Document:

Unassociated Document

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

TABLE
OF CONTENTS

 

Page

 

	
      Article
      I - Employment
	
      1

	
      Section
      1.01. Term
	
      1

	
      Section
      1.02. Position
	
      1

	
      Section
      1.03. Duties

	
      1

	
      Article
      II - Compensation
	
      2

	
      Section
      2.01. Basic Compensation
	
      2

	
      Section
      2.02. Incentive Compensation
	
      2

	
      Section
      2.03. Other Benefits

	
      2

	
      Article
      III - Termination of Employment
	
      3

	
      Section
      3.01. Termination of Employment by Company
	
      3

	
      Section
      3.02. Death
	
      4

	
      Section
      3.03. Termination of Employment by the Executive
	
      4

	
      Section
      3.04. Change of Control
	
      5

	
      Section
      3.05. Definitions of Certain Terms

	
      5

	
      Article
      IV - Non-Competition; Confidential Information
	
      6

	
      Section
      4.01. Non-Competition
	
      6

	
      Section
      4.02. Non-Interference
	
      7

	
      Section
      4.03. Trade Secrets
	
      7

	
      Section
      4.04. Survival of Terms

	
      7

	
      Article
      V - Miscellaneous
	 	
      7

	
      Section
      5.01. Services as Officer or Director
	
      7

	
      Section
      5.02. Conflicts
	
      8

	
      Section
      5.03. Right to Change Business
	
      8

	
      Section
      5.04. Notices
	
      8

	
      Section
      5.05. Assignment and Succession
	
      8

	
      Section
      5.06. Headings
	
      8

	
      Section
      5.07. Applicable Law
	
      8

	
      Section
      5.08. Withholding Taxes
	
      9

	
      Section
      5.09. Entire Agreement; Amendments
	
      9

	
      Section
      5.10. Waivers
	
      9

	
      Section
      5.11. Partial Invalidity
	
      9

	
      Section
      5.12. Execution of Counterparts
	
      9

 

i

EMPLOYMENT
AGREEMENT
originally dated December 10, 1998, as extended by a letter agreement on January
23, 2002 and January 25, 2005, and as amended and restated as of the date
hereof, by and among Arnold S. Lippa (the “Executive”) and DOV Pharmaceutical,
Inc., a Delaware corporation (the “Company”).

 

WHEREAS,
the Company and the Executive desire to amend and restate this Employment
Agreement to assure the Company of the continued services of the Executive and
to set forth the duties and compensation of the Executive, all upon the terms
and conditions hereinafter set forth;

 

NOW,
THEREFORE, in consideration of the agreements and covenants contained herein,
the Executive and the Company hereby agree as follows:

 

 

Article
I - Employment

 

Section
1.01.  Term. The
term of this Employment Agreement shall commence on the date of the amendment
and restatement of this Employment Agreement, and, unless sooner terminated
pursuant to Article III hereof, shall terminate on the date that is two years
thereafter (the “Employment Period”). 

 

Section
1.02.  Position. The
Company shall employ the Executive and the Executive shall serve as Chief
Executive Officer during the Employment Period.

 

Section
1.03.  Duties.

 

(a)  Subject
to the powers, authorities and responsibilities vested in the Board of Directors
of the Company (the “Board”) under the General Corporation Law of the State of
Delaware, the Executive shall have such responsibilities and authorities as are
customarily possessed and exercisable by the Chief Executive Officer of a
corporation. The Executive shall also perform such other executive and
administrative duties (not inconsistent with the position of Chief Executive
Officer) as the Executive may reasonably be expected to be capable of performing
on behalf of the Company and any subsidiaries and affiliates of the Company as
may from time to time be authorized or directed by the Board.

 

(b)  During
the Employment Period, the Executive shall perform faithfully the duties
assigned to him hereunder to the best of his abilities and devote his full
business time and attention to the Company’s business.

 

(c)  The
Company shall provide and pay for a standard director’s and officer’s insurance
policy insuring the Executive against liability arising out of the performance
of his duties, and shall indemnify and hold the Executive harmless from such
liability.

 

 

Article
II - Compensation

 

Section
2.01.  Basic
Compensation. As
compensation for the Executive’s services hereunder, the Company shall pay to
the Executive an annual salary of $402,325 (as adjusted, the “Basic
Compensation”), payable in bi-weekly installments. The Basic Compensation shall
be increased by no less than 10% per year during the Employment
Period.

 

Section
2.02.  Incentive
Compensation. In
addition to his Basic Compensation, the Company shall pay to the Executive such
performance bonuses as may be determined in the discretion of the Compensation
Committee of the Board (“Incentive Compensation”).

 

Section
2.03.  Other
Benefits.

 

(a)  During
the Employment Period, the Company shall provide the Executive and maintain on
the Executive’s behalf, or reimburse the Executive for carrying, comprehensive
medical insurance, dental insurance, disability insurance and life insurance on
the life of the Executive. In addition, the Executive shall have the right to
participate in the Company’s other programs for the benefit of employees in
accordance with their terms and as the same may be amended from time to
time.

 

(b)  The
Executive shall be eligible to participate in the Company’s Stock Option Plan as
may be in effect from time to time.

 

(c)  The
Company shall pay to or on behalf of the Executive a monthly automobile
allowance of $1,600.

 

(d)  The
Executive shall be entitled to six weeks of paid vacation in each calendar year.
The Executive shall also be entitled to the same standard paid holidays given by
the Company to senior executives generally, all as determined from time to time
by the Board or appropriate committee thereof. Vacation time shall cumulate and
carry forward from year to year provided that the Executive shall not be
entitled to more than 10 weeks of vacation in any one year without the
permission of the Compensation Committee and provided that the Executive shall
coordinate his vacation schedule with the President.

 

(e)  The
Company shall reimburse the Executive for travel or other expenses or
disbursements reasonably incurred or made by him in connection with the
Company’s business during the Employment Period upon receipt of reasonable
documentation thereof.

 

(f)  The
benefits set forth in this Section 2.03 shall be collectively referred to as the
“Benefits.”

 

2

 

Article
III - Termination
of Employment

 

Section
3.01.  Termination
of Employment by Company.

 

(a)  Except as
otherwise provided in this Article III and in Article IV, upon the occurrence of
any of the following events, this Employment Agreement and the rights and
obligations of the parties hereunder shall terminate:

 

(i)  “Disability”
(as defined in Section 3.05(a)) of the Executive; or

 

(ii)  Conduct
by the Executive constituting “Cause” (as defined in Section
3.05(b)).

 

(b)  In the
case of termination pursuant to Section 3.01(a)(i), the Company shall be
obligated to pay the Executive and the Executive shall be entitled to receive,
in complete and total satisfaction of the obligations of the Company hereunder,
an amount equal to his Basic Compensation, Incentive Compensation and Benefits
for the period commencing on the date of termination and ending on the date that
is nine months after the date of termination. Basic Compensation, Incentive
Compensation and Benefits shall be paid in the manner and at the intervals
provided in Article II. 

 

(c)  In the
case of termination pursuant to Section 3.01(a)(ii), the Company shall be
obligated to pay the Executive and the Executive shall be entitled to receive,
in complete and total satisfaction of the obligations of the Company hereunder,
an amount equal to his Basic Compensation, earned but unpaid Incentive
Compensation and Benefits through the date of such termination.

 

(d)  In the
case of termination of the Executive by the Company other than pursuant to
Section 3.01(a)(i) or (ii) or Section 3.02, subject to the execution of a
release of employment claims in a form reasonably satisfactory to the Company,
the Company shall pay the Executive and the Executive shall be entitled to
receive, in complete and total satisfaction of the obligations of the Company
hereunder, an amount equal to the Executive’s Basic Compensation (at the rate in
effect on the date of termination) for the period commencing on the date of
termination and ending on the later of (i) the date that is one year after the
date of such termination and (ii) the date two years from the date of this
restated and amended Employment Agreement (the “Severance Period”). Such amount
shall be paid as salary continuation at the intervals provided in Article II;
provided, however, if such salary continuation is considered deferred
compensation within the meaning of Section 409A of the Internal Revenue Code of
1986 (“Section 409A”), salary continuation shall not commence until at least six
months after the Executive’s termination of employment and the initial payment
shall include a catch-up amount covering amounts that would otherwise have been
paid during the first six-month period. During the Severance Period, the
Executive shall make himself available to provide consulting services (other
than Board services) to the Company at such time as may be reasonably requested
by the Company, not to exceed two (2) days in each calendar month. In the event
the Executive shall be requested to serve as Chairman of the Board of Directors
of the Company, he shall not be entitled to receive any compensation other than
fees customarily payable to a director of the Company. During the Severance
Period, the Executive shall also have the right to receive the same medical and
dental health insurance coverage available to active employees of the Company,
subject to payment of any required employee premiums. In addition, if this
Employment Agreement is terminated pursuant to this paragraph, the Executive
shall immediately have the right to exercise all stock options contained in the
Stock Option Plan, including those options for which the period during which
such options may be exercised has not yet commenced. 

 

3

Section
3.02.  Death

 

In the
event of the death of the Executive during the Employment Period, the Employment
Period shall terminate on the date of death and the Executive’s designated
beneficiary or, if none, his estate shall be entitled to receive, in complete
and total satisfaction of the Company’s obligations hereunder, any accrued and
unpaid Basic Compensation, Incentive Compensation and Benefits, as appropriate,
through such date of death and for a period of 90 days thereafter.

 

Section
3.03.  Termination
of Employment by the Executive.

 

(a)  If during
the Employment Period there should occur any of the following events (each of
the following being an event giving the Executive the right to resign for “Good
Reason”): (i) a change in the title and/or responsibilities of the Executive,
such that the Executive is no longer the Chief Executive Officer of the Company
and no longer has such responsibilities and authorities as are customarily
exercisable by the Chief Executive Officer of a corporation or (ii) a failure by
the Company to provide the Executive with the Basic Compensation, Incentive
Compensation or Benefits, other than a failure that is not in bad faith and is
remedied by the Company within 15 days after receipt of notice thereof given by
the Executive, or (iii) a breach by the Company of any of the material terms of
this Agreement that is not remedied by the Company within 15 days of notice
thereof by the Executive, the Executive may elect to terminate his employment by
notice to the Company (subject to Article IV). If the Executive exercises such
election, the Employment Period shall terminate effective upon the later to
occur of: (x) the receipt of such notice by the Company and (y) the expiration
of the 15-day period referred to in Section 3.03(a)(ii) or (iii).

 

(b)  If the
Executive exercises his election to terminate the rights and obligations of the
parties pursuant to Section 3.03(a), the Company shall be obligated to pay the
Executive and the Executive shall be entitled to receive in complete and total
satisfaction of the obligations of the Company hereunder, the salary and
benefits continuation set forth in Section 3.01(d), subject to the conditions
stated therein. In addition, if this Employment Agreement is terminated pursuant
to this paragraph, the Executive shall immediately have the right to exercise
all stock options contained in the Stock Option Plan, including those options
for which the period during which such options may be exercised has not yet
commenced.

 

4

(c)  If the
Executive terminates this Employment Agreement for any reason other than those
contained in Section 3.02 and Section 3.03(a), the rights and obligations of the
parties hereunder shall terminate immediately (except as otherwise provided in
Article IV) and the Employment Period shall terminate immediately except that
the Executive shall be entitled to receive, in complete and total satisfaction
of the obligations of the Company hereunder, his Basic Compensation, Incentive
Compensation and Benefits through the date of such termination.

 

Section
3.04.  Change
of Control

 

Notwithstanding
anything to the contrary contained herein, in the event that the Executive is
terminated or the Executive terminates his employment pursuant to Section
3.03(a) in connection with or within six months following the Change of Control,
then the Company shall be obligated to pay the Executive, and the Executive
shall be entitled to receive in complete and total satisfaction of the
obligations of the Company hereunder, an amount equal to the Executive’s Basic
Compensation for the period commencing on the date of termination and ending on
the date that is two years after the date of such termination. The Basic
Compensation due to the Executive pursuant to this Section 3.04 shall be paid in
full on the date of the termination of the Executive; provided, however, that in
the event it is necessary to avoid the imposition of additional taxes under
Section 409A, such payment shall not be made until at least six (6) months after
the Executive’s termination of employment. For two years after the termination
date, the Executive shall also have the right to receive the same medical and
dental health insurance coverage offered to active employees of the Company,
subject to payment of any required employee premiums. In addition, if this
Employment Agreement is terminated pursuant to this paragraph, the Executive
shall immediately have the right to exercise all stock options contained in the
Stock Option Plan, including those options for which the period during which
such options may be exercised has not yet commenced.

 

Section
3.05.  Definitions
of Certain Terms.

 

(a)  “Disability”
shall mean any physical or mental condition of the Executive that renders the
Executive incapable of performing any substantial portion of the services
contemplated hereby (as confirmed by competent medical evidence) and that has
continued for at least 90 consecutive business days in any 12 month period or a
total of six months during any 12-month period.

 

(b)  The
following shall constitute conduct entitling the Company to terminate the
Executive’s employment for “Cause”: (i) the Executive’s willful refusal to
perform or substantial disregard of the Executive’s duties to the Company that
is not cured within 10 days of notice (specifying the failure) thereof from the
Board, (ii) the commission by the Executive of a willful and material breach of
Article IV or (iii) the conviction of any felony by the Executive (or the
equivalent thereof under the laws of any state). It shall be presumed that any
termination of the Executive by the Company is without Cause, and such
presumption may only be overcome by clear and convincing evidence that the
termination of Executive’s employment can properly be construed as for Cause. If
the issue of “Cause” is litigated in a proceeding in any court or through any
means of alternative dispute resolution and such issue is resolved in the
Executive’s favor, then the Company shall reimburse the Executive for all
reasonable attorney’s fees, costs and expenses incurred by the Executive in such
proceeding.

 

5

(c)  “Change
of Control” shall mean: (i) a merger or consolidation of the Company with or
into another corporation other than a transaction (A) in which the Company is
the surviving Corporation (except where such other merger or consolidation party
is controlled by or under common control with another corporation) or (B)
merging or consolidating the Company with any corporation controlling,
controlled by or under common control with the Company (in which case the
surviving corporation shall be deemed the “Company” for purposes of this
Employment Agreement), or (ii) the sale of all or substantially all the assets
of the Company to any corporation or entity, other than a sale to any
corporation or entity controlling, controlled by or under common control with
the Company prior to such transaction (in which case the surviving corporation
shall be deemed the “Company” for purposes of this Employment
Agreement).

 

 

Article
IV - Non-Competition;
Confidential Information

 

Section
4.01.  Non-Competition.

 

(a)  Subject
to Sections 4.01(b) and 4.01(c), the Executive shall not engage in any
activities, whether as employer, proprietor, partner, stockholder (other than as
the holder of less than 5% of the stock of a corporation listed on a national
securities exchange or in the National Association of Securities Dealers, Inc.
Automated Quotation System (such a corporation being hereinafter referred to as
a “Public Corporation”)), director, employee, consultant or otherwise, of any
company with substantially the same business as or competes directly with the
Company in the United States during the following periods:

 

(i)  the
Employment Period; and

 

(ii)  during
any period after the termination of this Employment Agreement pursuant to
Article 3 for which the Executive is being or has been paid.

 

(b)  The
Executive shall not be deemed to be in breach of this Employment Agreement by
reason of services performed for a subsidiary or affiliate of the
Company.

 

(c)  Notwithstanding
anything to the contrary contained herein, if the Company finds that the
Executive has violated any covenants contained in Section 4.01, 4.02 or 4.03,
then the Company shall be obligated to pay any amounts due to the Executive
(“Escrow Amount”) to Goodwin Procter LLP, as
escrow agent (“Escrow Agent”) at 599 Lexington Avenue, New York, New York 10022.
Escrow Agent shall hold the Escrow Amount in escrow until a court or agency
legally empowered to enforce the covenants contained in Section 4.01, 4.02 and
4.03 reaches a final determination whether the Executive has violated any such
covenants or until mutually instructed by the parties. Escrow Agent shall
disburse the Escrow Amount in accordance with such court or agency’s final
determination or pursuant to such party instructions. 

 

6

Section
4.02.  Non-Interference. During
the Employment Period and the period of non-competition as determined pursuant
to Section 4.01(a), the Executive:

 

(a)  shall not
publicly disparage any of the products, services or actions of the Company or
any of the Company’s subsidiaries or affiliates; and

 

(b)  shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization, solicit, endeavor
to entice away from the Company, or otherwise interfere with the relationship of
the Company with any person or entity who is, or was within the then most recent
12-month period, a customer or client of the Company.

 

Section
4.03.  Trade
Secrets. The
Executive shall not, at any time during the Employment Period or thereafter, use
(except for the sole benefit of the Company, the Company’s subsidiaries and
affiliates) or, without the written consent of the Board, divulge to any person
(other than, during the Employment Period, an executive of the Company or any of
the Company’s subsidiaries or other person to whom disclosure is reasonably
necessary or appropriate or legally required in connection with the Executive’s
duties hereunder) any trade secrets or other confidential information of the
Company or any of its subsidiaries or affiliates, except to the extent that (a)
such information becomes a matter of public record, or is published in a
newspaper, magazine or other periodical available to the general public, in each
case, through no violation of this Employment Agreement by the Executive or (b)
such disclosure is required by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process provided that the Executive shall immediately notify the Company of the
existence, terms and circumstances surrounding such a request so that it may
seek an appropriate protective order. When the Executive ceases to be employed
by the Company, the Executive shall surrender to the Company all records and
documents in any form obtained by him or entrusted to him during the course of
his employment hereunder (together with all copies thereof) that pertain to the
business of the Company or its subsidiaries or affiliates or that were paid for
by the Company or any of the Company’s subsidiaries or affiliates provided that
the Executive may retain copies of such documents as may be necessary for the
Executive’s personal records for federal income tax purposes or, with the
approval of the Board, for other purposes relating to the Executive’s legal
affairs, which approval shall not be unreasonably withheld.

 

Section
4.04.  Survival
of Terms. The
covenants contained in Sections 4.01, 4.02 and 4.03 shall survive the
termination of the Executive’s employment.

 

 

Article
V - Miscellaneous

 

Section
5.01.  Services
as Officer or Director. During
the Employment Period, the Executive shall, if elected or appointed, serve as a
director of the Company and as an officer and/or director of all current and
future subsidiaries and affiliates of the Company without any additional
compensation for such services provided that the Executive shall be provided
with reasonable and customary directors’ and officers’ insurance if any such
corporation is or becomes publicly held and further provided that the Company
shall cause any such subsidiary and affiliate to save the Executive harmless
from any and all liability arising out of the performance of the Executive’s
duties as director and officer.

 

7

Section
5.02.  Conflicts. The
Executive hereby warrants and represents that he is not under any legal or
contractual obligation that would conflict in any manner with the obligations
and duties he is undertaking herein, and that his execution of this Employment
Agreement shall not breach any agreement to which he is now a party. The
Executive further agrees to reimburse and hold the Company harmless for any
costs, damages or fees sustained or expended by the Company as a result of this
untruth of the representations or breach of warranties contained in this Section
5.03.

 

Section
5.03.  Right
to Change Business. This
Employment Agreement and any rights or privileges granted to the Executive
hereunder shall not prevent the Company or any of the Company’s subsidiaries
from exercising its corporate powers to modify the business operations or
activities of such entity.

 

Section
5.04.  Notices. Any
notice or request required or permitted to be given under this Employment
Agreement shall be sufficient if in writing and delivered personally or sent by
registered mail, return receipt requested, to the addresses set forth below or
to any other address designated by either party by notice similarly given. Such
notice shall be deemed to have been given upon the personal delivery thereof or
three days after the date of such mailing thereof, as the case may
be.

 

If to the
Executive, to:     345 Crest
Road
                  Ridgewood,
New Jersey 07450

 

If to the
Company, to:     DOV
Pharmaceutical, Inc.
                  433
Hackensack Avenue
                  Hackensack,
New Jersey 07601
                  Attention:
General Counsel

 

With a
copy to:        Goodwin
Procter LLP
                  599
Lexington Avenue
                  New York,
New York 10022
                  Attention:
Joseph R. Siegelbaum

 

Section
5.05.  Assignment
and Succession. The
Executive acknowledges that the services to be rendered by him hereunder are
unique and personal. Accordingly, the Executive may not assign any of his rights
or delegate any of his duties or obligations under this Employment Agreement.
The rights and obligations of the Company under this Employment Agreement shall
inure to the benefit of and be binding upon its successors and
assigns.

 

Section
5.06.  Headings. The
headings contained in this Employment Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.

 

Section
5.07.  Applicable
Law. This
Employment Agreement shall be interpreted in accordance with the laws of the
State of New Jersey, without regard to conflict of law rules. Each party hereby
irrevocably consents and submits to the in personam jurisdiction of any court of
general jurisdiction in the State of New Jersey which shall serve as the sole
and exclusive forum in any suit, action or proceeding arising out of or in
connection with this Employment Agreement.

 

8

Section
5.08.  Withholding
Taxes. The
Company may withhold from any amounts payable under this Employment Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulations.

 

Section
5.09.  Entire
Agreement; Amendments. This
Employment Agreement contains the entire understanding of the parties hereto
with regard to the subject matter contained herein, and supersedes all prior
agreements or understandings between the parties hereto or any related parties.
This Employment Agreement may be amended only pursuant to a writing signed by
both parties hereto.

 

Section
5.10.  Waivers. Any
term or provisions of this Employment Agreement may be waived, or the time for
its performance may be extended, by the party or parties entitled to the
benefits thereof but only to the extent evidenced by a writing executed by such
party. The failure of any party hereto to enforce at any time any provision of
this Employment Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this Employment Agreement or
any part hereof or the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Employment Agreement shall be
held to constitute a waiver of any other or subsequent breach.

 

Section
5.11.  Partial
Invalidity. Each
provision hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any one or more of the provisions
contained herein is, for any reason, held to be unenforceable in any respect,
such unenforceability shall not affect any other provisions of this Employment
Agreement, and this Employment Agreement shall be construed as if such
unenforceable provision or provisions had never been contained herein unless the
deletion of such provision or provisions would result in such a material change
as to cause the remaining terms hereof to be unreasonable.

 

Section
5.12.  Execution
of Counterparts. This
Employment Agreement may be executed in one or more counterparts, each of which
shall be considered an original instrument, but all of which shall be considered
one and the same agreement, and shall become binding when one or more
counterparts have been signed by each of the parties and delivered to the
other.

 

9

IN
WITNESS WHEREOF, the Company has caused this Employment Agreement as amended and
restated, to be signed by its duly authorized officer and the Executive has
signed this Employment Agreement, as amended and restated, as of the 23rd day of
May, 2005.

 

	 	 	 
	 	DOV PHARMACEUTICAL,
      INC.
	 
 	 
 	 
 
		By:  	/s/ Zola
Horovitz
	 	
      

      Zola
      Horovitz

      Chair,
      Compensation Committee

	 	
	 	 
	 	/s/ Arnold S. Lippa
      

      Arnold S. Lippa
	 	 
	 	 

10Unassociated Document

RESTRICTED
STOCK AWARD AGREEMENT

 

UNDER THE
DOV PHARMACEUTICAL, INC.
2000
STOCK OPTION AND GRANT PLAN
AS
AMENDED AND RESTATED AS OF MARCH 28, 2002

 

Name of
Grantee: Arnold S. Lippa

No. of
Shares: 60,000

Grant
Date: May 23, 2005

 

Pursuant
to the DOV Pharmaceutical, Inc. 2000 Stock Option and Grant Plan (the “Plan”) as
amended and restated as of March 28, 2002 and as further amended through the
date hereof, DOV Pharmaceutical, Inc. (the “Company”) hereby grants a Restricted
Stock Award (an “Award”) to the Grantee named above. Pursuant to this Award, the
Grantee shall receive the number of shares of Common Stock, par value $0.0001
per share (the “Stock”) of the Company specified above, subject to the
restrictions and conditions set forth herein and in the Plan.

 

1.  Acceptance
of Award. Upon
acceptance of this Award by the Grantee, the shares of Restricted Stock so
accepted shall be issued and held by the Company’s transfer agent in book entry
form, and the Grantee’s name shall be entered as the stockholder of record on
the books of the Company. Thereupon, the Grantee shall have all the rights of a
shareholder with respect to such shares, including voting and dividend rights,
subject, however, to the restrictions and conditions specified in
Paragraph 2 below.

 

2.  Restrictions
and Conditions.

 

(a)  Any book
entries for the shares of Restricted Stock granted herein shall bear an
appropriate legend, as determined by the Committee in its sole discretion, to
the effect that such shares are subject to restrictions as set forth herein and
in the Plan.

 

(b)  Shares of
Restricted Stock granted herein may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of by the Grantee prior to
vesting.

 

(c)  If the
Grantee’s service relationship with the Company and its Subsidiaries (as both an
employee and director) is voluntarily or involuntarily terminated for any reason
other than death prior to the vesting of any shares of Restricted Stock granted
herein, such shares of Restricted Stock shall be immediately forfeited.

 

3.  Vesting
of Restricted Stock. The
restrictions and conditions in Paragraph 2 of this Agreement shall lapse on
the Vesting Date or Dates specified in the following schedule so long as the
Grantee remains an employee or director of the Company on such Dates. If a
series of Vesting Dates is specified, then the restrictions and conditions in
Paragraph 2 shall lapse only with respect to the number of shares of
Restricted Stock specified as vested on such date.

 

	
      Number
      of
Shares
      of Restricted Stock Vested
	 	
      Cumulative
      Number of
Vested Shares
	 	
      Vesting
      Date

	
      20,000

       
	 	
      20,000

       
	 	
      May
      23, 2006

       

	
      20,000

       
	 	
      40,000

       
	 	
      May
      23, 2007

       

	
      20,000

       
	 	
      60,000

       
	 	
      May
      23, 2008

       

 

Subsequent
to such Vesting Date or Dates, the shares of Stock on which all restrictions and
conditions have lapsed shall no longer be deemed Restricted Stock. The Committee
may at any time accelerate the vesting schedule specified in this
Paragraph 3. In addition, in the event of the Grantee’s death or a Sale
Event (as defined in the Plan) all restrictions on the Restricted Stock shall
automatically lapse and such shares shall no longer be deemed Restricted Stock
upon the Grantee’s death or the consummation of such Sale Event, as the case may
be.

 

4.  Dividends.
Dividends on shares of Restricted Stock shall be paid currently to the
Grantee.

 

5.  Incorporation
of Plan.
Notwithstanding anything herein to the contrary, this Agreement shall be subject
to and governed by all the terms and conditions of the Plan, including the
powers of the Committee set forth in Section 2(b) of the Plan. Capitalized terms
in this Agreement shall have the meaning specified in the Plan, unless a
different meaning is specified herein.

 

6.  Transferability. This
Agreement is personal to the Grantee, is non-assignable and is not transferable
in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution.

 

7.  Tax
Withholding. The
Grantee shall, not later than the date as of which the receipt of this Award
becomes a taxable event for Federal income tax purposes, pay to the Company or
make arrangements satisfactory to the Committee for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable
event. The Grantee may elect to have such minimum tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued, or (ii) transferring to the Company, a number of
shares of Stock with an aggregate Fair Market Value that would satisfy the
withholding amount due.

 

8.  Miscellaneous.

 

(a)  Notice
hereunder shall be mailed or delivered to the Company at its principal place of
business, and shall be mailed or delivered to the Grantee at the address on file
with the Company, or in either case, at such other address as one party may
subsequently furnish to the other party in writing.

 

2

(b)  This
Agreement does not confer upon the Grantee any rights with respect to
continuation of employment or other service relationship with the Company or any
Subsidiary.

 

	 	 	 
	 	DOV PHARMACEUTICAL,
      INC.
	 
 	 
 	 
 
		By:  	/s/ Zola
Horovitz
	 	
      

      Zola
      Horovitz

      Chairman,
      Compensation Committee

	 	
	 The foregoing Agreement is hereby
      accepted and the terms and conditions thereof hereby agreed to by the
      undersigned.
	 	 
	 	 
	Dated: May
      23, 2005	/s/ Arnold
      S. Lippa
      

      Arnold S. Lippa
	 	 
	 	 

3

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