RESTRICTED STOCK BONUS AGREEMENT
                             WITH JAMES L. KNIGHTON

         This  Agreement  is made as of the 29th day of  October,  1998,  by and
between  SUGEN,  Inc.,  a Delaware  corporation  (the  "Company"),  and James L.
Knighton ("Recipient").

                                   Witnesseth:

         Whereas, Recipient provides valuable services to the Company;

         Whereas,  the  Company  desires  to issue,  and  Recipient  desires  to
receive,  shares of the Company's common stock ("Common Stock") in consideration
for services rendered to the Company or for its benefit; and

         Whereas,  the issuance of Common Stock  hereunder is in connection with
and  in  furtherance  of  the  Company's   compensatory   benefit   program  for
participation of the Company's employees,  directors,  officers, consultants and
advisors.

         Now, Therefore, It Is Agreed between the parties as follows:

         1. The Company  hereby  awards to Recipient  twenty  thousand  (20,000)
shares of Common  Stock  (the  "Shares"),  subject  to the  following  terms and
conditions.

         2. Provided that Recipient has  continuously  rendered  services to the
Company  or any  affiliate  of the  Company  from  and  after  the  date of this
Agreement  through October 29, 1999, ten thousand  (10,000) Shares shall vest on
October  29,  1999 (the "First  Vesting  Date").  Provided  that  Recipient  has
continuously  rendered  services to the Company or any  affiliate of the Company
from  and  after  the date of this  Agreement  through  October  29,  2000,  the
remaining  ten thousand  (10,000)  Shares  shall vest on October 29, 2000,  (the
"Second  Vesting  Date"  and with the  First  Vesting  Date,  collectively,  the
"Vesting  Dates").  However,  to the extent the Vesting Dates occur on a date on
which the trading of the  applicable  vested  Shares  either (i) would result in
liability  to Recipient  under Rule 10b-5 as  promulgated  under the  Securities
Exchange  Act of 1934,  as  amended,  or (ii)  would  be  prohibited  under  the
Company's  trading window policy  designed to prevent  violations of Rule 10b-5,
then the Vesting Dates shall be delayed, as applicable,  until the first date on
which  Recipient  could  trade  the  applicable  vested  Shares  without  either
incurring  liability under Rule 10b-5 or violating the Company's insider trading
window policy.

         3. If at any time prior to the Second Vesting Date, Recipient ceases to
render   services  to  the  Company  or  any   affiliate  of  the  Company  (the
"Separation"),  any and all unvested  Shares shall  immediately  cease  vesting,
Recipient  shall have no further  right in the unvested  Shares and the unvested
Shares shall automatically be reacquired by the Company.

         4.  Recipient may satisfy any federal,  state or local tax  withholding
obligation  relating to the  acquisition  of the Shares by any of the  following
means or by a  combination  of such means:  (1)  tendering a cash  payment,  (2)
authorizing the Company to withhold shares from the Shares otherwise issuable to
Recipient as a result of the acquisition of the Shares, or (3) delivering to the
Company owned and unencumbered shares of the Common Stock of the Company.
<PAGE>
         5. Recipient acknowledges that the Shares to be issued pursuant to this
Agreement have not been registered  under the Securities Act of 1933, as amended
(the "Securities Act"), and that the Shares are deemed to constitute "restricted
securities"  under  Rule 144  promulgated  under  the  Securities  Act.  In this
connection,  Recipient  warrants and represents to the Company that Recipient is
holding the Shares for Recipient's own account and that Recipient has no present
intention of  distributing  or selling said stock except as permitted  under the
Securities  Act.  Recipient  further  warrants and represents that Recipient has
either (i) a preexisting  personal or business  relationship with the Company or
any of its officers,  directors or controlling  persons, or (ii) the capacity to
protect his or her own interests in connection with the receipt of the Shares by
virtue of the business or financial  expertise of any  professional  advisors to
Recipient who are unaffiliated with, and who are not compensated by, the Company
or any of its affiliates, directly or indirectly. Recipient further acknowledges
that the exemption from registration under Rule 144 will not be available for at
least two (2) years from the date of acquisition of the Shares,  unless at least
one (1) year  from the date of  acquisition  (i) a public  trading  market  then
exists for the Common Stock of the Company, (ii) adequate information concerning
the Company is then available to the public and (iii) other terms and conditions
of Rule 144 are complied  with;  and that any  disposition  of the Shares may be
made only in limited amounts in accordance with such terms and conditions.

         6. Until the  applicable  Vesting  Date,  the Shares shall be issued in
book form only and share certificates shall not be issued.  Notwithstanding  the
foregoing,  in the event that  certificates  representing the Shares are issued,
all such certificates shall have endorsed thereon the following legends:

                  (a)  "THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  ARE
         UNVESTED AND SUBJECT TO FORFEITURE IN  ACCORDANCE  WITH THE  RESTRICTED
         STOCK BONUS AGREEMENT BETWEEN THE ISSUER AND THE REGISTERED  HOLDER, OR
         THE PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE ISSUER'S
         PRINCIPAL  OFFICE.  ANY  TRANSFER OR  ATTEMPTED  TRANSFER OF THE SHARES
         REPRESENTED  BY THIS  CERTIFICATE  IS VOID  WITHOUT  THE PRIOR  EXPRESS
         WRITTEN CONSENT OF THE ISSUER."

                  (b) "THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT
         BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
         "SECURITIES  ACT").  THEY  MAY  NOT BE  SOLD  OR  OFFERED  FOR  SALE OR
         OTHERWISE  DISTRIBUTED  UNLESS THE SECURITIES ARE REGISTERED  UNDER THE
         SECURITIES ACT OR AN EXEMPTION THEREFROM IS AVAILABLE."

         7. Recipient  agrees that it shall in no event make any  disposition of
all or any portion of the Shares unless and until:

               (i) There is then in effect a  registration  statement  under the
Securities Act covering such proposed  disposition and such  disposition is made
in accordance with said registration statement; or

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<PAGE>
              (ii) (a) Recipient shall have notified the Company of the proposed
disposition  and shall have  furnished the Company with a detailed  statement of
the circumstances surrounding the proposed disposition, (b) Recipient shall have
furnished the Company with an opinion of its own counsel to the effect that such
disposition  will not require  registration  of the Shares under the  Securities
Act, and (c) such opinion of its counsel shall have been concurred in by counsel
for the Company,  such  concurrence  not to be  unreasonably  withheld,  and the
Company shall have advised Recipient of such concurrence.

         8. The Company  shall not be required  (i) to transfer on its books any
Shares  which shall have been sold or  transferred  in  violation  of any of the
provisions set forth in this  Agreement or the terms of the  Securities  Act, or
(ii) to treat as owner of such  Shares  or to  accord  the right to vote as such
owner or to pay dividends to any  transferee to whom such Shares shall have been
so transferred.

         9. Subject to the provisions of this Agreement, Recipient shall, during
the term of this Agreement,  exercise all rights and privileges of a stockholder
of the Company with respect to the Shares.  Recipient  shall be deemed to be the
holder of the Shares for purposes of receiving any  dividends  which may be paid
with respect to such Shares and for  purposes of  exercising  any voting  rights
relating to such Shares,  even if some or all of such Shares have not yet vested
and been released from the Company's reacquisition right.

         10.  If any  change is made in the  Shares  subject  to this  Agreement
(through  merger,   consolidation,   reorganization,   recapitalization,   stock
dividend,  dividend  in  property  other than  cash,  stock  split,  liquidating
dividend,  combination  of  shares,  exchange  of  shares,  change in  corporate
structure or otherwise),  this Agreement will be  appropriately  adjusted in the
class(es) of securities, maximum number of Shares and price per Share subject to
this Agreement.

         11. In the event of: (1) a merger or consolidation in which the Company
is not the surviving  corporation;  (2) a reverse merger in which the Company is
the  surviving  corporation  but  the  shares  of  the  Company's  Common  Stock
outstanding  immediately  preceding  the merger are  converted  by virtue of the
merger  into  other  property,  whether  in the  form  of  securities,  cash  or
otherwise; (3) any other capital reorganization in which more than fifty percent
(50%)  of the  shares  of the  Company  entitled  to vote are  exchanged;  (4) a
transaction  or  group  of  related  transactions  involving  the sale of all or
substantially  all of the Company's  assets;  (5) the acquisition by any person,
entity  or group  (excluding  any  employee  benefit  plan,  or  related  trust,
sponsored or maintained by the Company or any  subsidiary of the Company) of the
beneficial  ownership,  directly or  indirectly,  of  securities  of the Company
representing  more than fifty percent (50%) of the combined  voting power in the
election of members of the board of directors of the Company; or (6) a change in
the composition of the Company's Board of Directors such that, during any period
of two  consecutive  years,  individuals  who, at the  beginning of such period,
constitute the Board of Directors,  together with  individuals  who are Approved
New Directors (as defined below), cease for any reason to have authority to cast
at least a majority of the votes which all  directors  on the Board are entitled
to vote;  then, to the extent not prohibited by law, the time during the Vesting
Date shall be accelerated  prior to such event.  For purposes of this Agreement,
an  "Approved  New  Director"  shall be a Board member  whose  election,  or the
nomination for election by the Company's stockholders, was approved by a vote of
a majority of

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<PAGE>
the votes  entitled  to be cast by the  directors  then still in office who were
directors at the beginning of the period.

         12. The  acquisition  and  vesting of the Shares may have  adverse  tax
consequences  to the  Recipient  which may  avoided  or  mitigated  by filing an
election  under  Section  83(b) of the Internal  Revenue  Code,  as amended (the
"Code").  Such  election must be filed within thirty (30) days after the date of
this Agreement.  RECIPIENT  ACKNOWLEDGES THAT IT IS HIS OWN RESPONSIBILITY,  AND
NOT THE COMPANY'S,  TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B),  EVEN IF
RECIPIENT REQUESTS THE COMPANY TO MAKE THE FILING ON HIS OR HER BEHALF.

         13. Rights and  obligations  under this Agreement shall not be impaired
by any amendment of this Agreement  unless (i) the Company  requests the consent
of Recipient and (ii) Recipient consents in writing.

         14. The parties hereto agree to execute such further instruments and to
take such further  action as may reasonably be necessary to carry out the intent
of this Agreement.

         15.  Any  notice  required  or  permitted  hereunder  shall be given in
writing and shall be deemed  effectively  given upon  personal  delivery or upon
deposit in the United States Post Office,  by registered or certified  mail with
postage and fees  prepaid,  addressed  to the other party  hereto at its address
hereinafter shown below its signature or at such other address as such party may
designate by ten (10) days' advance written notice to the other party hereto.

         16.  This  Agreement  shall be  governed  by the  laws of the  State of
California without regard to such State's principles of conflict of laws.

         17. This  Agreement  shall inure to the benefit of the  successors  and
assigns of the Company and,  subject to the  restrictions on transfer herein set
forth,  shall  be  binding  upon  Recipient,   his  or  her  heirs,   executors,
administrators, successors and assigns.

         18. This Agreement does not constitute an employment contract nor shall
be deemed to create in any way whatsoever any obligation on Recipient's  part to
continue in the employ of the Company or any  affiliate  of the  Company,  or to
limit the ability of the Company or any  affiliate  of the Company to  terminate
Recipient's employment with the Company or affiliate of the Company at any time,
for any reason or for no reason.

         19.  This  Agreement   constitutes  the  entire,  final  and  exclusive
statement  of the  agreement  between  the parties  hereto  with  respect to the
subject matter hereof.

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


Recipient:



/s/ James L. Knighton
---------------------
James L. Knighton

Address:
153 Terrace Drive
San Francisco, California  94127




SUGEN, Inc.:



/s/ Stephen Evans-Freke
-----------------------
Stephen Evans-Freke
Chief Executive Officer and
Chairman of the Board of Directors

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