Document:

Exhibit
10.26

 

RIGEL PHARMACEUTICALS, INC.

 

2000 NON-EMPLOYEE DIRECTORS’ STOCK
OPTION PLAN

 

ADOPTED AUGUST 18, 2000

APPROVED
BY STOCKHOLDERS SEPTEMBER 11, 2000

EFFECTIVE
DATE: DECEMBER 4, 2000

AMENDED
AND RESTATED APRIL 24, 2003

AMENDED
AND RESTATED JUNE 20, 2003

APPROVED
BY STOCKHOLDERS JUNE 20, 2003

AMENDED
AND RESTATED APRIL 22, 2005

APPROVED
BY STOCKHOLDERS JUNE 2, 2005

AMENDED
AND RESTATED JANUARY 31, 2007

APPROVED
BY STOCKHOLDERS MAY 31, 2007

AMENDED
AND RESTATED SEPTEMBER 18, 2007

AMENDED
AND RESTATED FEBRUARY 21, 2008

 

1.             PURPOSES.

 

(a)        Eligible Option Recipients. The persons eligible to receive Options
are the Non-Employee Directors of the Company.

 

(b)        Available Options. The purpose of the Plan is to provide a
means by which Non-Employee Directors may be given an opportunity to benefit
from increases in value of the Common Stock through the granting of
Nonstatutory Stock Options.

 

(c)        General Purpose. The Company, by means of the Plan,
seeks to retain the services of its Non-Employee Directors, to secure and
retain the services of new Non-Employee Directors and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.

 

2.             DEFINITIONS.

 

(a)        “Affiliate” means any parent corporation or
subsidiary corporation of the Company, whether now or hereafter existing, as
those terms are defined in Sections 424(e) and (f), respectively, of the
Code.

 

(b)        “Annual
Grant” means
an Option granted annually to all Non-Employee Directors who meet the criteria
specified in subsection 6(b) of the Plan.

 

(c)        “Annual
Meeting”
means the annual meeting of the stockholders of the Company.

 

 

(d)             “Board” means the Board of Directors of the
Company.

 

(e)                  A “Change in Control,”
with respect to Options granted on or after the effective date
of the Plan, will be deemed to have occurred upon the first to occur of an
event set forth in any one of the following paragraphs:

 

(i)            the acquisition (other than from the
Company, by any person (as such term is defined in Section 13(c) or
14(d) of the Exchange Act of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of fifty (50%)
or more of the combined voting power of the Company’s then outstanding voting
securities; or

 

(ii)           the closing of:

 

(a)               a merger or consolidation involving the Company if the
stockholders of the Company, immediately before such merger or consolidation,
do not, as a result of such merger or consolidation, own, directly or
indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities of the corporation resulting from such
merger or consolidation in substantially the same proportion as
their ownership of the combined voting power of the voting securities of
the Company outstanding immediately before such merger or consolidation; or

 

(ß)              a complete liquidation or dissolution of the Company
or an agreement for the sale or other disposition of all or substantially all
of the assets of the Company.

 

Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities is acquired by (i) a trustee or other fiduciary
holding securities under one or more employee benefit plans maintained by the
Company or any of its subsidiaries or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or indirectly by
the stockholders of the Company in the same proportion as their ownership
of stock in the Company immediately prior to such acquisition.

 

For
the avoidance of doubt, the term Change in Control shall not include a sale of
assets, merger or other transaction effected exclusively for the purpose of
changing the domicile of the Company.

 

Notwithstanding
the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the
Company or any Affiliate and the Optionholder shall supersede the
foregoing definition with respect to Options subject to such agreement; provided, however, that if no definition
of Change in Control or any analogous term is set forth in such an individual
written agreement, the foregoing definition shall apply.

 

(f)          “Code” means the Internal Revenue Code of
1986, as amended.

 

(g)         “Common
Stock” means
the common stock of the Company.

 

(h)         “Company” means Rigel Pharmaceuticals, Inc.,
a Delaware corporation.

 

(i)          “Consultant” means any person, including an advisor,
(i) engaged by the Company or an Affiliate 

 

 

to render consulting or
advisory services and who is compensated for such services or (ii) who is
a member of the Board of Directors of an Affiliate. However, the term “Consultant”
shall not include either Directors of the Company who are not compensated by
the Company for their services as Directors or Directors of the Company who are
merely paid a director’s fee by the Company for their services as Directors.

 

(j)         “Continuous
Service”
means that the Optionholder’s service with the Company or an Affiliate, whether
as an Employee, Director or Consultant, is not interrupted or terminated. The
Optionholder’s Continuous Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Optionholder renders service
to the Company or an Affiliate as an Employee, Consultant or Director or a
change in the entity for which the Optionholder renders such service, provided
that there is no interruption or termination of the Optionholder’s service. For
example, a change in status without interruption from a Non-Employee Director
of the Company to a Consultant of an Affiliate or an Employee of the Company
will not constitute an interruption of Continuous Service. The Board or the
chief executive officer of the Company, in that party’s sole discretion, may
determine whether Continuous Service shall be considered interrupted in the
case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave.

 

(k)       “Director” means a member of the Board of
Directors of the Company.

 

(l)         “Disability” means the permanent and total disability
of a person within the meaning of Section 22(e)(3) of the Code.

 

(m)       “Employee” means any person employed by the
Company or an Affiliate. Mere service as a Director or payment of a director’s
fee by the Company or an Affiliate shall not be sufficient to constitute “employment”
by the Company or an Affiliate.

 

(n)        “Exchange
Act” means
the Securities Exchange Act of 1934, as amended.

 

(o)        “Fair
Market Value”
means, as of any date, the value of the Common Stock determined as follows:

 

(i)         If
the Common Stock is listed on any established stock exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of
a share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common
Stock) on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable.

 

(ii)       In
the absence of such markets for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board.

 

(p)        “Initial
Grant” means
an Option granted to a Non-Employee Director who meets the criteria 

 

 

specified in subsection 6(a) of
the Plan.

 

(q)        “IPO
Date” means
the effective date of the initial public offering of the Common Stock.

 

(r)        “Non-Employee
Director”
means a Director who is not an Employee.

 

(s)        “Nonstatutory
Stock Option”
means an Option not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated
thereunder.

 

(t)         “Officer” means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

(u)        “Option” means a Nonstatutory Stock Option
granted pursuant to the Plan.

 

(v)        “Option
Agreement”
means a written agreement between the Company and an Optionholder evidencing
the terms and conditions of an individual Option grant. Each Option Agreement
shall be subject to the terms and conditions of the Plan.

 

(w)       “Optionholder” means a person to whom an Option is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

 

(x)        “Plan” means this Rigel Pharmaceuticals, Inc.
2000 Non-Employee Directors’ Stock Option Plan.

 

(y)        “Rule 16b-3” means Rule 16b-3 promulgated under
the Exchange Act or any successor to Rule 16b-3, as in effect from time to
time.

 

(z)        “Securities
Act” means
the Securities Act of 1933, as amended.

 

3.             ADMINISTRATION.

 

(a)        Administration by Board. The Board shall administer the Plan.
The Board may not delegate administration of the Plan to a committee.

 

(b)        Powers of Board. The Board shall have the power, subject
to, and within the limitations of, the 

 

 

express provisions of the
Plan:

 

(i)            To determine the provisions of each Option to the extent not specified
in the Plan.

 

(ii)           To construe and interpret the Plan and Options 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 or in any Option Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.

 

(iii)         To
amend the Plan or an Option as provided in Section 12.

 

(iv)          To
terminate or suspend the Plan as provided in Section 13.

 

(v)            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
that are not in conflict with the provisions of the Plan.

 

(c)        Effect of Board’s Decision. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

 

(d)        Cancellation and Re-Grant of Options. Notwithstanding anything to the
contrary in the Plan, neither the Board nor any Committee shall have the
authority to: (i) reprice any outstanding Option under the Plan, (ii) cancel
and re-grant any outstanding Option under the Plan, or (iii) effect any
other action that is treated as a repricing under generally accepted accounting
principles unless, in each case, the stockholders of the Company have approved
such an action within twelve (12) months prior to such an event.

 

4.             SHARES SUBJECT TO THE PLAN.

 

(a)        Share Reserve. Subject to the provisions of Section 11
relating to adjustments upon changes in the Common Stock, the Common Stock that
may be issued pursuant to Options shall not exceed in the aggregate 435,000
shares of Common Stock, which number consists of (i) 33,333 shares of
Common stock initially reserved for issuance under the Plan plus (ii) 66,667
shares of Common stock approved by the Board in April 2003 and
subsequently approved by the Company’s stockholders plus (iii) 225,000
shares of Common Stock approved by the Board in April 2005 and
subsequently approved by the Company’s stockholders plus (iv) 110,000
shares of Common Stock approved by the Board in January 2007 and
subsequently approved by the Company’s stockholders.

 

(b)       Reversion of Shares to the Share Reserve. If any Option shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full, the shares of Common Stock not acquired under such Option
shall revert to and again become available for issuance under the Plan. If any
shares 

 

 

subject to an Option are
not delivered to an Optionholder because the Option is exercised through a
reduction of shares subject to the Option (
i.e ., “net exercised”), the number of shares that are not delivered
to the Optionholder shall not remain available for issuance under the Plan. If
any shares subject to an Option are not delivered to an Optionholder because
such shares are withheld in satisfaction of the withholding of taxes incurred
in connection with the exercise of an Option, the number of shares that are not
delivered to the Optionholder shall not remain available for subsequent
issuance under the Plan. If the exercise price of any Option is satisfied by
tendering shares of Common Stock held by the Optionholder (either by actual
delivery or attestation), then the number of shares so tendered shall not
remain available for subsequent issuance under the Plan.

 

(c)        Source of Shares. The shares of Common Stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.

 

5.             ELIGIBILITY.

 

The Options as set forth
in section 6 automatically shall be granted under the Plan to all Non-Employee
Directors.

 

6.             NON-DISCRETIONARY GRANTS.

 

(a)        Initial Grants. Without any further action of the Board, each person
who is elected or appointed for the first time to be a Non-Employee Director
after the IPO Date automatically shall, upon the date of his or her initial
election or appointment to be a Non-Employee Director by the Board or
stockholders of the Company, be granted an Initial Grant to purchase twenty
thousand (20,000) shares of Common Stock on the terms and conditions set forth
herein.

 

(b)        Annual Grants. Without any further action of the Board, a
Non-Employee Director shall be granted an Annual Grant as follows: On the day
following each Annual Meeting commencing with the Annual Meeting in 2001, each
person who is then a Non-Employee Director automatically shall be granted an
Annual Grant to purchase ten thousand (10,000) shares of Common Stock on the
terms and conditions set forth herein;
provided, however, that if the person has not been serving as a
Non-Employee Director for the entire period since the preceding Annual Meeting,
then the number of shares subject to the Annual Grant shall be reduced pro rata
for each full quarter prior to the date of grant during which such person did
not serve as a Non-Employee Director.

 

7.             OPTION PROVISIONS.

 

Each Option shall be in
such form and shall contain such terms and conditions as required by the Plan.
Each Option shall contain such additional terms and conditions, not
inconsistent with the Plan, as the Board shall deem appropriate. Each Option
shall include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:

 

(a)        Term. No Option shall be exercisable after the expiration
of ten (10) years from the date it was 

 

 

granted.

 

(b)        Exercise Price. The exercise price of each Option shall be one hundred
percent (100%) of the Fair Market Value of the stock subject to the Option on
the date the Option is granted. Notwithstanding the foregoing, an Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

 

(c)        Consideration. The purchase price of stock acquired pursuant to an
Option may be paid, to the extent permitted by applicable statutes and
regulations, in any combination of the following methods:

 

(i)         By
cash or check.

 

(ii)       Provided
that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal
, by delivery of already-owned shares of Common Stock either that the
Optionholder has held for more than six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes) or that the Optionholder did not acquire, directly or
indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market
Value on the date of exercise. “Delivery” for these purposes shall include
delivery to the Company of the Optionholder’s attestation of ownership of such
shares of Common Stock in a form approved by the Company. Notwithstanding the
foregoing, the Optionholder may not exercise the Option by tender to the
Company of Common Stock to the extent such tender would violate the provisions
of any law, regulation or agreement restricting the redemption of the Company’s
stock.

 

(iii)      Provided that at the time of exercise the Common Stock
is publicly traded and quoted regularly in
The Wall Street Journal , pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.

 

(iv)       By a “net exercise” arrangement pursuant to which the
Company will reduce the number of shares of Common Stock issued upon exercise
by the largest whole number of shares with a Fair Market Value that does not
exceed the aggregate exercise price;  provided, however,  that the Company shall accept a cash or other
payment from the Optionholder to the extent of any remaining balance of the
aggregate exercise price not satisfied by such holding back of whole shares;  provided,
further, however,  that shares
of Common Stock will no longer be outstanding under an Option and will not be
exercisable thereafter to the extent that (i) shares are used to pay the
exercise price pursuant to the “net exercise,” (ii) shares are delivered
to the Optionholder as a result of such exercise, and (iii) shares are
withheld to satisfy tax withholding obligations.

 

(d)        Transferability. An Option is transferable by will or by the laws of
descent and distribution. An Option also is transferable (i) by instrument
to an inter vivos or testamentary trust, in a form accepted by the Company, in
which the Option is to be passed to beneficiaries upon the death of the trustor
(settlor) and (ii) by gift, in a form accepted by the Company, to a member
of the “immediate family” of the Optionholder as that term is defined in 17
C.F.R. 240.16a-1(e). An Option shall be exercisable during the lifetime of the
Optionholder only by the Optionholder and a permitted transferee as provided
herein. However, the Optionholder may, by delivering 

 

 

written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionholder, shall thereafter be entitled to
exercise the Option.

 

(e)                        Exercise Schedule. The Option shall be exercisable as the
shares of Common Stock subject to the Option vest.

 

(f)                          Vesting Schedule.

 

(i)         Each
Option granted as an initial grant shall vest in accordance with the schedule
set forth below that results in a shorter period of full vesting:

 

(1)           1/36th of the shares of Common Stock subject to
the Option shall vest each month after the date of grant over a period of three
(3) years; or

 

(2)           the Option shall vest in equal monthly installments
after the date of grant over a period commencing on the date that the
Optionholder is appointed for the first time to be a Non-Employee Director by
the Board and ending on the date of the Annual Meeting at which the
Optionholder is first scheduled to be considered for election to be a
Non-Employee Director by the stockholders of the Company.

 

(ii)       Each Option granted as an annual grant before the
Annual Meeting in 2008 shall vest such that 1/36th of the shares of Common Stock subject to
such Option shall vest each month after the date of grant over a period of
three (3) years; and each Option granted as an annual grant on or after
the Annual Meeting in 2008 shall vest such that 1/12  th 
of the shares of Common Stock subject to such Option shall vest each
month after the date of grant over a period of one (1) year.

 

(g)        Termination of Continuous Service. In the event an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death or
Disability), the Optionholder may exercise his or her Option (to the extent
that the Optionholder was entitled to exercise it as of the date of
termination) but only within such period of time ending on the earlier of (i) the
date three (3) months following the termination of the Optionholder’s
Continuous Service, or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, after termination, the Optionholder does
not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate.

 

(h)        Extension of Termination Date. If the exercise of the Option following
the termination of the Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements
under the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in subsection 7(a) or (ii) the
expiration of a period of three (3) months after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.

 

(i)         Disability of Optionholder. In the event an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the 

 

 

Optionholder was entitled
to exercise it as of the date of termination), but only within such period of
time ending on the earlier of (i) the date twelve (12) months following
such termination or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

 

(j)         Death of Optionholder. In the event (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death or (ii) the
Optionholder dies within the three-month period after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the
Option may be exercised (to the extent the Optionholder was entitled to
exercise the Option as of the date of death) by the Optionholder’s estate, by a
person who acquired the right to exercise the Option by bequest or inheritance
or by a person designated to exercise the Option upon the Optionholder’s death,
but only within the period ending on the earlier of (1) the date eighteen
(18) months following the date of death or (2) the expiration of the term
of such Option as set forth in the Option Agreement. If, after death, the
Option is not exercised within the time specified herein, the Option shall
terminate.

 

8.             COVENANTS OF THE COMPANY.

 

(a)        Availability of Shares. During the terms of the Options, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Options.

 

(b)        Securities Law Compliance. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Options and to issue and sell shares of
Common Stock upon exercise of the Options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any stock issued or issuable pursuant to any such
Option. 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 Options unless and until such authority is
obtained.

 

9.             USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of
stock pursuant to Options shall constitute general funds of the Company.

 

10.          MISCELLANEOUS.

 

(a)        Stockholder Rights. No Optionholder shall be deemed to be
the holder of, or to have any of the rights of a holder with respect to, any
shares subject to such Option unless and until such Optionholder has satisfied
all requirements for exercise of the Option pursuant to its terms.

 

(b)        No Service Rights. Nothing in the Plan or any instrument
executed or Option granted pursuant thereto shall confer upon any Optionholder
any right to continue to serve the Company as a Non-Employee Director 

 

 

or shall affect the right
of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant’s agreement
with the Company or an Affiliate or

 

(iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

 

(c)        Investment Assurances. The Company may require an
Optionholder, as a condition of exercising or acquiring stock under any Option,
(i) to give written assurances satisfactory to the Company as to the
Optionholder’s knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option; and (ii) to
give written assurances satisfactory to the Company stating that the
Optionholder is acquiring the stock subject to the Option for the Optionholder’s
own account and not with any present intention of selling or otherwise
distributing the stock. The foregoing requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (iii) the issuance
of the shares upon the exercise or acquisition of stock under the Option has
been registered under a then currently effective registration statement under
the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.

 

(d)        Withholding Obligations. The Optionholder may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in addition
to the Company’s right to withhold from any compensation paid to the
Optionholder by the Company) or by a combination of such means:  (i) tendering
a cash payment; (ii) authorizing the Company to withhold shares from the
shares of the Common Stock otherwise issuable to the Optionholder as a result
of the exercise or acquisition of stock under the Option, provided, however,
that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the
Company owned and unencumbered shares of the Common Stock.

 

11.          ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a)        Capitalization Adjustments. If any change is made in the stock
subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately adjusted
in the class(es) and maximum number of securities subject both to the Plan
pursuant to subsection 4(a) and to the nondiscretionary Options specified
in Section 5, and the outstanding Options will be appropriately adjusted
in the class(es) and number of securities and price per share of stock subject
to such outstanding Options. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction “without
receipt of consideration” by the Company.)

 

 

(b)        Corporate Transaction. In the event of (i) a sale, lease
or other disposition of all or substantially all of the securities or assets of
the Company, (ii) a merger or consolidation in which the Company is not
the surviving corporation or (iii) 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 or acquiring corporation may assume any Options
outstanding under the Plan or may substitute similar Options (including an
option to acquire the same consideration paid to the stockholders in the
transaction described in this subsection 11(b)) for those outstanding under the
Plan. In the event no surviving corporation or acquiring corporation assumes
such Options or substitutes similar Options for those outstanding under the
Plan, then with respect to Options held by Optionholders who are in Continuous Service
immediately prior to such an event, the vesting of such Options (and the time
during which such Options may be exercised) shall be accelerated in full, and
the Options shall terminate if not exercised at or prior to such event. With
respect to any other Options outstanding under the Plan, such Options shall
terminate if not exercised prior to such event.

 

(c)        Change in Control. 
Upon a Change in Control, all Options held by each Optionholder whose
Continuous Service has not terminated immediately prior to the Change in
Control shall become fully vested and exercisable immediately prior to the
effectiveness of such Change in Control.

 

12.          AMENDMENT OF THE PLAN AND OPTIONS.

 

(a)        Amendment of Plan. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11
relating to adjustments upon changes in stock, no amendment shall be effective
unless approved by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy the requirements of Rule 16b-3 or any
Nasdaq or securities exchange listing requirements.

 

(b)        Stockholder Approval. The Board may, in its sole discretion,
submit any other amendment to the Plan for stockholder approval.

 

(c)        No Impairment of Rights. Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

 

(d)        Amendment of Options. The Board at any time, and from time to
time, may amend the terms of any one or more Options; provided, however, that
the rights under any Option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the Optionholder and (ii) the Optionholder
consents in writing.

 

13.          TERMINATION OR SUSPENSION OF THE PLAN.

 

(a)        Plan Term. The Board may suspend or terminate the Plan at any
time. No Options may be granted under the Plan while the Plan is suspended or
after it is terminated.

 

(b)        No Impairment of Rights. Suspension or termination of the Plan
shall not impair rights and 

 

 

obligations under any
Option granted while the Plan is in effect except with the written consent of
the Optionholder.

 

14.          EFFECTIVE DATE OF PLAN.

 

The Plan shall become
effective on the IPO Date, but no Option shall be exercised unless and until
the Plan has been approved by the stockholders of the Company, which approval
shall be within twelve (12) months before or after the date the Plan is adopted
by the Board.

 

15.          CHOICE OF LAW.

 

All questions concerning
the construction, validity and interpretation of this Plan shall be governed by
the law of the State of Delaware, without regard to such state’s conflict of
laws rules.Exhibit 10.27

 

2008
Base Salaries for Named Executive Officers

 

	
  Name and Title

  	
   

  	
  Salary

  	
   

  
	
  James M. Gower

  	
   

  	
  $

  	
  600,000

  	
   

  
	
  Chief Executive
  Officer

  	
   

  	
   

  	
   

  
	
  Ryan D. Maynard

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Chief Financial
  Officer and Vice President

  	
   

  	
   

  	
   

  
	
  Donald G. Payan

  	
   

  	
  $

  	
  483,000

  	
   

  
	
  Executive Vice
  President, President of Discovery and Research

  	
   

  	
   

  	
   

  
	
  Elliot B.
  Grossbard

  	
   

  	
  $

  	
  450,200

  	
   

  
	
  Executive Vice
  President, Chief Medical Officer

  	
   

  	
   

  	
   

  
	
  Raul R.
  Rodriguez

  	
   

  	
  $

  	
  430,000

  	
   

  
	
  Executive Vice
  President, Chief Operating Officer

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