Exhibit
10.1


November
2, 2006


Rene Belder, M.D.


Dear Rene:


I am pleased to offer you
the following opportunity with Pharmacopeia Drug Discovery, Inc.  It is my sincere hope that you will choose to
join our organization, as it is our belief that you possess the ability to make
significant contribution toward our future growth and innovation.  The following will confirm the terms of our
offer of employment to you:


Position/Location:
You will assume the position of Vice President, Clinical and Regulatory Affairs (the
“Position”), based
in our Cranbury, NJ headquarters and in this position will report directly to
me.  The
Position shall be part of the Company’s senior management team (SMT) and shall
require you to assume responsibility for duties generally associated with the
Vice President, Clinical and Regulatory Affairs position.


Compensation:
Your compensation in the Position will include an annual base salary of $275,000.00, paid
semi-monthly at the rate of $11,458.33 per pay period.  This will be your base salary through 2006
and 2007 and until our 2007 Salary Review, effective March 1, 2008.


Effective November 13,
2006, or upon your actual start date, whichever is later, you will participate
in our annual management incentive program and will be eligible to earn, at
target, an additional 25% of your base salary based upon the achievement of
corporate and individual objectives.  You
will be eligible to earn a bonus for 2006 performance in 2007, prorated for the
number of months you are employed by us in 2006.


In addition, you will be
paid a one-time bonus of $30,000 upon commencement of your employment with us.


Employment
and Benefits: As an employee of Pharmacopeia, you will
participate in our comprehensive employee benefits package.  We are committed to maintaining a competitive
position in the employment marketplace and in doing so make available to you
the standard employee benefits package provided to employees. This will
include, but is not limited to, health, disability, and life insurance;
participation in our 401(k) retirement plan; vacation benefits, and
participation in our equity compensation plan. 
Additionally, you will be eligible to participate in our Executive Life
and LTD plans.  Please find a complete
summary of our benefits enclosed for your review.









 



 


Severance
Provisions: We will provide a separate agreement
that details our mutual obligations and commitments upon the termination of
your employment.


Incentive
Stock Option Grant: Upon joining the Company, you will be given an option for 100,000
shares of Company
common stock pursuant to the terms of the Company’s 2004 Stock Incentive Plan (the “Plan”).  The option
will be memorialized in an option agreement with standard terms consistent with
this letter agreement and your severance agreement.  The option will vest over a 4-year
period, 25% at the end of the first year and monthly thereafter.  The option will be priced at the market close
price on your first day of
employment with us.  In the event of a consolidation,
merger, reorganization, or sale of all, or substantially all, of the assets or
capital stock of the Company or other business combination in which the Plan is
not either continued or assumed, the above option will vest in full.


Vacation:  You will receive four weeks vacation annually, prorated in 2006 for the number of months you are
employed by the Company.


Reimbursement of Expenses:  The
Company shall reimburse you for all normal items of travel, entertainment and
other business expenses reasonably incurred by you on behalf of the Company.  Such expenses shall be documented and
submitted to the Company in accordance with the reimbursement policies of the
Company in effect from time to time.


Attorney
Fees:  The Company agrees to pay the
reasonable legal fees you incur in the negotiation and execution of this
agreement, in an amount not to exceed $3,000.


Confidentiality:  Due to the nature of your responsibilities,
you will be required to execute the Company’s Invention and Non-Disclosure
Agreement upon commencement of your employment with us.  We
enclose a copy of that agreement for your review.


Consideration
and Response Times: We would appreciate a response to
this offer as soon as possible.


Start
Date: We will mutually agree to a start date and propose
it to be November 13, 2006.



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This letter supersedes
any prior or contrary representations that may have been made by Pharmacopeia
Drug Discovery, Inc.  The terms of this
offer may be amended only in writing and signed by you and an authorized
officer of the company.  This offer is
subject to satisfactory documentation with respect to your identification and
right to work in the United States. 
Please sign and return one copy of the letter.


We look forward to your
participation as a member of the Pharmacopeia team and your involvement in what
we are confident represents an exciting and professionally rewarding venture.


On Behalf of Pharmacopeia
Drug Discovery, Inc.:


 


	
  

  	
   /s/ Leslie
  J. Browne, Ph.D.

  	
   

  
	
   

  	
   Leslie J.
  Browne, Ph.D.

  
	
   

  	
   President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   Signed and
  agreed by:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Rene
  Belder, M.D.

  	
   

  
	
   

  	
   Rene
  Belder, M.D.

  
				



 



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