Document:

EXHIBIT
10.25

 

RIGEL PHARMACEUTICALS, INC.

 

AMENDED AND RESTATED CHANGE OF CONTROL SEVERANCE PLAN

 

Section 1.              INTRODUCTION.

 

The Rigel
Pharmaceuticals, Inc. Change
of Control Severance Plan (the “Plan”) was
originally established effective December 19, 2007.  The purpose of the Plan is to provide for the
payment of severance benefits to certain eligible executives of Rigel
Pharmaceuticals, Inc. (the “Company”) who meet the eligibility criteria set forth in Section 2(a) below.  This Plan supersedes any severance plan,
policy or practice with respect to Qualifying Terminations (as defined below),
whether formal or informal, written or unwritten, previously announced or
maintained by the Company.  This Plan
document also is the Summary Plan Description for the Plan.  The Company hereby amends and restates the
Plan in its entirety effective November 13, 2008 as set forth herein.

 

Section 2.              ELIGIBILITY
FOR BENEFITS.

 

(a)           General
Rules.  Subject to the requirements
of the Plan, the Company will grant the severance benefits described in Section 3
to Eligible Employees.

 

(1)           Definition
of “Eligible Employee.”  For purposes
of this Plan, an Eligible Employee is an employee of the Company serving at or
above the level of Vice President (including non-officer Vice Presidents) at
the time he or she suffers a “Qualifying Termination” (as defined below).  The Plan Administrator shall make the
determination of whether an employee is an Eligible Employee, and such
determination shall be binding and conclusive on all persons.  Temporary employees and independent
contractors are not eligible for severance benefits under the Plan.

 

(2)           Obligations
of Eligible Employees.  In order to
receive any benefits under the Plan:

 

(i)            the
Eligible Employee must remain on the job and satisfactorily provide services to
the Company until his or her date of termination;

 

(ii)           the Eligible Employee must execute and return
to the Company a general waiver and release in substantially the form attached
hereto as Exhibit A, Exhibit B or Exhibit C, as applicable,
within the time frame set forth therein (the “Release”)
and such release must become effective in accordance with its terms but not
later than the 60th day following the termination of employment (with the Company
having the authority, in its discretion, to modify the form of the required
release to comply with applicable law and to determine the form of the required
release, which may be incorporated into a termination agreement or other
agreement with the Eligible Employee) and notwithstanding the payment schedules
set forth in Appendix A, no benefits will be paid prior to the effective date
of the 

 

1

 

Release
but rather on the first regular payroll pay day following the effective date of
the Release, the Company will pay the Eligible Employee the benefits the
Eligible Employee would otherwise have received on or prior to such date but
for the delay in payment related to the effectiveness of the Release, with the
balance of the benefits being paid as originally scheduled; and

 

(iii)         the
Eligible Employee must remain in compliance with his or her continuing
obligations to the Company, including obligations under his or her Employee
Proprietary Information and Inventions Assignment Agreement (such form, or any
similar form, the “Proprietary Agreement”).

 

(b)           Exceptions
to Benefit Entitlement.  An employee
who otherwise is an Eligible Employee will not receive benefits under the Plan
(or will receive reduced benefits under the Plan) in the following circumstances,
as determined by the Company in its sole discretion:

 

(1)           The
employee is covered by any other severance or separation pay plan, policy or
practice of the Company or has executed an individually negotiated employment
contract or agreement with the Company relating to severance benefits, in
either case with respect to severance benefits payable upon an event that
constitutes a Qualifying Termination (used herein as defined herein), and such
agreement, plan, policy or practice is in effect on his or her termination
date.  In such case, the employee’s
severance benefit upon a Qualifying Termination, if any, shall be governed by
the terms of such agreement, plan, policy or practice and shall be governed by
this Plan only to the extent that (i) the employee elects to waive and
release all claims and rights the employee has to severance pay or benefits
upon a Qualifying Termination under such agreement, plan, policy, or practice
or (ii) the reduction pursuant to Section 3(c) below does not
entirely eliminate benefits under this Plan.

 

(2)           The
employee’s employment terminates other than as a result of a Qualifying
Termination (including a termination for Cause prior to the effective date of a
previously scheduled Qualifying Termination, a termination as a result of death
or disability, or the employee voluntarily terminates employment with the
Company other than as a Resignation for Good Reason.  Voluntary terminations include, but are not
limited to, resignation, retirement, failure to return from a leave of absence
on the scheduled date and/or termination in order to accept employment with
another entity (including but not limited to any entity that is wholly or
partly owned (directly or indirectly) by the Company or an affiliate of the
Company.)).

 

(3)           The
employee has not signed an enforceable Proprietary Agreement covering the
employee’s period of employment with the Company (and with any predecessor) and
does not confirm in writing that he or she is and shall remain subject to the
terms of that Proprietary Agreement.

 

(4)           Following
notice of a Qualifying Termination, the employee’s behavior rises to level of
Cause for termination.

 

2

 

(c)           An
involuntary termination without “Cause”
means an involuntary termination of an employee’s employment by the Company
other than as a result of death or disability and other than for one of the
following reasons:

 

(1)           an
intentional action or intentional failure to act by the employee that was
performed in bad faith and to the material detriment of the business of the
Company or an Employer;

 

(2)           an
employee’s intentional refusal or intentional failure to act in accordance with
any lawful and reasonable order of his or her superiors that has not been cured
within ten (10) days after written notice from the Company, or that has
caused irreparable damage incapable of cure;

 

(3)           an
employee’s habitual or gross neglect of the duties of employment that has not
been cured within ten (10) days after written notice from the Company, or
that has caused irreparable damage incapable of cure;

 

(4)           an
employee’s indictment, charge, or conviction of a felony or any crime involving
moral turpitude, or participation in any act of theft or dishonesty, in each
case, that has had or could reasonably be expected to have a material
detrimental effect on the business of the Company; or

 

(5)           an employee’s violation of any material
provision of the Proprietary Agreement or violation of any material provision
of any other written Company policy or procedure.

 

(d)           A
“Change of Control” means the
consummation, in a single transaction or in a series of related transactions,
of any one or more of the following events:

 

(1)           a sale, lease or
other disposition of all or substantially all of the assets of the Company, other than a sale, lease or other disposition
of all or substantially all of the assets of the Company to an entity, more
than fifty percent (50%) of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease or other disposition;

 

(2)           a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately after the
consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not own, directly or
indirectly, either (A) outstanding voting securities representing more
than fifty percent (50%) of the
combined outstanding voting power of the surviving entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of the combined
outstanding voting power of the parent of the surviving entity in such merger,
consolidation or similar transaction, in each case in substantially the same
proportions as their ownership of the outstanding voting securities of the
Company immediately prior to such transaction; or

 

(3)           any “Exchange Act
Person” becomes the owner, directly or indirectly, of securities of the Company
representing more than fifty percent
(50%) of the 

 

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combined voting power of
the Company’s then outstanding securities other than by virtue of a merger,
consolidation or similar transaction.

 

(e)           An
“Exchange Act Person”  means any natural person, entity or
“group” (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as
amended), except that “Exchange Act Person” shall not include (1) the
Company or any subsidiary of the Company, (2) any employee benefit plan of
the Company or any subsidiary of the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities, (4) an entity
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company;
or (5) any natural person, entity or “group” (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of
1934, as amended) that, as of the effective date of this Plan, is the
owner, directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.

 

(f)            A
“Qualifying Termination” means an
involuntary termination without Cause or a Resignation for Good Reason and in
either case provided such termination is a separation from service” (as such
term is defined in Section 1.409A-1(h) of the Treasury Regulations)
and such termination occurs on or within eighteen (18) months following the
effective date of the Change of Control.

 

(g)           A
“Resignation for Good Reason” means
the Eligible Employee has resigned from all positions he or she then-holds with
the Company (or any successor thereto):

 

(1)           one
of the following actions has been taken:

 

(i)            there is a material
diminution of Eligible Employee’s authority, including but not limited
to decision-making authority, duties, or
responsibilities;

 

(ii)           there is a material
reduction in the Eligible Employee’s annual base compensation (including the
base salary and target bonus opportunity),  where material is
considered greater than 5%;

 

(iii)         the Eligible Employee
is required to relocate his or her primary work location to a facility or
location that would increase the Eligible Employee’s one way commute distance
by more than twenty (20)
miles from the Eligible Employee’s primary
work location as of immediately prior to such change;

 

(iv)          A
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Eligible Employee is required to report, including a
requirement that the Eligible Employee report to a corporate officer or
employee instead of reporting directly to the board of directors of a
corporation (or similar governing body with respect to an entity other than a
corporation);

 

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(v)            A material
diminution in the  budget  over which the
Eligible Employee retains authority;

 

(vi)          the Eligible
Employee is required, as a condition to continued service, to enter into any
agreement with the Company or a successor thereto regarding confidentiality,
non-competition, non-solicitation or other similar restrictive covenant that is
materially more restrictive than under the Proprietary Agreement;

 

(vii)         the Company
materially breaches its obligations under this Plan or any then-effective
written employment agreement with the Eligible Employee; or

 

(viii)        any
acquirer, successor or assign of the Company fails to assume and perform, in
all material respects, the obligations of the Company hereunder; and

 

(2)           the
Eligible Employee provides written notice to the Company’s General Counsel
within the 60-day period immediately following such action; and

 

(3)           such action is not remedied by the Company
within thirty (30) days following the Company’s receipt of such written notice;
and

 

(4)           the Eligible Employee’s resignation is
effective not later than sixty (60) days after the expiration of such thirty
(30) day cure period.

 

Section 3.              AMOUNT
OF BENEFIT.

 

(a)           Severance
Benefits.  Subject to the terms and
conditions of the Plan, the severance benefits that shall be provided to
Eligible Employees under the Plan are set forth in Appendix A.

 

(b)           Additional
Benefits.  Notwithstanding the
foregoing, the Company may, in its sole discretion, authorize benefits in an
amount in addition to those benefits set forth in Section 3(a) to an
Eligible Employee.  The provision of any
such benefits to an Eligible Employee shall in no way obligate the Company to
provide such benefits to any other Eligible Employee or to any other employee,
even if similarly situated.  Receipt of
benefits under this Plan pursuant to such exceptions may be subject to a
covenant of confidentiality and non-disclosure.

 

(c)           Certain
Reductions.  The Company shall reduce
an Eligible Employee’s severance benefits under this Plan, in whole or in part,
by any other severance benefits, pay in lieu of notice, or other similar
benefits payable to the Eligible Employee by the Company in connection with the
Eligible Employee’s Qualifying Termination, including but not limited to any
payments or benefits that are due pursuant to (i) any other severance
plan, policy or practice, or any individually negotiated employment contract or
agreement with the Company relating to severance benefits, in each case, as is
in effect on the Eligible Employee’s termination date, (ii) any applicable
legal requirement, including, without limitation, the Worker Adjustment and
Retraining Notification Act (the “WARN Act”),
or (iii) any Company policy or practice providing for the Eligible
Employee to remain on the payroll without being in active service for a limited
period of time after being given notice of the termination of the Eligible
Employee’s 

 

5

 

employment.  The
benefits provided under this Plan are intended to satisfy, to the greatest
extent possible, any and all statutory obligations that may arise out of an
Eligible Employee’s termination of employment, and the Plan Administrator shall
so construe and implement the terms of the Plan.  In the Company’s sole discretion, such
reductions may be applied on a retroactive basis, with severance benefits
previously paid being recharacterized as payments pursuant to the Company’s
statutory obligation.

 

(d)           Parachute Payments. If any payment or benefit (including
payments and benefits pursuant to this Plan) that an Eligible Employee would
receive in connection with a Change of Control from the Company or otherwise (“Payment”) would (1) constitute
a “parachute payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), and (2) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then
the Company shall cause to be determined, before any amounts of the Payment are
paid to the Eligible Employee, which of the following two alternative forms of
payment shall be paid to the Eligible Employee: (i) payment in full of the
entire amount of the Payment (a “Full Payment”), or (ii) payment of only
a part of the Payment so that the Eligible Employee receives the largest
payment possible without the imposition of the Excise Tax (a “Reduced Payment”).  The determination shall be made as follows:

 

(1)           A Full Payment
shall be made if the quotient obtained by dividing (i) the Full Payment,
less the Reduced Payment, by (ii) the Reduced Payment (such quotient, the “Reduction Percentage”), is greater
than fifteen percent (15%).  If the Full
Payment is made, the Company shall pay, and the Eligible Employee shall be entitled
to receive, an additional payment (a “Gross-Up Payment”) from the Company in an
amount equal to (A) the Excise Tax on the Full Payment, (B) any
interest or penalties imposed on the Eligible Employee with respect to the
Excise Tax on the Full Payment, and (C) an additional amount sufficient to
pay the Excise Tax and the federal and state income and employment taxes
arising from the payments made by the Company to the Eligible Employee pursuant
to (A), (B) and (C).  For purposes
of determining the amount of the Gross-Up Payment, the Eligible Employee shall
be deemed to have: (x) paid federal income taxes at the highest marginal
rate of federal income and employment taxation for the calendar year in which
the Gross-Up Payment is to be made, and (y) paid applicable state and
local income taxes at the highest rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.  Except as otherwise
provided herein, the Eligible Employee shall not be entitled to any additional
payments or other indemnity arrangements in connection with the Payment or the
Gross-Up Payment.

 

(2)           A Reduced Payment
shall be made in the event that the Reduction Percentage is less than or equal
to fifteen percent (15%).  If a Reduced
Payment is made, the Eligible Employee shall have no rights to any additional
payments and/or benefits constituting the Payment beyond the amount of the
Reduced Payment.  The reduction in the
Payment shall occur in the following order: (i) reduction of cash
payments; (ii) cancellation of accelerated vesting of equity awards other
than stock options; (iii) cancellation of accelerated vesting of stock
options; and (iv) reduction of other benefits paid to the Eligible
Employee.  In the event that acceleration
of compensation from the Eligible Employee’s equity awards is to be reduced,
such acceleration of vesting shall be canceled in the reverse order of the date
of grant.

 

6

 

(3)           The independent
professional firm engaged by the Company for general tax audit purposes as of
the day prior to the effective date of the Change of Control shall make all
determinations required to be made under this Section 3(d).  If the independent professional firm so
engaged by the Company is serving as an advisor, accountant or auditor for the
individual, entity or group affecting the Change of Control, the Company shall
appoint a nationally recognized professional firm to make the determinations
required hereunder.  The Company shall
bear all expenses with respect to the determinations by such firm required to
be made hereunder.  The firm engaged to
make the determinations hereunder shall provide its calculations, together with
detailed supporting documentation, to the Company and the Eligible Employee
within thirty (30) calendar days after the date on which the Eligible Employee’s
right to a Payment is triggered (if requested at that time by the Company or
the Eligible Employee) or such other time as requested by the Company or the
Eligible Employee.  If the firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish the
Company and the Eligible Employee with an opinion reasonably acceptable to the
Eligible Employee that no Excise Tax will be imposed with respect to such
Payment.  If the firm determines that an
Excise Tax is payable with respect to a Payment and that a Gross-Up Payment is
due to the Eligible Employee under Section 3(d)(1), the Company shall pay
the Gross-Up Payment not later than thirty (30) days after the date on which
the Eligible Employee remits the Excise Tax to the appropriate taxing authorities.  Any good faith determinations of the firm
made hereunder shall be final, binding and conclusive upon the Company and the
Eligible Employee.

 

(e)           Code Section 409A. 
If the Company (or, if applicable, the successor entity thereto)
determines that the payments and benefits provided under the Plan (the “Plan Payments”)
constitute “deferred compensation” under Code Section 409A (together, with
any state law of similar effect, “Section 409A”) and an Eligible Employee
is a “specified employee” of the Company or any successor entity thereto, as
such term is defined in Section 409A(a)(2)(B)(i) (a “Specified Employee”),
then, solely to the extent necessary to avoid the incurrence of the adverse
personal tax consequences under Section 409A, the timing of the Plan
Payments shall be delayed as follows:  on
the earliest to occur of (1) the date that is six months and one day after
a “separation from service” (as such term is defined in Section 1.409A-1(h) of
the Treasury Regulations), and (2) the date of the Eligible Employee’s
death (such earliest date, the “Delayed Initial Payment Date”), and the Company (or the
successor entity thereto, as applicable) shall then (i) pay to the
Eligible Employee a lump sum amount equal to the sum of the Plan Payments that
the Eligible Employee would otherwise have received through the Delayed Initial
Payment Date if the commencement of the payment of the Plan Payments had not
been delayed pursuant to this Section 3(e) and (ii) commence
paying the balance of the Plan Payments in accordance with the applicable
payment schedules set forth in on Appendix A. 
Prior to the imposition of any delay on the Plan Payments as set forth
above, it is intended that (A) each installment of the Plan Payments
provided in Appendix A be regarded as a separate “payment” for purposes of
Treasury Regulations Section 1.409A-2(b)(2)(i), (B) all Plan Payments
provided in Appendix A satisfy, to the greatest extent possible, the exemptions
from the application of Section 409A provided under Treasury Regulations
Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (C) the Plan
Payments consisting of COBRA premiums also satisfy, to the greatest extent
possible, the exemption from the application of Section 409A provided
under Treasury Regulations Section 1.409A-1(b)(9)(v).

 

7

 

Section 4.              COMPANY PROPERTY.

 

(a)           Return
of Company Property.  An Eligible
Employee will not be entitled to any severance under the Plan unless and until
the Eligible Employee returns all Company Property.  For this purpose, “Company
Property” means all paper and electronic company documents (and
all copies thereof) created and/or received by the Eligible Employee during his
or her period of employment with the Company and other Company Property which
the Eligible Employee had in his or her possession or control at any time,
including, but not limited to, Company and/or Employer files, notes, drawings
records, plans, forecasts, reports, studies, analyses, proposals, agreements,
financial information, research and development information, sales and
marketing information, operational and personnel information, specifications,
code, software, databases, computer-recorded information, tangible property and
equipment (including, but not limited to, leased vehicles, computers, computer
equipment, software programs, facsimile machines, mobile telephones, servers),
credit and calling cards, entry cards, identification badges and keys; and any
materials of any kind which contain or embody any proprietary or confidential
information of the Company and/or an Employer (and all reproductions thereof in
whole or in part).  As a condition to
receiving benefits under the Plan, Eligible Employees must not make or retain
copies, reproductions or summaries of any such Company Property.  However, an Eligible Employee is not required
to return his or her personal copies of documents evidencing the Eligible
Employee’s hire, termination, compensation, benefits and stock options and any
other documentation received as a shareholder of the Company.

 

(b)           Transition
of Work.  An Eligible Employee will
not be entitled to any severance benefit under the Plan unless and until the
Eligible Employee (1) has satisfactorily transitioned his or her work and
information concerning his or her work to the Company to the extent reasonably
requested in writing by the Company and (2) has provided the Company with
all logins, passwords, passcodes and similar information created by the
Eligible Employee for documents, email and electronic files that the Eligible
Employee created or used on Company systems.

 

Section 5.              TIME
OF PAYMENT AND FORM OF BENEFIT.

 

Except as
otherwise provided in Section 3, all severance benefits under the Plan
shall be paid at the time and in the form provided in Appendix A following the
Eligible Employee’s satisfaction of all of the requirements under the
Plan.  All payments under the Plan will
be subject to applicable withholding for federal, state and local taxes.  If an Eligible Employee is indebted to the
Company at his or her termination date, the Company reserves the right to
offset any severance payments under the Plan by the amount of such
indebtedness.  Additionally, if an
Eligible Employee is subject to withholding for taxes related to any non-Plan
benefits, the Company may offset any severance payments under the Plan by the
amount of such withholding taxes. 
However, payments under the Plan will not be subject to any other
deductions such as, but not limited to, 401(k) plan contributions and/or
401(k) loan repayments or other employee benefit and benefit plan
contributions.

 

8

 

Section 6.              RIGHT
TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

 

(a)           Exclusive
Discretion.  The Plan Administrator
is the Company.  As Plan Administrator,
the Company is the named fiduciary charged with the responsibility for
administering the Plan.  The Plan
Administrator shall have the exclusive discretion and authority to establish
rules, forms, and procedures for the administration of the Plan and to construe
and interpret the Plan and to decide any and all questions of fact,
interpretation, definition, computation or administration arising in connection
with the operation of the Plan, including, but not limited to, the eligibility
to participate in the Plan and amount of benefits paid under the Plan.  The Plan Administrator may delegate any or
all of its administrative duties to an officer of the Company and any such
delegation shall convey with it the full discretionary authority of the Plan
Administrator to carry out the delegated duties.  The Company or the Plan Administrator shall
indemnify and hold harmless any person to whom it delegated its
responsibilities; provided, however,
such person does not act with gross negligence or willful misconduct.  The rules, interpretations, computations and
other actions of the Plan Administrator or its delegate shall be binding and
conclusive on all persons.

 

(b)           Termination;
Amendment.

 

(1)           This Plan will
automatically terminate on December 31, 2010 if no Change of Control has
occurred by that date.  If a Change of
Control has occurred by that date, this Plan will terminate on the date that is
eighteen (18) months and one (1) day after the effective date of the
Change of Control;  provided,
however, that no such termination shall affect the right to any
unpaid benefit of any Eligible Employee whose Qualifying Termination date has
occurred prior to such date, and such unpaid benefit rights shall continue to
be governed by the terms of this plan.

 

(2)           The Company
reserves the right to amend this Plan (including the exhibits and appendices
hereto) and the benefits provided hereunder at any time prior to a Change of
Control of the Company; provided, however, that
no such amendment shall affect the right to any unpaid benefit of any Eligible
Employee whose Qualifying Termination date has occurred prior to amendment of
the Plan.

 

(3)           Any purported
amendment or termination of this Plan (and the exhibits and appendices hereto)
upon or following a Change of Control of the Company will not be effective as
to any Eligible Employee who has not consented, in writing, to such amendment
or termination. Any action amending or terminating the Plan shall be in writing
and executed by a duly authorized executive officer of the Company.

 

Section 7.              NO
IMPLIED EMPLOYMENT CONTRACT.

 

The Plan shall
not be deemed (i) to give any employee or other person any right to be
retained in the employ of the Company or (ii) to interfere with the right
of the Company to discharge any employee or other person at any time, with or
without cause, which right is hereby reserved.

 

9

 

Section 8.              LEGAL
CONSTRUCTION.

 

This Plan is
intended to be governed by and shall be construed in accordance with the
Employee Retirement Income Security Act of 1974 (“ERISA”)
and, to the extent not preempted by ERISA, the laws of the State of California (without
regard to principles of conflict of laws).

 

Section 9.              CLAIMS,
INQUIRIES AND APPEALS.

 

(a)           Applications
for Benefits and Inquiries.  Any
application for benefits, inquiries about the Plan or inquiries about present
or future rights under the Plan must be submitted to the Plan Administrator in
writing by an applicant (or his or her authorized representative).  The Plan Administrator is:

 

Rigel
Pharmaceuticals, Inc.

Attn: General Counsel

1180 Veterans Boulevard

South San Francisco, CA 94080

 

(b)           Denial of
Claims.  In the event that any
application for benefits is denied in whole or in part, the Plan Administrator
must provide the applicant with written or electronic notice of the denial of
the application, and of the applicant’s right to review the denial.  Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
The notice of denial will be set forth in a manner designed to be
understood by the applicant and will include the following:

 

(1)           the
specific reason or reasons for the denial;

 

(2)           references
to the specific Plan provisions upon which the denial is based;

 

(3)           a
description of any additional information or material that the Plan
Administrator needs to complete the review and an explanation of why such
information or material is necessary; and

 

(4)           an
explanation of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the applicant’s right to bring a
civil action under Section 502(a) of ERISA following a denial on
review of the claim, as described in Section 10(d) below.

 

This notice of
denial will be given to the applicant within ninety (90) days after the Plan
Administrator receives the application, unless special circumstances require an
extension of time, in which case, the Plan Administrator has up to an
additional ninety (90) days for processing the application.  If an extension of time for processing is
required, written notice of the extension will be furnished to the applicant
before the end of the initial ninety (90) day period.

 

10

 

This notice of
extension will describe the special circumstances necessitating the additional
time and the date by which the Plan Administrator is to render its decision on the
application.

 

(c)           Request
for a Review.  Any person (or that
person’s authorized representative) for whom an application for benefits is
denied, in whole or in part, may appeal the denial by submitting a request for
a review to the Plan Administrator within sixty (60) days after the application
is denied.  A request for a review shall
be in writing and shall be addressed to:

 

Rigel
Pharmaceuticals, Inc.

Attn: General Counsel

1180 Veterans Boulevard

South San Francisco, CA 94080

 

A request for
review must set forth all of the grounds on which it is based, all facts in
support of the request and any other matters that the applicant feels are
pertinent.  The applicant (or his or her
representative) shall have the opportunity to submit (or the Plan Administrator
may require the applicant to submit) written comments, documents, records, and
other information relating to his or her claim. 
The applicant (or his or her representative) shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim.  The review shall take into account all
comments, documents, records and other information submitted by the applicant
(or his or her representative) relating to the claim, without regard to whether
such information was submitted or considered in the initial benefit
determination.

 

(d)           Decision
on Review.  The Plan Administrator
will act on each request for review within sixty (60) days after receipt of the
request, unless special circumstances require an extension of time (not to
exceed an additional sixty (60) days), for processing the request for a
review.  If an extension for review is
required, written notice of the extension will be furnished to the applicant
within the initial sixty (60) day period. 
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the review. 
The Plan Administrator will give prompt, written or electronic notice of
its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will set forth, in a
manner calculated to be understood by the applicant, the following:

 

(1)           the
specific reason or reasons for the denial;

 

(2)           references
to the specific Plan provisions upon which the denial is based;

 

(3)           a
statement that the applicant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to his or her claim; and

 

11

 

(4)           a
statement of the applicant’s right to bring a civil action under Section 502(a) of
ERISA.

 

(e)           Rules and
Procedures.  The Plan Administrator
will establish rules and procedures, consistent with the Plan and with
ERISA, as necessary and appropriate in carrying out its responsibilities in
reviewing benefit claims.  The Plan
Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so
at the applicant’s own expense.

 

(f)            Exhaustion
of Remedies.  No legal action for
benefits under the Plan may be brought until the applicant (i) has
submitted a written application for benefits in accordance with the procedures
described by Section 10(a) above, (ii) has been notified by the Plan
Administrator that the application is denied, (iii) has filed a written
request for a review of the application in accordance with the appeal procedure
described in Section 10(c) above, and (iv) has been notified
that the Plan Administrator has denied the appeal.  Notwithstanding the foregoing, if the Plan
Administrator does not respond to an applicant’s claim or appeal within the
relevant time limits specified in this Section 10, the applicant may bring
legal action for benefits under the Plan pursuant to Section 502(a) of
ERISA.

 

Section 10.            BASIS
OF PAYMENTS TO AND FROM PLAN.

 

The Plan shall
be unfunded, and all benefits under the Plan shall be paid only from the
general assets of the Company.  An
Eligible Employee’s right to receive payments under the Plan is no greater than
that of the Company’s unsecured general creditors.  Therefore, if the Company were to become
insolvent, the Eligible Employee might not receive benefits under the Plan.

 

Section 11.            OTHER
PLAN INFORMATION.

 

(a)           Employer
and Plan Identification Numbers. The Employer Identification Number
assigned to the Company (which is the “Plan Sponsor”
as that term is used in ERISA) by the Internal Revenue Service is
94-3248524.  The Plan Number assigned to
the Plan by the Plan Sponsor pursuant to the instructions of the Internal
Revenue Service is  510.

 

(b)           Ending
Date for Plan’s Fiscal Year and Type of Plan.  The date of the end of the fiscal year for
the purpose of maintaining the Plan’s records is December 31.  The Plan is a welfare benefit plan.

 

(c)           Agent
for the Service of Legal Process. 
The agent for the service of legal process with respect to the Plan is:

 

Rigel
Pharmaceuticals, Inc.

Attn: General Counsel

1180 Veterans Boulevard

South San Francisco, CA 94080

 

(d)           Plan
Sponsor and Administrator.  The Plan
Sponsor and the “Plan Administrator” of the
Plan is:

 

12

 

Rigel
Pharmaceuticals, Inc.

Attn: General Counsel

1180 Veterans Boulevard

South San Francisco, CA 94080

 

The Plan Sponsor’s and Plan Administrator’s telephone
number is (650) 624-1100 and facsimile number is (650) 624-1101.

 

Section 12.            STATEMENT
OF ERISA RIGHTS.

 

Participants
in this Plan are entitled to certain rights and protections under ERISA.  If you are an Eligible Employee, you are
considered a participant in the Plan and, under ERISA, you are entitled to:

 

(a)           Receive
Information About Your Plan and Benefits

 

(1)           Examine,
without charge, at the Plan Administrator’s office and at other specified
locations, such as worksites, all documents governing the Plan and a copy of
the latest annual report (Form 5500 Series), if applicable, filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure Room of
the Employee Benefits Security Administration;

 

(2)           Obtain,
upon written request to the Plan Administrator, copies of documents governing
the operation of the Plan and copies of the latest annual report (Form 5500
Series), if applicable, and an updated (as necessary) Summary Plan
Description.  The Administrator may make
a reasonable charge for the copies; and

 

(3)           Receive
a summary of the Plan’s annual financial report, if applicable.  The Plan Administrator is required by law to
furnish each participant with a copy of this summary annual report.

 

(b)           Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Plan
participants, ERISA imposes duties upon the people who are responsible for the
operation of the employee benefit plan. 
The people who operate the Plan, called “fiduciaries” of the Plan, have
a duty to do so prudently and in the interest of you and other Plan
participants and beneficiaries.  No one,
including your employer, your union or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
Plan benefit or exercising your rights under ERISA.

 

(c)           Enforce Your Rights.  If your claim for a Plan benefit
is denied or ignored, in whole or in part, you have a right to know why this
was done, to obtain copies of documents relating to the decision without
charge, and to appeal any denial, all within certain time schedules as set
forth in detail in Section 10 herein.

 

Under ERISA,
there are steps you can take to enforce the above rights.  For instance, if you request a copy of Plan
documents or the latest annual report from the Plan, if applicable, and do not
receive them within 30 days, you may file suit in a Federal court and you are
not required to follow the claims procedure set forth in Section 10
herein.  In such a case, the 

 

13

 

court may require the Plan
Administrator to provide the materials and pay you up to $110 a day until you
receive the materials, unless the materials were not sent because of reasons
beyond the control of the Plan Administrator.

 

If you have
completed the claims and appeals procedure described in Section 10 and
have a claim for benefits which is denied or ignored, in whole or in part, you
may file suit in a state or Federal court.

 

If you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal court.  The court will decide who should pay court
costs and legal fees.  If you are
successful, the court may order the person you have sued to pay these costs and
fees.  If you lose, the court may order
you to pay these costs and fees, for example, if it finds your claim is
frivolous.

 

(d)           Assistance with Your Questions.  If you have any questions about
the Plan, you should contact the Plan Administrator.  If you have any questions about this
statement or about your rights under ERISA, or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of
Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration or accessing its
website at http://www.dol.gov/ebsa/.

 

Section 13.            GENERAL
PROVISIONS.

 

(a)           Notices.  Any notice, demand or request required or
permitted to be given by either the Company or an Eligible Employee pursuant to
the terms of this Plan shall be in writing and shall be deemed given when
delivered personally or deposited in the U.S. mail, with postage prepaid, and
addressed to the parties, in the case of the Company, at the address set forth
in Section 12(d) and, in the case of an Eligible Employee, at the
address as set forth in the Company’s employment file maintained for the Eligible
Employee as previously furnished by the Eligible Employee or such other address
as a party may request by notifying the other in writing.

 

(b)           Transfer
and Assignment.  The rights and
obligations of an Eligible Employee under this Plan may not be transferred or
assigned without the prior written consent of the Company.  This Plan shall be binding upon any person
who is a successor by merger, acquisition, consolidation or otherwise to the
business formerly carried on by the Company without regard to whether or not
such person or entity actively assumes the obligations hereunder.  Following a Change of Control, any references
to the “Company” in this Plan shall be deemed to be references also to any
successor to the company.

 

(c)           Waiver.
 Any party’s failure to enforce any
provision or provisions of this Plan shall not in any way be construed as a
waiver of any such provision or provisions, nor prevent any party from
thereafter enforcing each and every other provision of this Plan.  The 

 

14

 

rights granted the parties herein are cumulative and
shall not constitute a waiver of any party’s right to assert all other legal
remedies available to it under the circumstances.

 

(d)           Severability.
 Should any provision of this Plan be
declared or determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired.

 

(e)           Section Headings.  Section headings in this Plan are
included for convenience of reference only and shall not be considered part of
this Plan for any other purpose.

 

Section 14.            CIRCULAR
230 DISCLAIMER.

 

THE FOLLOWING
DISCLAIMER IS PROVIDED IN ACCORDANCE WITH THE INTERNAL REVENUE SERVICE’S
CIRCULAR 230 (21 CFR PART 10).  ANY
ADVICE IN THIS PLAN IS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE
USED BY YOU FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED
ON YOU.  ANY ADVICE IN THIS PLAN WAS
WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF PARTICIPATION IN THE COMPANY’S
CHANGE OF CONTROL SEVERANCE PLAN.  YOU
SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT
TAX ADVISOR.

 

Section 15.            EXECUTION.

 

To record the
adoption of the Plan as set forth herein, effective as of   November
13, 2008, Rigel Pharmaceuticals, Inc.  has
caused its duly authorized officer to execute the same this 15th day of December,
2008.

 

	
   

  	
  RIGEL
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Dolly Vance

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   SVP, General Counsel, Corporate Secretary

  

 

15

 

For Employees Age 40 or Older

Individual Termination

 

EXHIBIT A

 

RELEASE AGREEMENT

 

I understand and agree completely to the
terms set forth in the Rigel Pharmaceuticals, Inc. Change of Control
Severance Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company or the Employers that is not expressly stated
therein.  Certain capitalized terms used
in this Release are defined in the Plan.

 

I hereby confirm my obligations under my Proprietary Agreement with the
Company and/or the Employer.

 

Except as otherwise set forth in this Release, I hereby generally and
completely release the Company, the Employers, and their current and former
directors, officers, employees, stockholders, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the “Released
Parties”) from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement
(collectively, the “Released Claims”).  The Released Claims include, but are not
limited to:  (1) all claims arising
out of or in any way related to my employment with the Company, the Employers
or their affiliates, or the termination of that employment; (2) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, the Employers,
or their affiliates; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), the
federal Employee Retirement Income Security Act of 1974 (as amended), and the
California Fair Employment and Housing Act (as amended).  Notwithstanding the foregoing, the following
are not included in the Released Claims (the “Excluded
Claims”): (1) any rights or claims for indemnification I
may have pursuant to any written indemnification agreement with the Company to
which I am a party, the charter, bylaws, or operating agreements of the
Company, or under applicable law;  or (2) any
rights which are not waivable as a matter of law.  In addition, nothing in this Release prevents
me from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission, the Department of Labor, or the
California Department of Fair Employment and Housing, except that I hereby
waive my right to any monetary benefits in connection with any such claim,
charge or proceeding.  I hereby represent
and warrant that, other than the Excluded 

 

1

 

Claims, I am not aware of any claims I have or might have against any
of the Released Parties that are not included in the Released Claims.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA.  I
also acknowledge that the consideration given for the Released Claims is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that: (a) the Released
Claims do not apply to any rights or claims that arise after the date I sign
this Release; (b) I should consult with an attorney prior to signing this
Release (although I may choose voluntarily not to do so); (c) I have
twenty-one (21) days to consider this Release (although I may choose to
voluntarily to sign it sooner); (d) I have seven (7) days following
the date I sign this Release to revoke the Release by providing written notice
to an officer of the Company; and (e) the Release will not be effective
until the date upon which the revocation period has expired unexercised, which
will be the eighth day after I sign this Release (“Effective
Date”).

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with
the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, and I have not suffered any on-the-job
injury for which I have not already filed a workers’ compensation claim.

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than twenty-one (21)
days following the date it is provided to me, and I must not revoke it
thereafter.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2

 

For Employees Age 40 or Older

 Group
Termination

 

EXHIBIT B

 

RELEASE AGREEMENT

 

I understand and agree completely to the
terms set forth in the Rigel Pharmaceuticals, Inc. Change of Control
Severance Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company or the Employers that is not expressly stated
therein.  Certain capitalized terms used
in this Release are defined in the Plan.

 

I hereby confirm my obligations under my Proprietary Agreement with the
Company and/or the Employer.

 

Except as otherwise set forth in this Release, I hereby generally and
completely release the Company, the Employers, and their current and former
directors, officers, employees, stockholders, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the “Released
Parties”) from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement
(collectively, the “Released Claims”).  The Released Claims include, but are not
limited to:  (1) all claims arising
out of or in any way related to my employment with the Company, the Employers
or their affiliates, or the termination of that employment; (2) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, the Employers,
or their affiliates; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended). 
Notwithstanding the foregoing, the following are not included in the
Released Claims (the “Excluded Claims”):
(1) any rights or claims for indemnification I may have pursuant to any
written indemnification agreement with the Company to which I am a party, the
charter, bylaws, or operating agreements of the Company, or under applicable
law;  or (2) any rights which are
not waivable as a matter of law.  In
addition, nothing in this Release prevents me from filing, cooperating with, or
participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, or the California Department of Fair
Employment and Housing, except that I hereby waive my right to any monetary
benefits in connection with any such claim, charge or proceeding.  I hereby represent and warrant that, other
than the Excluded 

 

1

 

Claims, I am not aware of any claims I have or might have against any
of the Released Parties that are not included in the Released Claims.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA.  I
also acknowledge that the consideration given for the Released Claims is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that: (a) the Released
Claims do not apply to any rights or claims that arise after the date I sign
this Release; (b) I should consult with an attorney prior to signing this
Release (although I may choose voluntarily not to do so); (c) I have
forty-five (45) days to consider this Release (although I may choose to
voluntarily to sign it sooner); (d) I have seven (7) days following
the date I sign this Release to revoke the Release by providing written notice
to an officer of the Company; and (e) the Release will not be effective
until the date upon which the revocation period has expired unexercised, which
will be the eighth day after I sign this Release (“Effective
Date”).

 

I have received with this Release all of the information required by
the ADEA, including without limitation a detailed list of the job titles and
ages of all employees who were terminated in this group termination and the
ages of all employees of the Company in the same job classification or
organizational unit who were not terminated, along with information on the
eligibility factors used to select employees for the group termination and any
time limits applicable to this group termination program.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with
the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, and I have not suffered any on-the-job
injury for which I have not already filed a workers’ compensation claim.

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than forty-five (45)
days following the date it is provided to me, and I must not revoke it
thereafter.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2

 

For Employees Under Age 40

Individual and Group Termination

 

EXHIBIT C

 

RELEASE AGREEMENT

 

I understand and agree completely to the
terms set forth in the Rigel Pharmaceuticals, Inc. Change of Control
Severance Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company or the Employers that is not expressly stated
therein.  Certain capitalized terms used
in this Release are defined in the Plan.

 

I hereby confirm my obligations under my Proprietary Agreement with the
Company and/or the Employer.

 

Except as otherwise set forth in this Release, I hereby generally and
completely release the Company, the Employers, and their current and former
directors, officers, employees, stockholders, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns (collectively, the “Released
Parties”) from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement
(collectively, the “Released Claims”).  The Released Claims include, but are not
limited to:  (1) all claims arising
out of or in any way related to my employment with the Company, the Employers
or their affiliates, or the termination of that employment; (2) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, the Employers,
or their affiliates; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, and the California Fair Employment and Housing Act
(as amended).  Notwithstanding the
foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any
rights or claims for indemnification I may have pursuant to any written
indemnification agreement with the Company to which I am a party, the charter,
bylaws, or operating agreements of the Company, or under applicable law;  or (2) any rights which are not waivable
as a matter of law.  In addition, nothing
in this Release prevents me from filing, cooperating with, or participating in
any proceeding before the Equal Employment Opportunity Commission, the
Department of Labor, or the California Department of Fair Employment and
Housing, except that I hereby waive my right to any monetary benefits in
connection with any such claim, charge or proceeding.  I hereby represent and warrant that, other
than the Excluded Claims, I am not aware of any claims I have or might have
against any of the Released Parties that are not included in the Released
Claims.

 

1

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with
the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, and I have not suffered any on-the-job
injury for which I have not already filed a workers’ compensation claim.

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than fourteen (14) days
following the date it is provided to me.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2

 

APPENDIX A

 

RIGEL PHARMACEUTICALS, INC.

CHANGE OF CONTROL SEVERANCE PLAN

 

Severance benefits provided to Eligible Employees under the Rigel Pharmaceuticals, Inc.
Change of Control Severance Plan (the “Plan”) are as follows:

 

1.             Severance Benefits.  Subject to the exceptions set forth in Section 2
of the Plan, each Eligible Employee who suffers a Qualifying Termination and
who meets all of the requirements set forth in the Plan, including, without
limitation, executing and letting become effective a general waiver and release
in substantially the form attached to the Plan as Exhibit A, Exhibit B
or Exhibit C, as applicable, within the applicable time period set forth
therein, shall receive severance benefits as set forth in this Appendix A.

 

(a)           Cash
Severance.  The Company shall make a
lump sum payment of “Cash Severance” to the Eligible Employee in an amount
determined as follows:

 

	
  Title at Termination

  	
   

  	
  Amount

  
	
  CEO or EVP

  	
   

  	
  2.5 x (Base
  Salary + Eligible Bonus)

  
	
  SVP or VP
  (Section 16 reporting officers)

  	
   

  	
  2.0 x (Base
  Salary + Eligible Bonus)

  
	
  SVP or VP
  (non-officers)

  	
   

  	
  1.5 x (Base
  Salary + Eligible Bonus)

  

 

Subject to Section 3(e) of the Plan, the Cash Severance will
be paid in a lump sum on the first regular payroll date following the effective
date of the general waiver and release, but in no event later than March 15
of the year following the year in which the Qualifying Termination occurs.

 

(b)           COBRA
Premium Benefit.  If the Eligible Employee was enrolled in a
group health plan (i.e., medical,
dental, or vision plan) sponsored by the Company or an affiliate of the Company
immediately prior to the Qualifying Termination, the Eligible Employee may be eligible
to continue coverage under such group health plan (or to convert to an
individual policy) at the time of the Eligible Employee’s termination of
employment under the Consolidated Omnibus Budget Reconciliation Act of 1985
(together with any state law of similar effect, “COBRA”).  The
Company will notify the Eligible Employee of any such right to continue such
coverage at the time of termination pursuant to COBRA.  No provision of this Plan will affect the
continuation coverage rules under COBRA, except that the Company’s
payment, if any, of applicable insurance premiums, or waiver of any cost of
coverage under any self-funded group health plan, will be credited as payment
by the Eligible Employee for purposes of the Eligible 

 

1

 

Employee’s payment required under COBRA.  Therefore, the period during which an
Eligible Employee may elect to continue the Company’s or its affiliate’s group
health plan coverage at his or her own expense under COBRA, the length of time
during which COBRA coverage will be made available to the Eligible Employee,
and all other rights and obligations of the Eligible Employee under COBRA
(except the obligation to pay insurance premiums that the Company pays, if any,
or, with respect to a self-funded plan, any obligation to pay the cost of
coverage to the Company that the Company waives, if any) will be applied in the
same manner that such rules would apply in the absence of this Plan.

 

If an Eligible Employee timely elects
continued coverage under COBRA, the Company shall pay the full amount of the
Eligible Employee’s COBRA premiums, or shall provide coverage under any
self-funded plan, on behalf of the Eligible Employee for the Eligible Employee’s
continued coverage under the Company’s group health plans, including coverage
for the Eligible Employee’s eligible dependents, for up to eighteen (18) months
following the Eligible Employee’s Qualifying Termination; provided,
however, that no such premium payments shall be made, and no coverage
shall be provided under any self-funded group health plan, following the date
on which the Eligible Employee and his eligible dependents cease (or would
cease) to be eligible for continued coverage under COBRA.  Each Eligible Employee shall be required to
notify the Company immediately if the Eligible Employee becomes covered by a
group health plan of a subsequent employer. 
Upon the conclusion of such period of insurance premium payments made by
the Company, or the provision of coverage under a self-funded group health
plan, the Eligible Employee will be responsible for the timely payment of the
full amount of premiums (or payment for the cost of coverage) required under
COBRA for the duration of the COBRA period.

 

For purposes of this Section 1(b), any
applicable insurance premiums that are paid by the Company shall not include
any amounts payable by the Eligible Employee under an Internal Revenue Code Section 125
health care reimbursement plan, which amounts, if any, are the sole
responsibility of the Eligible Employee.

 

(c)           Accelerated
Vesting.  The vesting and
exercisability of all then-outstanding compensatory equity awards held by the
Eligible Employee shall be accelerated such that the awards are fully vested
and exercisable as of the date of the Qualifying Termination.

 

(d)           Extended
Period to Exercise Post Termination. 
If the Eligible Employee has signed an agreement to extend the period to
exercise post termination within thirty (30) days after becoming eligible to
participate in the Plan, the Company will amend such Eligible Employee’s
then-outstanding stock options to extend the post-termination exercise period
of such options that is applicable upon a Qualifying Termination until the
earlier of (i) the original end of the term of each such option (generally
10 years from the date of grant) or (ii) the one (1) year anniversary
of the date of the Qualifying Termination.

 

2

 

2.             Definitions:
 The following definitions shall
apply for purposes of this Appendix A:

 

(a)           “Base Salary” shall mean the greater of the Eligible
Employee’s base salary in effect immediately prior to (i) the Change of
Control or (ii) the date of the Qualifying Termination. Base Salary does
not include variable forms of compensation such as bonuses, incentive
compensation, commissions, expenses or expense allowances.

 

(b)           “Eligible Bonus” shall mean the product of (i) the
average percentage of the target annual incentive bonus earned by the Eligible
Employee for performance during the two fiscal years immediately prior to the
fiscal year in which the Qualifying Termination occurs and (ii) the target
annual incentive bonus, expressed in dollars, which the Eligible Employee is
eligible to earn in the fiscal year in which (A) the Change of Control
occurs or (B) the Qualifying Termination occurs, whichever of (A) or (B) is
greater.

 

The foregoing severance benefits are subject
to all of the terms and conditions of the Plan, including reduction against any
other severance owed to the Eligible Employee.

 

	
   

  	
  Appendix A Adopted: November 13, 2008

  
	
   

  	
   

  
	
   

  	
  Rigel Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dolly Vance

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  SVP, General Counsel, Corporate Secretary

  
				

 

3EXHIBIT
10.26

 

RIGEL PHARMACEUTICALS, INC.

 

2000 EMPLOYEE STOCK PURCHASE PLAN

 

APPROVED BY THE BOARD OF DIRECTORS AUGUST 18, 2000

APPROVED BY STOCKHOLDERS SEPTEMBER 11, 2000

AMENDED AND RESTATED APRIL 24, 2003

APPROVED BY STOCKHOLDERS JUNE 20, 2003

AMENDED JANUARY 31, 2007

APPROVED BY STOCKHOLDERS MAY 31, 2007

AMENDED BY THE COMPENSATION COMMITTEE NOVEMBER 13, 2008

 

1.             PURPOSE.

 

(a)           The purpose of this
2000 Employee Stock Purchase Plan (the “Plan”) is to provide a means by which
employees of Rigel Pharmaceuticals, Inc. (the “Company”) and its
Affiliates, as defined in subparagraph 1(b), that are designated as provided in
subparagraph 2(b), may be given an opportunity to purchase common stock of the
Company (the “Common Stock”).

 

(b)           The word “Affiliate”
as used in the Plan means any parent corporation or subsidiary corporation of
the Company, as those terms are defined in Sections 424(e) and (f),
respectively, of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(c)           The Company, by
means of the Plan, seeks to retain the services of its employees, to secure and
retain the services of new employees, and to provide incentives for such
persons to exert maximum efforts for the success of the Company.

 

(d)           The Company intends
that the rights to purchase stock of the Company granted under the Plan be
considered options issued under an “employee stock purchase plan” as that term
is defined in Section 423(b) of the Code.

 

2.             ADMINISTRATION.

 

(a)           The
Plan shall be administered by the Board of Directors (the “Board”) of the
Company unless and until the Board delegates administration to a Committee, as
provided in subparagraph 2(c).  Whether
or not the Board has delegated administration, the Board shall have the final
power to determine all questions of policy and expediency that may arise in the
administration of the Plan.

 

(b)           The
Board shall have the power, subject to, and within the limitations of, the
express provisions of the Plan:

 

(i)            To determine when
and how rights to purchase stock of the Company shall be granted and the
provisions of each offering of such rights (which need not be identical).

 

1

 

(ii)           To designate from
time to time which Affiliates of the Company shall be eligible to participate
in the Plan.

 

(iii)         To construe and
interpret the Plan and rights granted under it, and to establish, amend and
revoke rules and regulations for its administration.  The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

 

(iv)          To amend the Plan as
provided in paragraph 13.

 

(v)            To terminate or
suspend the Plan as provided in paragraph 15.

 

(vi)          Generally, to
exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company and its Affiliates and
to carry out the intent that the Plan be treated as an “employee stock purchase
plan” within the meaning of Section 423 of the Code.

 

(c)           The Board may
delegate administration of the Plan to a Committee composed of not fewer than
two (2) members of the Board (the “Committee”).  If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. 
The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.

 

3.             SHARES SUBJECT TO THE
PLAN.

 

(a)           Subject to the
provisions of paragraph 12 relating to adjustments upon changes in stock, the
Common Stock that may be sold pursuant to rights granted under the Plan shall
not exceed in the aggregate 464,062 shares of Common Stock, plus an annual
increase to be added on the first seven (7) anniversaries of the Effective
Date of the Plan, ending on and including the anniversary of the Effective Date
in 2007, equal to the least of (i) one
percent (1%) of the total number of shares of Common Stock outstanding on such
anniversary date, (ii) 88,888 shares, or (iii) a number of shares
determined by the Board prior to the anniversary date.  In addition, an additional 1,500,000 shares
shall be made available under the Plan on the first date of the next Offering
that commences on or after July 1, 2007. 
If any right granted under the Plan shall for any reason terminate
without having been exercised, the Common Stock not purchased under such right
shall again become available for the Plan.

 

(b)           The stock subject
to the Plan may be unissued shares or reacquired shares, bought on the market
or otherwise.

 

4.             GRANT OF RIGHTS;
OFFERING.

 

The Board or
the Committee may from time to time grant or provide for the grant of rights to
purchase Common Stock of the Company under the Plan to eligible employees (an “Offering”)
on a date or dates (the “Offering Date(s)”) selected by the Board or the
Committee.  Each Offering shall be in
such form and shall contain such terms and conditions as the Board or 

 

2

 

the Committee shall deem
appropriate, which shall comply with the requirements of Section 423(b)(5) of
the Code that all employees granted rights to purchase stock under the Plan
shall have the same rights and privileges. 
The terms and conditions of an Offering shall be incorporated by
reference into the Plan and treated as part of the Plan.  The provisions of separate Offerings need not
be identical, but each Offering shall include (through incorporation of the
provisions of this Plan by reference in the document comprising the Offering or
otherwise) the period during which the Offering shall be effective, which
period shall not exceed twenty-seven (27) months beginning with the Offering
Date, and the substance of the provisions contained in paragraphs 5 through 8,
inclusive.

 

5.             ELIGIBILITY.

 

(a)           Rights may be
granted only to employees of the Company or, as the Board or the Committee may
designate as provided in subparagraph 2(b), to employees of any Affiliate of
the Company.  Except as provided in
subparagraph 5(b), an employee of the Company or any Affiliate shall not be
eligible to be granted rights under the Plan unless, on the Offering Date, such
employee has been in the employ of the Company or any Affiliate for such
continuous period preceding such grant as the Board or the Committee may
require, but in no event shall the required period of continuous employment be
greater than two (2) years.  In
addition, unless otherwise determined by the Board or the Committee and set
forth in the terms of the applicable Offering, no employee of the Company or
any Affiliate shall be eligible to be granted rights under the Plan, unless, on
the Offering Date, such employee’s customary employment with the Company or
such Affiliate is for at least twenty (20) hours per week and at least five (5) months
per calendar year.

 

(b)           The Board or the
Committee may provide that each person who, during the course of an Offering,
first becomes an eligible employee of the Company or designated Affiliate will,
on a date or dates specified in the Offering which coincides with the day on
which such person becomes an eligible employee or occurs thereafter, receive a
right under that Offering, which right shall thereafter be deemed to be a part
of that Offering.  Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:

 

(i)            the date on which
such right is granted shall be the “Offering Date” of such right for all
purposes, including determination of the exercise price of such right;

 

(ii)           the period of the
Offering with respect to such right shall begin on its Offering Date and end
coincident with the end of such Offering; and

 

(iii)         the Board or the
Committee may provide that if such person first becomes an eligible employee
within a specified period of time before the end of the Offering, he or she
will not receive any right under that Offering.

 

(c)           No employee shall
be eligible for the grant of any rights under the Plan if, immediately after
any such rights are granted, such employee owns stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of
stock of the Company 

 

3

 

or of any Affiliate.  For purposes of this subparagraph 5(c), the rules of
Section 424(d) of the Code shall apply in determining the stock
ownership of any employee, and stock which such employee may purchase under all
outstanding rights and options shall be treated as stock owned by such
employee.

 

(d)           An eligible
employee may be granted rights under the Plan only if such rights, together
with any other rights granted under “employee stock purchase plans” of the
Company and any Affiliates, as specified by Section 423(b)(8) of the
Code, do not permit such employee’s rights to purchase stock of the Company or
any Affiliate to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of fair market value of such stock (determined at the time such
rights are granted) for each calendar year in which such rights are outstanding
at any time.

 

(e)           Officers of the
Company and any designated Affiliate shall be eligible to participate in
Offerings under the Plan; provided, however,
that the Board may provide in an Offering that certain employees who are highly
compensated employees within the meaning of Section 423(b)(4)(D) of
the Code shall not be eligible to participate.

 

6.             RIGHTS; PURCHASE
PRICE.

 

(a)           On each Offering
Date, each eligible employee, pursuant to an Offering made under the Plan,
shall be granted the right to purchase up to the number of shares of Common
Stock of the Company purchasable with a percentage designated by the Board or
the Committee not exceeding fifteen percent (15%) of such employee’s Earnings
(as defined in subparagraph 7(a)) during the period which begins on the
Offering Date (or such later date as the Board or the Committee determines for
a particular Offering) and ends on the date stated in the Offering, which date
shall be no later than the end of the Offering. 
The Board or the Committee shall establish one or more dates during an
Offering (the “Purchase Date(s)”) on which rights granted under the Plan shall
be exercised and purchases of Common Stock carried out in accordance with such
Offering.

 

(b)           In connection with
each Offering made under the Plan, the Board or the Committee may specify a
maximum number of shares that may be purchased by any employee as well as a
maximum aggregate number of shares that may be purchased by all eligible
employees pursuant to such Offering.  In
addition, in connection with each Offering that contains more than one Purchase
Date, the Board or the Committee may specify a maximum aggregate number of
shares which may be purchased by all eligible employees on any given Purchase
Date under the Offering.  If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee
shall make a pro rata allocation of the shares available in as nearly a uniform
manner as shall be practicable and as it shall deem to be equitable.

 

(c)           The purchase price
of stock acquired pursuant to rights granted under the Plan shall be not less
than the lesser of:

 

(i)            an amount equal to
eighty-five percent (85%) of the fair market value of the stock on the Offering
Date; or

 

4

 

(ii)           an amount equal to
eighty-five percent (85%) of the fair market value of the stock on the Purchase
Date.

 

7.             PARTICIPATION;
WITHDRAWAL; TERMINATION.

 

(a)           An eligible
employee may become a participant in the Plan pursuant to an Offering by
delivering a participation agreement to the Company within the time specified
in the Offering, in such form as the Company provides.  Each such agreement shall authorize payroll
deductions of up to the maximum percentage specified by the Board or the Committee
of such employee’s Earnings during the Offering.  “Earnings” is defined as an employee’s wages
(including amounts thereof elected to be deferred by the employee, that would
otherwise have been paid, under any arrangement established by the Company that
is intended to comply with Section 125, Section 401(k), Section 402(h) or
Section 403(b) of the Code or that provides non-qualified deferred
compensation), which shall include overtime pay, but shall exclude profit
sharing, bonuses, incentive pay, commissions or other remuneration paid
directly to the employee, the cost of employee benefits paid for by the Company
or an Affiliate, education or tuition reimbursements, imputed income arising
under any group insurance or benefit program, traveling expenses, business and
moving expense reimbursements, income received in connection with stock
options, contributions made by the Company or an Affiliate under any employee
benefit plan, and similar items of compensation, as determined by the Board or
the Committee.  The payroll deductions
made for each participant shall be credited to an account for such participant
under the Plan and shall be deposited with the general funds of the
Company.  A participant may reduce
(including to zero) or increase such payroll deductions, and an eligible
employee may begin such payroll deductions, after the beginning of any Offering
only as provided for in the Offering.  A
participant may make additional payments into his or her account only if
specifically provided for in the Offering and only if the participant has not had
the maximum amount withheld during the Offering.

 

(b)           At any time during
an Offering, a participant may terminate his or her payroll deductions under
the Plan and withdraw from the Offering by delivering to the Company a notice
of withdrawal in such form as the Company provides.  Such withdrawal may be elected at any time
prior to the end of the Offering except as provided by the Board or the
Committee in the Offering.  Upon such
withdrawal from the Offering by a participant, the Company shall distribute to
such participant all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participant’s
interest in that Offering shall be automatically terminated.  A participant’s withdrawal from an Offering
will have no effect upon such participant’s eligibility to participate in any
other Offerings under the Plan but such participant will be required to deliver
a new participation agreement in order to participate in subsequent Offerings
under the Plan.

 

(c)           Rights granted
pursuant to any Offering under the Plan shall terminate immediately upon
cessation of any participating employee’s employment with the Company and any
designated Affiliate, for any reason, and the Company shall distribute to such
terminated employee all of his or her accumulated payroll deductions (reduced
to the extent, if any, such 

 

5

 

deductions have been used to acquire stock
for the terminated employee), under the Offering, without interest.

 

(d)           Rights granted
under the Plan shall not be transferable by a participant otherwise than by
will or the laws of descent and distribution, or by a beneficiary designation
as provided in paragraph 14 and, otherwise during his or her lifetime, shall be
exercisable only by the person to whom such rights are granted.

 

8.             EXERCISE.

 

(a)           On each Purchase
Date specified therefor in the relevant Offering, each participant’s accumulated
payroll deductions and other additional payments specifically provided for in
the Offering (without any increase for interest) will be applied to the
purchase of whole shares of stock of the Company, up to the maximum number of
shares permitted pursuant to the terms of the Plan and the applicable Offering,
at the purchase price specified in the Offering.  No fractional shares shall be issued upon the
exercise of rights granted under the Plan. 
The amount, if any, of accumulated payroll deductions remaining in each
participant’s account after the purchase of shares which is less than the
amount required to purchase one share of stock on the final Purchase Date of an
Offering shall be held in each such participant’s account for the purchase of
shares under the next Offering under the Plan, unless such participant
withdraws from such next Offering, as provided in subparagraph 7(b), or is no
longer eligible to be granted rights under the Plan, as provided in paragraph
5, in which case such amount shall be distributed to the participant after such
final Purchase Date, without interest. 
The amount, if any, of accumulated payroll deductions remaining in any
participant’s account after the purchase of shares which is equal to the amount
required to purchase whole shares of stock on the final Purchase Date of an
Offering shall be distributed in full to the participant after such Purchase
Date, without interest.

 

(b)           No rights granted
under the Plan may be exercised to any extent unless the shares to be issued upon
such exercise under the Plan (including rights granted thereunder) are covered
by an effective registration statement pursuant to the Securities Act of 1933,
as amended (the “Securities Act”) and the Plan is in material compliance with
all applicable state, foreign and other securities and other laws applicable to
the Plan.  If on a Purchase Date in any
Offering hereunder the Plan is not so registered or in such compliance, no
rights granted under the Plan or any Offering shall be exercised on such Purchase
Date, and the Purchase Date shall be delayed until the Plan is subject to such
an effective registration statement and such compliance, except that the
Purchase Date shall not be delayed more than twelve (12) months and the
Purchase Date shall in no event be more than twenty-seven (27) months from the
Offering Date.  If on the Purchase Date
of any Offering hereunder, as delayed to the maximum extent permissible, the
Plan is not registered and in such compliance, no rights granted under the Plan
or any Offering shall be exercised and all payroll deductions accumulated
during the Offering (reduced to the extent, if any, such deductions have been
used to acquire stock) shall be distributed to the participants, without
interest.

 

6

 

9.             COVENANTS OF THE
COMPANY.

 

The Company shall seek to obtain from each
federal, state, foreign or other regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and sell
shares of stock upon exercise of the rights granted under the Plan.  If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such rights unless and until
such authority is obtained.

 

10.          USE OF PROCEEDS FROM
STOCK.

 

Proceeds from
the sale of stock pursuant to rights granted under the Plan shall constitute
general funds of the Company.

 

11.          RIGHTS AS A STOCKHOLDER.

 

A participant
shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares subject to rights granted under the Plan
unless and until the participant’s shareholdings acquired upon exercise of
rights under the Plan are recorded in the books of the Company.

 

12.          ADJUSTMENTS UPON CHANGES
IN STOCK.

 

(a)           If any change is
made in the stock subject to the Plan, or subject to any rights granted under
the Plan, due to a change in corporate capitalization and without the receipt
of consideration by the Company (through reincorporation, stock dividend, stock
split, reverse stock split, combination or reclassification of shares), the
Plan will be appropriately adjusted in the class(es) and maximum number of
securities subject to the Plan pursuant to subsection 3(a), and the outstanding
rights will be appropriately adjusted in the class(es) and number of securities
and price per share of stock subject to such outstanding rights.  Such adjustments shall be made by the Board,
the determination of which shall be final, binding and conclusive.

 

(b)           In the event
of:  (1) a dissolution, liquidation
or sale of all or substantially all of the securities or assets of the Company,
(2) a merger or consolidation in which the Company is not the surviving
corporation or (3) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding
the merger are converted by virtue of the merger into other property, whether
in the form of securities, cash or otherwise, then any surviving corporation
may assume outstanding rights or substitute similar rights for those under the
Plan.  In the event that no surviving
corporation assumes outstanding rights or substitutes similar rights therefor,
participants’ accumulated payroll deductions shall be used to purchase Common
Stock immediately prior to the transaction described above and the participants’
rights under the ongoing Offering shall terminate immediately following such
purchase.

 

7

 

13.          AMENDMENT OF THE PLAN.

 

(a)           The Board at any
time, and from time to time, may amend the Plan.  However, except as provided in paragraph 12
relating to adjustments upon changes in stock, no amendment shall be effective
unless approved by the stockholders of the Company within twelve (12) months
before or after the adoption of the amendment, where the amendment will:

 

(i)            Increase the
number of shares reserved for rights under the Plan;

 

(ii)           Modify the
provisions as to eligibility for participation in the Plan (to the extent such
modification requires stockholder approval in order for the Plan to obtain
employee stock purchase plan treatment under Section 423 of the Code or to
comply with the requirements of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (“Rule 16b-3”)); or

 

(iii)         Modify the Plan in
any other way if such modification requires stockholder approval in order for
the Plan to obtain employee stock purchase plan treatment under Section 423
of the Code or to comply with the requirements of Rule 16b-3.

 

It is expressly contemplated
that the Board may amend the Plan in any respect the Board deems necessary or
advisable to provide eligible employees with the maximum benefits provided or
to be provided under the provisions of the Code and the regulations promulgated
thereunder relating to employee stock purchase plans and/or to bring the Plan
and/or rights granted under it into compliance therewith.

 

(b)           Rights and
obligations under any rights granted before amendment of the Plan shall not be
impaired by any amendment of the Plan, except with the consent of the person to
whom such rights were granted, or except as necessary to comply with any laws
or governmental regulations, or except as necessary to ensure that the Plan
and/or rights granted under the Plan comply with the requirements of Section 423
of the Code.

 

14.          DESIGNATION OF
BENEFICIARY.

 

(a)           A participant may
file a written designation of a beneficiary who is to receive any shares and
cash, if any, from the participant’s account under the Plan in the event of
such participant’s death subsequent to the end of an Offering but prior to
delivery to the participant of such shares and cash.  In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant’s
account under the Plan in the event of such participant’s death during an
Offering.

 

(b)           Such designation of
beneficiary may be changed by the participant at any time by written
notice.  In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant’s death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its sole discretion, may
deliver such shares and/or cash to the spouse or to any one or more dependents
or relatives of the participant, or if no spouse, 

 

8

 

dependent or relative is known to the
Company, then to such other person as the Company may designate.

 

15.          TERMINATION OR
SUSPENSION OF THE PLAN.

 

(a)           The Board in its
discretion, may suspend or terminate the Plan at any time.  No rights may be granted under the Plan while
the Plan is suspended or after it is terminated.

 

(b)           Rights and
obligations under any rights granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan, except as
expressly provided in the Plan or with the consent of the person to whom such
rights were granted, or except as necessary to comply with any laws or
governmental regulation, or except as necessary to ensure that the Plan and/or
rights granted under the Plan comply with the requirements of Section 423
of the Code.

 

(c)           Notwithstanding the
foregoing, the Plan shall terminate and no rights may be granted under the Plan
after the tenth anniversary of the Effective Date.

 

16.          EFFECTIVE DATE OF PLAN.

 

The Plan shall
become effective simultaneously with the effectiveness of the Company’s
registration statement under the Securities Act with respect to the initial
public offering of shares of the Company’s Common Stock (the “Effective Date”),
but no rights granted under the Plan shall be exercised unless and until the
Plan has been approved by the stockholders of the Company within twelve (12)
months before or after the date the Plan is adopted by the Board, which date
may be prior to the Effective Date.

 

17.          MISCELLANEOUS PROVISIONS.

 

(a)           The Plan and
Offering do not constitute an employment contract.  Nothing in the Plan or in the Offering shall
in any way alter the at will nature of a participant’s employment or be deemed
to create in any way whatsoever any obligation on the part of any participant
to continue in the employ of the Company or any Affiliate, or on the part of
the Company or any Affiliate to continue the employment of a participant.

 

(b)           The provisions of
the Plan shall be governed by the laws of the State of Delaware without resort
to that state’s conflicts of laws rules.

 

9

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