Exhibit 10.28
SOMAXON PHARMACEUTICALS, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     Amended and Restated Employment Agreement (this “Agreement”) made and
entered into as of December 1, 2007, between Somaxon Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and                     , an individual
(“Executive”).
W I T N E S S E T H:
     Whereas, the Company and Executive are parties to that certain Employment
Agreement dated as of                      (the “Prior Agreement”);
     Whereas, the Company and Executive desire to amend and restate the Prior
Agreement upon the terms and conditions hereinafter set forth;
     Now, Therefore, in consideration of the premises and the mutual covenants
hereinafter set forth, and intending to be legally bound hereby, it is hereby
agreed as follows:
          1. Position and Duties. Executive shall diligently and conscientiously
devote Executive’s full business time, attention, energy, skill and diligent
efforts to the business of the Company and the discharge of Executive’s duties
hereunder. Executive’s duties under this Agreement shall be to serve as
                    , with the responsibilities, rights, authority and duties
customarily pertaining to such office and as may be established from time to
time by or under the direction of the Board of Directors of the Company (the
“Board”) or its designees. Executive shall report to the Board and the President
and Chief Executive Officer of the Company. Executive shall also act as an
officer and/or director and/or manager of such affiliates of the Company as may
be designated by the Board from time to time, commensurate with Executive’s
office, all without further compensation, other than as provided in this
Agreement. As an exempt, salaried employee, Executive will be expected to work
such hours as required by the nature of Executive’s work assignments.
          2. Place and Term of Employment. Executive’s performance of services
under this Agreement shall be rendered in San Diego County, California, subject
to necessary travel requirements of Executive’s position and duties hereunder.
Executive’s employment shall not be for a particular term and may be terminated
by either Executive or the Company at any time, for any reason or no reason,
subject to the provisions contained in Paragraph 7.
          3. Compensation.
               (a) Base Salary. The Company shall pay to Executive base salary
compensation at an annual rate of $                    . The Board shall review
Executive’s base salary annually in light of the performance of Executive and
the Company, and may, in its sole discretion, maintain or increase (but not
decrease) such base salary by an amount it determines to be appropriate.
Executive’s annual base salary payable hereunder, as it may be maintained or
increased from time to time, is referred to herein as “Base Salary.” Base Salary
shall be paid in equal installments in accordance with the Company’s payroll
practices in effect from time to time for executive officers, but in no event
less frequently than monthly.
               (b) Bonus Plan. The Company shall adopt a bonus program providing
for annual bonus awards to Executive and the Company’s other eligible employees
dependent upon, among other things, the achievement of certain performance
levels by the Company, the nature, magnitude and

 

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quality of the services performed by Executive for the Company and the
compensation paid for positions of comparable responsibility and authority
within the Company’s industry (the “Company Employee Bonus Plan”).
          4. Benefits. Executive shall be eligible to participate in all
employee benefit programs of the Company offered from time to time during the
term of Executive’s employment by the Company to employees or executive officers
of Executive’s rank, to the extent that Executive qualifies under the
eligibility provisions of the applicable plan or plans, in each case consistent
with the Company’s then-current practice as approved by the Board from time to
time. Except to the extent financially feasible for the Company, the foregoing
shall not be construed to require the Company to establish such plans or to
prevent the modification or termination of such plans once established, and no
such action or failure thereof shall affect this Agreement. Executive recognizes
that the Company has the right, in its sole discretion, to amend, modify or
terminate its benefit plans without creating any rights in Executive.
Notwithstanding the foregoing, the Company’s failure to provide Executive with
compensation and benefits substantially equivalent (in terms of benefit levels
and/or reward opportunities) in all material respects to those provided for
under each of the Company’s material employee benefit plans, programs and
practices as in effect from time to time shall constitute a material breach of
this Agreement.
          5. Vacation. Executive shall be entitled to paid vacation and sick
time (“PTO”) of up to 4 weeks per calendar year. Executive may roll-over unused
PTO time from one calendar year to another, subject to a maximum of 6 weeks of
accrued PTO, which is to be accrued in accordance with the Company’s PTO policy.
          6. Business Expenses. The Company shall promptly reimburse Executive
for Executive’s reasonable and necessary expenditures for travel, entertainment
and similar items made in furtherance of Executive’s duties under this Agreement
consistent with the policies of the Company as applied to all executive
officers. Executive shall document and substantiate such expenditures as
required by the policies of the Company as applied to all executive officers,
including an itemized list of all expenses incurred, the business purposes for
which such expenses were incurred, and such receipts as Executive reasonably has
been able to obtain.
          7. Termination of Employment.
               (a) Death or Disability.
                    (i) In the event of Executive’s death, Executive’s
employment with the Company shall automatically terminate.
                    (ii) Each of the Company and Executive shall have the right
to terminate Executive’s employment in the event of Executive’s Disability.
“Disability” as used in this Agreement shall have meaning set forth in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”),
which as of the date of this Agreement is as follows: “An individual is
permanently and totally disabled if he is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months.” A
termination of Executive’s employment by either party for Disability shall be
communicated to the other party by written notice, and shall be effective on the
10th day after receipt of such notice by the other party (the “Disability
Effective Date”), unless Executive returns to full-time performance of
Executive’s duties before the Disability Effective Date.

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               (b) By the Company.
                    (i) The Company shall have the right to terminate
Executive’s employment for Cause. “Cause” as used in this Agreement shall mean:
                    (A) Executive’s breach of any of the covenants contained in
Paragraphs 8, 9, and 10 of this Agreement;
                    (B) Executive’s conviction by, or entry of a plea of guilty
or nolo contendere in, a court of competent and final jurisdiction for any crime
involving moral turpitude or punishable by imprisonment in the jurisdiction
involved;
                    (C) Executive’s commission of an act of fraud, whether prior
to or subsequent to the date hereof upon the Company;
                    (D) Executive’s continuing repeated willful failure or
refusal to perform Executive’s duties as required by this Agreement (including,
without limitation, Executive’s inability to perform Executive’s duties
hereunder as a result of chronic alcoholism or drug addiction and/or as a result
of any failure to comply with any laws, rules or regulations of any governmental
entity with respect to Executive’s employment by the Company);
                    (E) Executive’s gross negligence, insubordination or
material violation of any duty of loyalty to the Company or any other material
misconduct on the part of Executive;
                    (F) Executive’s intentional commission of any act which
Executive knows (or reasonably should know) is likely to be materially
detrimental to the Company’s business or goodwill; or
                    (G) Executive’s material breach of any other provision of
this Agreement, provided that termination of Executive’s employment pursuant to
this subsection (G) shall not constitute valid termination for good cause unless
Executive shall have first received written notice from the Board stating with
specificity the nature of such breach and affording Executive at least twenty
days to correct the breach alleged.
Nothing in this Paragraph 7(b)(i) shall prevent Executive from challenging the
Board’s determination that Cause exists or that Executive has failed to cure any
act (or failure to act) that purportedly formed the basis for the Board’s
determination, under the arbitration procedures set forth in Paragraph 19 below.
                    (ii) The Company shall have the right to terminate
Executive’s employment hereunder without Cause at any time.
               (c) By Executive.
                    (i) Executive shall have the right to terminate his or her
employment with the Company for Good Reason (as defined below). Executive’s
continued employment shall not constitute Executive’s consent to, or a waiver of
rights with respect to, any act or failure to act constituting Good Reason
hereunder.
                    (ii) For purposes of this Agreement “Good Reason” shall
mean:

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                    (A) a material diminution in Executive’s base compensation;
                    (B) a material diminution in Executive’s authority, duties
or responsibilities;
                    (C) a material diminution in the authority, duties or
responsibilities of the supervisor to whom Executive is required to report;
                    (D) a material change in the geographic location at which
Executive must perform his or her duties; or
                    (E) any other action or inaction that constitutes a material
breach by the Company of its obligations to Executive under this Agreement.
     Notwithstanding the foregoing, Good Reason shall only exist if Executive
shall have provided the Company with written notice within ninety (90) days of
the initial occurrence of any of the foregoing events or conditions, and the
Company fails to eliminate the conditions constituting Good Reason within thirty
(30) days after receipt of written notice of such event or condition from
Executive. Executive’s termination by reason of resignation from employment with
the Company for Good Reason shall be treated as involuntary. Executive’s
resignation from employment with the Company for Good Reason must occur within
two (2) years following the initial existence of the act or failure to act
constituting Good Reason.
               (iii) Executive shall have the right to terminate his or her
employment hereunder without Good Reason upon 30 days’ written notice to the
Company, and such termination shall not in and of itself be a breach of this
Agreement.
          (d) Termination Payments.
               (i) If Executive’s employment with the Company is terminated
pursuant to Paragraph 7(a)(i) (i.e., death), the Company shall pay to Executive
(a) his or her accrued but unpaid Base Salary through the date of termination
(plus all accrued and unpaid expenses reimbursable in accordance with
Paragraph 6), (b) any accrued but unused PTO, and (c) at the discretion of the
Board, an annual bonus for the year in which Executive’s death occurs, prorated
through the date of death, based on the Board’s good-faith estimate of the
actual amount, if any, that would have been payable for such year under the
Company Employee Bonus Plan (assuming Executive had remained employed by the
Company through the end of such year) in accordance with Paragraph 3(b), in each
case payable in a lump sum within ten (10) days following Executive’s death.
               (ii) If Executive’s employment with the Company is terminated
pursuant to Paragraph 7(a)(ii) (i.e., Disability), the Company shall pay to
Executive (A) his or her accrued but unpaid Base Salary through the date of
termination (plus all accrued and unpaid expenses reimbursable in accordance
with Paragraph 6), (B) any accrued but unused PTO, (C) an amount equal to
Executive’s actual Base Salary (not including any bonus payable) for the
12 month period immediately prior to such termination, and (D) at the discretion
of the Board, an annual bonus for the year in which Executive’s Disability
occurs, prorated through the date of termination, based on the Board’s
good-faith estimate of the actual amount, if any, that would have been payable
for such year under the Company Employee Bonus Plan (assuming Executive had
remained employed by the Company through the end of such year) in accordance
with Paragraph 3(b), in each case payable in a lump sum within ten (10) days
following Executive’s Release Effective Date (as defined below).

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               (iii) If Executive’s employment with the Company is voluntarily
terminated by Executive pursuant to Paragraph 7(c)(i) (i.e., Good Reason), or if
the Company terminates Executive’s employment with the Company other than
pursuant to Paragraphs 7(a)(ii) or 7(b)(i), then the Company shall pay to
Executive the following, which Executive acknowledges to be fair and reasonable,
as consideration for the Release described in Paragraph 7(f):
               (A) Executive’s accrued but unpaid Base Salary through the date
of termination (plus all accrued and unpaid expenses reimbursable in accordance
with Paragraph 6), payable in a lump sum on the date of termination;
               (B) any accrued but unused PTO, payable in a lump sum on the date
of termination;
               (C) at the discretion of the Board, an annual bonus for the year
in which Executive’s employment is terminated, prorated through the date of
termination, based on the Board’s good-faith estimate of the actual amount, if
any, that would have been payable for such year under the Company Employee Bonus
Plan (assuming Executive had remained employed by the Company through the end of
such year) in accordance with Paragraph 3(b), payable in a lump sum within ten
(10) days following Executive’s Release Effective Date (as defined below);
               (D) subject to Section 23 below, an amount equal to Executive’s
actual Base Salary (not including any bonus payable) for the 12 month period
immediately prior to such termination, payable in a lump sum within ten
(10) days following Executive’s Release Effective Date (as defined below);
               (E) the Company shall pay all costs which the Company would
otherwise have incurred to maintain all of Executive’s health, welfare and
retirement benefits (either on the same or substantially equivalent terms and
conditions) if Executive had continued to render services to the Company for 12
continuous months after the date of his or her termination of employment; and
               (F) notwithstanding any provision to the contrary in Executive’s
options under the Option Plan or other plan (including, without limitation, the
expiration dates or vesting provisions thereof) or any restricted stock
agreement, (1) the unvested portion, if any, of Executive’s outstanding options
shall be deemed to have vested on the date of termination with respect to the
number of shares that would have vested had Executive remained employed by the
Company for 12 months following such termination, and Executive shall have
180 days from the date of termination to exercise such options (but not longer
than the original term of such options), and (2) any restrictions with respect
to any restricted shares of the Company’s capital stock that Executive then
holds shall immediately lapse with respect to the number of restricted shares
that would have vested had Executive remained employed by the Company for
12 months following such termination; provided, however, that this
Section 7(d)(iii)(F) shall not apply to the shares of restricted stock granted
to Executive on October 8, 2007.
               (iv) If Executive’s employment with the Company is terminated by
the Company pursuant to Paragraph 7(b)(i) (i.e., for Cause), or Executive
voluntarily terminates his employment with the Company other than pursuant to
Paragraphs 7(a) or 7(c)(i), without limiting or prejudicing any other legal or
equitable rights or remedies which the Company may have upon such breach by
Executive, the Company shall pay Executive his or her accrued but unpaid Base
Salary and any

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accrued but unused PTO (plus all accrued and unpaid expenses reimbursable in
accordance with Paragraph 6) through the date of termination, payable in a lump
sum on the date of termination.
               (v) In addition to the foregoing, upon the termination of
Executive’s employment, Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with the
terms and provisions of any other benefit, compensation, incentive, medical,
disability or life insurance plans, programs or agreements of the Company in
effect upon such termination.
               (vi) The termination payments described above shall supersede any
severance program, plan or policy that may be adopted by the Company with
respect to its employees generally, and the terms of this Paragraph 7(d) shall
control in the event of any discrepancy with such severance program, plan or
policy.
          (e) Change in Control.
               (i) In the event of any Change in Control (defined below) during
the term of Executive’s employment with the Company, notwithstanding any
provision to the contrary in Executive’s options under the Option Plan or other
plan (including, without limitation, the expiration dates or vesting provisions
thereof) or any restricted stock agreement (A) (1) 50% of any unvested portion
of such options shall be deemed to have vested on the date of the Change in
Control and (2) the remaining unvested portion of such options shall vest on the
date that is 12 months from the closing of such Change in Control, subject to
Executive’s continuing service with the Company or any parent or subsidiary or
successor on such date, and (B) (1) the restrictions with respect to 50% of the
restricted shares of the Company’s capital stock that Executive then holds shall
immediately lapse on the date of the Change in Control and (2) the restrictions
with respect to any remaining restricted shares shall lapse on the date that is
12 months from the closing of such Change in Control, subject to Executive’s
continuing service with the Company or any parent or subsidiary or successor on
such date; provided, however, that this Section 7(e)(i) shall not apply to the
shares of restricted stock granted to Executive on October 8, 2007.
               (ii) Following a Change in Control, if Executive’s employment
with the Company is voluntarily terminated by Executive pursuant to
Paragraph 7(c)(i) (i.e., Good Reason), or if the Company terminates Executive’s
employment with the Company other than pursuant to Paragraphs 7(a) or 7(b)(i),
then, in addition to the application of Paragraph 7(d)(iii) to such situation,
notwithstanding any provision to the contrary in Executive’s options under the
Option Plan or other plan (including, without limitation, the expiration dates
or vesting provisions thereof) or any restricted stock agreement, (A) any
unvested portion of such options shall be deemed to have vested on the date of
termination and Executive shall have 180 days from the date of termination to
exercise such options (but not longer than the original term of such options),
and (B) any restrictions with respect to restricted shares of the Company’s
capital stock that Executive then holds shall immediately lapse on the date of
termination; provided, however, that this Section 7(e)(ii) shall not apply to
the shares of restricted stock granted to Executive on October 8, 2007.
               (iii) “Change in Control” means and includes each of the
following:
                    (A) the acquisition, directly or indirectly, by any “person”
or “group” (as those terms are defined in Sections 3(a)(9), 13(d) and 14(d) of
the Exchange Act and the rules thereunder) of “beneficial ownership” (as
determined pursuant to Rule 13d-3 under the Exchange Act) of securities entitled
to vote generally in the election of directors (“voting securities”) of the
Company that represent 50% or more of the combined voting power of the Company’s
then outstanding voting securities, other than:

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               (1) an acquisition by a trustee or other fiduciary holding
securities under any employee benefit plan (or related trust) sponsored or
maintained by the Company or any person controlled by the Company or by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any person controlled by the Company, or
               (2) an acquisition of voting securities by the Company or a
corporation owned, directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the stock of the
Company, or
               (3) an acquisition of voting securities pursuant to a transaction
described in subsection (C) below that would not be a Change in Control under
subsection (C);
          Notwithstanding the foregoing, the following event shall not
constitute an “acquisition” by any person or group for purposes of this
Paragraph 7(e)(iii)(A): an acquisition of the Company’s securities by the
Company which causes the Company’s voting securities beneficially owned by a
person or group to represent 50% or more of the combined voting power of the
Company’s then outstanding voting securities; provided, however, that if a
person or group shall become the beneficial owner of 50% or more of the combined
voting power of the Company’s then outstanding voting securities by reason of
share acquisitions by the Company as described above and shall, after such share
acquisitions by the Company, become the beneficial owner of any additional
voting securities of the Company, then such acquisition shall constitute a
Change in Control; or
               (B) during any period of two consecutive years, individuals who,
at the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have entered
into an agreement with the Company to effect a transaction described in
Subparagraphs (A) or (C) of this Paragraph 7(e)(iii)) whose election by the
Board or nomination for election by the Company’s stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of the two year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or
               (C) the consummation by the Company (whether directly involving
the Company or indirectly involving the Company through one or more
intermediaries) of (1) a merger, consolidation, reorganization, or business
combination or (2) a sale or other disposition of all or substantially all of
the Company’s assets or (3) the acquisition of assets or stock of another
entity, in each case other than a transaction:
               (I) which results in the Company’s voting securities outstanding
immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the
person that, as a result of the transaction, controls, directly or indirectly,
the Company or owns, directly or indirectly, all or substantially all of the
Company’s assets or otherwise succeeds to the business of the Company (the
Company or such person, the “Successor Entity”)), directly or indirectly, at
least a majority of the combined voting power of the Successor Entity’s
outstanding voting securities immediately after the transaction, and
               (II) after which no person or group beneficially owns voting
securities representing 50% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated
for purposes of this

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paragraph (2) as beneficially owning 50% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the Company
prior to the consummation of the transaction; or
                    (D) the Company’s stockholders approve a liquidation or
dissolution of the Company.
          For purposes of Subparagraph 7(e)(iii)(A) above, the calculation of
voting power shall be made as if the date of the acquisition were a record date
for a vote of the Company’s stockholders, and for purposes of Subparagraph
7(e)(iii)(C) above, the calculation of voting power shall be made as if the date
of the consummation of the transaction were a record date for a vote of the
Company’s stockholders.
               (f) Condition Precedent. If Executive’s employment with the
Company is voluntarily terminated by Executive pursuant to Paragraph 7(c)(i)
(i.e., Good Reason) or if the Company terminates Executive’s employment with the
Company other than pursuant to Paragraphs 7(a) or 7(b)(i), prior to the receipt
of any payments or benefits provided by Paragraphs 7(d)(ii), 7(d)(iii) and
7(e)(ii) on account of the occurrence of such termination of Executive’s
employment with the Company, Executive shall execute a “Release” in the form
attached hereto as Exhibit A or Exhibit B, as appropriate. Such Release shall
specifically relate to all of Executive’s rights and claims in existence at the
time of such execution and shall confirm Executive’s obligations under the
Proprietary Information and Inventions Agreement (as defined below). Executive
shall have 50 days following the date of termination to execute such Release. It
is understood that, in the event that Executive is at least 40 years old on the
date of the termination of his or her employment with the Company, Executive has
a certain period to consider whether to execute such Release, and Executive may
revoke such Release within 7 business days after execution. In the event
Executive does not execute such Release within the applicable period, or if
Executive revokes such Release within the subsequent 7 business day period,
Executive shall not be entitled to the aforesaid payments and benefits. The date
on which Executive’s Release becomes effective and the applicable revocation
period lapses shall be the “Release Effective Date.”
          8. Proprietary Information and Inventions Agreement. As a condition of
continued employment, Executive will be required to continue to comply with the
Proprietary Information and Inventions Agreement between Executive and the
Company. In Executive’s work for the Company, Executive will be expected not to
use or disclose any confidential information, including trade secrets, of any
former employer or other person to whom Executive has an obligation of
confidentiality. Rather, Executive will be expected to use only that information
which is generally known and used by persons with training and experience
comparable to Executive’s, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company. Executive agrees that he or she will not bring onto
Company premises any unpublished documents or property belonging to any former
employer or other person to whom Executive has an obligation of confidentiality.
          9. Non-Solicitation.
               (a) Nonsolicitation of Employees or Consultants. Executive agrees
that for a period of one year after termination of Executive’s employment with
the Company (the “Nonsolicitation Period”), Executive will not directly or
indirectly induce or solicit any of the Company’s employees or consultants to
leave their employment.
               (b) Nonsolicitation of Customers. Executive agrees that all
customers of the Company or any of its subsidiaries for which Executive has or
will provide services during the term of Executive’s employment with the
Company, and all prospective customers from whom Executive has

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solicited business while in the employ of the Company, shall be solely the
customers of the Company or such subsidiary. Executive agrees that, for the
Nonsolicitation Period, Executive shall neither directly nor indirectly solicit
business as to products or services competitive with those of the Company or any
of its subsidiaries, from any of the Company’s or any of its subsidiaries’
customers with whom Executive had contact within one year prior to Executive’s
termination.
               (c) Scope of Covenants. Executive agrees that the covenants
contained in this Paragraph 9 are reasonable with respect to their duration,
geographic area and scope. If, at the time of enforcement of this Paragraph 9, a
court holds that the restrictions stated herein are unreasonable under the
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographic area legally permissible under such circumstances will be
substituted for the period, scope or area stated herein.
               (d) Equitable Relief. In the event of a breach of this
Paragraph 9 by Executive, the Company shall, in addition to all other remedies
available to it, be entitled to equitable relief by way of an injunction and any
other legal or equitable remedies.
          10. Nondisparagement. Executive will not at any time during or after
the term of Executive’s employment with the Company directly (or through any
other person or entity) make any public statements (whether orally or in
writing) which are intended to be derogatory or damaging to the Company or any
of its subsidiaries, their respective businesses, activities, operations,
affairs, reputations or prospects or any of their respective officers,
employees, directors, partners, agents or shareholders; provided that Executive
may comment generally on industry matters in response to inquiries from the
press and in other public speaking engagements. The Company shall not at any
time during or after the term of Executive’s employment with the Company,
directly (or through any other person or entity) make any public statements
(whether oral or in writing) which are intended to be derogatory or damaging
concerning Executive.
          11. Indemnification; Directors & Officers Insurance.
               (a) The Company shall indemnify Executive to the maximum extent
permitted by law and by the charter and bylaws of Company if Executive is made a
party, or threatened to be made a party, to any threatened or pending legal
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer,
director, manager, member, partner or employee of the Company, in which capacity
Executive is or was serving at the Company’s request, against reasonable
expenses (including reasonable attorneys’ fees), judgments, fines and settlement
payments incurred by him or her in connection with such action, suit or
proceeding.
               (b) The Company shall use reasonable commercial efforts to
maintain directors & officers insurance for the benefit of Executive and other
executive officers and directors with a level of coverage comparable to other
companies in the Company’s industry at a similar stage of development.
               (c) The Company and Executive have entered into an
Indemnification Agreement in the form attached hereto as Exhibit C.
          12. Representation of the Parties. Executive represents and warrants
to the Company that Executive has the capacity to enter into this Agreement and
the other agreements referred to herein, and that the execution, delivery and
performance of this Agreement and such other agreements by Executive will not
violate any agreement, undertaking or covenant to which Executive is party or is
otherwise bound. The Company represents to Executive that it is duly formed and
is validly existing under the laws of the State of Delaware, that it is fully
authorized and empowered by action of its Board

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to enter into this Agreement and the other agreements referred to herein, and
that performance of its obligations under this Agreement and such other
agreements will not violate any agreement between it and any other person, firm
or other entity.
          13. Key Man Insurance. The Company will have the right throughout the
term of Executive’s employment with the Company to obtain or increase insurance
on Executive’s life in such amount as the Board determines, in the name of the
Company or and for its sole benefit or otherwise, in the discretion of the
Board. Upon reasonable advance notice, Executive will cooperate in any and all
necessary physical examinations without expense to Executive, supply
information, and sign documents, and otherwise cooperate fully with the Company
as the Company may request in connection with any such insurance. Executive
warrants and represents that, to Executive’s best knowledge, Executive is in
good health and does not suffer from any medical condition which might interfere
with the timely performance of Executive’s obligations under this Agreement. To
the extent the Company elects to obtain a policy of insurance on the life of
Executive, unless an alternative life insurance benefit has been established for
the Company’s executive officers, including Executive, the Company shall also
obtain and pay for a whole life insurance policy providing for payment of not
less than the equivalent of one year’s Base Salary in benefits to Executive’s
designated beneficiaries (this policy shall be in addition to any coverage
provided by the Company’s group life insurance plan provided to employees
generally).
          14. Notices. All notices given under this Agreement shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, (b) three business days after being mailed by first class certified
mail, return receipt requested, postage prepaid, (c) one business day after
being sent by a reputable overnight delivery service, postage or delivery
charges prepaid, or (d) on the date on which a facsimile is transmitted to the
parties at their respective addresses stated below. Any party may change its
address for notice and the address to which copies must be sent by giving notice
of the new addresses to the other parties in accordance with this Paragraph 14,
except that any such change of address notice shall not be effective unless and
until received.
If to the Company:
Somaxon Pharmaceuticals, Inc.
Attn: Chief Executive Officer
3721 Valley Centre Drive, Suite 500
San Diego, CA 92130
If to Executive:
[Name and Address of Executive]
          15. Entire Agreement, Amendments, Waivers, Etc.
               (a) No amendment or modification of this Agreement shall be
effective unless set forth in a writing signed by the Company and Executive. No
waiver by either party of any breach by the other party of any provision or
condition of this Agreement shall be deemed a waiver of any similar or
dissimilar provision or condition at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the waiving party.
               (b) This Agreement, together with the Exhibits hereto and the
documents referred to herein and therein, sets forth the entire understanding
and agreement of the parties with respect to the subject matter hereof and
supersedes all prior oral and written understandings and agreements, including,
without limitation, the Prior Agreement. There are no representations,
agreements,

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arrangements or understandings, oral or written, among the parties relating to
the subject matter hereof which are not expressly set forth herein, and no party
hereto has been induced to enter into this Agreement, except by the agreements
expressly contained herein.
               (c) Nothing herein contained shall be construed so as to require
the commission of any act contrary to law, and wherever there is a conflict
between any provision of this Agreement and any present or future statute, law,
ordinance or regulation, the latter shall prevail, but in such event the
provision of this Agreement affected shall be curtailed and limited only to the
extent necessary to bring it within legal requirements.
               (d) This Agreement shall inure to the benefit of and be
enforceable by Executive and Executive’s heirs, executors, administrators and
legal representatives, and by the Company and its successors and assigns. This
Agreement and all rights hereunder are personal to Executive and shall not be
assignable. 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.
               (e) If any provision of this Agreement or the application thereof
is held invalid, the invalidity shall not affect the other provisions or
application of this Agreement that can be given effect without the invalid
provisions or application, and to this end the provisions of this Agreement are
declared to be severable.
          16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
principles of conflict of laws.
          17. Taxes. All payments required to be made to Executive hereunder,
whether during the term of Executive’s employment hereunder or otherwise, shall
be subject to all applicable federal, state and local tax withholding laws.
          18. Headings, Etc. The headings set forth herein are included solely
for the purpose of identification and shall not be used for the purpose of
construing the meaning of the provisions of this Agreement. Unless otherwise
provided, references herein to Exhibits and Paragraphs refer to Exhibits to and
Paragraphs of this Agreement.
          19. Arbitration. Any dispute or controversy between Company and
Executive, arising out of or relating to this Agreement, the breach of this
Agreement, or otherwise, shall be settled by arbitration in San Diego,
California administered by the American Arbitration Association in accordance
with its National Rules for the Resolution of Employment Disputes then in effect
and judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator shall have the authority to award
any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction. However,
either party may, without inconsistency with this arbitration provision, apply
to any court having jurisdiction over such dispute or controversy and seek
interim provisional, injunctive or other equitable relief until the arbitration
award is rendered or the controversy is otherwise resolved. Except as necessary
in court proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of Company and Executive. The Company shall pay all of
the direct costs and expenses in any arbitration hereunder and the arbitrator’s
fees and costs; provided, however, that the arbitrator shall

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have the discretion to award the prevailing party reimbursement of its, his or
her reasonable attorney’s fees and costs. The Company and Executive hereby
expressly waive their right to a jury trial.
          20. Survival. Executive’s obligations under the provisions of
Paragraphs 8, 9 and 10, as well as the provisions of Paragraphs 6, 7(d),
7(e)(ii), 11 and 15 through and including 23, shall survive the termination or
expiration of this Agreement.
          21. Confidentiality. The parties agree that the existence and terms of
this Agreement are and shall remain confidential. The parties shall not disclose
the fact of this Agreement or any of its terms or provisions to any person
without the prior written consent of the other party hereto; provided, however,
that nothing in this Paragraph 21 shall prohibit disclosure of such information
to the extent required by law, nor prohibit disclosure of such information by
Executive to any legal or financial consultant, all of whom shall first agree to
be bound by the confidentiality provisions of this Paragraph 21, nor prohibit
disclosure of such information within the Company in the ordinary course of its
business to those persons with a need to know, as reasonably determined by the
Company, or by the Company to any legal or financial consultant.
          22. Construction. Each party has cooperated in the drafting and
preparation of this Agreement. Therefore, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
          23. Section 409A of the Code.
               (a) This Agreement is not intended to provide for any deferral of
compensation subject to Section 409A of the Code, and, accordingly, the
severance payments payable under Section 7(d) shall be paid no later than the
later of: (i) the fifteenth (15th) day of the third month following Executive’s
first taxable year in which such severance benefit is no longer subject to a
substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third
month following first taxable year of the Company in which such severance
benefit is no longer subject to substantial risk of forfeiture, as determined in
accordance with Code Section 409A and any Treasury Regulations and other
guidance issued thereunder. To the extent applicable, this Agreement shall be
interpreted in accordance with Code Section 409A and Department of Treasury
regulations and other interpretive guidance issued thereunder.
               (b) Notwithstanding anything to the contrary in this Agreement,
if at the time of Executive’s termination of employment with the Company
Executive is a “specified employee” as defined in Code Section 409A, as
determined by the Company in accordance with Code Section 409A, to the extent
that the payments or benefits under this Agreement are subject to Code
Section 409A and the delayed payment or distribution of all or any portion of
such amounts to which Executive is entitled under this Agreement is required in
order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i),
then such portion shall be paid or distributed to Executive during the thirty
(30) day period commencing on the earlier of (x) the date that is six (6) months
following Executive’s termination of employment with the Company, (y) the date
of Executive’s death, or (z) the earliest date as is permitted under Code
Section 409A.
               (c) As provided in Internal Revenue Notice 2006-79,
notwithstanding any other provision of this Agreement, with respect to an
election or amendment to change a time and form of payment under this Agreement
made on or after January 1, 2007 and on or before December 31, 2007, the
election or amendment may apply only to amounts that would not otherwise be
payable in 2007 and may not cause an amount to be paid in 2007 that would not
otherwise be payable in 2007.

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(Signature Page Follows)

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     In Witness Whereof, the parties have executed this Agreement as of the date
first above written.

                  COMPANY:    
 
                Somaxon Pharmaceuticals, Inc.    
 
           
 
  By:        
 
     
 
   
 
      Name:    
 
      Title:    
 
                EXECUTIVE:    
 
                          [Name of Executive]    

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Exhibit A
RELEASE
(Individual Termination)
[The language in this Release may change based on legal developments and
evolving best practices;
this form is provided as an example of what will be included in the final
Release document.]
     Certain capitalized terms used in this Release are defined in the Amended
and Restated Employment Agreement by and between Somaxon Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), and [Name of Executive] (“Executive”)
dated as of the 1st day of December, 2007 (the “Agreement”), which Executive has
previously executed and of which this Release is a part.
     Pursuant to the Agreement, and in consideration of and as a condition
precedent to the payments and benefits provided under Paragraph 7(d) of the
Agreement, Executive hereby furnishes the Company with this Release.
     Executive hereby confirms his/her obligations under the Company’s
proprietary information and inventions agreement.
     On Executive’s own behalf and on behalf of Executive’s heirs, estate and
beneficiaries, Executive hereby waives, releases, acquits and forever discharges
the Company, and each of its Subsidiaries and affiliates, and each of their
respective past or present officers, directors, agents, servants, employees,
shareholders, predecessors, successors and assigns, and all persons acting by,
through, under, or in concert with them, or any of them, of and from any and all
suits, debts, liens, contracts, agreements, promises, claims, liabilities,
demands, causes of action, costs, expenses, attorneys’ fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, fixed or contingent, suspected and unsuspected,
disclosed and undisclosed (“Claims”), from the beginning of time to the date
hereof, including without limitation, Claims that arose as a consequence of
Executive’s employment with the Company, or arising out of the termination of
such employment relationship, or arising out of any act committed or omitted
during or after the existence of such employment relationship, all up through
and including the date on which this Release is executed, including, but not
limited to, Claims which were, could have been, or could be the subject of an
administrative or judicial proceeding filed by Executive or on Executive’s
behalf under federal, state or local law, whether by statute, regulation, in
contract or tort. This Release includes, but is not limited to: (1) Claims for
intentional and negligent infliction of emotional distress; (2) tort Claims for
personal injury; (3) Claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interest in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, front pay, back pay
or any other form of compensation; (4) Claims for breach of contract; (5) Claims
for any form of retaliation, harassment, or discrimination; (6) Claims pursuant
to any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended, the federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), the federal
Employee Retirement Income Security Act of 1974, as amended, the federal
Americans with Disabilities Act of 1990, the California Fair Employment and
Housing Act, as amended, and the California Labor Code; and (7) all other Claims
based on tort law, contract law, statutory law, common law, wrongful discharge,
constructive discharge, fraud, defamation, emotional distress, pain and
suffering, breach of the implied covenant of good faith and fair dealing,
compensatory or punitive damages, interest, attorneys’ fees, and reinstatement
or re-employment. If any court rules that Executive’s waiver of the right to
file any administrative or judicial charges or complaints is ineffective,
Executive agrees not to seek or accept any money damages or any other relief
upon the filing of any such administrative or judicial charges or complaints.

1

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     Executive acknowledges that he/she has read and understand 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 of any jurisdiction of similar effect with respect to
his/her release of any unknown Claims Executive may have against the Company.
     Notwithstanding the foregoing, nothing in this Release shall constitute a
release by Executive of any claims or damages based on any right Executive may
have to enforce the Company’s executory obligations under the Agreement, any
right Executive may have to vested or earned compensation and benefits, or
Executive’s eligibility for indemnification under applicable law, Company
governance documents, Executive’s indemnification agreement with the Company or
under any applicable insurance policy with respect to Executive’s liability as
an employee or officer of the Company.
     If Executive is 40 years of age or older at the time of the termination,
Executive acknowledges that he/she is knowingly and voluntarily waiving and
releasing any rights he/she may have under ADEA. Executive also acknowledges
that the consideration given under the Agreement for the Release is in addition
to anything of value to which he/she was already entitled. Executive further
acknowledges that he/she has been advised by this writing, as required by the
ADEA, that: (A) his/her waiver and release do not apply to any rights or claims
that may arise on or after the date he/she executes this Release; (B) Executive
has the right to consult with an attorney prior to executing this Release;
(C) Executive has 21 days to consider this Release (although he/she may choose
to voluntarily execute this Release earlier); (D) Executive has 7 days following
the execution of this Release to revoke the Release; and (E) this Release shall
not be effective until the date upon which the revocation period has expired,
which shall be the 8th day after this Release is executed by Executive, without
Executive’s having given notice of revocation.
     Executive further acknowledges that Executive has carefully read this
Release, and knows and understands its contents and its binding legal effect.
Executive acknowledges that by signing this Release, Executive does so of
Executive’s own free will, and that it is Executive’s intention that Executive
be legally bound by its terms. Executive further acknowledges that if he does
not sign this release within 50 days following the date of termination of
employment, or revokes this Release within the foregoing revocation period, if
applicable, Executive shall not be entitled to the payments and benefits
provided under Paragraphs 7(d) of the Agreement.

                    [Name of Executive]
 
       
 
  Date:    
 
       

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Exhibit B
RELEASE
(Group Termination)
[The language in this Release may change based on legal developments and
evolving best practices;
this form is provided as an example of what will be included in the final
Release document.]
     Certain capitalized terms used in this Release are defined in the Amended
and Restated Employment Agreement by and between Somaxon Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), and ___(“Executive”) dated as of the 1st
day of December, 2007 (the “Agreement”), which Executive has previously executed
and of which this Release is a part.
     Pursuant to the Agreement, and in consideration of and as a condition
precedent to the payments and benefits provided under Paragraphs 7(d) of the
Agreement, Executive hereby furnishes the Company with this Release.
     Executive hereby confirms his/her obligations under the Company’s
proprietary information and inventions agreement.
     On Executive’s own behalf and on behalf of Executive’s heirs, estate and
beneficiaries, Executive hereby waives, releases, acquits and forever discharges
the Company, and each of its Subsidiaries and affiliates, and each of their
respective past or present officers, directors, agents, servants, employees,
shareholders, predecessors, successors and assigns, and all persons acting by,
through, under, or in concert with them, or any of them, of and from any and all
suits, debts, liens, contracts, agreements, promises, claims, liabilities,
demands, causes of action, costs, expenses, attorneys’ fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, fixed or contingent, suspected and unsuspected,
disclosed and undisclosed (“Claims”), from the beginning of time to the date
hereof, including without limitation, Claims that arose as a consequence of
Executive’s employment with the Company, or arising out of the termination of
such employment relationship, or arising out of any act committed or omitted
during or after the existence of such employment relationship, all up through
and including the date on which this Release is executed, including, but not
limited to, Claims which were, could have been, or could be the subject of an
administrative or judicial proceeding filed by Executive or on Executive’s
behalf under federal, state or local law, whether by statute, regulation, in
contract or tort. This Release includes, but is not limited to: (1) Claims for
intentional and negligent infliction of emotional distress; (2) tort Claims for
personal injury; (3) Claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interest in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, front pay, back pay
or any other form of compensation; (4) Claims for breach of contract; (5) Claims
for any form of retaliation, harassment, or discrimination; (6) Claims pursuant
to any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended, the federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), the federal
Employee Retirement Income Security Act of 1974, as amended, the federal
Americans with Disabilities Act of 1990, the California Fair Employment and
Housing Act, as amended, and the California Labor Code; and (7) all other Claims
based on tort law, contract law, statutory law, common law, wrongful discharge,
constructive discharge, fraud, defamation, emotional distress, pain and
suffering, breach of the implied covenant of good faith and fair dealing,
compensatory or punitive damages, interest, attorneys’ fees, and reinstatement
or re-employment. If any court rules that Executive’s waiver of the right to
file any administrative or judicial charges or complaints is ineffective,
Executive agrees not to seek or accept any money damages or any other relief
upon the filing of any such administrative or judicial charges or complaints.

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     Executive acknowledges that he/she has read and understand 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 of any jurisdiction of similar effect with respect to
his/her release of any unknown Claims Executive may have against the Company.
     Notwithstanding the foregoing, nothing in this Release shall constitute a
release by Executive of any claims or damages based on any right Executive may
have to enforce the Company’s executory obligations under the Agreement, any
right Executive may have to vested or earned compensation and benefits, or
Executive’s eligibility for indemnification under applicable law, Company
governance documents, Executive’s indemnification agreement with the Company or
under any applicable insurance policy with respect to Executive’s liability as
an employee or officer of the Company.
     If Executive is 40 years of age or older at the time of the termination,
Executive acknowledges that he/she is knowingly and voluntarily waiving and
releasing any rights he/she may have under ADEA. Executive also acknowledges
that the consideration given under the Agreement for the Release is in addition
to anything of value to which he/she was already entitled. Executive further
acknowledges that he/she has been advised by this writing, as required by the
ADEA, that: (A) his/her waiver and release do not apply to any rights or claims
that may arise on or after the date he/she executes this Release; (B) Executive
has the right to consult with an attorney prior to executing this Release;
(C) Executive has 45 days to consider this Release (although he/she may choose
to voluntarily execute this Release earlier); (D) Executive has 7 days following
the execution of this Release to revoke the Release; (E) this Release shall not
be effective until the date upon which the revocation period has expired, which
shall be the 8th day after this Release is executed by Executive, without
Executive’s having given notice of revocation; and (F) Executive has received
with this Release a detailed list of job titles and ages of all employees who
were terminated in this group termination and the ages of all employees of the
Company in the same job classification or organizational unit who were not
terminated.
     Executive further acknowledges that Executive has carefully read this
Release, and knows and understands its contents and its binding legal effect.
Executive acknowledges that by signing this Release, Executive does so of
Executive’s own free will, and that it is Executive’s intention that Executive
be legally bound by its terms. Executive further acknowledges that if he does
not sign this release within 50 days following the date of termination of
employment, or revokes this Release within the foregoing revocation period, if
applicable, Executive shall not be entitled to the payments and benefits
provided under Paragraph 7(d) of the Agreement.

                    [Name of Executive]
 
       
 
  Date:    
 
       

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Exhibit C
Indemnification agreement
[Attached]

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Agreements entered into with:

  •   Meg M. McGilley, Vice President and Chief Financial Officer, base salary
at December 1, 2007 of $236,500,   •   Susan E. Dubé, Senior Vice President,
Corporate and Business Development, base salary at December 1, 2007 of $257,250,
  •   Jeffrey W. Raser, Senior Vice President, Sales and Marketing, base salary
at December 1, 2007 of $257,250,   •   Philip Jochelson, M.D., Senior Vice
President and Chief Medical Officer, base salary at December 1, 2007 of
$300,000,   •   James J. L’Italien, Ph.D., Senior Vice President, Regulatory
Affairs and Quality Assurance, base salary at December 1, 2007 of $290,000, and
eligible for a one-time bonus of $100,000 on March 16, 2008,   •   Matthew W.
Onaitis, Vice President and General Counsel, base salary at December 1, 2007 of
$225,000,   •   Brain T. Dorsey, Vice President, Product Development, base
salary at December 1, 2007 of $230,000, and   •   Robert L. Jones, Vice
President, Human Resources, base salary at December 1, 2007 of $215,000,