**Exhibit10.1**

 

**EMPLOYMENTAGREEMENT OF LESLIE JOHNSTON BROWNE**

 

Thisemployment agreement (the “Agreement”) is made and entered into as of the 14thday of July, 2004, by and between Pharmacopeia Drug Discovery, Inc.,(hereinafter the “Company”), and Leslie Johnston Browne, Ph.D. (hereinafter“Dr. Browne”).

 

**RECITALS**

 

WHEREAS,the Company desires to employ Dr. Browne to render services in the capacity ofPresident and Chief Executive Officer of Pharmacopeia Drug Discovery, Inc.(“President and Chief Executive Officer”) on the terms set forth in thisAgreement;

 

WHEREAS,Dr. Browne desires to render services during the term of this Agreement in thecapacity of President and Chief Executive Officer on the terms set forth inthis Agreement;

 

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

 

# 1.                                       Employment.

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## a.                                       The Company agrees to employ Dr. Browne asPresident and Chief Executive Officer upon the terms and conditions set forthin this Agreement.

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## b.                                      Dr. Browne’s duties, powers andresponsibilities as President and Chief Executive Officer shall be those whichare customary for such position, as may be determined from time to time by theBoard of Directors of the Company (“the Board”).  Dr. Browne agrees to perform and discharge such duties well andfaithfully and to be subject to the supervision and direction of the Board.

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## c.                                       The position of President and Chief ExecutiveOfficer is a full-time position.  Dr.Browne agrees to devote his full time effort, attention, and energies to thisposition.  Dr. Browne will not renderany professional services or engage in any activity which might be competitivewith, adverse to the best interest of, or create the appearance of a conflictof interest with the Company.  Prior toserving on any other board of directors, Dr. Browne shall obtain the writtenpermission of the Board, which shall not be unreasonably withheld.  Dr. Browne agrees to abide by the policies,and rules and regulations of the Company as they may be amended from time totime.

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# 2.                                       Term.

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## a.                                       The employment of Dr. Browne as President andChief Executive Officer under this Agreement is for an initial term of one yearbeginning on

 

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## Dr. Browne’s first date ofemployment by the Company, August 9, 2004 (the “Start Date”).

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## b.                                      Unless earlier terminated under theprovisions of this Agreement, this Agreement will renew automatically forsuccessive one year periods at the conclusion of the initial term and anysucceeding renewal terms (collectively, the “Term”), unless either partynotifies the other in writing, at least one year in advance, of its intentionnot to renew the Agreement at the expiration of the initial or renewal term.

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# 3.                                       Compensation.

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## a.                                       For his services under this Agreement as Presidentand Chief Executive Officer, Dr. Browne will be paid by the Company an initialbase salary of Three Hundred Fifty Thousand Dollars ($350,000) per year (“BaseSalary”).  The Base Salary will be paidin equal installments, less normally applicable payroll deductions, inaccordance with the Company’s regular payroll schedule.  Dr. Browne’s compensation will be reviewedon or before February 28 of each year to determine whether hiscompensation level shall be adjusted in a manner commensurate with his performancein the prior year of service.

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## b.                                      Dr. Browne shall be entitled to a signingbonus of $100,000.  One half of thisbonus ($50,000), less normally applicable payroll deductions, shall be paid assoon as practicable after the Start Date. The remainder ($50,000), less normally applicable payroll deductions,shall be paid six months after the Start Date.

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## c.                                       Beginning January 1, 2005, Dr. Browneshall participate in the Company’s Bonus Program for Senior Management, whichshall provide an annual bonus target of fifty percent (50%) of Dr. Browne’sBase Salary, as determined in accordance with the Company’s existingcompensation policy.  Such amountspayable to Dr. Browne under the bonus program shall be referred to herein asthe “Incentive Bonus.”  IncentiveBonuses will be paid on the March 1 following the completion of eachcalendar year, provided Dr. Browne is employed or is receiving severancepayments on that date, or upon the expiration of the Term (as described inSection 4(g)).

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## d.                                      From time to time, Dr. Browne may be grantedthe option to purchase Company stock under the terms of the Company’s StockOption Plan, or similar employee stock option plans in effect from time totime.  Such stock option grants shall besubject to the terms of the applicable stock option plan(s) then in effect.

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## e.                                       Dr. Browne shall be granted on the Start Datethree hundred thousand (300,000) options to purchase Company stock, priced atthe fair market value on the date of the grant.  The vesting schedule for these options shall be asfollows:  25% of these options shall bevested after one year (from the date of the grant) and 1/48 of the optionsshall vest on the first of each month thereafter.  These options are intended to be incentive stock options asdefined under section 422 of the Internal Revenue Code of 1986 and anyregulations promulgated thereunder. However, to the extent the option

 

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## grant fails to satisfy any requirement ofsection 422(d) of the Code, the affected options shall be treated asnon-qualified stock options.

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# 4.                                       Termination; Resignation; PermanentDisability; Death.   Dr. Browne’s employment as President andChief Executive Officer may be terminated at any time by action of the Boardfor any reason.  In the event oftermination of his employment, the Company shall have no liability to Dr.Browne as President and Chief Executive Officer for compensation or benefitsexcept as specified in this Section 4 or as required by the Company’sbenefits policy.

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## a.                                       Involuntary Termination Without Cause.  IfDr. Browne’s employment as President and Chief Executive Officer is terminatedinvoluntarily by the Board, without “Cause” (as defined below), during theTerm, the Company shall:

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##### (1)                                  Pay Dr. Browne all compensation and benefitsaccrued, but unpaid, up to the date of his termination.  Dr. Browne’s Incentive Bonus for thecalendar year in which his employment is terminated shall be paid on apro rata basis, based on the actual percentage of target bonuses determinedby the Company’s Board of Directors for the year in which the terminationoccurs.

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##### (2)                                  Continue to pay Dr. Browne each month, for aperiod of twenty-four (24) months, an amount equal to one twelfth of his annualBase Salary in effect as of the date of termination.  The Company will maintain Dr. Browne’s group medical coverageduring the period he is receiving payments under this Section 4(a)(2).

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##### (3)                                  Allow all vested options to be exercisablepursuant to the terms of the stock option agreement(s) under which the optionswere granted.

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##### (4)                                  If the termination occurs in the first yearof the Term, twenty-five percent (25%) of the initial option grant willimmediately vest on the termination date.

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## b.                                      Termination by Dr. Browne for Good Reason.  Inthe event Dr. Browne terminates this Agreement with at least ninety (90)days’ written notice and for “Good Reason,” as defined below, during the Term,he shall be entitled to receive the benefits provided in Section 4(a)above.  For purposes of thisSection 4(b), “Good Reason” shall be provided by the occurrence of any ofthe following events:  i) Dr. Browne’sremoval as President and Chief Executive Officer of the Company or any other materialadverse change by the Company in Dr. Browne’s duties, authority orresponsibilities as President and Chief Executive Officer of the Company; ii) a reduction

 

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## of more than twenty percent(20%) of Dr. Browne’s base salary, unless made with Dr. Browne’s expresswritten consent; iii) a material reduction in the kind or level of employeebenefits such that Dr. Browne’s overall benefits package is significantlyreduced, unless made with Dr. Browne’s express written consent; iv) if as aresult of a relocation of the Company to a facility more than fifty (50) milesfrom the Company’s current location, Dr. Browne is required to relocate hisresidence, unless made with Dr. Browne’s express written consent; v) amaterial breach of this Agreement by the Company that has not been cured withinthirty (30) days after written notice thereof by Dr. Browne to the Company; or vi) a change of control (as defined inSection 4(c)) of the Company that materially changes Dr. Browne’s duties,title or responsibility.

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## c.                                       Termination Without Cause in Connection withChange of Control.  In the event that Dr. Browne’s employment asPresident and Chief Executive Officer is terminated involuntarily by the Boardwithout Cause in connection with a “change of control” (as defined below) ofthe Company: i) Dr. Browne shall be entitled to receive the benefitsprovided in Section 4(a) above; ii) all stock options granted to Dr.Browne that are then unvested shall immediately vest; and iii) Dr. Browne shallreceive pro rata Incentive Bonuses for the period during which he is receivingpayments under Section 4(a)(2), equal to the average Incentive Bonus hereceived in each of the three years immediately prior to the termination or, ifless than three years’ of bonus history is available, his target bonus for theyear in which the termination occurs.

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For purposes of thisAgreement, a “change of control” means that any of the following events hasoccurred:

 

(i)                                     Anyperson (as such term is used in Section 13(d) of the Securities ExchangeAct of 1934 (the “Exchange Act”)), other than the Company, any employee benefitplan of the Company or any entity organized, appointed or established by theCompany for or pursuant to the terms of any such plan, together with all“affiliates” and “associates” (as such terms are defined in Rule 12b-2 underthe Exchange Act) becomes the beneficial owner or owners (as defined in Rule 13d-3and 13d-5 promulgated under the Exchange Act), directly or indirectly (the“Control Group”), of more than 50% of the outstanding equity securities of theCompany, or otherwise becomes entitled, directly or indirectly, to vote morethan 50% of the voting power entitled to be cast at elections for directors(“Voting Power”) of the Company;

 

(ii)                                  Aconsolidation or merger (in one transaction or a series of relatedtransactions) of the Company pursuant to which the holders of the Company’sequity securities immediately prior to such transaction or series of relatedtransactions would not be the holders, directly or indirectly, immediatelyafter such transaction or series of related transactions of more than 50% ofthe Voting Power of the entity surviving such transaction or series of relatedtransactions; or

 

(iii)                               Thesale, lease, exchange or other transfer (in one transaction or a series ofrelated transactions) of all or substantially all of the assets of the Company.

 

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## d.                                      Termination for Cause. If  Dr. Browne’s employment isterminated as President and Chief Executive Officer for “Cause” as definedbelow during the Term, the Company shall pay Dr. Browne all accrued, butunpaid, compensation and benefits which are then due and owing as of the dateof his termination.  He shall not beentitled to receive a pro rata Incentive Bonus for the calendar year in whichthe termination occurs, or any of the amounts specified in Section 4(a).  The Company shall have the right to setoffany amounts due to Dr. Browne by any amounts owed by Dr. Browne to the Companyat the time Dr. Browne’s employment terminates and he hereby authorizes theCompany to make this setoff.

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Dr.Browne’s employment may be terminated for “Cause” at any time upon delivery ofwritten notice to Dr. Browne.  “Cause”means the occurrence of any of the following events:  i) any gross failure on the part of Dr. Browne (other than byreason of disability as provided in Section 4(f)) to faithfully andprofessionally carry out his duties or to comply with any other materialprovision of this Agreement, which failure continues after written noticethereof by the Board, provided that the Board shall not be required to providesuch notice in the event that such failure (A) is not susceptible to remedy or (B)relates to the same type of acts or omissions as to which such notice has beengiven on a prior occasion; ii) Dr. Browne’s material dishonesty (which shallinclude without limitation any misuse or misappropriation of the Company’sassets), or other willful misconduct which is intended to injure or whichinjures or is likely to injure the business of the Company; iii) Dr.Browne’s conviction for any felony or for any other crime involving moralturpitude, whether or not relating to his employment; iv) Dr. Browne’sinsobriety or use of drugs, chemicals or controlled substances either (A) inthe course of performing his duties and responsibilities under this Agreement,or (B) otherwise affecting the ability of Dr. Browne to perform the same;v) Dr. Browne’s failure to comply with a lawful, written direction of theBoard, which is consistent with Dr. Browne’s duties and responsibilities asPresident and Chief Executive Officer with the Company; or vi) any wanton andwillful dereliction of duties by Dr. Browne. The existence of any of the foregoing events or conditions shall bedetermined by the Board in the exercise of its reasonable judgment.

 

## e.                                       Voluntary Resignation.  Inthe event that Dr. Browne shall voluntarily resign as President and ChiefExecutive Officer:

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##### (1)                                  Dr. Browne shall provide the Company’s Boardof Directors with ninety (90) days’ advance written notice of his intention toresign voluntarily.

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##### (2)                                  Following the effective date of hisresignation, the Company shall be relieved of all other obligations to paycompensation to Dr. Browne, except that the Company shall immediately pay Dr.Browne all accrued, but unpaid, Base Salary and any other unpaid expenses orexpense reimbursement.

 

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## f.                                         Disability.  If Dr. Browne becomesdisabled for more than one hundred eighty (180) days in any twelve (12) monthperiod, the Company shall have the right to terminate his employment withoutfurther liability upon written notice to Dr. Browne.  Dr. Browne shall be deemed disabled for purposes of thisAgreement either i) if he is deemed disabled for purposes of any long-termdisability insurance policy paid for by the Company and at the time in effect,or ii) if in the exercise of the Company’s reasonable judgment, due toaccident, mental or physical illness, or any other reason, he cannot performhis duties as President and Chief Executive Officer.  In the event the Company shall terminate Dr. Browne due todisability, as described above, Dr. Browne shall be entitled to receive thebenefits set forth in Section 4(a), reduced by the amount of anydisability plan or insurance benefit paid to him.

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## g.                                      Non-renewal.  Following the expiration ofthe Term by reason of timely notice of non-renewal by the Company in accordancewith Section 2(b), Dr. Browne shall be entitled to receive the benefitsset forth in Section 4(a) above, except that the severance described inSection 4(a)(2) shall be for a period of twelve (12) months following theexpiration of the Term.  Upon theexpiration of the Term by reason of timely notice of non-renewal by Dr. Browne,Dr. Browne will remain eligible to receive a pro rata Incentive bonus for theyear in which the Term expires.  In theevent the Term expires by reason of timely notice of non-renewal, thetwenty-four (24) month time period set forth in Section 12 of thisAgreement shall be reduced to twelve (12) months following the expiration ofthe Term.

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## h.                                      Death.  In the event of the death ofDr. Browne, this Agreement shall automatically terminate and any obligation tocontinue to pay compensation and benefits shall cease as of the date of hisdeath.

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## i.                                          No Mitigation.  Dr.Browne has no duty to mitigate any payment obligations of the Company underthis Section 4.

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## j.                                          Certain Additional Payments.  Ifany of the benefits or payments under this Agreement, or under any otheragreement with or plan of the Company (in the aggregate, the “Total Payments”),will be subject to the tax (the “Excise Tax”) imposed by Section 4999 ofthe Internal Revenue Code, the Company shall pay Dr. Browne in cash anadditional amount (the “Gross-Up Payment”) such that the net amount retained byDr. Browne after deduction of any Excise Tax upon the Total Payments and anyfederal, state and local income tax and Excise Tax upon the Gross-Up Paymentprovided for by this Section 4(g) shall be equal to the TotalPayments.  Such payments shall be madeby the Company to Dr. Browne as soon as practical following a determinationthat any of the Total Payments will be subject to the Excise Tax, but in noevent beyond thirty (30) days from such date.

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Alldeterminations required to be made under this Section 4(j), includingwhether any of the Total Payments will be subject to the Excise Tax and theamounts of such Excise Tax, shall be made by a nationally recognized accountingfirm

 

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(the“Accounting Firm”) mutually acceptable to the parties.  The Accounting Firm shall provide detailedsupporting calculations both to the Company and to Dr. Browne within 10 daysafter a request for such determinations are made by Dr. Browne or theCompany.  Any such determination by theAccounting Firm shall be binding upon the Company and Dr. Browne.  For purposes of determining the amount ofthe Gross-Up Payment, Dr. Browne shall be deemed to pay Federal, state andlocal income taxes at the highest marginal rates applicable to Dr. Browne as ofthe date of the determination.

 

# 5.                                       Board Membership.  AsPresident and Chief Executive Officer, Dr. Browne shall at all times benominated by the Board to serve on the Company’s Board of Directors, subject toelection by the stockholders.

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# 6.                                       Vacation and Holiday.  Dr.Browne shall be entitled to four weeks’ vacation each year and to thoseholidays observed by the Company.  As anessential employee of the Company, Dr. Browne shall schedule his vacationand holiday observances so as not to unreasonably interfere with theperformance of his duties as President and Chief Executive Officer.

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# 7.                                       Health Insurance; Life Insurance; OtherFringe Benefits. Dr. Browneshall be entitled to the benefit of such group medical, accident and long-termdisability insurance as the Company shall make available from time to time toits executive employees.

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# 8.                                       Relocation and Temporary Housing.  TheCompany will pay for the reasonable, properly documented costs of relocatingDr. Browne’s household goods to the Princeton, New Jersey area from SanFrancisco, California, in accordance with Company policy.  The Company will also provide Dr. Brownewith a payment of $4,000 per month for nine months, to be used for temporaryhousing in the Princeton, New Jersey area. It is anticipated that Dr. Browne will obtain permanent housing in thePrinceton, New Jersey area prior to one year after the Start Date.

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In addition, the Companywill pay for up to nine (9) trips between the Princeton, NJ area and SanFrancisco, CA for Dr. and/or Mrs. Browne, in connection with house-hunting orthe sale or rental of their San Francisco residence.

 

The Company will alsoreimburse closing costs associated with the purchase of a residence in thePrinceton, New Jersey area along with associated reasonable and customaryexpenses.  To the extent that therelocation cost and closing cost reimbursements are taxable to Dr. Browne, theCompany will gross-up the payment such that the net amount received by Dr.Browne equals the amount of the reimbursable expenses.

 

Upon the signing of acontract to purchase, lease or rent a residence in Princeton, New Jersey, theCompany will pay Dr. Browne a relocation bonus of one hundred thousand dollars($100,000), which Dr. Browne agrees to return to the Company in the event theclosing on such residence is not consummated. In the event Dr. Browne

 

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sells his Californiaresidence within twelve (12) months of the Start Date, he will receive anadditional payment of fifty thousand dollars ($50,000) upon verification of theclosing of that sale.

 

# ShouldDr. Browne voluntarily terminate his employment with the Company prior to one(1) year from the date of this Agreement, Dr. Browne will repay to the Companyone half of all monies paid to him or on his behalf in association with hisrelocation and temporary housing, not to exceed the net amount received by himafter taxes.  The Company may collectany such mandatory repayments, in full or in part, by deducting them fromamounts otherwise due Dr. Browne from the Company, and Dr. Browne herebyauthorizes such deduction.

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# 9.                                       Professional Expenses.  Dr.Browne will be reimbursed in accordance with the Company’s policy and procedurefor the reasonable costs of properly documented professional and businessrelated travel expenses required in the course of his employment.  TheCompany will also pay for appropriate professional dues and memberships, whichmust be approved in advance by the Board.

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# 10.                                 Legal Fees.  Dr. Browne shall be entitledto reimbursement by the Company for any legal fees he may incur in connectionwith the negotiation and execution of this Agreement, in an amount not toexceed $10,000.

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# 11.                                 Confidential Information. Except as reasonably necessary to perform his duties as President andChief Executive Officer, Dr. Browne agrees not to reveal to any other person orentity or use for his own benefit any confidential information of or aboutCompany or its operations, both during and after his employment under thisAgreement, including without limitation marketing plans, financial information,key personnel, employees’ salaries and benefits, customer lists, pricing andcost structures, operation methods and any other information not available tothe public, without the Company’s prior written consent.

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# 12.                                 Non-Competition.  Dr.Browne shall not, during the course of his employment with the Company or for aperiod of twenty-four (24) months thereafter, directly or indirectly:

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## a.                                       Be employed by, engaged in or participate inthe ownership, management, operation or control of, or act in any advisory orother capacity for, any Competing Entity which conducts its business within theTerritory (as the terms Competing Entity and Territory are hereinafterdefined); provided, however, that notwithstanding the foregoing,Dr. Browne may make solely passive investments in any Competing Entity thecommon stock of which is “publicly held” and of which Dr. Browne shall not ownor control, directly or indirectly, in the aggregate securities which constitute5% or more of the voting rights or equity ownership thereof.

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## b.                                      solicit or divert any business or anycustomer from the Company or assist any person, firm or corporation in doing soor attempting to do so;

 

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## c.                                       cause or seek to cause any person, firm orcorporation to refrain from dealing or doing business with the Company orassist any person, firm or corporation in doing so; or

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## d.                                      solicit for employment, or advise orrecommend to any other person that they employ or solicit for employment orretention as an employee or consultant, any person who is an employee of, orexclusive consultant to, the Company.

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TheCompany’s obligation to make payments pursuant to Section 4 above shallterminate in the event that, and at such time as, Dr. Browne is in breach ofhis obligation not to compete as set forth in this Section 12.  For purposes of this Section, the term“Competing Entity” shall mean any entity which is in possession of drugssubstantially similar to those of the Company that are in pre-clinicaldevelopment or clinical trials, or which is presently or hereafter engaged inthe business of providing to third parties chemistry products or services forpre-clinical drug discovery or chemical development which i) include theoutlicensing of small molecule libraries, the undertaking of drug candidatescreening, and/or related drug optimization activities; or  ii) utilize combinatorial chemistry orhigh-throughput screening technologies in offering pre-clinical drug discoveryservices.  The term “Territory” shallmean North America, Europe and Japan. Notwithstanding anything in the above to the contrary, Dr. Browne mayengage in the activities set forth in Section 12(a) hereof with the priorwritten consent of the Company, which consent shall not be unreasonablywithheld.  In determining whether aspecific activity by Dr. Browne for a Competing Entity shall be permitted, theCompany will consider, among other things, the nature and scope of i) theduties to be performed by Dr. Browne, and ii) the business activities ofthe Competing Entity at the time of Dr. Browne’s proposed engagement by suchentity.

 

Dr.Browne acknowledges and agrees that the covenants set forth in thisSection are reasonable and necessary in all respects for the protection ofthe Company’s legitimate business interests (including without limitation theCompany’s confidential, proprietary information and trade secrets and clientgood-will, which represents a significant portion of the Company’s net worthand in which the Company has a property interest).  Dr. Browne acknowledges and agrees that, in the event that hebreaches any of the covenants set forth in this Section, the Company may beirreparably harmed and may not have an adequate remedy at law; and, therefore,in the event of such a breach, the Company shall be entitled to injunctiverelief, in addition to (and not exclusive of) any other remedies (includingmonetary damages) to which the Company may be entitled under law.  If any covenant set forth in thisSection 12 is deemed invalid or unenforceable for any reason, it is theParties’ intention that such covenants be equitably reformed or modified to theextent necessary (and only to such extent to) render it valid and enforceablein all respects.  In the event that thetime period and geographic scope referenced above is deemed unreasonable,overbroad, or otherwise invalid, it is the Parties’ intention that theenforcing court shall reduce or modify the time period and/or geographic scopeto the extent necessary (and only to such extent necessary) to render suchcovenants reasonable, valid, and enforceable in all respects.

 

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# 13.                                 Arbitration.  Any and all disputes betweenthe parties (except actions to enforce the provisions of Section 12 ofthis Agreement), arising under or relating to this Agreement or any otherdispute arising between the parties, including claims arising under anyemployment discrimination laws, shall be adjudicated and resolved exclusivelythrough binding arbitration before the American Arbitration Associationpursuant to the American Arbitration Association’s then-in-effect NationalRules for the Resolution of Employment Disputes (hereafter “Rules”).  The initiation and conduct of anyarbitration hereunder shall be in accordance with the Rules and each side shallbear its own costs and counsel fees in such arbitration.  Any arbitration hereunder shall be conductedin Princeton, New Jersey, and any arbitration award shall be final and bindingon the Parties.  The arbitrator shallhave no authority to depart from, modify, or add to the written terms of thisAgreement.  The arbitration provisionsof this Section shall be interpreted according to, and governed by, theFederal Arbitration Act, 9 U.S.C. § 1 et seq., and any actionpursuant to such Act to enforce any rights hereunder shall be broughtexclusively in the United States District Court for the District of  New Jersey. The parties consent to the jurisdiction of (and the laying of venue in)such court.

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# 14.                                 Waiver.  The waiver by either party ofany breach of any provision of this Agreement shall not operate or be construedas a waiver of any subsequent breach by the other party of any provision of theAgreement.

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# 15.                                 Severability.  Inthe event that any section, paragraph or term of this Agreement shall bedetermined to be invalid or unenforceable by any competent authority ortribunal for any reason, the remainder of this Agreement shall be unaffectedthereby and shall remain in full force and effect, and any such section,paragraph, or term shall be deemed modified to the extent to make itenforceable.

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# 16.                                 Successors and Assigns. This Agreement shall bind and inure to the benefit of the successors andassigns of the Company, and the heirs, executors or personal representatives ofDr. Browne.  This Agreement may not beassigned by Dr. Browne.  This Agreementmay be assigned to any successor in interest to the Company and Dr. Brownehereby consents to such assignment.

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# 17.                                 Warranties and Representations.  Dr.Browne hereby warrants and represents to the Company that he is not a party toany other agreement or understanding with any other person or entity (includingwithout limitation any agreements containing restrictive covenants governingpost-employment competition, solicitation, the disclosure of confidentialinformation, and intellectual property rights, and the like) that would,directly or indirectly, prevent him in any way from lawfully entering into thisAgreement, performing any of the duties required hereunder (or that might beassigned to him in the future hereunder), or fully complying with and honoringeach and every term, covenant, and promise contained in this Agreement.

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# 18.                                 Lawful Employment in United States.  ThisAgreement is contingent upon Dr. Browne’s ability to be lawfully employed inthe United States

 

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# indefinitely, withoutemployer sponsorship.  Customarydocumentation establishing work eligibility will be required in accordance withapplicable law.

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# 19.                                 Entire Agreement; Amendments. This Agreement, including the recitals (which are a part hereof),together with the applicable bylaws and policies of the Company, constitutesthe entire Agreement between the parties hereto and there are no otherunderstandings, agreements or representations, expressed or implied.  This Agreement may amended only in writingsigned by both parties.

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# 20.                                 Governing Law. This Agreement shall be governed by and construed in accordance with thelaws of the State of New Jersey.

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Datedthis 14th day of July, 2004.

 

 
| PHARMACOPEIA  DRUG        |                           |
|---------------------------|--------------------------------|
| DISCOVERY,  INC.:         |                           |
|                      |                           |
|                      |                           |
| By:                       | /s/ Joseph  A. Mollica    |   | /s/ Leslie  Johnston Browne |   |
| Joseph  A. Mollica, Ph.D. | Leslie Johnston Browne,  Ph.D. |
| Chairman  of the Board    |                           |
|                           |                                |  |  |  |

 

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