Exhibit 10.16

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is effective as of the last date signed by the parties
hereto (the “Effective Date”) and is entered into by and between NEUROCRINE
BIOSCIENCES, INC., 12780 El Camino Real, San Diego, California 92130
(hereinafter the “Company”), and Kyle Gano (hereinafter “Executive”).

R E C I_T A L S

WHEREAS, the Company and Executive wish to set forth in this Agreement the terms
and conditions under which Executive is to be employed by the Company on and
after the Effective Date hereof;

NOW, THEREFORE, the Company and Executive, in consideration of the mutual
promises set forth herein, agree as follows:

ARTICLE 1

NATURE OF EMPLOYMENT

1.1Commencement Date. Executive’s full-time employment with the Company under
this Agreement shall be deemed to have commenced as of November 3, 2014
(“Commencement Date”) and this Agreement shall continue from the Effective Date
until it is terminated by either the Company or Executive pursuant to the terms
set forth in Article 6.

1.2At-Will Employment. Executive shall be employed at-will by the Company and
therefore either Executive or the Company may terminate the employment
relationship and this Agreement at any time, with or without Cause (as defined
herein) and with or without advance notice, subject to the provisions of Article
6.

ARTICLE 2

EMPLOYMENT DUTIES

2.1Title/Responsibilities. Executive hereby accepts employment with the Company
pursuant to the terms and conditions hereof. Executive agrees to serve the
Company in the position of Chief Business Development Officer. Executive shall
have the powers and duties commensurate with such position, including but not
limited to hiring personnel necessary to carry out the responsibilities for such
position as set forth in the annual business plan approved by the Board of
Directors.

2.2Full Time Attention. Executive shall devote his best efforts and his full
business time and attention to the performance of the services customarily
incident to such office and to such other services as the President and Chief
Executive Officer (hereinafter “CEO”) or Board of Directors may reasonably
request.

2.3Other Activities. Except upon the prior written consent of the CEO, Executive
shall not during the period of employment engage, directly or indirectly, in any
other business activity (whether or not pursued for pecuniary advantage) that is
or may be competitive with, or that might place him in a competing position to
that of the Company or any other corporation or entity that directly or
indirectly controls, is controlled by, or is under common control with the
Company (an “Affiliated Company”), provided that Executive may own less than two
percent (2%) of the outstanding securities of any such publicly traded competing
corporation.

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ARTICLE 3

COMPENSATION

3.1Base Salary. Executive shall receive a Base Salary at an annual rate of
$310,000, payable semi-monthly in equal installments in accordance with the
Company’s normal payroll practices. The CEO shall provide Executive with annual
performance reviews, and, thereafter, Executive shall be entitled to such
increase in Base Salary as the CEO and the Compensation Committee of the Board
of Directors (hereinafter the “Compensation Committee”) may from time to time
establish in their sole discretion.

3.2Incentive Bonus. In addition to any other bonus Executive shall be awarded by
the Compensation Committee, Executive shall be eligible to receive an annual
incentive bonus as determined by the Company’s Compensation Committee and CEO
based upon the achievement by the Company of annual corporate goals established
by the Board of Directors and the achievement of Executive in meeting annual
personal goals established by the CEO and the Compensation Committee.
Executive’s annual incentive bonus at target will be as set forth in the
Company’s Executive Officer Bonus Plan (the “Target Annual Bonus”); for fiscal
year 2014, this target is set at 50% of base pay earned. The Company’s annual
corporate goals, and if applicable, the Executive’s annual personal goals, will
be set forth in writing by the CEO and the Compensation Committee within ninety
(90) days after the start of the Company’s fiscal year. The Compensation
Committee in consultation with the independent members of the Board of Directors
and the CEO shall, in their sole discretion, determine whether Executive’s
annual personal goals have been attained. The Compensation Committee in
consultation with the independent members of the Board of Directors shall, in
its sole discretion, determine whether the annual corporate goals have been
attained. Any annual incentive bonus shall be considered earned only if
Executive is employed by the Company both on the date that the determination is
made as to whether annual personal goals have been met, and on the date that the
determination is made as to whether annual corporate goals have been met. These
determinations generally will be made within the first quarter following the end
of the Company’s fiscal year. Except as provided in Article 6 herein, no
pro-rata bonus will be considered earned if Executive leaves the Company for any
reason prior to the foregoing determination dates. Any annual incentive bonus
that is earned shall be paid no later than the fifteenth day of the third month
following the end of the Company’s fiscal year for which such bonus was earned.

3.3Equity. Except as provided in Article 6 in the case of certain terminations
of employment, this Agreement shall not affect any Stock Awards (as such term is
defined below) previously granted by the Company to Executive. Subject to
approval by the Company’s Compensation Committee, in consultation with the
independent members of the Board of Directors, Executive will be eligible to
receive additional Stock Awards on terms to be determined by the Compensation
Committee at the time of any such grant. The determination whether to grant any
additional Stock Award to Executive is in the sole discretion of the
Compensation Committee, in consultation with the independent members of the
Board of Directors. For all purposes of this Agreement, “Stock Awards” shall
mean any rights granted by the Company to Executive with respect to the common
stock of the Company, including, without limitation, stock options, stock
appreciation rights, restricted stock, stock bonuses and restricted stock units.

3.4Withholdings. All compensation and benefits payable to Executive under this
Agreement shall be subject to all federal, state, local taxes and other
withholdings and similar taxes and payments required by applicable law.

ARTICLE 4

EXPENSE ALLOWANCES AND FRINGE BENEFITS

4.1Vacation. Executive shall be entitled to participate in the Company’s
vacation plan pursuant to the terms of that plan.

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4.2Benefits. During Executive’s employment hereunder, the Company shall also
provide Executive with the health insurance benefits it generally provides to
its other senior management employees. As Executive becomes eligible in
accordance with criteria to be adopted by the Company, the Company shall provide
Executive with the right to participate in and to receive benefit from life,
accident, disability, medical, and savings plans and similar benefits made
available generally to employees of the Company as such plans and benefits may
be adopted by the Company. With respect to long-term disability insurance
coverage, the Executive will pay all premiums for such coverage with after-tax
dollars, and the Company will reimburse the Executive for the premium costs so
paid by the Executive, which reimbursement benefit shall be taxable income,
subject to withholding. The amount and extent of benefits to which Executive is
entitled shall be governed by the specific benefit plan as it may be amended
from time to time. With respect to personal financial and tax planning expenses
incurred by Executive (the “Financial Planning Expenses”), the Company will
reimburse the Executive for Financial Planning Expenses incurred by the
Executive during the 2015 calendar year and each calendar year thereafter, up to
a maximum reimbursement benefit of $3,000 each calendar year, which
reimbursement benefit shall be taxable income, subject to withholding. Such
Financial Planning Expenses shall be reimbursed and accounted for under the
expense reimbursement policies and procedures established by the Company (the
“Expense Reimbursement Policy”), subject to Executive’s timely provision of
adequate records and other documentary evidence of having incurred such
Financial Planning Expenses in accordance with the terms of the Expense
Reimbursement Policy; such reimbursement shall be made promptly, but in no event
later than December 31 of the calendar year following the year in which such
Financial Planning Expenses were incurred by Executive.

4.3Business Expense Reimbursement. During the term of this Agreement, Executive
shall be entitled to receive proper reimbursement for all reasonable
out-of-pocket expenses incurred by him (in accordance with the policies and
procedures established by the Company for its senior executive officers) in
performing services hereunder. Executive agrees to furnish to the Company
adequate records and other documentary evidence of such expense for which
Executive seeks reimbursement. Such expenses shall be reimbursed and accounted
for under the policies and procedures established by the Company, and such
reimbursement shall be made promptly, but in no event later than December 31 of
the calendar year following the year in which such expenses were incurred by
Executive.

ARTICLE 5

CONFIDENTIALITY

5.1Proprietary Information. Executive represents and warrants that he has
previously executed and delivered to the Company the Company’s standard
Proprietary Information and Inventions Agreement.

5.2Return of Property. All documents, records, apparatus, equipment and other
physical property which is furnished to or obtained by Executive in the course
of his employment with the Company shall be and remain the sole property of the
Company. Executive agrees that, upon the termination of his employment, he shall
return all such property (whether or not it pertains to Proprietary Information
as defined in the Proprietary Information and Inventions Agreement), and agrees
not to make or retain copies, reproductions or summaries of any such property.

5.3No Use of Prior Confidential Information. Executive will not intentionally
disclose to the Company or use on its behalf any confidential information
belonging to any of his former employers or any other third party.

ARTICLE 6

TERMINATION

6.1General. As set forth in Section 1.2 herein, Executive shall be employed on
an at-will basis by the Company. Notwithstanding the foregoing, Executive’s
employment and this Agreement may be terminated in one of six ways as set forth
in this Article 6: (a) Executive’s Death (Section 6.2); (b) Executive’s
Disability (Section 6.3); (c) Termination by the Company for Cause (Section
6.4); (d) Termination by the Company without Cause (Section 6.5); (e)
Termination by Executive due to a Constructive Termination (Section 6.6); or (f)
Voluntary Resignation (Section 6.7).

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6.2By Death. Executive’s employment and this Agreement shall terminate
automatically upon the death of Executive. In such event:

(a)Stock Awards. The vesting of all outstanding Stock Awards held by Executive
shall be accelerated so that the amount of shares vested under such Stock Awards
shall equal that number of shares that would have been vested if Executive had
continued to render services to the Company for 12 continuous months after the
date of Executive’s termination of employment. All Stock Awards held by
Executive that are vested at the time of termination (including any accelerated
Stock Awards) will be exercisable in accordance with their terms until the
earlier of (x) one year after the termination date, or (y) the expiration of the
maximum term of the option.

(b)Bonus. The Company shall pay to Executive’s beneficiaries or his estate, as
the case may be, a lump sum amount equal to Executive’s Target Annual Bonus (as
defined in Section 3.2) for the Company’s fiscal year in which Executive’s death
occurs multiplied by a fraction, the numerator of which is the number of full
months of employment by Executive in such fiscal year and the denominator of
which is 12. Such amount shall be paid as soon as administratively practicable,
but in no event later than March 15 following the year in which Executive’s
death occurred.

(c)Accrued Compensation. The Company shall pay to Executive’s beneficiaries or
his estate, as the case may be, any accrued Base Salary, any vested deferred
compensation (other than pension plan or profit-sharing plan benefits that will
be paid in accordance with the applicable plan), any benefits under any plans of
the Company (other than pension and profit-sharing plans) in which Executive is
a participant to the full extent of Executive’s rights under such plans, any
accrued vacation pay and any appropriate business expenses incurred by Executive
in connection with his duties hereunder, all to the date of termination
(collectively “Accrued Compensation”).

(d)No Severance Compensation. The compensation and benefits set forth in
Sections 6.2(a) through (c) herein shall be the only compensation and benefits
provided by the Company in the event of Executive’s death and no other severance
compensation or benefits shall be provided.

6.3By Disability. If Executive is prevented from performing his duties hereunder
by reason of any physical or mental incapacity that results in Executive’s
satisfaction of all requirements necessary to receive benefits under the
Company’s long-term disability plan due to a total disability, then, to the
extent permitted by law, the Company may terminate the employment of Executive
and this Agreement at or after such time. In such event, and if Executive signs
the General Release set forth as Exhibit A or such other form of release as the
Company may require (the “Release”) on or within the time period set forth
therein, but in no event later than forty-five (45) days after the termination
date and allows such Release to become effective (the “Release Effective Date”),
then:

(a)Accrued Compensation. The Company shall pay to Executive all Accrued
Compensation (as defined in Section 6.2(c) herein).

(b)Base Salary Continuation. The Company shall continue to pay Executive’s Base
Salary, less required withholdings, for a period of 12 months (the “Disability
Base Salary Payments”) following Executive’s separation from service; provided
that the Disability Base Salary Payments shall be reduced by any insurance or
other payments to Executive under policies and plans sponsored by the Company,
even if premiums are paid by Executive. Subject to the provisions of Section
6.11, the Disability Base Salary Payments shall be paid in accordance with the
Company’s standard payroll practices; provided, however, that any amounts that
would otherwise be scheduled to be paid prior to the Release Effective Date
shall instead accrue and be paid during the first payroll period following the
Release Effective Date, and all other payments shall be made as originally
scheduled.

(c)Bonus. The Company shall pay a lump sum amount equal to Executive’s Target
Annual Bonus (as defined in Section 3.2) for the Company’s then-current fiscal
year multiplied by a fraction, the numerator of which is the number of full
months of employment by Executive in the current fiscal year and the denominator
of which is 12. Such payment shall be made within ten (10) days following the
Release Effective Date.

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(d)Stock Awards. The vesting of all outstanding Stock Awards held by Executive
shall be accelerated so that the amount of shares vested under such Stock Awards
shall equal that number of shares which would have been vested if Executive had
continued to render services to the Company for 12 continuous months after the
date of Executive’s termination of employment.

(e)Health Insurance Benefits. To the extent provided by the federal COBRA law
or, if applicable, state insurance laws, and by the Company’s current group
health insurance policies, Executive will be eligible to continue Executive’s
group health insurance benefits at Executive’s own expense. If Executive timely
elects continued coverage under COBRA, the Company shall pay Executive’s COBRA
premiums, and any applicable Company COBRA premiums, necessary to continue
Executive’s then-current coverage for a period of 12 months after the date of
Executive’s termination of employment; provided, however, that any such payments
will cease if Executive voluntarily enrolls in a health insurance plan offered
by another employer or entity during the period in which the Company is paying
such premiums. Executive agrees to immediately notify the Company in writing of
any such enrollment.

Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that it cannot provide the foregoing benefit without potentially
incurring financial costs or penalties under applicable law (including, without
limitation, Section 2716 of the Public Health Service Act), the Company shall in
lieu thereof provide to Executive a taxable monthly amount to continue his group
health insurance coverage in effect on the date of separation from service
(which amount shall be based on the premium for the first month of COBRA
coverage), which payments shall be made regardless of whether Executive elects
COBRA continuation coverage and shall commence in the month following the month
in which Executive incurs a separation from service and shall end on the earlier
of (x) the date on which Executive voluntarily enrolls in a health insurance
plan offered by another employer or entity during the period in which the
Company is paying such amounts and (y) 12 months after the date of Executive’s
separation from service.

(f)Disability Plans. Nothing in this Section 6.3 shall affect Executive’s rights
under any disability plan in which Executive is a participant.

6.4Termination by the Company for Cause.

(a)No Liability. The Company may terminate Executive’s employment and this
Agreement for Cause (as defined below) without liability at any time. In such
event, the Company shall pay Executive all Accrued Compensation (as defined in
Section 6.2(c) herein), but no other compensation or reimbursement of any kind,
including without limitation, any severance compensation or benefits shall be
paid, and thereafter the Company’s obligations hereunder shall terminate.

(b)Definition of “Cause.” For purposes of this Agreement, “Cause” shall mean one
or more of the following:

(i)Executive’s intentional commission of an act, or intentional failure to act,
that materially injures the business of the Company; provided, however, that in
no event shall any business judgment made in good faith by Executive and within
Executive’s defined scope of authority constitute a basis for termination for
Cause under this Agreement;

(ii)Executive’s intentional refusal or intentional failure to act in accordance
with any lawful and proper direction or order of the Board of Directors, the
Chief Executive Officer, or the individual to whom Executive reports.

(iii)Executive’s material breach of Executive’s fiduciary, statutory,
contractual, or common law duties to the Company (including any material breach
of this Agreement, the Proprietary Information and Inventions Agreement, or the
Company’s written policies);

(iv)Executive’s indictment for or conviction of any felony or any crime
involving dishonesty; or

(v)Executive’s participation in any fraud or other act of willful misconduct
against the Company;

provided, however, that in the event that any of the foregoing events is
reasonably capable of being cured, the Company shall provide written notice to
Executive describing the nature of such event and Executive shall thereafter
have ten (10) business days to cure such event.

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6.5Termination by the Company without Cause.

(a)The Company’s Right. The Company may terminate Executive’s employment and
this Agreement without Cause (as defined in Section 6.4(b) herein) at any time
by giving thirty (30) days advance written notice to Executive.

(b)Severance Benefits. If the Company terminates Executive’s employment without
Cause, and if Executive signs the Release on or within the time period set forth
therein (but in no event later than forty-five (45) days after the termination
date) and allows such Release to become effective (the “Release Effective
Date”), then:

(i)Accrued Compensation. The Company shall pay to Executive all Accrued
Compensation (as defined in Section 6.2(c) herein).

(ii)Cash Compensation Amount Payments. The Company shall pay Executive an amount
calculated as follows: [Executive’s annual Base Salary + Executive’s Target
Annual Bonus (as defined in Section 3.2 herein)] multiplied by 1.0 (the “Cash
Compensation Amount”). Subject to the provisions of Section 6.11, the Cash
Compensation Amount will be paid in equal installments on the Company’s standard
payroll dates over a period of 12 months following Executive’s separation from
service; provided, however, that any amounts that would otherwise be scheduled
to be paid prior to the Release Effective Date shall instead accrue and be paid
during the first payroll period following the Release Effective Date, and all
other payments shall be made as originally scheduled.

(iii)Stock Awards. The vesting of all outstanding Stock Awards held by Executive
shall be accelerated so that the amount of shares vested under such Stock Awards
shall equal that number of shares which would have been vested if Executive had
continued to render services to the Company for 12 continuous months after the
date of Executive’s termination of employment.

(iv)Health Insurance Benefits. To the extent provided by the federal COBRA law
or, if applicable, state insurance laws, and by the Company’s current group
health insurance policies, Executive will be eligible to continue Executive’s
group health insurance benefits at Executive’s own expense. If Executive timely
elects continued coverage under COBRA, the Company shall pay Executive’s COBRA
premiums, and any applicable Company COBRA premiums, necessary to continue
Executive’s then-current coverage for a period of 12 months after the date of
Executive’s termination of employment; provided, however, that any such payments
will cease if Executive voluntarily enrolls in a health insurance plan offered
by another employer or entity during the period in which the Company is paying
such premiums. Executive agrees to immediately notify the Company in writing of
any such enrollment.

Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that it cannot provide the foregoing benefit without potentially
incurring financial costs or penalties under applicable law (including, without
limitation, Section 2716 of the Public Health Service Act), the Company shall in
lieu thereof provide to Executive a taxable monthly amount to continue his group
health insurance coverage in effect on the date of separation from service
(which amount shall be based on the premium for the first month of COBRA
coverage), which payments shall be made regardless of whether Executive elects
COBRA continuation coverage and shall commence in the month following the month
in which Executive incurs a separation from service and shall end on the earlier
of (x) the date on which Executive voluntarily enrolls in a health insurance
plan offered by another employer or entity during the period in which the
Company is paying such amounts and (y) 12 months after the date of Executive’s
separation from service.

6.6Termination by Executive due to a Constructive Termination.

(a)Executive’s Right. Executive may resign his employment and terminate this
Agreement at any time as a result of a Constructive Termination (as defined in
Section 6.6(c) herein).

(b)Severance Benefits. If Executive resigns his employment and terminates this
Agreement as a result of a Constructive Termination, and if Executive signs the
Release on or within the time period set forth therein (but in no event later
than forty-five (45) days after the termination date) and allows such Release to
become effective, then Executive shall receive all of the severance benefits set
forth in Section 6.5(b) herein.

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(c)Definition of “Constructive Termination.” For purposes of this Agreement,
“Constructive Termination” shall mean a resignation of employment and
termination of this Agreement by Executive for one or more of the following
reasons:

(i)Assignment to, or withdrawal from, Executive of any duties or
responsibilities that results in a material diminution in such Executive’s
authority, duties or responsibilities as in effect immediately prior to such
change;

(ii)A material diminution in the authority, duties or responsibilities of the
supervisor to whom Executive is required to report,

(iii)A material reduction by the Company of Executive’s annual Base Salary;

(iv)A relocation of Executive or the Company’s principal executive offices if
Executive’s principal office is at such offices, to a location more than forty
(40) miles from the location at which Executive is then performing his duties,
except for an opportunity to relocate which is accepted by Executive in writing;
or

(v)A material breach by the Company of any provision of this Agreement or any
other enforceable written agreement between Executive and the Company;

provided however, that Executive must first provide the Company with written
notice specifying the condition giving rise to a Constructive Termination within
ninety (90) days following the initial existence of such condition; and
Executive’s notice must specify that Executive intends to terminate his
employment no earlier than thirty (30) days after providing such notice, and the
Company must be given an opportunity to cure such condition within thirty (30)
days following its receipt of such notice and avoid paying benefits.

6.7Voluntary Resignation, Executive may resign his or her employment and
terminate this Agreement at any time for any reason other than due to a
Constructive Termination (as defined in Section 6.6(c) herein). In such event,
the Company shall pay Executive all Accrued Compensation (as defined in Section
6.2(c) herein), but no other compensation or reimbursement of any kind,
including without limitation, any severance compensation or benefits shall be
paid, and thereafter the Company’s obligations hereunder shall terminate.

6.8Change In Control.

(a)Severance Benefits. If (i) within six months after the consummation of a
Change in Control (as defined in Section 6.8(b) herein), (1) the Company
terminates Executive’s employment and this Agreement without Cause pursuant to
Section 6.5 herein or (2) Executive resigns his employment and terminates this
Agreement as a result of a Constructive Termination pursuant to Section 6.6
herein, and (ii) in either event (1) or (2), Executive signs the Release on or
within the time period set forth therein, but in no event later than forty-five
(45) days after the termination date and allows such Release to become effective
(the “Release Effective Date”), then Executive shall receive the following
severance benefits in lieu of any severance benefits set forth in Section 6.5(b)
or Section 6.6(b) herein:

(i)Accrued Compensation. The Company shall pay to Executive all Accrued
Compensation (as defined in Section 6.2(c) herein).

(ii)CIC Cash Compensation Amount Payment. The Company shall pay Executive an
amount calculated as follows: [Executive’s annual Base Salary + Executive’s
Target Annual Bonus (as defined in Section 3.2 herein)] multiplied by 1.5
(collectively, the “CIC Cash Compensation Amount”). The CIC Cash Compensation
Amount will be paid in one lump sum within ten (10) days following the Release
Effective Date.

(iii)Cash Payment for Stock Awards. Within ten (10) days following the Release
Effective Date, the Company shall pay Executive a cash amount equal to the
value, as of the date of the consummation of the Change in Control, of (1) all
Stock Awards that are unvested at the time of termination of employment, and (2)
all Stock Awards that are vested at the time of termination of employment and
for which the shares subject to such Stock Awards have not yet been issued,
including, without limitation, any unexercised stock options, unexercised stock
appreciation rights, and unissued shares subject to a restricted stock unit
award,

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provided, in either case, that such Stock Awards were held by Executive as of
the date of consummation of the Change in Control, and all rights of Executive
in such Stock Awards and any unvested shares of stock that previously may have
been issued thereunder shall be extinguished as a result of such payment, with
the result that such Stock Awards shall automatically terminate unexercised and
unvested shares of stock previously issued shall automatically be reacquired by
the Company or its successor. For purposes of the foregoing cash payment, (1)
stock options and stock appreciation rights shall be valued on the basis of the
difference between the value of the subject stock for purposes of the
transaction constituting the Change of Control and the exercise or base price of
the award, and (2) restricted stock, restricted stock units or other full value
awards and shares of stock acquired under Stock Awards shall be valued on the
basis of the value of the subject stock for purposes of the transaction
constituting the Change in Control.

(iv)Health Insurance Benefits. To the extent provided by the federal COBRA law
or, if applicable, state insurance laws, and by the Company’s current group
health insurance policies, Executive will be eligible to continue Executive’s
group health insurance benefits at Executive’s own expense. If Executive timely
elects continued coverage under COBRA, the Company shall pay Executive’s COBRA
premiums, and any applicable Company COBRA premiums, necessary to continue
Executive’s then-current coverage for a period of 18 months after the date of
Executive’s termination of employment; provided, however, that any such payments
will cease if Executive voluntarily enrolls in a health insurance plan offered
by another employer or entity during the period in which the Company is paying
such premiums. Executive agrees to immediately notify the Company in writing of
any such enrollment.

Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that it cannot provide the foregoing benefit without potentially
incurring financial costs or penalties under applicable law (including, without
limitation, Section 2716 of the Public Health Service Act), the Company shall in
lieu thereof provide to Executive a taxable monthly amount to continue his group
health insurance coverage in effect on the date of separation from service
(which amount shall be based on the premium for the first month of COBRA
coverage), which payments shall be made regardless of whether Executive elects
COBRA continuation coverage and shall commence in the month following the month
in which Executive incurs a separation from service and shall end on the earlier
of (x) the date on which Executive voluntarily enrolls in a health insurance
plan offered by another employer or entity during the period in which the
Company is paying such amounts and (y) 18 months after the date of Executive’s
separation from service.

(b)Definition of “Change in Control.” For purposes of this Agreement, a “Change
in Control” shall have occurred if at any time during Executive’s employment
hereunder, any of the following events shall occur:

(i)The Company is merged, or consolidated. or reorganized into or with another
corporation or other legal person, and as a result of such merger, consolidation
or reorganization less than 50% of the combined voting power of the
then-outstanding securities of such corporation or person immediately after such
transaction are held in the aggregate by the holders of voting securities of the
Company immediately prior to such transaction;

(ii)The Company sells all or substantially all of its assets or any other
corporation or other legal person and thereafter, less than 50% of the combined
voting power of the then-outstanding voting securities of the acquiring or
consolidated entity are held in the aggregate by the holders of voting
securities of the Company immediately prior to such sale;

(iii)There is a report filed after the date of this Agreement on Schedule 13 D
or schedule 14 D-1 (or any successor schedule, form or report), each as
promulgated pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”)
disclosing that any person (as the term “person” is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the
term beneficial owner is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) representing 50% or more of the
combined voting power of the then-outstanding voting securities of the Company;

(iv)The Company shall file a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to item
1 of Form 8-X thereunder or Item 5(f) of Schedule 14 A thereunder (or any
successor schedule, form or report or item therein) that the change in control
of the Company has or may have occurred or will or may occur in the future
pursuant to any then-existing contract or transaction; or

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(v)During any period of two (2) consecutive years, individuals who at the
beginning of any such period constitute the directors of the Company cease for
any reason to constitute at least a majority thereof unless the election to the
nomination for election by the Company’s shareholders of each director of the
Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of such period.

(c)Parachute Payments.

(i)If any payment or benefit (including payments or benefits pursuant to this
Agreement) that Executive would receive in connection with a Change in Control
or otherwise (“Payment”) would (1) constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), and (2) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to
the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion
of the Payment that would result in no portion of the Payment being subject to
the Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Executive’s receipt, on an
after-tax basis, of the greater economic benefit notwithstanding that all or
some portion of the Payment may be subject to the Excise Tax. If a reduction in
payments or benefits constituting “parachute payments” is necessary so that the
Payment equals the Reduced Amount, Executive shall have no rights to any
additional payments and/or benefits, and reduction shall occur in the manner
that results in the greatest economic benefit for Executive. If more than one
method of reduction will result in the same economic benefit, the items so
reduced will be reduced pro rata.

(ii)In the event it is subsequently determined by the Internal Revenue Service
that some portion of the Reduced Amount as determined pursuant to clause (x) in
the preceding paragraph is subject to the Excise Tax, Executive agrees to
promptly return to the Company a sufficient amount of the Payment so that no
portion of the Reduced Amount is subject to the Excise Tax. For the avoidance of
doubt, if the Reduced Amount is determined pursuant to clause (y) in the
preceding paragraph, Executive will have no obligation to return any portion of
the Payment pursuant to the preceding sentence.

(iii)The independent registered public accounting firm engaged by the Company
for general audit purposes as of the day prior to the effective date of the
event described in Section 280G(b)(2)(A)(i) of the Code will perform the
foregoing calculations. If the independent registered public accounting firm so
engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting such Change in Control or similar transaction, the
Company will appoint a nationally recognized independent registered public
accounting firm to make the determinations required hereunder. The Company will
bear all expenses with respect to the determinations by such independent
registered public accounting firm required to be made hereunder. Any good faith
determinations of the independent registered public accounting firm made
hereunder will be final, binding and conclusive upon the Company and you.

6.9Mitigation. Except as otherwise specifically provided herein, Executive shall
not be required to mitigate the amount of any payment provided under this
Agreement by seeking other employment or self-employment, nor shall the amount
of any payment provided for under this Agreement be reduced by any compensation
earned by Executive as a result of employment by another employer or through
self-employment or by retirement benefits after the date of Executive’s
termination of employment from the Company, except as provided herein.

6.10Coordination. If upon termination of employment, Executive becomes entitled
to rights under other plans, contracts or arrangements entered into by the
Company, this Agreement shall be coordinated with such other arrangements so
that Executive’s rights under this Agreement are not reduced, and that any
payments under this Agreement offset the same types of payments otherwise
provided under such other arrangements, but do not otherwise reduce any payments
or benefits under such other arrangements to which Executive becomes entitled.

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6.11Application of Section 409A. Notwithstanding anything to the contrary
herein, the following provisions apply to the extent severance benefits provided
herein are subject to Section 409A of the Code and the regulations and other
guidance thereunder and any state law of similar effect (collectively “Section
409A”). Severance benefits shall not commence until Executive has a “separation
from service” for purposes of Section 409A. If Executive is a “specified
employee” within the meaning of 409A(a)(2)(B)(i) of the Code, any installment
payments of Disability Base Salary Payments pursuant to Section 6.3(b) or Cash
Compensation Amounts pursuant to Section 6.5(b) or 6.6(b) that are triggered by
a separation from service shall be accelerated to the minimum extent necessary
so that (a) the lesser of (y) the total cash severance payment amount, or (z)
six (6) months of such installment payments are paid no later than March 15 of
the calendar year following such termination, and (b) all amounts paid pursuant
to the foregoing clause (a) will constitute separate payments for purposes of
Section l.409A- 2(b)(2) of the Treasury Regulations and thus will be payable
pursuant to the “short-term deferral” rule set forth in Section l.409A-l(b)(4)
of the Treasury Regulations. It is intended that if Executive is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time
of such separation from service the foregoing provision shall result in
compliance with the requirements of Section 409A(a)(2)(B)(i) of the Code because
payments to Executive will either be payable pursuant to the “short-term
deferral” rule set forth in Section l.409A­ l(b)(4) of the Treasury Regulations
or will not be paid until at least 6 months after separation from service. The
severance benefits are intended to qualify for an exemption from application of
Section 409A or comply with its requirements to the extent necessary to avoid
adverse personal tax consequences under Section 409A, and any ambiguities herein
shall be interpreted accordingly.

ARTICLE 7

GENERAL PROVISIONS

7.1Governing Law. The validity, interpretation, construction and performance of
this Agreement and the rights of the parties thereunder shall be interpreted and
enforced under California law without reference to principles of conflicts of
laws. The parties expressly agree that inasmuch as the Company’s headquarters
and principal place of business are located in California, it is appropriate
that California law govern this Agreement.

7.2Assignment; Successors Binding Agreement.

(a)No Assignment. Executive may not assign, pledge or encumber his interest in
this Agreement or any part thereof.

(b)Assumption by Successor. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by operation of
law or by agreement in form and substance reasonably satisfactory to Executive,
to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.

(c)This Agreement shall inure to the benefit of and be enforceable by
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributee, devisees and legatees. If Executive should die
while any amount is at such time payable to Executive hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Executive’s devisee, legates or other designee or, if
there be no such designee, to his estate.

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7.3Notice. For the purposes of this Agreement, notices 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 mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.

To the Company:

Neurocrine Biosciences, Inc.

12780 El Camino Real

San Diego, CA 92130

Attn.: President & Chief Executive Officer

To Executive:

 

 

 

 

 

 

7.4Modification; Waiver; Entire Agreement. This Agreement constitutes the
complete, final and exclusive embodiment of the entire agreement between
Executive and the Company with regard to this subject matter. It is entered into
without reliance on any promise or representation, written or oral, other than
those expressly contained herein, and it supersedes any other such promises,
warranties or representations, including, without limitation, the Prior
Employment Agreement which shall have no further force or effect. No provisions
of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by Executive and such
officer as may be specifically designated by the Board of Directors of the
Company. No waiver by either party hereto at any time of any breach by the other
party of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or any prior or subsequent time.

7.5Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

7.6Controlling Document. Except to the extent described in Section 6.10, in case
of conflict between any of the terms and condition of this Agreement and any
document herein referred to, the terms and conditions of this Agreement shall
control.

7.7Executive Acknowledgment. Executive acknowledges (a) that he has consulted
with or has had the opportunity to consult with independent counsel of his own
choice concerning this Agreement, and has been advised to do so by the Company,
and (b) that he has read and understands the Agreement, is fully aware of its
legal effect, and has entered into it freely based on his own judgment.

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7.8Dispute Resolution. To ensure the rapid and economical resolution of disputes
that may arise in connection with Executive’s employment, Executive and the
Company agree that any and all disputes, claims, or causes of action, in law or
equity, arising from or relating to the enforcement, breach, performance,
execution, or interpretation of this Agreement, Executive’s employment, or the
termination of that employment, shall be resolved, to the fullest extent
permitted by law pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, by
final, binding and confidential arbitration in San Diego, California conducted
before a single arbitrator by Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) or its successor, under the then applicable JAMS rules; provided,
however, that in no event shall the Arbitrator be empowered to hear or determine
any class or collective claim of any type. The JAMS rules can be found online at
wwwjamsadr.com. By agreeing to this arbitration procedure, both Executive and
the Company waive the right to resolve any such dispute through a trial by jury
or judge or by administrative proceeding. The arbitrator shall: (a) have the
authority to compel adequate discovery for the resolution of the dispute and to
award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. The Company shall pay all of JAMS’
arbitration fees. Nothing in this letter agreement shall prevent either
Executive or the Company from obtaining injunctive relief in court if necessary
to prevent irreparable harm pending the conclusion of any arbitration. The
parties agree that the arbitrator shall award reasonable attorneys’ fees, costs,
and all other related expenses to the prevailing party in any action brought
hereunder, and the arbitrator shall have discretion to determine the prevailing
party in an arbitration where multiple claims may be at issue.

7.9Remedies.

(a)Injunctive Relief. The parties agree that the services to be rendered by
Executive hereunder are of a unique nature and that in the event of any breach
or threatened breach of any of the covenants contained herein, the damage or
imminent damage to the value and the goodwill of the Company’s business will be
irreparable and extremely difficult to estimate, making any remedy at law or in
damages inadequate. Accordingly, the parties agree that the Company shall be
entitled to injunctive relief against Executive in the event of any breach or
threatened breach of any such provisions by Executive, in addition to any other
relief (including damage) available to the Company under this Agreement or under
law.

(b)Exclusive. Both parties agree that the remedy specified in Section 7.9(a)
above is not exclusive of any other remedy for the breach by Executive of the
terms hereof.

7.10Counterparts. This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one and the same Agreement.

Executed by the parties as follows:

 

 

EXECUTIVE

 

NEUROCRINE BIOSCIENCES, INC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Kyle W. Gano

 

By:

 

/s/ Kevin Gorman

 

 

 

 

 

 

 

Date:

 

11/12/14

 

Date:

 

11/10/14

 

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EXHIBIT A

GENERAL RELEASE

Pursuant to the terms of the Employment Agreement between Neurocrine
Biosciences, Inc. (the “Company”) and --- (“Executive”) dated --- (the
“Agreement”), the parties hereby enter into the following General Release (the
“Release”):

1.Accrued Salary and Vacation. Executive understands that, on the last date of
Executive’s employment with the Company, the Company will pay Executive any
accrued salary and accrued and unused vacation to which Executive is entitled by
law, regardless of whether Executive signs this Release.

2.General Release. Executive hereby generally and completely releases the
Company and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively the “Released Parties”) of and from any
and all claims, liabilities and obligations, both known and unknown, arising out
of or in any way related to events, acts, conduct, or omissions occurring at any
time prior to or at the time that Executive signs this Release.

3.Scope of Release. This general release includes, but is not limited to: (1)
all claims arising out of or in any way related to Executive’s employment with
the Company or the termination of that employment; (2) all claims related to
Executive’s compensation or benefits from the Company, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership or equity
interests in the Company; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing
(including claims based on or arising under the Agreement); (4) all tort claims,
including claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (5) all federal, state, and local statutory
claims, including claims for discrimination, harassment, retaliation, attorneys’
fees, or other claims arising under the federal Civil Rights Act of 1964 (as
amended), the federal Americans with Disabilities Act of 1990, the federal Age
Discrimination in Employment Act (as amended) (“ADEA’’), the federal Family and
Medical Leave Act, the California Labor Code (as amended), the California Family
Rights Act, and the California Fair Employment and Housing Act (as amended).

4.ADEA Waiver. Executive acknowledges that Executive is knowingly and
voluntarily waiving and releasing any rights Executive may have under the ADEA,
and that the consideration given for the waiver and release in the preceding
paragraph is in addition to anything of value to which Executive is already
entitled. Executive further acknowledges that Executive has been advised by this
writing that: (1) Executive’s waiver and release do not apply to any rights or
claims that may arise after the date Executive signs this Release; (2) Executive
should consult with an attorney prior to signing this Release (although
Executive may choose voluntarily not to do so); (3) Executive has twenty-one
(21) days to consider this Release (although Executive may choose voluntarily to
sign it earlier); (4) Executive has seven (7) days following the date Executive
signs this Release to revoke it by providing written notice of revocation to the
Company’s Chief Executive Officer; and (5) this Release will not be effective
until the date upon which the revocation period has expired, which will be the
eighth calendar day after the date Executive signs it provided that Executive
does not revoke it (the “Effective Date”).

5.Section 1542 Waiver. EXECUTIVE UNDERSTANDS THAT THIS AGREEMENT INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. Executive acknowledges that Executive
has read and understands Section 1542 of the California Civil Code which reads
as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her
settlement with the debtor.” Executive hereby expressly waives and relinquishes
all rights and benefits under that section and any law or legal principle of
similar effect in any jurisdiction with respect to Executive’s respective
release of claims herein, including but not limited to Executive’s release of
unknown and unsuspected claims.

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6.Excluded Claims. Executive understands that notwithstanding the foregoing, the
following are not included in the Released Claims (the “Excluded Claims”): (i)
any rights or claims for indemnification Executive may have pursuant to any
written indemnification agreement to which he is a party, the charter, bylaws,
or operating agreements of any of the Released Parties, or under applicable law;
or (ii) any rights which are not waivable as a matter of law. In addition,
Executive understands that nothing in this release prevents Executive from
filing, cooperating with, or participating in any proceeding before the Equal
Employment Opportunity Commission, the Department of Labor, or the California
Department of Fair Employment and Housing, except that Executive acknowledges
and agrees that Executive shall not recover any monetary benefits in connection
with any such claim, charge or proceeding with regard to any claim released
herein. Executive hereby represents and warrants that, other than the Excluded
Claims, Executive is not aware of any claims he has or might have against any of
the Released Parties that are not included in the Released Claims.

7.Executive Representations. Executive hereby represents that Executive has been
paid all compensation owed and for all hours worked; Executive has received all
the leave and leave benefits and protections for which Executive is eligible,
pursuant to the Family and Medical Leave Act, the California Family Rights Act,
or otherwise; and Executive has not suffered any on-the-job injury for which
Executive has not already filed a workers’ compensation claim.

8.Nondisparagement. Executive agrees not to disparage the Company, its parent,
or its or their officers, directors, employees, shareholders, affiliates and
agents, in any manner likely to be harmful to its or their business, business
reputation, or personal reputation (although Executive may respond accurately
and fully to any question, inquiry or request for information as required by
legal process).

9.Cooperation. Executive agrees not to voluntarily (except in response to legal
compulsion) assist any third party in bringing or pursuing any proposed or
pending litigation, arbitration, administrative claim or other formal proceeding
against the other party, or against the Company’s parent or subsidiary entities,
affiliates, officers, directors, employees or agents. Executive further agrees
to reasonably cooperate with the other party, by voluntarily (without legal
compulsion) providing accurate and complete information, in connection with such
other party’s actual or contemplated defense, prosecution, or investigation of
any claims or demands by or against third parties, or other matters, arising
from events, acts, or failures to act that occurred during the period of
Executive’s employment by the Company.

10.No Admission of Liability. The parties agree that this Release, and
performance of the acts required by it, does not constitute an admission of
liability, culpability, negligence or wrongdoing on the part of anyone, and will
not be construed for any purpose as an admission of liability, culpability,
negligence or wrongdoing by any party and/or by any party’s current, former or
future parents, subsidiaries, related entities, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns. The parties
specifically acknowledge and agree that this Release is a compromise of disputed
claims and that the Company denies any liability for any matter released herein.

 

NEUROCRINE BIOSCIENCES, INC.:

 

EXECUTIVE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

By:

 

 

 

 

 

 

 

 

 

Date:

 

 

 

Date:

 

 

 

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