
affecting the ability of Employee to perform the same;

 

(v)                                 Employee’s failure to comply with a lawful
written direction of the Company; or

 

(vi)                              any wanton or willful dereliction of duties by
Employee.

 

(b)                                  Involuntary Termination By The Company
Without Cause.  The Company may involuntarily terminate Employee’s employment
under this Agreement at any time without Cause upon delivery of written notice
to Employee.  Subject to the provisions of Section 1(g) hereof (concerning a
termination in connection with a Change in Control (as defined in Section 1(g)),
if Employee’s employment is terminated involuntarily by the Company without
Cause pursuant to this Section 1(b), the Company shall:

 

(i)                                     pay Employee all compensation and
benefits accrued, but unpaid, up to the effective date of termination of
Employee’s employment;

 

(ii)                                  pay Employee, within thirty (30) days
after the effective date of termination of Employee’s employment, a lump sum
amount equal to twelve (12) months of Employee’s base salary in effect as of the
effective date of termination of Employee’s employment;

 

(iii)                               pay  Employee, within thirty (30) days after
the effective date of termination of Employee’s employment, a lump sum pro rata
portion of Employee’s target incentive bonus for the calendar year in which
Employee’s employment is terminated as provided in this Section 1(b), such
portion to be based on the number of full months for which Employee was
employed  during the year of  termination;

 

(iv)                              maintain Employee’s group medical coverage
until the earlier of (A) the end of a  period of twelve (12) months following
the effective date of such termination, or (B) until such time as comparable
medical coverage is obtained by Employee; and

 

(v)                                 allow all vested options or other incentive
securities to be exercised pursuant to the terms of the option agreement or
other agreements under which such options or other incentive securities were
granted.

 

(c)                                  Termination By Employee For Good Reason.

 

(i)                                    Benefits.  Employee may terminate
Employee’s employment under this Agreement for Good Reason (as defined below)
upon the provision of advance written notice to the Company specifying in
reasonable detail the events or conditions upon which Employee is basing such
termination.  Employee must give such notice within ninety (90) days after the
event that gives rise to Good Reason.  The Company will be given the
opportunity, but shall have no obligation, to cure such events or conditions
within thirty (30) days after the provision by Employee of such notice.  If the
Company elects in a written notice to Employee not to cure such events or
conditions or otherwise fails to so cure such events or conditions within such
thirty (30) day period, Employee may terminate his employment with the Company
for Good Reason pursuant to this Section 1(c) within thirty (30) days after the
expiration of the cure period.  In the event of such termination, the Company
shall:

 

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(A)                              pay Employee all compensation and benefits
accrued, but unpaid, up to the effective date of termination of Employee’s
employment;

 

(B)                                pay Employee, within thirty (30) days after
the effective date of termination of Employee’s employment, a lump sum amount
equal to twelve (12) months of Employee’s base salary in effect as of the
effective date of termination of Employee’s employment;

 

(C)                                pay Employee, within thirty (30) days after
the effective date of termination of Employee’s employment, a lump sum pro rata
portion of Employee’s target incentive bonus for the calendar year in which
Employee’s employment is terminated as provided in this Section 1(c), such
portion to be based on the number of full months for which Employee was employed
during the year of termination;

 

(D)                               maintain Employee’s group medical coverage
until the earlier of (A) the end of  a period of twelve (12) months following
the effective date of such termination, or (B) until such time as comparable
medical coverage is obtained by Employee; and

 

(E)                                 allow all vested options or other incentive
securities to be exercised pursuant to the terms of the option agreement or
other agreements under which such options or other incentive securities were
granted.

 

(ii)                                  Definition of “Good Reason.” For purposes
of this Agreement, “Good Reason” means any one or more of the following events
or conditions without the consent of Employee:

 

(A)                              any action or inaction that constitutes a
material breach by the Company of the terms of this Agreement or the Letter
Agreement;

 

(B)                                any material change in the geographic
location at which Employee must perform services for the Company, which, for
purposes of this Agreement, means a requirement that Employee commute more than
fifty (50) miles from the offices of the Company at which he was principally
employed on the date of this Agreement;

 

(C)                                any material diminution of the authority,
duties or responsibilities of Employee, including without limitation a material
diminution in Employee’s position as Executive Vice President, Chief Financial
Officer and Treasurer; or

 

(D)                               any material reduction in Employee’s base
salary (other than such a reduction applicable generally to substantially all
employees of the Company), which, for purposes of this Agreement, means a
reduction of more than twenty percent (20%) in Employee’s annual base salary as
in effect on the date of this Agreement or as the same may be increased from
time to time after such date.

 

(d)                                  Termination By Employee Without Good Reason
(Voluntary Resignation).  Employee may voluntarily resign Employee’s position
and terminate Employee’s employment under this Agreement without Good Reason at
any time.  Upon such a termination, the Company shall have no obligation to pay
compensation and provide benefits to Employee other than the payment of all
accrued and unpaid base salary and any other unpaid expenses or expense
reimbursements prior to the effective date of such termination.

 

(e)                                  Disability.  If Employee becomes disabled
for more than one hundred eighty (180) days in any twelve (12) month period, the
Company shall have the right to terminate Employee’s employment without further
liability upon written notice to Employee.  Without limiting the generality of

 

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the foregoing, Employee shall be deemed disabled for purposes of this Agreement
either (i) if Employee is deemed disabled for purposes of any long-term
disability insurance policy paid for by the Company and at the time in effect,
or (ii) if in the exercise of the Company’s reasonable judgment, due to
accident, mental or physical illness, or any other reason, Employee cannot
perform Employee’s duties.  In the event the Company shall terminate Employee
due to disability, as described above, Employee shall be entitled to receive
only those benefits provided under the Company’s Long Term Disability Plan, and
Employee’s stock options and other incentive compensation grants will be treated
under the applicable Disability section of the 2004 Stock Incentive Plan (as
amended, the “2004 Plan”) or any other stock option or incentive compensation
plan of the Company under which they were granted.

 

(f)                                    Death.  In the event of the death of
Employee, this Agreement shall automatically terminate and any obligation to
continue to pay compensation and benefits shall cease as of the date of
Employee’s death, except for the payment of all accrued, but unpaid, base salary
and any other unpaid expenses or expense reimbursements prior to the date of
death.  In the event of Employee’s death, Employee’s stock options and other
incentive compensation grants shall be treated under the applicable Death
section of the 2004 Plan or any other stock option or incentive compensation
plan of the Company under which they were granted.

 

(g)                                 Change In Control Termination.

 

(i)                                     Benefits.  In the event Employee’s
employment under this Agreement is terminated by the Company involuntarily
without Cause or Employee terminates Employee’s employment with the Company for
Good Reason (as defined in Section 1(c) above), in either case at any time
during the period commencing two (2) months before and ending twelve (12) months
after the occurrence of a Change in Control, the Company shall:

 

(A)                              pay Employee all compensation and benefits
accrued, but unpaid, up to the effective date of termination of Employee’s
employment;

 

(B)                                pay Employee, within thirty (30) days after
the effective date of termination of Employee’s employment, a lump sum amount
equal to eighteen (18) months of Employee’s base salary in effect as of the
effective date of Employee’s termination of employment;

 

(C)                                pay Employee, within thirty (30) days after
the effective date of termination of Employee’s employment, a lump sum amount
equal to one hundred and fifty percent (150%) of Employee’s target incentive
bonus;

 

(D)                               maintain Employee’s group medical coverage
until the earlier of  the end of a period of eighteen (18) months following the
effective date of termination, or (B) such time as comparable medical coverage
is obtained by Employee.

 

Anything contained in this Section to the contrary notwithstanding, Employee
shall not be entitled to any of the benefits set forth in this
Section 1(g)(i) if Employee either resigns and terminates such employment
voluntarily (other than for Good Reason, as described above) or is terminated by
the Company for Cause.

 

For purposes of Section 1(g) hereof, the term “Company” shall include any
Acquiring Company (as defined below), and all obligations of the Company under
such Section shall be assumed by any Acquiring Company.

 

(ii)                                  Stock Options.  In the event Employee’s
employment under this Agreement is terminated by the Company involuntarily
without Cause or Employee terminates his employment with the Company for Good
Reason, in either case at any time during the period

 

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commencing two (2) months before and ending twelve (12) months after the
occurrence of a Change in Control:

 

(A)                              notwithstanding anything to the contrary
contained in the 2004 Plan or any other stock option or incentive compensation
plan of the Company, any unvested stock options or other incentive securities
which were granted to Employee during the term of this Agreement under the 2004
Plan or any such other stock option or incentive compensation plan shall
immediately vest on the date of such termination of Employee’s employment, the
expiration date of the exercise period for such options or other securities
shall be the earlier of (1) one (1) year following the date of termination, or
(2) the expiration of the term of the option, and the Company shall take all
actions necessary or advisable to give effect to this Section 1(g)(ii)(A); and

 

(B)                                all vested options or other incentive
securities held by Employee which were issued pursuant to the 2004 Plan or any
such other plan shall be exercisable pursuant to the terms of the stock option
agreement or other agreement(s) under which the options or other incentive
securities were granted, and the Company shall take all actions necessary or
advisable to give effect to this Section 1(g)(ii)(B).

 

Anything contained in this Section to the contrary notwithstanding, Employee
shall not be entitled to any of the benefits set forth in this
Section 1(g)(ii) if Employee either resigns and terminates such employment
voluntarily (other than for Good Reason, as described above) or is terminated by
the Company for Cause.

 

(iii)                               Definition Of “Change in Control.”  The
definition of “Change in Control” set forth in the 2004 Plan is incorporated,
and made a part hereof, by reference.

 

(iv)                              Definition Of “Acquiring Company.”  For
purposes of Section 1(g) of this Agreement, an “Acquiring Company” shall mean
the resulting or surviving corporation, or the company issuing cash or
securities (or its ultimate parent company), in a merger, sale, asset purchase,
or assignment of all or substantially all of the Company’s assets, consolidation
or share exchange involving the Company, or the successor corporation to the
Company (whether in any such transaction or otherwise).

 

2.                                       GENERAL RELEASE.  Notwithstanding
anything in this Agreement to the contrary, no payments shall be made or
benefits provided by the Company under Section 1unless Employee executes and
does not revoke a general release in favor of the Company and its affiliates,
and its and their respective officers, employees and directors.  A form of
general release is attached hereto as Exhibit A.

 

3.                                       CERTAIN EXCISE TAX PROVISIONS. 
Notwithstanding anything herein to the contrary:

 

(a)                                  Additional Payment.  In the event that
(i) any payments or benefits received or to be received by Employee in
connection with Employee’s employment with the Company (or termination thereof),
whether under this Agreement or otherwise (the “Total Payments”), would subject
Employee to the excise tax imposed under Section 4999 of the Code (the “Excise
Tax”), and (ii) the amount of  total “parachute payment” as defined in
Section 280G(b) of the Code to be paid to the Employee is equal to or greater
than 110 percent (110%) of 2.99 times the Employee’s “base amount” as defined in
Section 280G(b)(3) of the Code (the “Safe Harbor Amount”), then the Company
shall pay Employee in cash an additional amount (the “Gross-Up Payment”) such
that the net amount retained by Employee after deduction of any Excise Tax upon
the Total Payments and any federal, state and local income tax and Excise Tax
upon the Gross-Up Payment shall be equal to the Total Payments.  Such payments
shall be made by the Company to Employee within thirty (30) days of Employee’s
taxable year next following Employee’s taxable year in which Employee remits the
related taxes to the taxing authorities.

 

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(b)                                  Reduced Payments.  In the event that
(i) the Total Payments would subject Employee to the Excise Tax, and (ii) the
amount of the total “parachute payment” as defined in Section 280G(b) of the
Code to be paid to Employee is less than 110% of the Safe Harbor Amount, then,
only to the extent necessary to eliminate the imposition of the Excise Tax, such
payments and benefits shall be reduced, in the order and of the type, mutually
agreed to by Employee and the Company.

 

(c)                                  Determinations.  All determinations
required to be made, including whether any of the Total Payments will be subject
to the Excise Tax and the amounts of such Excise Tax, shall be made by the
Company’s regular auditors (the “Accounting Firm”).  The Accounting Firm shall
provide detailed supporting calculations both to the Company and to Employee
within 10 days after a request for such determinations are made by Employee or
the Company.  Any such determination by the Accounting Firm shall be binding
upon the Company and Employee.  For purposes of making any determination
hereunder, Employee shall be deemed to pay Federal, state and local income taxes
at the highest marginal rates applicable to Employee as of the date of the
determination.

 

4.                                      SECTION 409A.  This Agreement is
intended to meet the requirements of the short-term deferral exemption under
section 409A of the Code.  However, if required by section 409A and if Employee
is a “specified employee” of a publicly traded corporation under section 409A of
the Code, payment of any amount under this Agreement shall be delayed for a
period of six (6) months after separation from service, as required by section
409A of the Code.  The accumulated postponed amount shall be paid in a lump sum
payment within ten (10) days after the end of the six (6)-month period.  If
Employee dies during the postponement period prior to payment of the postponed
amount, the amounts withheld on account of section 409A shall be paid to the
personal representative of Employee’s estate within sixty (60) days after the
date of Employee’s death.  The determination of “specified employees” shall be
made by the Compensation Committee of the Board of Directors of the Company in
accordance with section 409A of the Code and the regulations issued thereunder.

 

5.                                      NON-COMPETITION; NON-SOLICITATION.

 

(a)                                  Restrictions.  Employee shall not, during
the course of Employee’s employment with the Company or for a period of twelve
(12) months thereafter, directly or indirectly:

 

(i)                                     be employed by, engaged in or
participate in the ownership, management, operation or control of, or act in any
advisory or other capacity (including as an individual, principal, agent
employee, consultant or otherwise) for, any Competing Entity which conducts its
business within the Territory (as the terms Competing Entity and Territory are
hereinafter defined); provided, however, that notwithstanding any of the
foregoing, Employee may make solely passive investments in any Competing Entity
the common stock of which is “publicly-held” and of which Employee shall not own
or control, directly or indirectly, in the aggregate securities which constitute
5% or more of the voting power of such Competing Entity;

 

(ii)                                  solicit or divert any business or any
customer or known prospective customer from the Company or assist any person or
entity in doing so or attempting to do so;

 

(iii)                               cause or seek to cause any person or entity
to refrain from dealing or doing business with the Company or assist any person
or entity in doing so; or

 

(iv)                              solicit for employment, or advise or recommend
to any other person or entity that he, she or it employ or solicit for
employment or retention as an employee or consultant, any person who is an
employee of, or exclusive consultant to, the Company.

 

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(b)                                  Effect On The Company’s Obligations.  The
Company’s obligation to make payments and provide the other benefits pursuant to
Section 1 above shall terminate in the event that, and at such time as, Employee
is in breach of Employee’s obligations set forth in Section 5(a) above.

 

(c)                                  Definitions.  For purposes of this
Section 5:

 

(i)                                     “Competing Entity” means any entity
which is presently or hereafter principally engaged in any business of the type
or character engaged in or proposed to be engaged in by the Company from time to
time during Employee’s term of employment under this Agreement, including
without limitation, any business engaged in the discovery and development of
human therapeutic products for any of the same targets and for indications as
products the Company had in development or was marketing at any time during
Employee’s term of employment under this Agreement.

 

(ii)                                  “Territory” means North America, Europe
and Japan.

 

Notwithstanding anything in the above to the contrary, Employee may engage in
the activities set forth in Section 5(a) hereof with the prior written consent
of the Company, which consent shall not be unreasonably withheld.  Further, in
determining whether a specific activity by Employee for a Competing Entity shall
be permitted, the Company will consider, among other things, the nature and
scope of (i) the duties to be performed by Employee and (ii) the business
activities of the Competing Entity at the time of Employee’s proposed engagement
by such entity.

 

(d)                                  Acknowledgement.  Employee acknowledges and
agrees that the covenants set forth in this Section 5 are reasonable and
necessary in all respects for the protection of the Company’s legitimate
business interests (including, without limitation, the Company’s confidential,
proprietary information and trade secrets and client good-will, which represents
a significant portion of the Company’s net worth and in which the Company has a
property interest).  Employee acknowledges and agrees that, in the event that
Employee breaches any of the covenants set forth in this Section 5, the Company
shall be irreparably harmed and shall not have an adequate remedy at law; and,
therefore, in the event of such a breach, the Company shall be entitled to
injunctive relief, in addition to (and not exclusive of) any other remedies
(including monetary damages) to which the Company may be entitled under law.  If
any covenant set forth in this Section 5 is deemed invalid or unenforceable for
any reason, it is the parties’ intention that such covenants be equitably
reformed or modified to the extent necessary (and only to such extent) to render
it valid and enforceable in all respects.  In the event that the time period and
geographic scope referenced above is deemed unreasonable, overbroad, or
otherwise invalid, it is the parties’ intention that the enforcing court shall
reduce or modify the time period and/or geographic scope to the extent necessary
(and only to such extent) to render such covenants reasonable, valid and
enforceable in all respects.

 

6.                                      ARBITRATION.  Any and all disputes
between the parties (except actions to enforce the provisions of Section 5 of
this Agreement) arising under or relating to this Agreement or any other dispute
arising between the parties, including claims arising under any employment
discrimination laws, may be adjudicated and resolved exclusively through binding
arbitration before the American Arbitration Association pursuant to the American
Arbitration Association’s then-in-effect National Rules for the Resolution of
Employment Disputes (hereinafter, “Rules”).  The initiation and conduct of any
arbitration hereunder shall be in accordance with the Rules and, unless
expressly required by law, each side shall bear its own costs and counsel fees
in such arbitration.  Any arbitration hereunder shall be conducted in Princeton,
New Jersey or at such other location as mutually agreed by the parties.  Any
arbitration award shall be final and binding on the parties.  The arbitrator
shall have no authority to depart from, modify, or add to the written terms of
this Agreement.  The arbitration provisions of this Section 5 shall be
interpreted according to, and governed by, the Federal Arbitration Act, 9 U.S.C.
§ 1 et seq., and any action pursuant to such Act to enforce any rights hereunder
shall be brought exclusively in any United

 

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States District Court in the State of New Jersey.  The parties consent to the
jurisdiction of (and the laying of venue in) any such court.

 

7.                                      NOTICES.  For the purposes of this
Agreement, notices, demands and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or (unless otherwise specified) mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:

 

(a)                                  If to the Company, to:

 

Pharmacopeia, Inc.

3000 Eastpark Blvd.

Cranbury, NJ  08512

Attn.:  General Counsel

 

(b)                                  If to Employee, to:

 

Brian M. Posner

 

or to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective only
upon receipt thereof.

 

8.                                      WITHHOLDING TAXES.  All payments under
this Agreement shall be made subject to applicable tax withholding, and the
Company shall withhold from any payments under this Agreement all federal, state
and local taxes as the Company is required to withhold pursuant to any law or
governmental rule or regulation.  Except as specifically provided otherwise in
this Agreement, Employee shall bear all expense of, and be solely responsible
for, all federal, state and local taxes due with respect to any payment received
under this Agreement.

 

9.                                      WAIVER.  The waiver by the Company or
Employee of any breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach by Employee or the Company, as
applicable, of any provision of this Agreement.

 

10.                               SEVERABILITY.  The parties have carefully
reviewed the provisions of this Agreement and agree that they are fair and
equitable.  However, in light of the possibility of differing interpretations of
law and changes of circumstances, the parties agree that in the event that any
section, paragraph or term of this Agreement shall be determined to be invalid
or unenforceable by any competent authority or tribunal for any reason, the
remainder of this Agreement shall be unaffected thereby and shall remain in full
force and effect.  Moreover, if any of the provisions of this Agreement is
determined by a court of competent jurisdiction to be excessively broad as to
duration, activity, geographic application or subject, it shall be construed by
limiting or reducing it to the extent legally permitted so as to be enforceable
to the extent compatible with then applicable law.

 

11.                               SUCCESSORS AND ASSIGNS.  This Agreement shall
bind and inure to the benefit of the successors and assigns of the Company and
the heirs, executors or personal representatives of Employee.  This Agreement
may not be assigned by Employee.  This Agreement may be assigned to any
successor in interest to the Company (including by way of merger, consolidation
or reorganization, or by way of any assignment of all or substantially all of
the Company’s assets, business or properties), and Employee hereby consents to
such assignment.

 

12.                               ENTIRE AGREEMENT; AMENDMENTS.  This Agreement,
the Letter Agreement and the applicable bylaws and policies of the Company,
constitute the entire Agreement between the parties hereto and there are no
other understandings, agreements or representations, expressed or implied.

 

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This Agreement supersedes any and all prior or contemporaneous agreements, oral
or written, concerning Employee’s employment and compensation.  This Agreement
may be amended only in writing signed by Employee and the Chief Executive
Officer or the General Counsel of the Company.

 

13.                               COUNTERPARTS.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.

 

14.                               GOVERNING LAW; FORUM SELECTION.  This
Agreement shall be governed by and construed in accordance with the laws (other
than conflicts of laws principles) of the State of New Jersey applicable to
contracts executed in and to be performed entirely within such State.  The
parties consent to jurisdiction and laying of venue in the state and federal
courts of New Jersey for purposes of resolving disputes under this Agreement.

 

15.                                 COMPLIANCE WITH LAW.  This Agreement is
intended to comply with the requirements of section 409A of the Code, and
specifically, with the short term deferral exemption of section 409A, and shall
in all respects be administered in accordance with section 409A. 
Notwithstanding anything in the Agreement to the contrary, distributions may
only be made under the Agreement upon an event and in a manner permitted by
section 409A of the Code or an applicable exemption.  All payments to be made
upon a termination of employment under this Agreement may only be made upon a
“separation from service” under section 409A.  In no event may Employee,
directly or indirectly, designate the calendar year of payment.  For purposes of
section 409A of the Code, each payment made under this Agreement shall be
treated as a separate payment.  All reimbursements and in-kind benefits provided
under this Agreement shall be made or provided in accordance with the
requirements of section 409A of the Code, including, where applicable, the
requirement that (a) any reimbursement shall be for expenses incurred during
Employee’s lifetime (or during a shorter period of time specified in this
Agreement), (b) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during a

 

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calendar year may not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other calendar year, (c) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year
following the year in which the expense is incurred, and (d) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.

 

 

PHARMACOPEIA, INC.

 

 

 

 

 

By

/s/ Leslie J. Browne

 

 

Leslie J. Browne, Ph.D.

 

 

President and Chief Executive Officer

 

 

 

 

EMPLOYEE

 

 

 

 

 

By

/s/ Brian M. Posner

 

 

Brian M. Posner

 

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EXHIBIT A

 

General Release

 

IN CONSIDERATION OF the terms and conditions contained in the Amended and
Restated Severance Agreement, dated as of the 18th day of December, 2007, (the
“Severance Agreement”) by and between Brian M. Posner (“Employee”) and
Pharmacopeia, Inc. (the “Company”), and for other good and valuable
consideration, the receipt of which is hereby acknowledged, Employee on behalf
of Employee and his or her heirs, executors, administrators, and assigns,
releases and discharges the Company and its subsidiaries, divisions, affiliates
and parents, and their respective past, current and future officers, directors,
employees, agents, and/or owners, and their respective successors, and assigns
and any other person or entity claimed to be jointly or severally liable with
the Company or any of the aforementioned persons or entities (collectively the
“Released Parties”) from any and all manner of actions and causes of action,
suits, debts, dues, accounts, bonds, covenants, contracts, agreements,
judgments, charges, claims, and demands whatsoever (“Claims “) which Employee
and his heirs, executors, administrators, and assigns have, had, or may
hereafter have, against the Released Parties or any of them arising out of or by
reason of any cause, matter, or thing whatsoever from the beginning of the world
to the date hereof.  This General Release of Claims includes, without
limitation, any and all matters relating to Employee’s employment by the Company
and the cessation thereof, and any and all matters arising under any federal,
state, or local statute, rule, or regulation, or principle of contract law or
common law, including but not limited to, the Family and Medical Leave Act of
1993, as amended, 29 U.S.C. §§ 2601 et seq., Title VII of the Civil Rights Act
of 1964, as amended, 42 U.S.C. §§ 2000 et seq., the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et seq. (the “ADEA”), the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12101 et seq.,
the Worker Adjustment and Retraining Notification Act of 1988, as amended, 29
U.S.C. §§2101 et seq., Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C. §§ 1001 et seq. (“ERISA”), the New Jersey Law Against
Discrimination, N.J.S.A. 10:15-1, et seq., the New Jersey Conscientious
Executive Protection Act, N.J.S.A. 34:19-1 to 19-8, the New Jersey Wage and Hour
Act, N.J.S.A. 34-11-56a, et seq., and any other equivalent or similar federal,
state, or local statute; provided, however, that Employee does not release or
discharge the Released Parties from (i) any of the Company’s obligations to
Employee under the Severance Agreement, and (ii) any vested benefits to which
Employee may be entitled under any employee benefit plan or program subject to
ERISA.  It is understood that nothing in this General Release is to be construed
as an admission on behalf of the Released Parties of any wrongdoing with respect
to Employee, any such wrongdoing being expressly denied.

 

Employee represents and warrants that Employee fully understands the terms of
this General Release, that Employee is hereby advised to consult with legal
counsel before signing, and that Employee knowingly and voluntarily, of
Employee’s own free will, without any duress, being fully informed, and after
due deliberation, accepts its terms and signs below as Employee’s own free act. 
Except as otherwise provided herein, Employee understands that as a result of
executing this General Release, Employee will not have the right to assert that
the Company or any other of the Released Parties unlawfully terminated
Employee’s employment or violated any of Employee’s rights in connection with
Employee’s employment or otherwise.

 

Employee further represents and warrants that Employee has not filed, and will
not initiate, or cause to be initiated on Employee’s behalf any complaint,
charge, claim, or proceeding against any of the Released Parties before any
federal, state, or local agency, court, or other body relating to any claims
barred or released in this General Release thereof, and will not voluntarily
participate in such a proceeding.  However, nothing in this General Release
shall preclude or prevent Employee from filing a claim, which challenges the
validity of this General Release solely with respect to Employee’s waiver of any
losses arising under the ADEA. Employee shall not accept any relief obtained on
Employee’s behalf

 

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by any government agency, private party, class, or otherwise with respect to any
claims covered by this General Release.

 

Employee may take twenty-one (21) days to consider whether to execute this
General Release.  Upon Employee’s execution of this General Release, Employee
will have seven (7) days after such execution in which Employee may revoke such
execution.  In the event of revocation, Employee must present written notice of
such revocation to the Company’s Chief Executive Officer.  If seven (7) days
pass without receipt of such notice of revocation, this General Release shall
become binding and effective on the eighth (8th) day after the execution hereof
(the “Effective Date”).

 

INTENDING TO BE LEGALLY BOUND, Employee hereby sets Employee’s hand below:

 

 

 

 

 

 

 

 

 

Dated:

 

 

*              *              *

 

NOTARIZATION

 

State
of                                                                                              )

County
of                                                                                          )                             ss.

 

On this              day of                              in the year           
before me, the undersigned, personally appeared
                                                                    ; personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument, and acknowledged
to me that he executed the same in his capacity as an individual, and that by
his signature on the instrument he executed such instrument, and that such
individual made such appearance before the undersigned.

 

 

 

 

 

Notary Public

 

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