**Exhibit10.5**

 

 

August3, 2006

BrianM. Posner
| Re: |   | Amendment to Severance Agreement dated May 4,  2006 between Pharmacopeia Drug Discovery, Inc.   (“Pharmacopeia”) and Brian M. Posner (the “Agreement”) |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Dear Mr. Posner:

Referenceis made to the Agreement.

Inconsideration of your continued employment by Pharmacopeia, Pharmacopeia andyou hereby agree to amend and restate Section 1(g)(ii)(A) (Termination andEffect of Termination—Change in Control Termination—Stock Options) of theAgreement in its entirety as follows:

Section 1(g)(ii)(A)

[1(g)(ii)] “(A)(i) notwithstanding anything to thecontrary contained in the 2004 Plan or any other stock option or incentivecompensation plan of the Company, any unvested stock options or other incentivesecurities which were granted to Employee prior to the term of this Agreementunder the 2004 Plan or any such other stock option or incentive compensationplan shall immediately vest on the date of such termination of Employee’semployment, the expiration date of the exercise period for such options orother securities shall be the earlier of (1) the later of (A) December 31 of the year of suchtermination of the Employee’s employment, or (B) two-and-one-half (2.5)months following the date of such termination of Employee’s employment, and(2) the expiration of the term of the option, and the Company shall takeall actions necessary or advisable to give effect to this Section 1(g)(ii)(A);and

(ii) notwithstanding anything to the contrarycontained in the 2004 Plan or any other stock option or incentive compensationplan of the Company, any unvested stock options or other incentive securitieswhich are granted to Employee during the term of this Agreement under the 2004Plan or any such other stock option or incentive compensation plan shallimmediately vest on the date of such termination of Employee’s employment, theexpiration date of the exercise period for such options or other securitiesshall be the earlier of (1) one (1) year following the date oftermination or (2) the expiration of the term of the option, 

----

 

and the Company shall take all actions necessary oradvisable to give effect to this Section 1(g)(ii)(A); and”

Ifyou are in agreement with the terms of this letter agreement please sign belowand return one copy to my attention.
| Very truly yours,                     |
|---------------------------------------|
|                                  |
| /s/ Leslie J. Browne, Ph.D.           |
|                                  |
| Leslie J. Browne, Ph.D.               |
| President and Chief Executive Officer |
|                                  |
|                                  |
| ACKNOWLEDGED, AGREED AND              |
| ACCEPTED THIS 3RD DAY OF              |
| AUGUST, 2006                          |
|                                  |
|                                  |
|                                  |
| /s/ Brian M. Posner                   |   |
| Brian M. Posner                       |
| Executive Vice President and          |
| Chief Financial Officer               |

 

----