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Exhibit 10.22

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of this 4th day of February 2004 (the "Effective Date"), by and
between CYPRESS BIOSCIENCE, INC., a Delaware corporation (the "Company") and
Denise Woolard (the "Employee").

        WHEREAS, the Company desires to employ the Employee in an executive
capacity as Vice President of Business and Legal Affairs and Secretary on the
terms and conditions set forth herein and the Employee is willing to accept and
undertake such employment.

AGREEMENT

        NOW THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the Company and the Employee agree as follows:

ARTICLE 1

EMPLOYMENT; TERM; DUTIES

        1.1    Employment.    Upon the terms and conditions hereinafter set
forth, the Company hereby employs the Employee, and the Employee hereby accepts
continued employment, as Vice President of Business and Legal Affairs and
Secretary ("Vice President") of the Company.

        1.2    Term.    Unless sooner terminated as provided in Article 5
hereof, the Employee's employment hereunder shall be for a term commencing on
the Effective Date and ending on February 4, 2006, subject to automatic renewal
for one year periods following February 4, 2006, unless written notice has been
provided by either party at least 75 days prior to the date of such automatic
renewal (a "Non-Renewal Notice"). Notwithstanding anything herein to the
contrary, either party may terminate the Employee's employment under this
Agreement at any time, with or without Cause, subject to the terms and
conditions of Article 5 herein. The actual term of employment hereunder, giving
effect to any early termination of employment under Article 5 hereof, is
referred to as the "Term."

        1.3    Duties.    During the Term, the Employee shall perform such
executive duties for the Company and for its subsidiaries, consistent with her
position hereunder and as typically associated with the duties of a Vice
President of a publicly-held corporation and as reasonably may be assigned to
her from time to time by the Board and the Chief Executive Officer of the
Company. Except as contemplated by Section 1.5, the Employee shall devote her
entire business time, attention and energies to the performance of her duties
hereunder.

        1.4    Exclusive Agreement.    The Employee represents and warrants to
the Company that she is not a party to any agreement or arrangement, whether
written or oral, in effect which would prevent the Employee from rendering the
services contemplated hereunder to the Company during the Term.

        1.5    Other Activity.    Notwithstanding the foregoing, subject to her
fiduciary duties to the Company under applicable law, the Company acknowledges
and understands that the Employee may serve as a director of other companies not
in competition with the Company by providing prior written notice to the
Company; provided, however, that the performance of such services shall not
restrict or limit in any manner the Employee's ability to perform her duties
hereunder.

        1.6    Insurance.    The Company shall obtain, and shall use its
commercially reasonable best efforts to maintain during the Term, Director's and
Officer's Insurance and Product Liability Insurance

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policies, with full defense coverage of at least $10,000,000 for each,
respectively, with regard to all actions undertaken by the Employee in her
capacity as an officer and employee of the Company.

ARTICLE 2

COMPENSATION

        2.1    Base Salary.    For all services rendered by the Employee
hereunder and in consideration of all covenants and conditions undertaken by her
pursuant to this Agreement, the Company shall pay the Employee an annual base
salary ("Base Salary") of $225,000 per year in equal semi-monthly installments,
and which shall be increased if there is an across the board increase in base
salary for other executive officers. In addition, each year during the Term, the
Board shall review the Base Salary with a view to determining whether it would
be appropriate to increase such Base Salary. The annual Base Salary payable to
the Employee hereunder, as it may be so increased, thereafter shall constitute
the "Base Salary". If the first or last month of the Term is not a full calendar
month, then any calculation of Base Salary for such period shall be prorated for
the number of days in such months during which the Employee was employed.

        2.2    Bonuses.    

        (a)   In addition to the Base Salary, for the year 2004, the Employee
shall be paid a minimum cash bonus equal to 25% of Employee's Base Salary on the
date such bonus is payable, which shall be within 45 days of December 31, 2004,
payable in a lump sum ("Minimum Bonus"). This Minimum Bonus shall be the minimum
amount payable to the Employee for services provided in 2004.

        (b)   In addition to the Base Salary, the Employee may be eligible for
cash bonuses (the "Bonus Amount") based on the performance of the Employee
during a fiscal year, as evaluated by the CEO and the Board in their sole
discretion. It is acknowledged and agreed that the determination and the payment
of the Bonus Amount to the Employee shall be at the sole discretion of the Board
which may consider, among other matters, the financial condition of the Company
at the time. In exercising its discretion pursuant to this subsection, the Board
shall act in a manner at least as favorable to the Employee as governs the award
of bonuses to other executive officers and key employees of the Company.

        2.3    Deductions.    The Company shall deduct from the compensation
described in this Section 2 any Federal, state or city withholding taxes, social
security contributions and any other amounts which may be required to be
deducted or withheld by the Company pursuant to any federal, state or city laws,
rules or regulations.

ARTICLE 3

BENEFITS

        3.1    Benefits.    During the Term, the Employee shall be entitled to
participate in such compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension plans and
retirements plans as the Company may make available to its other executive
officers.

        3.2    Life Insurance.    The Company agrees that it will provide the
Employee with life insurance policy or policies in amounts at least as favorable
to the Employee as governs the other executive officers, subject to availability
of such insurance at commercially reasonable costs and the mutual agreement of
the Company and the Employee as to the type and nature of the policies.

        3.3    Expenses.    The Company agrees that the Employee is authorized
to incur reasonable and customary expenses in the performance of her duties
hereunder, including travel and entertainment costs, and upon presentation of
appropriate documentation thereof, the Company promptly shall pay or

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reimburse the Employee for such reasonable expenses. In the event that any
reimbursement by the Company of expenses of the Employee hereunder is deducted
by the Company, and results in additional taxes due and payable by the Employee,
the Company shall pay to the Employee an additional sum equal to the amount of
such additional tax liability of the Employee.

        3.4    Vacations.    During each full year of the Term, the Employee
shall be entitled to four (4) weeks of paid vacation, to be taken at times
determined by the Employee which are mutually agreeable with the Company and
which do not unreasonably interfere with the performance of her duties
hereunder.

ARTICLE 4

STOCK OPTIONS

        4.1    Stock Options.    

        (a)   Upon the date this Agreement is signed by both parties, and
pursuant to the terms of the Company's 2000 Equity Incentive Plan (the "Plan"),
the Employee will be granted a stock option to purchase 100,000 shares of the
Company's common stock (the "Option"). The Option will be governed by and
granted pursuant to a separate stock option agreement and the Plan. The exercise
price per share of the Option will be equal to the fair market value of the
common stock of the Company on the date of grant, as required by, and consistent
with the Plan. The Option will be subject to vesting ratably and daily over four
years so long as the Employee provides Continuous Service (as such term is
defined in the Plan) to the Company. For purposes of this Agreement, the Option
and all other stock options or stock awards granted to the Employee during the
Term shall be referred to as the "Options".

        (b)   In the event of a termination (as described in Article 5), and
except as otherwise provided in Section 4.1(c) and 4.1(d) hereof, all Options
which have not vested as of the Termination Date shall cease vesting and shall
be cancelled as of the Termination Date. All vested Options shall be cancelled
90 days after the Termination Date.

        (c)   Upon the Employee's death or Disability (as defined in Section 5.1
below), all rights under such Options shall transfer to the Employee's
designated beneficiary. All Options shall be cancelled 90 days after the
Employee is terminated due to Disability. In the event of the Employee's death,
the Employee's legal representatives shall have 180 days following the
Termination Date to exercise the Options before they are cancelled.

        (d)   The Company may grant the Employee options to purchase the
Company's common stock in addition to the Options at such times and on such
terms as may be decided from time to time by the Board, in its sole discretion.

ARTICLE 5

DEATH, DISABILITY; TERMINATION

        5.1    Death; Disability.    The Employee's employment hereunder shall
terminate upon her death or, at the election of the Company, by written notice
to the Employee if the Employee becomes Disabled (as such term is hereinafter
defined). In the event of a termination of the Employee's employment for death
or disability, the Company shall pay the Employee (or her legal representatives,
as the case may be) all earned and unpaid wages and accrued vacation.

        For the purposes of this Agreement, the Employee shall be deemed to be
"Disabled" or have a "Disability" if as a result of the occurrence of mental or
physical disability during the Term she has been unable to perform her duties
hereunder for six consecutive months or 180 days in any 12 consecutive month
period, as determined in good faith by the Board; provided, however, that if the
Employee develops a mental or physical disability during the Term, and it is
determined, in the

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reasonable professional judgment of an independent, objective and qualified
medical expert in the field of such disability, that the Employee will be unable
to perform her duties hereunder and that such disability will continue for six
consecutive months or 180 days in any twelve (12) consecutive month period, then
the Company shall be permitted to terminate the Employee's employment
immediately.

        The date of any termination of employment under this Section 5.1 or
Sections 5.2, 5.3, 5.4 or 5.5 is referred to herein as the "Termination Date."

        5.2    Termination of Employment by Employee.    

        (a)   Notwithstanding any provision to the contrary herein, unless
otherwise provided herein or unless otherwise provided by law, the Employee at
any time, upon 30 days' written notice to the Company, may terminate her
employment by the Company hereunder. Except as otherwise provided in
Section 5.2(b) below, the Company shall not be liable to the Employee for the
payment of any amount on such termination.

        (b)   In the event that the Employee terminates her employment as Vice
President following (i) an uncured material breach of this Agreement by the
Company, (ii) the occurrence the relocation of the Company's executive offices
or principal business location to a point more than 30 miles from the San Diego,
California area, (iii) any uncured action by the Board or direction given by the
Board to the Employee that is contrary to applicable law or accounting standards
or constitutes an unethical business practice, or (iv) a demotion or the
occurrence of a material reduction in the Employee's authority, functions or
responsibilities as Vice President without her consent, then such termination by
the Employee shall be deemed for all purposes, including for purposes of
severance payments and benefits provided under Section 5.4 hereof, to be a
termination by the Company of the employment of the Employee hereunder without
cause pursuant to Section 5.4. The Company shall have 30 days following receipt
of written notice by the Employee to the Company of the material breach
described in items (i) and (iii) above, setting forth in reasonable detail the
matter constituting such breach, to cure such breach.

        5.3    Termination of Employment With Cause.    In addition to any other
remedies available to it at law, in equity or as set forth in this Agreement,
the Company shall have the right, upon written notice to the Employee, to
immediately terminate her employment hereunder if the Employee (a) evidences a
pattern of willful breach in any material respect of any material provision of
this Agreement or a pattern of willful violation of any reasonable policies or
orders of the CEO or the Board and such pattern of willful breach or violation
does not cease within 30 days after the Employee's receipt of written notice
thereof from the Board setting forth in reasonable detail the matters
constituting such pattern,, (b) the Employee's commission of an act that
materially injures the business of the Company; (c) the Employee's conviction of
a felony involving moral turpitude that is likely to inflict or has inflicted
material injury on the business of the Company, (d) the Employee's engaging or
in any manner participating in any activity which is directly competitive with
or injurious to the Company or any of its Affiliates or which violates any
material provisions of Article 6 hereof or the Employee's Proprietary
Information and Inventions Agreement with the Company; or (e) the Employee's
commission of any fraud against the Company, its Affiliates, employees, agents
or customers or use or intentional appropriation for his personal use or benefit
of any funds or properties of the Company not authorized by the CEO or the Board
to be so used or appropriated.

        5.4    Termination of Employment Without Cause or for Non-Renewal.    

        (a)   Notwithstanding any provision to the contrary herein and unless
otherwise provided by law, the Company, at any time upon 30 days' written notice
to the Employee, in its sole and absolute discretion and for any or no reason,
may terminate the employment of the Employee as Vice President hereunder without
cause. In such event, if the Company issues the Employee a Non-renewal Notice,
or if the Agreement expires and the Employee is not rehired, then upon the
Employee furnishing the Company with a Release and Waiver of Claims in a form
acceptable to the Company, the Company

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shall pay the Employee an amount equal to the following: (a) if such event
occurs within 12 months following the Effective Date, a lump sum equal to twelve
months of the Base Salary, (b) if such event occurs after 12 months following
the Effective Date and within 26 months following the Effective Date, a lump sum
equal to nine months of the Base Salary and (c) if such event occurs after
26 months following the Effective Date, a lump sum equal to six months of the
Base Salary, subject to Section 5.5 if the termination occurs in connection with
a Change in Control.

        (b)   In the event that the employment of the Employee hereunder is
terminated by the Company without cause, a portion of all unvested Options shall
vest immediately upon the Termination Date as follows: (a) if such event occurs
within 12 months following the Effective Date, the unvested Options that would
have vested in the 12 month period following such Termination Date, (b) if such
event occurs after 12 months following the Effective Date and within 26 months
following the Effective Date, the unvested Options that would have vested in the
nine month period following such Termination Date and (c) if such event occurs
after 26 months following the Effective Date, the unvested Options that would
have vested in the 6 month period following such Termination Date.

        (c)   In the event that the employment of the Employee hereunder is
terminated by the Company without cause, the Company, at no cost to the Employee
and for a period of 12 months from the Termination Date, shallcontinue to
provide Employee and her family with all health insurance benefits under COBRA;
provided that Employee elects and is eligible for continued coverage under
COBRA.

        (d)   The Employee acknowledges that the payments referred to in
Section 5.2 and this Section 5.4 constitute the only payments which the Employee
shall be entitled to receive from the Company under this Agreement in the event
of any termination pursuant to Section 5.2, 5.3 and this Section 5.4, and that
except for such payments and such other obligations as are expressly provided
herein the Company shall have no further liability or obligation to her under
this Agreement.

        (e)   The Employee shall have no duty to mitigate damages in order to
receive any severance payments and benefits provided in this Section 5.4.

        5.5    Change in Control.    

        (a)   In the event Employee is terminated without cause during the
period beginning one month before and ending 13 months following the effective
date of a Change in Control, the Employee shall be paid a lump sum equal to
12 months of Base Salary and all Options shall immediately vest as provided in
Section 5.4(b) and shall receive the benefits described in Section 5.4(b).

        (b)   For purposes of this Agreement, Change in Control means: (i) a
sale of all or substantially all of the assets of the Company; (ii) a merger or
consolidation in which the Company is not the surviving entity and in which the
holders of the Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing
less than 50% of the voting power of the entity surviving such transaction or,
where the surviving entity is a wholly-owned subsidiary of another entity, the
surviving entity's parent; (iii) a reverse merger in which the Company is the
surviving entity but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities of the surviving entity's parent, cash or
otherwise, and in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than 50% of the voting power of the Company or,
where the Company is a wholly-owned subsidiary of another entity, the Company's
parent; or (iv) an acquisition by any person, entity or group within the meaning
of Section 13(d) or 14(d) of the Exchange Act of 1934, as amended (the "Exchange
Act"), or any comparable successor provisions (excluding any employee benefit
plan, or related trust, sponsored or maintained by the Company or subsidiary of
the Company or other entity controlled by the Company) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Company

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representing at least 75% of the combined voting power entitled to vote in the
election of directors of the Company; provided, however, that nothing in this
paragraph shall apply to a sale of assets, merger or other transaction effected
exclusively for the purpose of changing the domicile of the Company.

ARTICLE 6

INVENTIONS, NON-DISCLOSURE

        6.1    Non-Disclosure and Inventions.    As a condition of employment
the Employee agrees to execute and abide by the Company's Proprietary
Information and Inventions Agreement attached hereto as Exhibit A.

        6.2    Return of Company Property.    Promptly upon the expiration or
termination of the Employee's employment hereunder for any reason, the Employee
shall surrender to the Company all documents, drawings, work papers, lists,
memoranda, records and other data (including all copies) constituting or
disclosing any of the foregoing information.

        6.3    Breach of Non-Disclosure Provision.    In the event that the
Employee shall breach Section 6.2 hereof or any provision of the Proprietary
Information and Inventions Agreement, or in the event that any such breach is
threatened by the Employee, in addition to and without limiting or waiving any
other remedies available to the Company at law or in equity, the Company shall
be entitled to immediate injunctive relief in any court having the capacity to
grant such relief, to restrain any such breach or threatened breach and to
enforce the provisions of Section 6. The Employee acknowledges and agrees that
there is no adequate remedy at law for any such breach or threatened breach and,
in the event that any action or proceeding is brought seeking injunctive relief,
the Employee shall not use as a defense thereto that there is an adequate remedy
at law.

        6.4    Reasonable Restrictions.    The parties acknowledge that (a) the
agreements in this Article 6 are essential to protect the business and goodwill
of the Company, and (b) the foregoing restrictions are under all of the
circumstances reasonable and necessary for the protection of the Company and its
business.

ARTICLE 7

ARBITRATION

        To ensure the rapid and economical resolution of disputes that may arise
in connection with the Employee's employment with the Company, the Employee 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, or
interpretation of this Agreement, the Employee's employment, or the termination
of such employment, shall be resolved, to the fullest extent permitted by law,
by final, binding and confidential arbitration in San Diego, California
conducted by the Judicial Arbitration and Mediation Services, Inc. ("JAMS") or
its successor, under the then applicable rules of JAMS. The Employee
acknowledges that by agreeing to this arbitration procedure, both the Employee
and the Company waive the right to resolve any such dispute through a trial by
jury or judge or 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 arbitrator shall be authorized to
award any or all remedies that the Employee or the Company would be entitled to
seek in a court of law. The Company shall pay all JAMS' arbitration fees in
excess of those which would be required if the dispute were decided in a court
of law. Nothing in this Agreement is intended to prevent either the Employee or
the Company from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any such arbitration.

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ARTICLE 8

MISCELLANEOUS

        8.1    Binding Effect.    This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective legal representatives,
heirs, distributes and successors; provided, that the obligations of the
Employee under this Agreement shall not be delegable by her.

        8.2    Notices.    All notices and other communications hereunder and
all legal process in regard hereto shall be validly given, made or served if in
writing, when delivered personally (by courier service or otherwise), or when
actually received when mailed by first-class certified or registered United
States mail, postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth below, or at such
other address as any party hereto may from time to time advise the other party
in writing:

        If to the Company:

Cypress Bioscience, Inc.
4350 Executive Square Drive, Suite 325
San Diego, CA 92121

Attention: Chief Executive Officer

        If to the Employee:

Denise Woolard
12726 Via Cortina
Del Mar, CA 92014

        8.3    Severability.    If any provision of this Agreement, or portion
thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion thereof were not contained herein. In
addition, any such invalid or unenforceable provision or portion thereof shall
be deemed, without further action on the part of the parties hereto, modified,
amended or limited to the extent necessary to render the same valid and
enforceable.

        8.4    Waiver.    No waiver by a party hereto of a breach or default
hereunder by the other party shall be considered valid, unless in writing signed
by such first party, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or any other nature.

        8.5    Entire Agreement.    This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes any and all prior agreements between the Company and the Employee,
whether written or oral, relating to any or all matters covered by and contained
or otherwise dealt with in this Agreement. No representation, warranty,
undertaking or covenant is made by either party hereto except as provided herein
and any representations, warranties undertakings or covenants not set forth
herein are specifically disclaimed. This Agreement does not constitute a
commitment of the Company with regard to the Employee's employment, express or
implied, other than to the extent expressly provided for herein.

        8.6    Amendment.    No modification, change or amendment of this
Agreement or any of its provisions shall be valid, unless in writing and signed
by the party against whom such claimed modification, change or amendment is
sought to be enforced.

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        8.7    Authority.    The parties each represent and warrant that they
have the power, authority and right to enter into this Agreement and to carry
out and perform the terms, covenants and conditions hereof.

        8.8    Titles.    The titles of the Articles and Sections of this
Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement.

        8.9    Applicable Law.    This Agreement, and all of the rights and
obligations of the parties in connection with the employment relationship
established hereby, shall be governed by and construed in accordance with the
internal laws of the State of California without giving effect to principals
relating to the conflicts of law.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

 
 
CYPRESS BIOSCIENCE, INC.
 
 
By:
 
/s/  JAY D. KRANZLER      

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    Its:   Chief Executive Officer

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/s/  DENISE WOOLARD      

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Denise Woolard
 
 
 
 

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Exhibit 10.22

EMPLOYMENT AGREEMENT