Document:

Exhibit 10.1

 

SEVERANCE AGREEMENT FOR WILLIAM J. DELORBE

 

This SEVERANCE AGREEMENT (the “Agreement”) is
made and entered into as of the 26th day of August, 2005, by and between PHARMACOPEIA DRUG DISCOVERY, INC., a
Delaware corporation (hereinafter, the “Company”), and WILLIAM J.
DELORBE, an individual (hereinafter, “Employee”).

 

RECITALS

 

WHEREAS, Employee
has served as Executive Vice President, Human Resources of the Company since November 2001;

 

WHEREAS, the Company and Employee desire
Employee’s service to and employment by the Company to continue through, as
applicable, (i) October 31, 2005 if the Company does not exercise the
Extension Option (as defined below) or (ii) December 31, 2005 if the
Company exercises the Extension Option (the “Termination Date”);

 

WHEREAS, the Company desires to provide
certain benefits and payments to Employee in the event of such termination of
his employment with the Company and in the event of certain instances of the
termination of his employment prior to the Termination Date; and

 

WHEREAS, Employee
desires to accept such benefits and payments on the terms and subject to the
conditions set forth in this Agreement;

 

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

 

1.   TERMINATION
AND EFFECT OF TERMINATION.  Employee shall be employed by the Company as
Executive Vice President, Human Resources of the Company through the
Termination Date unless such employment is earlier terminated pursuant to this
Agreement.  Notwithstanding anything to
the contrary herein, (i) unless terminated earlier, Employee’s employment
with the Company shall terminate on the Termination Date and (ii) the
Chief Executive Officer of the Company may, at any time prior to the Termination
Date, require Employee not to be physically present at the Company’s offices.  In the event of termination of Employee’s
employment, the Company shall have no liability to Employee for compensation or
benefits except as specified in this Section 1 or as required by the
Company’s benefits policy.

 

(a)  Termination by the Company for
Cause. 
Employee’s employment may be terminated by the Company for Cause at any
time upon delivery of written notice to Employee.  Upon such a termination, the Company shall
have no obligation to Employee other than the payment of all accrued, but
unpaid, Base Salary and any unpaid expenses or expense reimbursements prior to
the effective date of such termination. 
For purposes of this Agreement, “Cause” means the occurrence of any one
or more of the following events or conditions:

 

(i)  any
gross failure on the part of Employee (other than by reason of disability as
provided in Section 1(e) below) to faithfully and professionally
carry out Employee’s duties or to comply with any other material provision of
this Agreement, which failure is not remedied or continues for thirty (30) days
after written notice detailing such failure is delivered by the Company;
provided, that the Company shall not be required to provide such notice in the

 

1

 

event that such failure (A) is
not susceptible to remedy or (B) relates to the same type of acts or
omissions as to which notice has been given on a prior occasion;

 

(ii) 
Employee’s dishonesty (which shall include without limitation any misuse
or misappropriation of the Company’s assets), or other willful misconduct
(including without limitation any conduct on the part of Employee intended to
or likely to injure the business of the Company);

 

(iii)  Employee’s conviction of any felony or of any other crime
involving moral turpitude, whether or not relating to Employee’s employment;

 

(iv)  Employee’s insobriety or use of drugs, chemicals or
controlled substances either (A) in the course of performing Employee’s
duties and responsibilities under this Agreement, or (B) otherwise
affecting the ability of Employee to perform the same;

 

(v)  Employee’s failure to comply with a lawful written direction
of the Company; or

 

(vi)  any wanton or willful dereliction of duties by Employee.

 

(b)  Involuntary Termination by the
Company without Cause.  The Company may involuntarily terminate
Employee’s employment under this Agreement at any time without Cause upon
delivery of written notice to Employee. 
Subject to the provisions of Section 1(g) (concerning
termination in connection with a Change of Control (as defined in  Section 1(g))
and Section 1(h) (concerning termination on the Termination Date), if
Employee’s employment is terminated involuntarily by the Company without Cause
pursuant to this Section 1(b), the Company shall:

 

(i)  pay Employee all compensation and benefits accrued, but
unpaid, up to the Termination Date;

 

(ii)  pay Employee in a lump sum one year’s Base Salary
in effect as of the effective date of termination;

 

(iii)  pay Employee in a lump sum within
thirty (30) days after termination an amount equal to 30% times one year’s Base Salary times the number
of full months worked in 2005;

 

(iv)  maintain Employee’s group medical coverage until the earlier
of (a) the end of a period of twelve months following
the effective date of such termination, or (b) until such time as
comparable medical coverage is obtained by the Employee; and

 

(v)  allow all vested options or other
incentive securities to be exercised pursuant to the terms of the option
agreement or other agreements under which such options or other incentive
securities were granted.

 

One year’s “Base
Salary” shall be $250,000 for purposes of this Agreement.

 

(c)  Termination by Employee for Good
Reason. 
Employee may terminate his employment under this Agreement for Good
Reason upon the provision of advance

 

2

 

written notice
to the Company specifying in reasonable detail the events or conditions upon
which Employee is basing such termination. 
The Company will be given the opportunity, but shall have no obligation,
to “cure” such events or conditions within thirty (30) days after the provision
by Employee of such notice.  Subject to
the provisions of Section 1(g) hereof (concerning termination in
connection with a Change of Control), if the Company elects in a written notice
to Employee not to cure such events or conditions or otherwise fails to so cure
such events or conditions within such thirty (30) day period, Employee may
terminate his employment with the Company for Good Reason pursuant to this Section 1(c) and
in the event of such termination, the Company shall:

 

(i)  pay Employee all compensation and benefits accrued, but
unpaid, up to the Termination Date;

 

(ii)  pay Employee in a lump sum one year’s Base Salary in effect as of the
effective date of termination;

 

(iii)  pay Employee in a lump sum within
thirty (30) days after termination an amount equal to 30% times one year’s Base Salary times the number
of full months worked in 2005;

 

(iv)  maintain Employee’s group medical coverage until the earlier
of (a) the end of a period of twelve months following the effective date of such
termination, or (b) until such time as comparable medical coverage is
obtained by the Employee; and

 

(v)  allow all vested options or other
incentive securities to be exercised pursuant to the terms of the option
agreement or other agreements under which such options or other incentive
securities were granted.

 

For purposes of this Agreement, Good Reason means any one or more of
the following events or conditions occurring prior to the Termination Date:

 

(A)  the Company’s material breach of any of the terms of this Agreement;

 

(B)  a diminution in Employee’s Executive Vice President, Human
Resources title;

 

(C)  the Company’s requiring Employee, without his consent, to
relocate from his residence or to commute more than fifty (50) miles from the
offices of the Company at which he was principally employed on the date of this
Agreement; or

 

(D)  a reduction by more than twenty percent (20%) in Employee’s annual Base
Salary as in effect on the date of this Agreement or as the same may be
increased from time to time after such date and prior to the delivery of such
notice (other than such a reduction applicable generally to substantially all
employees of the Company). 

 

(d)  Termination by Employee without
Good Reason (Voluntary Resignation).  Employee may voluntarily resign his position
and terminate his employment under this Agreement without Good Reason at any
time.  Upon such a termination, the
Company

 

3

 

shall have no
obligation to pay compensation and provide benefits to Employee other than the
payment of all accrued and unpaid Base Salary and any other unpaid expenses or
expense reimbursements prior to the effective date of such termination.

 

(e)  Disability.  If Employee becomes disabled for more than
one hundred eighty (180) days in any twelve (12) month period, the Company
shall have the right to terminate Employee’s employment without further
liability upon written notice to Employee. 
Without limiting the generality of the foregoing, Employee shall be
deemed disabled for purposes of this Agreement either (i) if Employee is deemed disabled for purposes of any
long-term disability insurance policy maintained by the Company and at the time
in effect, or (ii) if in the
exercise of the Company’s reasonable judgment, due to accident, mental or
physical illness, or any other reason, Employee cannot perform Employee’s duties.  In the event the Company shall terminate
Employee due to disability, as described above, Employee shall be entitled to
receive only those benefits provided under the Company’s Long Term Disability
Plan and Employee’s stock options will be subject to the Disability provisions of
the 2004 Stock Incentive Plan (the “2004
Plan”).

 

(f)  Death.  In the event of the death of Employee, this
Agreement shall automatically terminate and any obligation to continue to pay
compensation and benefits shall cease as of the date of death, except for the
payment of all accrued, but unpaid, Base Salary and any other unpaid expenses
or expense reimbursement prior to the date of death.  In
the event of Employee’s death, Employee’s stock options shall be subject to the
Death provisions of the 2004 Plan.

 

(g)  Change in Control Termination.

 

(i)  Benefits.  Subject to Section 1(i),
in the event Employee’s employment under this Agreement is terminated by the
Company involuntarily without Cause or Employee terminates his employment with
the Company for Good Reason as defined in Section 1(c), in either case at
any time during the period commencing two (2) months before and ending
twelve (12) months after the occurrence of a Change in Control, the Company
shall:

 

(A) pay Employee all compensation and benefits accrued, but
unpaid, up to the effective date of termination;

 

(B) pay Employee a lump sum amount equal to one and one-half (1.5)
times Employee’s annual Base Salary in effect as of the effective date of
termination;

 

(C) pay Employee a lump sum amount equal to one and one half (1.5)
times 30% times
one year’s Base Salary times the number of full months worked in 2005;

 

(D) maintain Employee’s group medical coverage until the earlier
of (a) the end of a period of eighteen (18) months following the effective
date of termination or (b) such time as comparable medical coverage is
obtained by the employee.

 

Anything contained in this Section to the contrary
notwithstanding, Employee shall not be entitled to any of the benefits set
forth in this

 

4

 

Section 1(g)(i) if Employee either resigns and terminates
such employment voluntarily (other than for Good Reason, as described above) or
is terminated by the Company for Cause, with the exception of accrued but
unpaid compensation, benefits and unreimbursed business expenses borne by
Employee as of the date of termination.

 

For purposes of Section 1(g) hereof, the term the “Company”
shall include any Acquiring Company (as defined below) and all obligations of
the Company under such Section shall be assumed by any Acquiring Company.

 

(ii)  Stock
Options.  Subject to Section 1(i), in the event
Employee’s employment under this Agreement is terminated by the Company
involuntarily without Cause or Employee terminates his employment with the
Company for Good Reason, in either case at any time during the period
commencing two (2) months before and ending twelve (12) months after the
occurrence of a Change in Control:

 

(A) notwithstanding anything to the contrary contained in the 2004
Plan or any other stock option or incentive compensation plan of the
Company, any unvested stock options or
other incentive securities which were granted to Employee prior to or
during the term of this Agreement under the 2004 Plan or any such other stock
option or incentive compensation plan
shall immediately vest on the
date of such termination of
Employee’s employment, the expiration date of the exercise period for such
options or other securities shall
be the earlier of (1) one (1) year following the date of termination
or (2) the expiration of the term of the option, and the Company shall
take all actions necessary or advisable to give effect to this Section 1(g)(ii)(A);
and

 

(B) all vested options or other incentive securities held by
Employee which were issued pursuant to the 2004 Plan or any such other plan
shall be exercisable pursuant to the terms of the stock option agreement or other agreement(s) under which the
options or other incentive securities
were granted, and the Company shall take all actions necessary or advisable to
give effect to this Section 1(g)(ii)(B).

 

Anything contained in this Section to the contrary
notwithstanding, Employee shall not be entitled to any of the benefits set
forth in this Section 1(g)(ii) if Employee either resigns and
terminates such employment voluntarily (other than for Good Reason, as
described above) or is terminated by the Company for Cause.

 

(iii) 
Definition of “Change in Control.”  The
definition of “Change in Control” set forth in the 2004 Plan is incorporated,
and made a part hereof, by reference.

 

(iv)  Definition of “Acquiring
Company.”  For
purposes of Section 1(g) of this Agreement, an “Acquiring Company”
shall mean the resulting or surviving corporation, or the company issuing cash
or securities (or its ultimate parent company), in a merger, sale, asset purchase, or assignment of all
or substantially all of the Company’s assets, consolidation or share
exchange involving the Company, or the successor corporation to the Company
(whether in any such transaction or otherwise).

 

(h)                                 Extension
of Employment.  The Company shall
have an option (the “Extension Option”), which option shall be exercisable
between the date of this

 

5

 

Agreement and
the close of business on September 1, 2005, to extend Employee’s service
to and employment by the Company through December 31, 2005.  The Company shall provide written notice to
Employee not later than the close of business on September 1, 2005 of the
Company’s decision to exercise or not to exercise the Extension Option.  If the Company exercises the Extension Option
pursuant to this Section 1(h), Employee shall continue his service and
employment as Executive Vice President, Human Resources through December 31,
2005 on the same terms as existed prior to November 1, 2005.

 

(i)                                    Termination
At the Termination Date.  At 5:00
PM on the Termination Date, if not earlier terminated under another provision
hereof, Employee’s employment with the Company shall terminate.  In the event that Employee’s employment with
the Company terminates at such time, Employee will only receive the benefits
set forth in this Section 1(i) and shall not receive any other payments
or benefits from the Company.

 

(i)  Benefits.  Employee
will receive the benefits set forth in Sections 1(b)(i), (ii), (iii) and
(iv).  In addition,
notwithstanding anything to the contrary contained in the 2004 Plan or any
other stock option or incentive compensation plan of the Company, any unvested stock
options or other incentive securities which
were granted to Employee prior to or during the term of this Agreement under
the 2004 Plan or any such other stock option or incentive compensation plan shall immediately vest on the Termination Date, the
expiration date of the exercise period for such options or other securities and for all other options or other incentive
securities held by Employee on the Termination Date shall be the earlier
of (1) one (1) year following the date of termination or (2) the
expiration of the term of the option or other security, and the Company shall
take all actions necessary or advisable to give effect to this sentence.

 

(ii)  Outplacement Services.  The Company shall provide Employee
outplacement assistance services from an organization mutually selected by
Employee and the Company, up to a maximum value of $15,000.

 

2.  GENERAL
RELEASE.  Notwithstanding
anything in this Agreement to the contrary, no payments shall be made or
benefits provided by the Company under Section 1 prior to the expiration
of the revocation period following execution by Employee at the time of
termination of a general release in favor of the Company and its affiliates,
and its and their respective officers, employees and directors.  A form of general release is attached hereto
as Exhibit A.

 

3.  SERVICE PRIOR TO
TERMINATION. 
Subject to the terms of this Agreement, prior to any termination of employment,
Employee shall be employed by the Company and shall occupy the position of
Executive Vice President, Human Resources of the Company.  While employed by the Company, Employee shall
devote his full time, energies and talents to serving as its Executive Vice
President, Human Resources.  Employee
agrees to perform his duties hereunder faithfully and efficiently subject to
the directions of the Company.  Without
limiting the generality of the foregoing, Employee’s duties, prior to Employee’s
termination of employment with the Company shall include: overseeing the
Company’s search for a Chief Medical Officer; overseeing the Company’s search
for a Director of Human Resources; overseeing the implementation of
administrative changes to the Company’s 401(K) plan approved by the
Compensation Committee of the Board of Directors; and overseeing the transition
of assets held in the Company’s executive deferred compensation plan.

 

6

 

4.  TAXES.  Employee
will be responsible for the payment of any tax liability incurred as a result
of this Agreement.  The Company may
withhold tax on any payments or benefits provided to Employee as required by
law or regulation.

 

5.  NON-COMPETITION; NON-SOLICITATION.

 

(a)  Restrictions. 
Employee shall not, during the course of Employee’s employment
with the Company or for a period of twelve (12) months thereafter, directly or
indirectly:

 

(i) be employed by, engaged in or participate in the ownership,
management, operation or control of, or act in any advisory or other capacity
(including as an individual, principal, agent employee, consultant or
otherwise) for, any Competing Entity which conducts its business within the
Territory (as the terms Competing Entity and Territory are hereinafter
defined); provided, however, that notwithstanding any of the foregoing,
Employee may make solely passive investments in any Competing Entity the common
stock of which is “publicly held” and of which Employee shall not own or
control, directly or indirectly, in the aggregate securities which constitute
5% or more of the voting power of such Competing Entity;

 

(ii) solicit or divert any business or any customer or known
prospective customer from the Company or assist any person or entity in doing
so or attempting to do so;

 

(iii) cause or seek to cause any person or entity to refrain from
dealing or doing business with the Company or assist any person or entity in
doing so; or

 

(iv) solicit for employment, or advise or recommend to any other
person or entity that he, she or it employ or solicit for employment or
retention as an employee or consultant, any person who is an employee of, or
exclusive consultant to, the Company.

 

(b)  Effect on the Company’s Obligations.  The
Company’s obligation to make payments and provide the other benefits pursuant
to Section 1 above shall terminate in the event that, and at such time as,
Employee is in breach of Employee’s obligations set forth in Section 5(a) above.

 

(c)  Definitions.  For purposes of this Section:

 

(i)  “Competing Entity” means any entity which is presently or
hereafter engaged in any business of the type or character engaged in by the
Company or any of its subsidiaries including, without limitation, (a) the
business of providing to third parties products or services for pre-clinical
drug discovery or chemical development which (x) include the outlicensing of
small molecule libraries, the undertaking of drug candidate screening, and/or
related drug optimization activities, or (y) utilize combinatorial chemistry or
high-throughput screening technologies in offering pre-clinical drug discovery
services or (b) any business which is engaged in the discovery and
development of human therapeutic products for the specific targets and
indications in which the Company was actively engaged at the time of the
termination of Employee’s employment with the Company.

 

(ii)  “Territory” means North America, Europe and Japan.

 

7

 

Notwithstanding
anything in the above to the contrary, Employee may engage in the activities
set forth in Section 5(a) hereof with the prior written consent of
the Company, which consent shall not be unreasonably withheld.  Further, in determining whether a specific
activity by Employee for a Competing Entity shall be permitted, the Company
will consider, among other things, the nature and scope of (A) the duties
to be performed by Employee and (B) the business activities of the
Competing Entity at the time of Employee’s proposed engagement by such entity.

 

(d)  Acknowledgement. 
Employee acknowledges and agrees that the covenants set forth in this Section are
reasonable and necessary in all respects for the protection of the Company’s
legitimate business interests (including without limitation the Company’s
confidential, proprietary information and trade secrets and client good will,
which represents a significant portion of the Company’s net worth and in which
the Company has a property interest). 
Employee acknowledges and agrees that, in the event that Employee
breaches any of the covenants set forth in this Section, the Company shall be
irreparably harmed and shall not have an adequate remedy at law; and,
therefore, in the event of such a breach, the Company shall be entitled to
injunctive relief, in addition to (and not exclusive of) any other remedies (including
monetary damages) to which the Company may be entitled under law.  If any covenant set forth in this Section 5
is deemed invalid or unenforceable for any reason, it is the parties’ intention
that such covenants be equitably reformed or modified to the extent necessary
(and only to such extent) to render it valid and enforceable in all
respects.  In the event that the time
period and geographic scope referenced above is deemed unreasonable, overbroad,
or otherwise invalid, it is the parties’ intention that the enforcing court
shall reduce or modify the time period and/or geographic scope to the extent
necessary (and only to such extent necessary) to render such covenants
reasonable, valid and enforceable in all respects.

 

5.  ARBITRATION.  Any
and all disputes between the parties (except actions to enforce the provisions
of Section 5 of this Agreement) arising under or relating to this
Agreement or any other dispute arising between the parties, including claims
arising under any employment discrimination laws, may be adjudicated and
resolved exclusively through binding arbitration before the American
Arbitration Association pursuant to the American Arbitration Association’s
then-in-effect National Rules for the Resolution of Employment Disputes
(hereinafter, “Rules”).  The initiation
and conduct of any arbitration hereunder shall be in accordance with the Rules and,
unless expressly required by law, each side shall bear its own costs and
counsel fees in such arbitration.  Any
arbitration hereunder shall be conducted in Princeton, New Jersey or at such
other location as mutually agreed by the parties.  Any arbitration award shall be final and
binding on the parties.  The arbitrator
shall have no authority to depart from, modify, or add to the written terms of
this Agreement.  The arbitration
provisions of this Section shall be interpreted according to, and governed
by, the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and any
action pursuant to such Act to enforce any rights hereunder shall be brought exclusively
in any United States District Court in the State of New Jersey.  The parties consent to the jurisdiction of
(and the laying of venue in) any such court.

 

6.  NOTICES.  For the purposes of this Agreement,
notices, demands and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or (unless otherwise specified) mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as follows:

 

8

 

(a)           If to the Company,
to:

 

Pharmacopeia Drug Discovery, Inc.

3000 Eastpark Blvd.

Cranbury, NJ  08512

Attn.:   Chief Executive Officer

 

With a copy to:

 

Pharmacopeia Drug Discovery, Inc.

3000 Eastpark Blvd.

Cranbury, NJ  08512

Attn.:   General Counsel

 

(b)           If to Employee, to:

 

William J. DeLorbe

 

or
to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective
only upon receipt thereof.

 

7.  WAIVER.  The waiver by the Company or Employee of any
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by Employee or the Company, as applicable of
any provision of this Agreement.

 

8.  SEVERABILITY.  The parties have carefully reviewed the
provisions of this Agreement and agree that they are fair and equitable.  However, in light of the possibility of
differing interpretations of law and changes of circumstances, the parties
agree that in the event that any section, paragraph or term of this Agreement
shall be determined to be invalid or unenforceable by any competent authority
or tribunal for any reason, the remainder of this Agreement shall be unaffected
thereby and shall remain in full force and effect.  Moreover, if any of the provisions of this
Agreement is determined by a court of competent jurisdiction to be excessively
broad as to duration, activity, geographic application or subject, it shall be
construed by limiting or reducing it to the extent legally permitted so as to
be enforceable to the extent compatible with then applicable law.

 

9.  SUCCESSORS
AND ASSIGNS.  This
Agreement shall bind and inure to the benefit of the successors and assigns of
the Company and the heirs, executors or personal representatives of
Employee.  This Agreement may not be
assigned by Employee.  This Agreement may
be assigned to any successor in interest to the Company (including by way of
merger, consolidation or reorganization, or by way of any assignment of all or
substantially all of the Company’s assets, business or properties), and
Employee hereby consents to such assignment.

 

10.  TERMINATION
OF EXISTING AGREEMENTS.  The Employee acknowledges
and agrees that he is not owed or entitled to any wages, payments, bonuses,
benefits, pay in lieu of notice, salary continuation or severance,
compensation, or any other remuneration of whatever kind arising from or
relating to his employment or the termination of his employment, except for the
payments and benefits provided for herein or as required by law. The Company and Employee agree that the
letter agreement dated October 19, 2001 between the Company and Employee,
the Severance Agreement for William J. DeLorbe dated as of March 24, 2004  and all other prior and existing
agreements between the Employee and the Company (whether or not written) (collectively, the “Prior Agreements”) are
hereby

 

9

 

terminated
and this Agreement shall supersede all such Prior Agreements.  Each of the Company and Employee confirm and
agree that the other has no continuing duties, liabilities or obligations under
the Prior Agreements.

 

11.  ENTIRE
AGREEMENT; AMENDMENTS. 
This Agreement and the
applicable bylaws and policies of the Company, constitute the entire agreement
between the parties hereto, and there are no other understandings, agreements
or representations, expressed or implied. 
This Agreement supersedes any and all prior or contemporaneous agreements,
oral or written, concerning Employee’s employment and compensation, including
the Prior Agreements.  This Agreement may
be amended only in writing signed by Employee and the Chief Executive Officer
of the Company.

 

12.  COUNTERPARTS.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.

 

13.  GOVERNING LAW; FORUM SELECTION. 
This Agreement shall be governed by and construed in accordance with the
laws (other than conflicts of laws principles) of the State of New Jersey
applicable to contracts executed in and to be performed entirely within such
State. 
The parties consent to jurisdiction and laying of venue in the state and
federal courts of New Jersey for purposes of resolving disputes under this
Agreement.

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
set forth above.

 

	
   

  	
  PHARMACOPEIA DRUG DISCOVERY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leslie J. Browne

  	
   

  
	
   

  	
   

  	
  Leslie J. Browne, Ph.D.

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. DeLorbe

  	
   

  
	
   

  	
   

  	
  William J. DeLorbe

  
					

 

10

 

EXHIBIT A

 

General Release

 

IN
CONSIDERATION OF the terms and conditions contained in the Severance Agreement,
dated as of the     th day of               ,
20    , (the “Severance Agreement”) by and between                             
(“Employee”) and Pharmacopeia Drug Discovery, Inc. (the “Company”), and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, Employee on behalf of himself and his heirs, executors,
administrators, and assigns, releases and discharges the Company and its
subsidiaries, divisions, affiliates and parents, and their respective past,
current and future officers, directors, employees, agents, and/or owners, and
their respective successors, and assigns and any other person or entity claimed
to be jointly or severally liable with the Company or any of the aforementioned
persons or entities (collectively the “Released Parties”) from any and all
manner of actions and causes of action, suits, debts, dues, accounts, bonds,
covenants, contracts, agreements, judgments, charges, claims, and demands
whatsoever (“Claims “) which Employee and his heirs, executors, administrators,
and assigns have, had, or may hereafter have, against the Released Parties or
any of them arising out of or by reason of any cause, matter, or thing
whatsoever from the beginning of the world to the date hereof.  This General Release of Claims includes,
without limitation, any and all matters relating to Employee’s employment by
the Company and the cessation thereof, and any and all matters arising under
any federal, state, or local statute, rule, or regulation, or principle of
contract law or common law, including but not limited to, the Family and
Medical Leave Act of 1993, as  amended, 29 U.S.C. §§ 2601 et
seq., Title VII of the Civil Rights Act of 1964, as  amended,
42 U.S.C. §§ 2000 et  seq., the Age Discrimination in
Employment Act of 1967, as  amended, 29 U.S.C. §§ 621 et
seq. (the “ADEA”), the Americans with Disabilities Act of 1990, as
amended, 42 U.S.C. §§ 12101 et  seq., the Worker
Adjustment and Retraining Notification Act of 1988, as  amended,
29 U.S.C. §§2101 et  seq., Employee Retirement Income Security Act
of 1974, as  amended, 29 U.S.C. §§ 1001 et  seq.
(“ERISA”), the New Jersey Law Against Discrimination, N.J.S.A. 10:15-1, et
seq., the New Jersey Conscientious Executive Protection Act, N.J.S.A. 34:19-1
to 19-8, the New Jersey Wage and Hour Act, N.J.S.A. 34-11-56a, et seq., and any
other equivalent or similar federal, state, or local statute; provided,
however, that Employee does not release or discharge the Released Parties from (i) any
of the Company’s obligations to him under the Severance Agreement, and (ii) any
vested benefits to which he may be entitled under any employee benefit plan or
program subject to ERISA.  It is
understood that nothing in this General Release is to be construed as an
admission on behalf of the Released Parties of any wrongdoing with respect to
Employee, any such wrongdoing being expressly denied.

 

Employee
represents and warrants that he fully understands the terms of this General
Release, that he is hereby advised to consult with legal counsel before
signing, and that he knowingly and voluntarily, of his own free will, without
any duress, being fully informed, and after due deliberation, accepts its terms
and signs below as his own free act. Except as otherwise provided herein,
Employee understands that as a result of executing this General Release, he
will not have the right to assert that the Company or any other of the Released
Parties unlawfully terminated his employment or violated any of his rights in connection
with his employment or otherwise.

 

Employee
further represents and warrants that he has not filed, and will not initiate,
or cause to be initiated on his behalf any complaint, charge, claim, or
proceeding against any of the Released Parties before any federal, state, or
local agency, court, or other body relating to any claims barred or released in
this General Release thereof, and will not voluntarily participate in such a
proceeding.  However, nothing in this
general release shall

 

11

 

preclude or prevent Employee
from filing a claim, which challenges the validity of this general release
solely with respect to Employee’s waiver of any Losses arising under the ADEA.
Employee shall not accept any relief obtained on his behalf by any government
agency, private party, class, or otherwise with respect to any claims covered
by this General Release.

 

Employee may
take twenty-one (21) days to consider whether to execute this General
Release.  Upon Employee’s execution of
this General Release, Employee will have seven (7) days after such
execution in which he may revoke such execution. In the event of revocation,
Employee must present written notice of such revocation to the Company’s Chief
Executive Officer.  If seven (7) days
pass without receipt of such notice of revocation, this General Release shall
become binding and effective on the eighth (8th) day after the execution hereof
(the “Effective Date”).

 

 

INTENDING TO BE LEGALLY BOUND,
I hereby set my hand below:

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  NOTARIZATION

  
	
   

  	
   

  
	
  State
  of

  	
  )

  	
   

  
	
  County
  of

  	
  )

  	
   

  	
  ss.

  
						

 

On this             
day of                             
in the year            before
me, the undersigned, personally appeared                                                                     ;
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same in his capacity as an individual,
and that by his signature on the instrument he executed such instrument, and
that such individual made such appearance before the undersigned.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

12Exhibit 10.32

 

STOCK PURCHASE AGREEMENT

 

by and among

 

FIRST COMMUNITY BANCORP

 

and

 

THE PURCHASERS LISTED ON SCHEDULE 1 HERETO

 

 

August 26, 2005

 

 

FIRST
COMMUNITY BANCORP

 

STOCK
PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”)
is made as of August 26, 2005, by and between First Community Bancorp, a
California corporation (the “Company”), and the Purchasers listed on Schedule 1
hereto (“Purchasers”).

 

RECITALS

 

WHEREAS, the Company has
authorized, and has filed a registration statement (the “Registration
Statement”) on Form S-3 under the Securities Act of 1933, as amended
(the “Act”), with respect to, the sale and issuance of an aggregate of
up to 3,400,000 shares of its Common Stock, no par value (the “Common Stock”);

 

WHEREAS, Purchasers collectively
desire to purchase                 
shares of Common Stock on the terms and conditions set forth herein, and the
Company desires to issue and sell such shares to Purchasers on the terms and
conditions set forth herein;

 

NOW, THEREFORE, in consideration
of the foregoing recitals and the mutual promises hereinafter set forth, the
parties hereto agree as follows:

 

SECTION 1

 

Agreement to Sell and Purchase

 

Subject to the terms and conditions hereof, Purchasers
jointly agree to purchase from the Company, on the Closing Date (as defined
below),                   
shares (the “Shares”) of Common Stock, with each individual purchaser
purchasing the number of Shares set forth opposite its name on Schedule 1,
and the Company agrees to issue and sell such Shares to Purchasers, for an
aggregate purchase price (the “Purchase Price”) equal to $                      .

 

SECTION 2

 

Closing, Delivery and Payment

 

2.1                                 Closing.  The closing (the “Closing”) of the
purchase and sale of the Shares shall take place at the offices of Irell &
Manella LLP, at 10:00 a.m., local time on Friday, August 26, 2005, or
at such time after the last to be waived or fulfilled of the conditions set
forth in Section 6 has been fulfilled or waived, but in no event later
than 5:00 p.m. on Friday, August 26, 2005 (it being understood that
neither party hereto shall have the obligation to close the purchase and sale
of Shares hereunder if the Closing shall not have occurred by such date except
to the extent the Closing shall have failed to occur due to a party’s failure
to perform its obligations hereunder, in which case such party shall remain
bound by its obligations hereunder).  The
date on which the Closing occurs is referred to herein as the “Closing Date.”

 

 

2.2                                 Delivery.  Prior to Closing, if Purchasers intend to
receive their Shares in book-entry form, Purchasers shall have submitted, or
caused the submission of, a request to the Depository Trust Company for the
transfer of the Shares to it in such denominations and in such names as
Purchasers shall determine, subject to receipt by the Company of the Purchase
Price.  At the Closing, subject to the
terms and conditions hereof, the Company will deliver to Purchasers the Shares in
book entry form through the facilities of the Depository Trust Company, or in
certificate form, in either case pursuant to instructions of the Purchasers as
set forth on Schedule 2.2(a) hereto, free and clear of any liens or
other encumbrances (other than those placed thereon by or on behalf of any
Purchaser), and Purchasers, through the Purchaser or entity identified on Schedule 1
as the Purchasers’ Representative (the “Purchasers’ Representative”),
will make payment to the Company of the Purchase Price, by wire transfer of
immediately available funds to an account designed by the Company and set forth
in Schedule 2.2(b) hereto.  The
delivery of the Shares will be preceded by the delivery of, or accompanied by,
the prospectus included in the Registration Statement, as supplemented to
reflect the terms of the issuance and sale of the Shares (as so supplemented,
and including all material incorporated by reference therein, the “Prospectus”).  Purchasers, acting through the Purchasers’
Representative, and the Company shall execute a cross receipt acknowledging receipt
of the Shares and the Purchase Price, respectively.

 

SECTION 3

 

Representations and Warranties of the Company

 

The Company hereby represents and warrants to
Purchasers as follows:

 

3.1                                 Organization and Standing; Certificate and Bylaws.  The Company is a corporation duly organized
and existing under, and by virtue of, the laws of the State of California and
is in good standing under such laws.  The
Company has requisite corporate power and authority to own and operate its
properties and assets and to carry on its business as currently conducted and
as proposed to be conducted.  The Company
is currently qualified to do business in each state in which the failure to be
so qualified would have a material adverse effect on the Company’s business as
now conducted and as proposed to be conducted.

 

3.2                                 Corporate Power.  The Company
has all requisite corporate power and authority to execute and deliver this
Agreement; to consummate the transactions contemplated hereby; and to carry out
and perform its obligations under the terms hereof.

 

3.3                                 Authorization.  This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding agreement, enforceable against the Company in
accordance with its terms.  The Shares have
been duly and validly authorized and, when issued pursuant to the terms hereof,
will be validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Registration Statement; and the Shares
will be free of any liens or encumbrances, other than any liens or encumbrances
created by or imposed upon Purchasers. 
The Shares are not subject to any preemptive rights or rights of first
refusal set forth in the charter documents of the Company or in any agreement
by which the Company is bound.

 

2

 

3.4                                 Compliance.  The execution, delivery, and performance of
and compliance with this Agreement and the issuance of the Shares by the
Company have not resulted and will not result in (i) any violation of,
conflict with or the termination of any right, the loss of any benefit or a
default (with or without notice and the passage of time) under (x) the Company’s
charter or by-laws or (y) any agreements to which the Company is a party,
or any applicable statute, rule, regulation, order or restriction of any
federal or state governmental entity or agency thereof, or (ii) the
creation of any mortgage, pledge, lien, encumbrance, or charge upon any of the
properties or assets of the Company that, in the case of any such matter
referred to in either clause (i) or (ii), would reasonably be expected to
have a material adverse effect upon the Company.

 

3.5                                 Governmental Consent, Etc.  No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of the Company is required in connection with the valid execution and delivery
of this Agreement or the offer, sale or issuance of the Shares, or the
consummation of any other transaction contemplated hereby.

 

3.6                                 Registration.  The Registration Statement (File No. 333-124948)
covering shares of Common Stock, including the Shares, has been filed with the
Securities and Exchange Commission (the “Commission”) and has become
effective.  On the effective date of the
Registration Statement and on the date hereof, the Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission (“SEC Regulations”) and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and on the date hereof and at the time of filing the Prospectus
pursuant to Rule 424(b) of the SEC Regulations, the Prospectus
conformed and will conform in all respects to the requirements of the Act and
the SEC Regulations, and as of such dates the Prospectus did not include nor
will it include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by Purchaser
specifically for use therein.

 

SECTION 4

 

Representations and Warranties of Purchaser

 

Each Purchaser hereby represents and warrants to the
Company with respect to the purchase of the Shares as follows:

 

4.1                                 Institutional Accredited Investor; Experience.  Such Purchaser
is an institutional “accredited investor” (as defined in Rule 501 under
the Act), with substantial experience in evaluating and investing in securities
of companies similar to the Company so that it is capable of evaluating the
merits and risks of its investment in the Company and has the capacity to
protect its own interests.

 

3

 

4.2                                 Investment.  It is acquiring the Shares for investment for
its own account or for the accounts of persons for whom it acts as an
investment advisor, in either case for investment purposes, and not with the
view to, or for resale in connection with, any distribution thereof.  Such Purchaser understands that it may be
deemed an “underwriter” under the Act in connection with any such distribution
and, under such circumstances, such Purchaser may be subject to various
statutory requirements and SEC Regulations. 
Neither it nor any of its affiliates nor any entity managed by it has,
with the Company or any third party, any plans or agreements to resell or
otherwise distribute the Shares.

 

4.3                                 No Reliance; Confidentiality of Information.  It has relied solely upon its own
investigations and diligence, including a review of the Company’s publicly
filed reports with the Commission, the Registration Statement (including
exhibits), the Prospectus and the Agreement, and not upon any other information
provided by or on behalf of the Company in making the decision to purchase the
Shares.  It understands and acknowledges
that neither the Company nor any of the Company’s representatives, agents or
attorneys is making or has made at any time any warranties or representations
of any kind or character, express or implied, with respect to any matter or the
Common Stock, except as expressly set forth herein.

 

4.4                                 Organization and Standing; Certificate and Bylaws.  Such Purchaser is a corporation, limited
liability company or other entity duly organized and existing under, and by
virtue of, the laws of the state of its incorporation, formation or
organization, and is in good standing under such laws.

 

4.5                                 Corporate Power; Authorization.  Such Purchaser
has all requisite power and authority to execute and deliver this Agreement; to
consummate the transactions contemplated hereby; and to carry out and perform
its obligations under the terms hereof. 
This Agreement has been duly authorized, executed and delivered by such
Purchaser, and constitutes a valid and legally binding agreement, enforceable
against such Purchaser in accordance with its terms.

 

4.6                                 Compliance.  The execution, delivery, and performance of
and compliance with this Agreement and the purchase of the Shares by such
Purchaser have not resulted and will not result in (i) any violation of,
conflict with or the termination of any right, the loss of any benefit or a
default (with or without notice and the passage of time) under (x) such
Purchaser’s corporate charter or by-laws or other organizational documents, as
applicable, or (y) any agreements to which such Purchaser is a party, or
any applicable statute, rule, regulation, order or restriction of Purchaser’s
place of organization, the United Sates or any state or other political
subdivision thereof or of any governmental entity or agency thereof, or (ii) the
creation of any mortgage, pledge, lien, encumbrance, or charge upon any of the
properties or assets of such Purchaser that, in the case of any such matter
referred to in either clause (i) or (ii), would reasonably be expected to
have an adverse effect upon its ability to consummate the transactions
contemplated hereby.

 

4.7                                 Governmental Consent, Etc.  No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of such Purchaser is required in connection with the valid execution and
delivery of this Agreement or the purchase of the Shares, or the consummation
of any other transaction contemplated hereby.

 

4

 

4.8                                 Tax Liability.  It has reviewed with its own tax advisors the
federal, state, local, and foreign tax consequences of this investment and the
transactions contemplated by this Agreement if and to the extent it deems such
review to be advisable.  It has relied
solely on such advisors and not on any statements or representations of the
Company or of any agents of the Company. 
It understands that, except as otherwise specifically contemplated by
this Agreement, it (and not the Company) shall be responsible for its own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.

 

4.9                                 Purchasers’ Representative.  Each Purchaser hereby appoints the Purchasers’
Representative its agent and attorney-in-fact and authorizes the Purchasers’
Representative to, and represents and agrees that the Purchasers’
Representative may act on its behalf with respect to, all matters as to which
the Purchasers’ Representative is required to act hereunder.

 

SECTION 5

 

Conditions

 

5.1                                 Conditions to Closing of Purchasers.  The obligation of Purchasers to purchase the
Shares at Closing is, at the option of Purchasers, acting through the
Purchasers’ Representative, subject to the fulfillment of the following
conditions as of the Closing Date:

 

(a)                                  Representations
and Warranties Correct.  The
representations and warranties made by the Company in Section 3 hereof
shall be true and correct as of the Closing Date.

 

(b)                                 Bringdown
Certificate.  The Company shall have
delivered to Purchasers’ Representative a certificate of the Company, executed
by an executive officer of the Company, dated the Closing Date, and certifying
to the fulfillment of the conditions specified in clause (a) of this Section 5.1,
accompanied by a certificate of the Company’s corporate secretary as to the
incumbency of such executive officer and the incumbency of each executive
officer executing this Agreement.

 

5.2                                 Conditions to Closing of Company.  The Company’s obligation to sell and issue
the Shares is, at the option of the Company, subject to the fulfillment of the
following conditions as of the Closing Date:

 

(a)                                  Representations
and Warranties Correct.  The
representations and warranties made by each Purchaser in Section 4 hereof
shall be true and correct when made and shall be true and correct on the
Closing Date.

 

(b)                                 Bringdown
Certificate.  Purchasers’
Representative shall have delivered to the Company a certificate of Purchasers,
executed by an executive officer of Purchasers’ Representative, dated the
Closing Date, and certifying to the fulfillment of the conditions specified in
clause (a) of this Section 5.2, accompanied by a certificate of the
secretary (or other appropriate officer) of Purchasers’ Representative as to
the incumbency of such executive officer and the incumbency of each executive
officer executing this Agreement.

 

5

 

SECTION 6

 

Miscellaneous

 

6.1                                 Governing Law.  This Agreement
shall be governed in all respects by the laws of the State of California,
without reference to the conflicts of law provisions thereof.

 

6.2                                 Survival.  The representations, warranties, covenants
and agreements made herein shall survive the closing of the transactions
contemplated hereby.

 

6.3                                 Successors and Assigns.  Except as
otherwise provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.

 

6.4                                 Entire Agreement; Amendment.  This Agreement
and the other documents delivered pursuant hereto at the Closing constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein.  Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.

 

6.5                                 Notices, Etc.  All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed (a) if to a Purchaser, to the Purchasers’
Representative at its address as set forth under its name on Schedule 1,
or to such other address as the Purchasers’ Representative shall have furnished
to the Company in writing, and (b) if to the Company, to its principal
executive offices and addressed to the attention of the Chief Executive
Officer, or to such other address as the Company shall have furnished to the Purchasers’
Representative.

 

Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.

 

6.6                                 Specific Performance.  The Company and each Purchaser acknowledge
and agree that irreparable damage to the other party would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed that each party shall
be entitled to an injunction, injunctions or other equitable relief to prevent
or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which the parties may be entitled by law or equity.

 

6

 

6.7                                 Expenses.  The Company and Purchasers shall bear their
own respective expenses incurred on its behalf with respect to this Agreement
and the transactions contemplated hereby.

 

6.8                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall
constitute one instrument.

 

6.9                                 Severability.  In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to
any party.

 

6.10                           Titles and Subtitles.  The titles and
subtitles used in this Agreement are used for convenience only and are not
considered in construing or interpreting this Agreement.

 

[SIGNATURE
PAGE FOLLOWS]

 

7

 

This STOCK PURCHASE AGREEMENT is hereby executed as of
the date first above written.

 

	
  “COMPANY”

  	
  FIRST COMMUNITY BANCORP,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  “PURCHASERS”

  	
  [name of purchaser]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [name of purchaser]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [name of purchaser]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

Address for notices for all Purchasers:

 

8

 

Schedule 1 – List of Purchasers

 

	
  Purchaser Name

  	
   

  	
  Number of Shares Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

Purchasers’ Representative:

 

9

 

Schedule 2.2(a) – Purchasers’ Share
Instructions

 

 

Schedule 2.2(b) – Seller’s Wire
Instruction

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