Document:

Exhibit
10.35

 

RIGEL
PHARMACEUTICALS, INC.

 

CHANGE OF
CONTROL SEVERANCE PLAN

 

Section 1.              INTRODUCTION.

 

The Rigel Pharmaceuticals, Inc. Change of Control Severance Plan (the
“Plan”) is 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.

 

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 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 and such release must
become effective in accordance with its terms (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

 

(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”).

 

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(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.

 

(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;

 

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(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 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 

 

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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 in
either case 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);

 

(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

 

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(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
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 

 

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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 unless the Eligible Employee elects
in writing a different order (provided,
however, that such election shall be subject to Company approval if
made on or after the date on which the event that triggers the Payment occurs):
(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 unless the Eligible Employee elects in
writing a different order for cancellation.

 

(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 

 

6

 

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
the termination date, and (2) the date of the Eligible Employee’s death
(such earliest date, the “Delayed
Initial Payment Date”), the Company (or the successor entity
thereto, as applicable) shall (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).

 

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,

 

7

 

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.

 

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, 

 

8

 

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.

 

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:

 

9

 

	
   

  	
  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.

 

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:

 

10

 

	
   

  	
  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

 

(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.

 

11

 

(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:

 

 

	
   

  	
  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.

 

12

 

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 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.

 

13

 

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 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.

 

14

 

(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  December 17,
2007, Rigel Pharmaceuticals, Inc.  has
caused its duly authorized officer to execute the same this 17th day of December,
2007.

 

RIGEL
PHARMACEUTICALS, INC.

 

 

	
   

  	
  By:

  	
  /s/ Dolly A. Vance

  	
   

  
	
   

  	
    Dolly A. Vance

  
	
   

  	
    Senior
  Vice President, General Counsel

    and 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:
                    
      , 200   

  
	
   

  	
   

  
	
   

  	
  Rigel Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

3Exhibit 10.1

 

1999
EQUITY PLAN

FOR EMPLOYEES OF

ALLIANCE IMAGING, INC. AND SUBSIDIARIES

 

(As
amended and restated December 14, 2007)

 

1.        PURPOSE OF PLAN

 

The 1999 Equity Plan, as
amended and restated, for Employees of Alliance Imaging, Inc. and
Subsidiaries (the “Plan”) is designed:

 

(a)           to
promote the long term financial interests and growth of Alliance Imaging, Inc.,
a Delaware corporation (the “Company”) and its Subsidiaries by attracting and
retaining management and personnel with the training, experience and ability to
enable them to make a substantial contribution to the success of the Company’s
business;

 

(b)           to
motivate personnel by means of growth-related incentives to achieve long range
goals; and

 

(c)           to
further the identity of interests of participants with those of the
stockholders of the Company through opportunities for stock or stock-based
ownership in the Company.

 

2.        DEFINITIONS

 

As used in the Plan, the
following words shall have the following meanings:

 

(a)           “Award”
means any right granted under the Plan, including a Stock Option award, a
Restricted Stock award, a Restricted Stock Unit award, a Stock Bonus award and
a Performance-Based Award.

 

(b)           “Award
Agreement” means an agreement between the Company and a Participant that sets
forth the terms, conditions and limitations applicable to an Award.

 

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

 

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

 

(e)           “Committee”
means the Compensation Committee of the Board of Directors or another committee
of the Board of Directors designated by the Board of Directors to administer
the Plan.

 

(f)            “Common
Stock” or “Share” means $.01 par value common stock of the Company.

 

(g)           “Covered
Employee” means an Employee who is, or could be, a “covered employee” within
the meaning of Section 162(m) of the Code.

 

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

 

 

(i)            “Employee”
means a person, including an officer, in the regular full-time employment of
the Company or one of its Subsidiaries.

 

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

 

(k)           “Fair
Market Value” means such value of a Share as reported for stock exchange
transactions and/or determined in accordance with any applicable resolutions or
regulations of the Committee in effect at the relevant time.

 

(l)            “Independent
Director” means a Director who is not an Employee.

 

(m)          “Participant”
means an Employee, Director, consultant or other person having a unique
relationship with the Company or one of its Subsidiaries, to whom one or more Awards
have been made and such Awards have not all been forfeited or terminated under
the Plan.

 

(n)           “Performance-Based Award” means an Award granted to selected
Covered Employees pursuant to Sections 6 and 7, but which is subject to the
terms and conditions set forth in Section 8.  All Performance-Based Awards are intended to
qualify as Qualified Performance-Based Compensation.

 

(o)           “Performance Criteria” means the criteria that the Committee
selects for purposes of establishing the Performance Goal or Performance Goals
for a Participant for a Performance Period. 
The Performance Criteria that will be used to establish Performance
Goals are limited to the following: net earnings (either before or after
interest, taxes, depreciation and amortization), economic value-added (as
determined by the Committee), sales or revenue, net income (either before or
after taxes), operating earnings, cash flow (including, but not limited to,
operating cash flow and free cash flow), cash flow return on capital, return on
net assets, return on stockholders’ equity, return on assets, return on
capital, stockholder returns, return on sales, gross or net profit margin,
productivity, expense, margins, operating efficiency, customer satisfaction,
working capital, earnings per share, price per share of Stock, and market
share, any of which may be measured either in absolute terms or as compared to
any incremental increase or as compared to results of a peer group.  The Committee shall, within the time
prescribed by Section 162(m) of the Code, define in an objective
fashion the manner of calculating the Performance Criteria it selects to use
for such Performance Period for such Participant.

 

(p)           “Performance
Goals” means, for a Performance Period, the goals established in writing by the
Committee for the Performance Period based upon the Performance Criteria.  Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual.  The Committee,
in its discretion, may, within the time prescribed by Section 162(m) of
the Code, adjust or modify the calculation of Performance Goals for such Performance
Period in order to prevent the dilution or enlargement of the rights of
Participants (a) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event, or development, or (b) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

 

2

 

(q)           “Performance
Period” means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment
of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to, and the payment of, a Performance-Based
Award.

 

(r)            “Qualified
Performance-Based Compensation” means any compensation that is intended to
qualify as “qualified performance-based compensation” as described in Section 162(m)(4)(C) of
the Code.

 

(s)           “Restricted
Stock” means restricted shares of Common Stock granted pursuant to Section 6
of the Plan.

 

(t)            “Restricted
Stock Unit” means a right to receive a specified number of shares of Common Stock
pursuant to

Section 7(a).

 

(u)           “Securities
Act” means the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.

 

(v)           “Stock
Bonus” means the right to receive a bonus of Common Stock for past services
pursuant to Section 7(b) of the Plan.

 

(w)          “Stock
Options” means the “Non-Qualified Stock Options” described in Section 5.

 

(x)            “Subsidiary”
means any corporation (or other entity) other than the Company in an unbroken
chain of entities beginning with the Company if each of the entities, or group
of commonly controlled entities, other than the last entity in the unbroken
chain, then owns stock (or other equity interest) possessing 50% or more of the
total combined voting power of all classes of equity in one of the other entities
in such chain.

 

3.        ADMINISTRATION OF PLAN

 

(a)           The
Plan shall be administered by the Committee. 
The members of the Committee shall consist solely of individuals who are
both “non-employee directors” as defined by Rule 16b-3 promulgated under
the Exchange Act and “outside directors” for purposes of Section 162(m) of
the Code, to the extent that the Company and its Employees are subject to Section 16
of the Exchange Act or Section 162(m) of the Code.  The Committee may adopt its own rules of
procedure, and the action of a majority of the Committee, taken at a meeting or
taken without a meeting by a writing signed by such majority, shall constitute
action by the Committee.  The Committee
shall have the power, authority and the discretion to administer, construe and
interpret the Plan and Award Agreements, to make rules for carrying out
the Plan and to make changes in such rules. 
Any such interpretations, rules, and administration shall be made and
done in good faith and consistent with the basic purposes of the Plan.  Notwithstanding the foregoing, the full Board
of Directors, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to all Awards granted to
Independent Directors and for purposes of such Awards the term “Committee” as
used in this Plan shall be deemed to refer to the Board of Directors.

 

3

 

(b)           The
Committee may delegate to the Chief Executive Officer and to other senior
officers of the Company its duties under the Plan subject to such conditions
and limitations as the Committee shall prescribe except that only the Committee
may designate and make Awards to Participants who are subject to Section 16
of the Exchange Act or Section 162(m) of the Code and only the Board
of Directors may designate and make Awards to Participants who are Independent
Directors.

 

(c)           The
Committee may employ attorneys, consultants, accountants, appraisers, brokers
or other persons.  The Committee, the
Company, and the officers and Directors of the Company shall be entitled to
rely upon the advice, opinions or valuations of any such persons.  Subject to the terms and conditions of the Plan
and any applicable Award Agreement, all actions taken and all interpretations
and determinations made by the Committee in good faith shall be final and
binding upon all Participants, the Company and all other interested persons.  No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Awards, and all members of the Committee
shall be fully protected by the Company with respect to any such action,
determination or interpretation.

 

4.        ELIGIBILITY

 

The Committee may from time
to time make Awards under the Plan to such Employees, Directors, consultants,
or other persons having a unique relationship with the Company or any of its
Subsidiaries, and in such form and having such terms, conditions and
limitations as the Committee may determine.  Awards may be granted singly, in combination
or in tandem.  The terms, conditions and
limitations of each Award under the Plan shall be set forth in an Award
Agreement, in a form approved by the Committee, consistent, however, with the
terms of the Plan; provided, however, such Award Agreement shall contain
provisions dealing with the treatment of Awards in the event of the
termination, death or disability of the Participant, and may also include
provisions concerning the treatment of Awards in the event of a change in
control of the Company.

 

5.        STOCK
OPTION AWARDS

 

From time to time, the
Committee will grant options to purchase Common Stock which are not “incentive
stock options,” within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended.  At the time of
grant, the Committee shall determine, and shall have specified in the Stock
Option Award Agreement or other Plan rules, the option exercise period, the
option exercise price, and such other conditions or restrictions on the grant or
exercise of the Stock Option as the Committee deems appropriate.  In addition to other restrictions contained
in the Plan and Stock Option Award Agreement, Stock Options granted under this Section 5
(i) may not be exercised more than 10 years after the date granted and (ii) may
not have an option exercise price less than 85% of the Fair Market Value of
Common Stock on the date the option is granted. 
Payment of the option exercise price shall be made in cash or, with the
consent of the Committee, in shares of Common Stock (including shares acquired
by contemporaneous exercise of other Stock Options), or a combination thereof,
in accordance with the terms of the Plan, the Stock Option Award Agreement and
any applicable guidelines of the Committee in effect at the time.

 

4

 

6.        RESTRICTED
STOCK AWARDS

 

(a)           The
Committee is authorized to make Awards of Restricted Stock to any Participant
selected by the Committee in such amounts and subject to such terms and conditions
as determined by the Committee.  All
Awards of Restricted Stock shall be evidenced by an Award Agreement.

 

(b)           Restricted
Stock shall be subject to such restrictions on transferability and other
restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive
dividends on the Restricted Stock). 
These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the
Committee determines at the time of the grant of the Award or thereafter.

 

(c)           The
Committee may establish the exercise or purchase price, if any, of any
Restricted Stock; provided, however, that such price shall not be less than the
par value of a Share on the date of grant, unless otherwise permitted by
applicable state law.  The Committee may
determine that Participants in the Plan may be awarded Restricted Stock in
consideration for past services actually rendered to the Company for its
benefit.

 

(d)           Except as otherwise determined by the Committee at the time
of the grant of the Award or thereafter, upon termination of employment or
service during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited; provided, however, that the Committee may (i) provide in
any Restricted Stock Award Agreement that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and (ii) in other cases
waive in whole or in part restrictions or forfeiture conditions relating to
Restricted Stock.

 

(e)           Restricted
Stock granted pursuant to the Plan may be evidenced in such manner as the
Committee shall determine.  If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

 

7.        OTHER TYPES
OF AWARDS

 

(a)           The
Committee is authorized to make Awards of Restricted Stock Units to any
Participant selected by the Committee in such amounts and subject to such terms
and conditions as determined by the Committee. 
At the time of grant, the Committee shall specify the date or dates on
which the Restricted Stock Units shall become fully vested and nonforfeitable,
and may specify such conditions to vesting as it deems appropriate.  At the time of grant, the Committee shall
specify the maturity date applicable to each grant of Restricted Stock Units
which shall be no earlier than the vesting date or dates of the Award and may
be determined at the election of the grantee. 
On the maturity date, the Company shall transfer to the Participant one
unrestricted, fully transferable Share for each Restricted Stock Unit scheduled
to be paid out on such date and not previously forfeited.

 

5

 

(b)           The
Committee is authorized to make Awards of Stock Bonuses to any Participant
selected by the Committee in such amounts and subject to such terms and
conditions as determined by the Committee. 
All Awards of Stock Bonuses shall be evidenced by an Award Agreement.

 

(c)           Except
as otherwise provided herein, the term of any Award of a Restricted Stock Unit
or Stock Bonus shall be set by the Committee in its discretion.

 

(d)           The
Committee may establish the exercise or purchase price, if any, of any Restricted
Stock Unit or Stock Bonus Award; provided, however, that such price shall not
be less than the par value of a Share on the date of grant, unless otherwise
permitted by applicable state law.  The
Committee may determine that Participants in the Plan may be awarded a Restricted
Stock Unit or Stock Bonus in consideration for past services actually rendered
to the Company for its benefit.

 

(e)           An
Award of a Restricted Stock Unit or Stock Bonus shall only be exercisable or
payable while the Participant is an Employee, Director, consultant or person
having a unique relationship with the Company, as applicable; provided, however, that the Committee
in its sole and absolute discretion may provide that an Award of a Restricted
Stock Unit or Stock Bonus may be exercised or paid subsequent to a termination
of employment or service, as applicable, or following a change in control of
the Company, or because of the Participant’s retirement, death or disability,
or otherwise.

 

(f)            All
Awards under this Section 7 shall be subject to such additional terms and
conditions as determined by the Committee and shall be evidenced by an Award
Agreement.

 

8.        PERFORMANCE-BASED AWARDS

 

(a)           Purpose.  The purpose of this Section 8 is to
provide the Committee the ability to qualify Awards other than Stock Options
and that are granted pursuant to Sections 6 and 7 as Qualified
Performance-Based Compensation.  If the
Committee, in its discretion, decides to grant a Performance-Based Award to a
Covered Employee, the provisions of this Section 8 shall control over any
contrary provision contained in Sections 6 and 7; provided, however, that the Committee may in its discretion
grant Awards to Covered Employees that are based on Performance Criteria or
Performance Goals but that do not satisfy the requirements of this Section 8.

 

(b)           Applicability.  This Section 8 shall apply only to those
Covered Employees selected by the Committee to receive Performance-Based
Awards.  The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner
entitle the Participant to receive an Award for the period.  Moreover, designation of a Covered Employee
as a Participant for a particular Performance Period shall not require
designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation of one Covered Employee as a Participant
shall not require designation of any other Covered Employees as a Participant
in such period or in any other period.

 

(c)           Procedures with Respect to Performance-Based Awards.  To the extent
necessary to comply with the Qualified Performance-Based Compensation
requirements of 

 

6

 

Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Sections 6 and 7 which may be
granted to one or more Covered Employees, no later than 90 days following the
commencement of any fiscal year in question or any other designated fiscal
period or period of service (or such other time as may be required or permitted
by Section 162(m) of the Code), the Committee shall, in writing, (a) designate
one or more Covered Employees, (b) select the Performance Criteria
applicable to the Performance Period, (c) establish the Performance Goals,
and amounts of such Awards, as applicable, which may be earned for such
Performance Period, and (d) specify the relationship between Performance
Criteria and the Performance Goals and the amounts of such Awards, as applicable,
to be earned by each Covered Employee for such Performance Period.  Following the completion of each Performance
Period, the Committee shall certify in writing whether the applicable
Performance Goals have been achieved for such Performance Period.  In determining the amount earned by a Covered
Employee, the Committee shall have the right to reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.

 

(d)           Payment of Performance-Based Awards.  Unless otherwise
provided in the applicable Award Agreement, a Participant must be employed by
the Company or a Subsidiary on the day a Performance-Based Award for such
Performance Period is paid to the Participant. 
Furthermore, a Participant shall be eligible to receive payment pursuant
to a Performance-Based Award for a Performance Period only if the Performance
Goals for such period are achieved.

 

(e)           Additional
Limitations.  Notwithstanding any other
provision of the Plan, any Award which is granted to a Covered Employee and is
intended to constitute Qualified Performance-Based Compensation shall be
subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as qualified performance-based compensation as described in Section 162(m)(4)(C) of
the Code, and the Plan shall be deemed amended to the extent necessary to
conform to such requirements.

 

9.        LIMITATIONS
AND CONDITIONS

 

(a)           Subject
to Section 11, the number of Shares available for Awards under the Plan
shall be 8,025,000 shares of the authorized Common Stock as of the effective
date of the Plan.  Unless restricted by
applicable law, Shares related to Awards that are forfeited, terminated,
canceled or expire unexercised, shall immediately become available for Awards.

 

(b)           No
Participant shall be granted, in any calendar year, Awards to purchase more
than 2,000,000 Shares.  The foregoing
limitation shall be adjusted proportionately in connection with any change in
the Company’s capitalization as described in Section 11 and 12.  For purposes of this Section 9(b), if a
Stock Option is canceled in the same calendar year it was granted (other than
in connection with a transaction described in Section 11 and 12), the
canceled Stock Option will be counted against the limit set forth in this Section 9(b).  For this purpose, if the exercise price of a
Stock Option is reduced, the transaction shall be treated as a cancellation of
the Stock Option and the grant of a new Stock Option.

 

7

 

(c)           No
Awards shall be made under the Plan beyond ten years after the effective date
of the Plan, as amended and restated on December 14, 2007, but the terms
of Awards made on or before the expiration thereof may extend beyond such
expiration.  At the time an Award is made
or amended or the terms or conditions of an Award are changed, the Committee
may provide for limitations or conditions on such Award.

 

(d)           Nothing
contained herein shall affect the right of the Company or any Subsidiary to
terminate any Participant’s employment at any time or for any reason.

 

(e)           Except
as otherwise prescribed by the Committee, the amounts of the Awards for any
employee of a Subsidiary, along with interest, dividends, and other expenses
accrued on deferred Awards shall be charged to the Participant’s employer
during the period for which the Award is made. 
If the Participant is employed by more than one Subsidiary or by a
combination of the Company and a Subsidiary during the period for which the Award
is made, the Participant’s Award and related expenses will be allocated between
the companies employing the Participant in a manner prescribed by the
Committee.

 

(f)            Other
than as specifically provided by will or by the applicable laws of descent and
distribution or the terms of any applicable trust, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to do so shall be
void.  No such benefit shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, engagements, or torts of the Participant.

 

(g)           Participants
shall not be, and shall not have any of the rights or privileges of,
stockholders of the Company in respect of any Shares purchasable or otherwise
acquired in connection with any Award unless and until certificates
representing any such Shares have been issued by the Company to such
Participants; provided, however, that no delay in the issuance of certificates
due to be issued hereunder representing any such Shares shall operate to impair
or prejudice any Participant’s rights to participate in a corporate transaction
providing for the disposition of such Shares.

 

(h)           No
election as to benefits or exercise of Stock Options, Restricted Stock, Restricted Stock Units,
Stock Bonuses, Performance-Based Awards or other rights may be made
during a Participant’s lifetime by anyone other than the Participant except by
a legal representative appointed for or by the Participant.

 

(i)            Absent
express provisions to the contrary, no Award under the Plan shall be deemed “compensation”
for purposes of computing benefits or contributions under any retirement plan
of the Company or its Subsidiaries and shall not affect any benefits under any
other benefit plan of any kind or subsequently in effect under which the
availability or amount of benefits is related to level of compensation.  The Plan is not a “Pension Plan” or “Welfare
Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

(j)            Unless
the Committee determines otherwise, no benefit or promise under the Plan shall
be secured by any specific assets of the Company or any of its Subsidiaries,
nor shall any 

 

8

 

assets of
the Company or any of its Subsidiaries be designated as attributable or
allocated to the satisfaction of the Company’s obligations under the Plan.

 

10.      TRANSFERS AND LEAVES OF ABSENCE

 

For purposes of the Plan,
unless the Committee determines otherwise: (a) a transfer of a Participant’s
employment without an intervening period of separation among the Company and
any Subsidiary shall not be deemed a termination of employment, and (b) a
Participant who is granted in writing a leave of absence shall be deemed to
have remained in the employ of the Company or a Subsidiary during such leave of
absence.

 

11.      ADJUSTMENTS

 

In the event of any change
in the outstanding Common Stock (including an exchange for cash) by reason of a
stock split, reverse stock split, spin-off, stock dividend, stock combination
or reclassification, recapitalization, reorganization, consolidation, merger,
change of control, or similar event, the Committee shall adjust appropriately
the number and kind of Shares subject to the Plan and available for or covered
by Awards and Share prices related to outstanding Awards, and make such other
revisions to outstanding Awards as it deems are equitably required.  Any adjustment affecting an Award intended as
Qualified Performance-Based Compensation shall be made consistent with the
requirements of Section 162(m) of the Code.

 

12.      MERGER,
CONSOLIDATION, EXCHANGE, ACQUISITION, DISTRIBUTION, LIQUIDATION OR DISSOLUTION

 

In its sole
discretion, and on such terms and conditions as it deems appropriate,
coincident with or after the grant of any Award, the Committee may provide that
such Award cannot be exercised after the consummation of the merger or
consolidation of the Company into another corporation, the exchange of all or
substantially all of the assets of the Company for the securities of another
corporation, the acquisition by another corporation of 80% or more of the
Company’s then outstanding shares of voting stock or the recapitalization,
reclassification, liquidation or dissolution of the Company, or other
adjustment or event which results in shares of Common Stock being exchanged for
or converted into cash, securities or other property, and if the Committee so
provides, it shall, on such terms and conditions as it deems appropriate in its
absolute discretion, also provide, either by the terms of such Award or by a
resolution adopted prior to the consummation of such merger, consolidation,
exchange, acquisition, recapitalization, reclassification, liquidation or
dissolution, that, for some period of time prior to the consummation of such
transaction or event, such Award shall be exercisable as to all shares subject
thereto, notwithstanding anything to the contrary herein (but subject to the
provisions of Section 9(c)) and that, upon the consummation of such event,
such Award shall terminate and be of no further force or effect; provided,
however, that the Committee may also provide, in its absolute discretion, that
even if the Award shall remain exercisable after any such event, from and after
such event, any such Award shall be exercisable only for the kind and amount of
cash, securities and/or other property, or the cash equivalent thereof (net of
any applicable exercise price), receivable as a result of such event by the holder
of a number of shares of stock for which such Award could have been exercised
immediately prior to such event.

 

9

 

In the event of a “spin-off” or other substantial
distribution of assets of the Company which has a material diminutive effect
upon the Fair Market Value of the Company’s Common Stock, the Committee shall
in its discretion make an appropriate and equitable adjustment to any Award
exercise price to reflect such diminution.

 

13.      AMENDMENT AND TERMINATION

 

The Committee shall have the
authority to make such amendments to any terms and conditions applicable to
outstanding Awards as are consistent with the Plan; provided, that, except for
adjustments under Section 11 or 12 hereof, no such action shall modify
such Award in a manner adverse to the Participant without the Participant’s
consent except as such modification is provided for or contemplated in the
terms of the Award.  The Board of
Directors may amend, suspend or terminate the Plan.

 

14.      WITHHOLDING
TAXES

 

The
Company shall have the right to deduct from any cash payment made under the
Plan any federal, state or local income or other taxes required by law to be
withheld with respect to such payment.  It
shall be a condition to the obligation of the Company to deliver Shares upon
the exercise of an Award that the Participant pay to the Company such amount as
may be requested by the Company for the purpose of satisfying any liability for
such withholding taxes.  Any Award
Agreement may provide that the Participant may elect, in accordance with any
conditions set forth in such Award Agreement, to pay a portion or all of such
withholding taxes in shares of Common Stock (including shares acquired by
contemporaneous exercise of other Stock Options).

 

15.      REGISTRATION

 

(a)           If
the Company shall have filed a registration statement pursuant to the
requirements of Section 12 of the Exchange Act, or engaged in a Public
Offering (as defined below), (i) the Company shall use reasonable efforts
to register the Awards and the Common Stock to be acquired on exercise of the
Awards on a Form S-8 Registration Statement or any successor to Form S-8
to the extent that such registration is then available with respect to such Awards
and Common Stock and (ii) the Company will use reasonable efforts to file
the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission (“SEC”) thereunder, to the extent required from time to
time to enable the Participant to sell shares of Common Stock without
registration under the Securities Act within the limitations of the exemptions
provided under any applicable rule or regulation of the SEC.  Notwithstanding anything contained in this Section 15,
the Company may deregister under Section 12 of the Exchange Act if it is
then permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder.  Nothing in this Section 15
shall be deemed to limit in any manner otherwise applicable restrictions on
sales of Common Stock.

 

(b)           As
used herein the term “Public Offering” shall mean the sale of shares of Common
Stock to the public pursuant to a registration statement under the Securities
Act which 

 

10

 

has been
declared effective by the SEC (other than a registration statement on Form S-8
or any other similar form) which results in an active trading market in the
Common Stock.

 

16.      EFFECTIVE
DATE AND TERMINATION DATES

 

The
Plan as amended and restated by the Board of Directors shall be effective on
and as of December 14, 2007 and shall terminate on December 13, 2017,
subject to earlier termination by the Board of Directors pursuant to Section 13.  The Plan will be submitted for the approval
of the Company’s stockholders within twelve (12) months after the date of the
Board’s initial adoption of the Plan. 
Awards may be granted prior to such stockholder approval, provided that
Awards granted to Independent Directors shall not be exercisable, shall not
vest and the restrictions thereon shall not lapse prior to the time when the
Plan is approved by the stockholders, and provided further that if such
approval has not been obtained at the end of said twelve month period, all
Awards previously granted to Independent Directors under the Plan shall
thereupon be canceled and become null and void.

 

17.      SECTION 409A

 

To the extent that the Committee
determines that any Award granted under the Plan is subject to Section 409A
of the Code, the Award Agreement evidencing such Award shall incorporate the
terms and conditions required by Section 409A of the Code.  To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the effective date of the Plan. 
Notwithstanding any provision of the Plan to the contrary, in the event
that following the effective date of the Plan the Committee determines that any
Award may be subject to Section 409A of the Code and related Department of
Treasury guidance (including such Department of Treasury guidance as may be
issued after the effective date of the Plan), the Committee may adopt such
amendments to the Plan and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, that the Committee determines
are necessary or appropriate to (a) exempt the Award from Section 409A
of the Code and/or preserve the intended tax treatment of the benefits provided
with respect to the Award, or (b) comply with the requirements of Section 409A
of the Code and related Department of Treasury guidance.

 

*
* * * * * * * * *

 

I hereby certify that the
foregoing Plan was duly amended and restated by the Board of Directors of
Alliance Imaging, Inc. on December 14, 2007.  Executed on this           
day of                             ,
2007.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  By: Eli Glovinsky

  
	
   

  	
  Title: Executive Vice President, General Counsel &

  Secretary

  

 

11

 

I hereby certify that the
foregoing Plan, as amended and restated herein was approved by the stockholders
of Alliance Imaging, Inc. on                             ,
2008.  Executed on this           
day of                               ,
2008.

 

	
   

  	
   

  	
   

  
	
   

  	
  By: Eli Glovinsky

  
	
   

  	
  Title: Executive Vice President, General Counsel &

  Secretary

  

 

12

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