Document:

Exhibit 10.30

 

Exhibit 10.30

SOMAXON PHARMACEUTICALS, INC.

2005 EQUITY INCENTIVE AWARD PLAN

RESTRICTED STOCK AWARD GRANT NOTICE AND

RESTRICTED STOCK AWARD AGREEMENT

     Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant to its 2005
Equity Incentive Award Plan (the “Plan”), hereby grants to the individual listed below
(“Participant”), the right to purchase the number of shares of the Company’s Stock set forth below
(the “Shares”) at the purchase price set forth below. This Restricted Stock award is subject to
all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement
attached hereto as Exhibit A (the “Restricted Stock Agreement”) and the Plan, which are
incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Grant Notice and the Restricted Stock Agreement.

	 	 	 	 	 
	Participant:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Grant Date:	 	October 8, 2007
	 
	 	 	 	 
	Purchase Price per Share:	 	$0.0001 per share
	 
	 	 	 	 
	Total Number of Shares of Restricted Stock:

	 	 20,000	 	 
	 
	 	 	 	 
	Vesting Schedule:	 	Subject to Section 5.12 of the
Restricted Stock Agreement, 5,000
Shares shall vest upon the
acceptance of the NDA for
SILENORTM and 15,000
Shares shall vest upon the
approval of the NDA for
SILENORTM, subject to
Participant’s continued service
to the Company as an Employee,
Director or Consultant on each
such date.

     By his or her signature, Participant agrees to be bound by the terms and conditions of the
Plan, the Restricted Stock Agreement and this Grant Notice. Participant has reviewed the Restricted
Stock Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Grant Notice and fully understands all provisions of
this Grant Notice, the Restricted Stock Agreement and the Plan. Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the Administrator of
the Plan upon any questions arising under the Plan, this Grant Notice or the Restricted Stock
Agreement. If Participant is married, his or her spouse has signed the Consent of Spouse attached
to this Grant Notice as Exhibit B.

	 	 	 	 	 	 	 	 	 
	SOMAXON PHARMACEUTICALS, INC.	 	 	 	PARTICIPANT
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 
	 	 	 	 	 
	
Print Name:

	 	 	 	 	Print Name:	 
	 

	 	 
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	Address:

	 	3721 Valley Centre
Drive, Suite 500 

San Diego, CA 92130
	 	 	 	Address:	 	 
	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 

 

 

EXHIBIT A

TO RESTRICTED STOCK AWARD GRANT NOTICE

RESTRICTED STOCK AWARD AGREEMENT

     Pursuant to the Restricted Stock Award Grant Notice (“Grant Notice”) to which this Restricted
Stock Award Agreement (this “Agreement”) is attached, Somaxon Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), has granted to Participant the right to purchase the number of shares
of Restricted Stock under the Company’s 2005 Equity Incentive Award Plan (the “Plan”) indicated in
the Grant Notice.

ARTICLE I

GENERAL

     1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the
meanings specified in the Plan and the Grant Notice.

     1.2 Incorporation of Terms of Plan. The Shares are subject to the terms and
conditions of the Plan which are incorporated herein by reference.

ARTICLE II

GRANT OF RESTRICTED STOCK

     2.1 Grant of Restricted Stock. In consideration of Participant’s past and/or
continued employment with or service to the Company or a Parent or Subsidiary and for other good
and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the
"Grant Date”), the Company irrevocably grants to Participant the right to purchase the number of
shares of Stock set forth in the Grant Notice (the “Shares”), upon the terms and conditions set
forth in the Plan and this Agreement.

     2.2 Purchase Price. The purchase price per Share (the “Purchase Price”) shall be as
set forth in the Grant Notice, without commission or other charge. The payment of the Purchase
Price shall be paid by cash or check.

     2.3 Issuance of Shares. The issuance of the Shares under this Agreement shall occur
at the principal office of the Company, upon payment of the Purchase Price by Participant,
simultaneously with the execution of this Agreement by the parties (the “Issuance Date”). Subject
to the provisions of Article IV below, on the Issuance Date, the Company shall issue the Shares
(which shall be issued in Participant’s name).

     2.4 Conditions to Issuance of Stock Certificates. The Shares, or any portion thereof,
may be either previously authorized but unissued shares or issued shares which have then been
reacquired by the Company. Such Shares shall be fully paid and nonassessable. The Company shall
not be required to issue or deliver any Shares prior to fulfillment of all of the following
conditions:

          (a) The admission of such Shares to listing on all stock exchanges on which such Stock is then
listed; and

A-1

 

          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem
necessary or advisable; and

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable; and

          (d) The receipt by the Company of full payment for such shares, including payment of all
amounts which, under federal, state, local or foreign tax law, the Company (or other employer
corporation) is required to withhold upon issuance of such Shares; and

          (e) The lapse of such reasonable period of time following the Issuance Date as the
Administrator may from time to time establish for reasons of administrative convenience.

     2.5 Rights as Stockholder.

          (a) Except as otherwise provided herein, upon delivery of the Shares to the escrow holder
pursuant to Article IV, Participant shall have all the rights of a stockholder with respect to said
Shares, subject to the restrictions herein, including the right to vote the Shares and to receive
all dividends or other distributions paid or made with respect to the Shares.

          (b) Any and all cash dividends paid on the Shares (or other securities at the time held in
escrow pursuant to Article IV and the Joint Escrow Instructions) and any and all Shares, capital
stock or other securities or other property received by or distributed to Participant with respect
to, in exchange for or in substitution of the Shares as a result of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification, or similar change in
the capital structure of the Company shall also be subject to the Company’s Repurchase Option (as
defined in Section 3.1 below) and the restrictions on transfer in Section 3.4 below until such
restrictions on the underlying Shares lapse or are removed pursuant to this Agreement (or, if such
Shares are no longer outstanding, until such time as such Shares would have been released from the
Company’s Repurchase Option pursuant to this Agreement). In addition, except as set forth in
Section 5.12, in the event of any merger, consolidation, share exchange or reorganization affecting
the Shares, including, without limitation, a Change in Control, then any new, substituted or
additional securities or other property (including money paid other than as a regular cash
dividend) that is by reason of any such transaction received with respect to, in exchange for or in
substitution of the Shares shall also be subject to the Company’s Repurchase Option (as defined in
Section 3.1 below) and the restrictions on transfer in Section 3.4 below until such restrictions on
the underlying Shares lapse or are removed pursuant to this Agreement (or, if such Shares are no
longer outstanding, until such time as such Shares would have been released from the Company’s
Repurchase Option pursuant to this Agreement), and any such assets or other securities received by
or distributed to Participant with respect to, in exchange for or in substitution of any Unreleased
Shares shall be immediately delivered to the Company to be held in escrow pursuant to Article IV.

     2.6 Consideration to the Company. In consideration of the issuance of the Shares by
the Company, Participant agrees to render faithful and efficient services to the Company or any
Parent or Subsidiary. Nothing in the Plan or this Agreement shall confer upon Participant any
right to (a) continue in the employ of the Company or any Parent or Subsidiary or shall interfere
with or restrict in any way the rights of the Company and its Parents and Subsidiaries, which are
hereby expressly reserved, to discharge Participant, if Participant is an Employee, or (b) continue
to provide services to the Company or any Parent or Subsidiary or shall interfere with or restrict
in any way the rights of the Company or its Parents

A-2

 

and Subsidiaries, which are hereby expressly reserved, to terminate the services of
Participant, if Participant is a consultant, at any time for any reason whatsoever, with or without
Cause, except to the extent expressly provided otherwise in a written agreement between the
Company, a Parent or a Subsidiary and Participant, or (c) continue to serve as a member of the
Board or shall interfere with or restrict in any way the rights of the Company, which are hereby
expressly reserved, to discharge Participant in accordance with the Company’s Bylaws.

ARTICLE III

RESTRICTIONS ON SHARES

     3.1 Repurchase Option. Subject to the provisions of Section 3.2 below, if Participant
has a Termination of Service (as defined below) before all of the Shares are released from the
Company’s Repurchase Option (as defined below), the Company shall, upon the date of such
Termination of Service (as reasonably fixed and determined by the Company), have an irrevocable,
exclusive option, but not the obligation, for a period of ninety (90) days after the date
Participant has a Termination of Service, to repurchase all or any portion of the Unreleased Shares
(as defined below in Section 3.3) at such time (the “Repurchase Option”) at the Purchase Price per
Share (the “Repurchase Price”). The Repurchase Option shall lapse and terminate ninety (90) days
after the Participant’s Termination of Service. The Repurchase Option shall be exercisable by the
Company by written notice to Participant or Participant’s executor (with a copy to the escrow agent
appointed pursuant to Section 4.1 below) and, at the Company’s option, by delivery to Participant
or Participant’s executor with such notice of payment in cash or a check in the amount of the
Repurchase Price times the number of Shares to be repurchased (the “Aggregate Repurchase Price”).
Upon delivery of such notice and the payment of the Aggregate Repurchase Price, the Company shall
become the legal and beneficial owner of the Shares being repurchased and all rights and interests
therein or relating thereto, and the Company shall have the right to retain and transfer to its own
name the number of Shares being repurchased by the Company. In the event the Company repurchases
any Shares under this Section 3.1, any dividends or other distributions paid on such Shares and
held by the escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be
promptly paid by the escrow agent to the Company.

     3.2 Release of Shares from Repurchase Restriction. The Shares shall be released from
the Company’s Repurchase Option on such dates and in such amounts as the Shares become vested in
accordance with the vesting schedule set forth in the Grant Notice. Any of the Shares released from
the Company’s Repurchase Option shall thereupon be released from the restrictions on transfer under
Section 3.4. In the event any of the Shares are released from the Company’s Repurchase Option, any
dividends or other distributions paid on such Shares and held by the escrow agent pursuant to
Section 4.1 and the Joint Escrow Instructions shall be promptly paid by the escrow agent to
Participant.

     3.3 Unreleased Shares. Any of the Shares which, from time to time, have not yet been
released from the Company’s Repurchase Option are referred to herein as “Unreleased Shares.”

     3.4 Restrictions on Transfer.

          (a) Subject to repurchase by the Company pursuant to Section 3.1 and Section 3.4(b), no
Unreleased Shares or any dividends or other distributions thereon or any interest or right therein
or part thereof, shall be liable for the debts, contracts or engagements of Participant or his or
her successors in interest or shall be subject to sale or other disposition by Participant or his
or her successors in interest by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such sale or other disposition be voluntary or involuntary or
by operation of law by judgment,

A-3

 

levy, attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted sale or other disposition thereof shall be null and void and of no
effect.

          (b) Notwithstanding any other provision in this Agreement, with the consent of the
Administrator, the Unreleased Shares may be transferred to certain Permitted Transferees, subject
to the terms and conditions set forth in Section 11.3(b) of the Plan.

     3.5 Definition of Termination of Service. “Termination of Service” shall mean the
last to occur of Participant’s Termination of Consultancy, Termination of Directorship or
Termination of Employment, as applicable. Participant shall not be deemed to have a Termination of
Service merely because of a change in the capacity in which the Participant renders service to the
Company or any Parent or Subsidiary (i.e., Participant is an Employee and becomes a Consultant) or
a change in the entity for which the Participant renders such service (i.e., an Employee of the
Company becomes an Employee of a Subsidiary), unless following such change in capacity or service
the Participant is no longer serving as an Employee, Independent Director or Consultant of the
Company or any Parent or Subsidiary.

ARTICLE IV

ESCROW OF SHARES

     4.1 Escrow of Shares. To ensure the availability for delivery of Participant’s
Unreleased Shares upon repurchase by the Company pursuant to the Repurchase Option under Section
3.1, Participant hereby appoints the Secretary of the Company, or any other person designated by
the Administrator as escrow agent, as his or her attorney-in-fact to assign and transfer unto the
Company, such Unreleased Shares, if any, repurchased by the Company pursuant to the Repurchase
Option pursuant to Section 3.1 and any dividends or other distributions thereon, and shall, upon
execution of this Agreement, deliver and deposit with the Secretary of the Company, or such other
person designated by the Administrator, any share certificates representing the Unreleased Shares,
together with the stock assignment duly endorsed in blank, attached to the Grant Notice as
Exhibit C to the Grant Notice. The Unreleased Shares and stock assignment shall be held by
the Secretary of the Company, or such other person designated by the Administrator, in escrow,
pursuant to the Joint Escrow Instructions of the Company and Participant attached as Exhibit
D to the Grant Notice, until the Company exercises its Repurchase Option as provided in Section
3.1, until such Unreleased Shares are released from the Company’s Repurchase Option, or until such
time as this Agreement no longer is in effect. Upon release of the Unreleased Shares from the
Company’s Repurchase Option, the escrow agent shall deliver to Participant the certificate or
certificates representing such Shares in the escrow agent’s possession belonging to Participant, or
shall deliver to Participant evidence of such Shares being released from such escrow if such Shares
are uncertificated, in either case in accordance with the terms of the Joint Escrow Instructions
attached as Exhibit D to the Grant Notice, and the escrow agent shall be discharged of all
further obligations hereunder. If the Shares are held in book entry form, then such entry will
reflect that the Shares are subject to the restrictions of this Agreement. Except as set forth in
Section 5.12, if any assets or other securities received by or distributed to Participant with
respect to, in exchange for or in substitution of such Unreleased Shares are held by the escrow
agent pursuant to this Section 4.1 and the Joint Escrow Instructions, such assets or other
securities shall also be subject to the restrictions set forth in this Agreement and held in escrow
pending release of the Unreleased Shares with respect to which such assets or other securities
relate from the Company Repurchase Option (or, if such Unreleased Shares are no longer outstanding,
until such time as such Unreleased Shares would have been released from the Company’s Repurchase
Option).

A-4

 

     4.2 Transfer of Repurchased Shares. Participant hereby authorizes and directs the
Secretary of the Company, or such other person designated by the Administrator, to transfer the
Unreleased Shares as to which the Repurchase Option has been exercised from Participant to the
Company.

     4.3 No Liability for Actions in Connection with Escrow. The Company, or its designee,
shall not be liable for any act it may do or omit to do with respect to holding the Shares in
escrow and while acting in good faith and in the exercise of its judgment.

ARTICLE V

OTHER PROVISIONS

     5.1 Adjustment for Stock Split. In the event of any stock dividend, stock split,
reverse stock split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, the Administrator shall make appropriate and equitable
adjustments in the Unreleased Shares subject to the Repurchase Option and the number of Shares,
consistent with any adjustment under Section 12.1 of the Plan. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to the Shares, to any and all shares
of capital stock or other securities or other property or cash which may be issued in respect of,
in exchange for, or in substitution of the Shares, and shall be appropriately adjusted for any
stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.

     5.2 Taxes. Participant has reviewed with Participant’s own tax advisors the federal,
state, local and foreign tax consequences of this investment and the transactions contemplated by
the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Participant understands that
Participant (and not the Company) shall be responsible for Participant’s tax liability that may
arise as a result of this investment or the transactions contemplated by this Agreement.
Participant understands that Participant will recognize ordinary income for federal income tax
purposes under Section 83 of the Code as and when the Repurchase Option lapses. Participant
understands that Participant may elect to be taxed for federal income tax purposes at the time the
Shares are purchased by Participant rather than as and when the Repurchase Option lapses by filing
an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30)
days from the date of purchase. A form of election under Section 83(b) of the Code is attached to
the Grant Notice as Exhibit E.

     PARTICIPANT ACKNOWLEDGES THAT IT IS PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO
TIMELY FILE THE ELECTION UNDER SECTION 83(b), AND THE COMPANY AND ITS REPRESENTATIVES SHALL HAVE NO
OBLIGATION OR AUTHORITY TO MAKE THIS FILING ON PARTICIPANT’S BEHALF.

     Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to
require payment (which payment may be made in cash, by deduction from other compensation payable to
Participant or in any form of consideration permitted by Section 16.3 of the Plan) of any sums
required by federal, state or local tax law to be withheld with respect to the issuance, lapsing of
restrictions on or sale of the Shares. As provided in Section 16.3 of the Plan, the Administrator
may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect
to have the Company or a Parent or Subsidiary, as applicable, withhold shares of Stock otherwise
issuable under an Award (or allow the return of shares of Stock) having a Fair Market Value equal
to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number
of shares of Stock which may be withheld with respect to the issuance, vesting, exercise or payment
of any Award (or which may be repurchased from the Participant of such Award within six months (or
such other period as may be determined by the

A-5

 

Administrator) after such shares of Stock were acquired by the Participant from the Company) in
order to satisfy the Participant’s federal, state, local and foreign income and payroll tax
liabilities with respect to the issuance, vesting, exercise or payment of the Award shall be
limited to the number of shares which have a Fair Market Value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the minimum.

     The Company shall not be obligated to deliver any new certificate representing vested Shares
to Participant or Participant’s legal representative unless and until Participant or Participant’s
legal representative shall have paid or otherwise satisfied in full the amount of all federal,
state and local taxes applicable to the taxable income of Participant resulting from the issuance,
lapsing of restrictions on or sale of the Shares.

     5.3 Administration. The Administrator shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions
taken and all interpretations and determinations made by the Administrator in good faith shall be
final and binding upon Participant, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan, this Agreement or the Shares. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and duties of the
Administrator under the Plan and this Agreement.

     5.4 Restrictive Legends and Stop-Transfer Orders.

          (a) Any share certificate(s) evidencing the Shares issued hereunder shall be endorsed with the
following legend and any other legends that may be required by state or federal securities laws:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF REPURCHASE IN
FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

          (b) Participant agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

          (c) The Company shall not be required: (i) to transfer on its books any Shares that have been
sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to
treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such shares shall have been so transferred.

     5.5 Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of the Secretary of the Company at the address given
beneath the signature of an authorized officer of the Company on the Grant Notice, and any notice
to be given to Participant shall be addressed to Participant at the address given beneath
Participant’s signature on the Grant Notice. By a notice given pursuant to this Section 5.5,
either party may hereafter designate a different address for notices to be given to that party.
Any notice shall be deemed duly given when sent via email or when sent by certified mail (return
receipt requested) and deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

A-6

 

     5.6 Titles. Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

     5.7 Construction. This Agreement shall be administered, interpreted and enforced
under the laws of the State of California without regard to conflicts of laws thereof. Should any
provision of this Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain enforceable.

     5.8 Conformity to Securities Laws. Participant acknowledges that the Plan is intended
to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange Commission
thereunder, and state securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Shares are to be issued, only in such a manner as
to conform to such laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws,
rules and regulations.

     5.9 Amendments. This Agreement may not be modified, amended or terminated except by
an instrument in writing, signed by Participant and by a duly authorized representative of the
Company.

     5.10 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,
this Agreement shall be binding upon Participant and his or her heirs, executors, administrators,
successors and assigns.

     5.11 Entire Agreement. The Plan and this Agreement (including all Exhibits hereto)
constitute the entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Participant with respect to the subject matter
hereof.

     5.12 Effect of Change in Control; Certain Terminations.

          (a) Notwithstanding anything to the contrary in the Plan, in the event of a Change in Control
prior to the acceptance and/or the approval of the NDA for SILENORTM, 50% of the unvested Shares
will vest immediately prior to the consummation of the Change in Control, and the remaining 50% of
the unvested Shares will be converted at the time of the consummation of the Change in Control into
the right to receive cash based on the value of the transaction, as determined by the Board, in its
sole discretion, which cash would be paid upon attainment of the remaining performance objectives.
For purposes of clarification, if at the time of a Change in Control the acceptance of the NDA for
SILENORTM has not yet occurred, 25% of any such cash would be paid upon the acceptance of the NDA
for SILENORTM and 75% of any such cash would be paid upon the approval of the NDA for SILENORTM.
If at the time of a Change in Control the acceptance of the NDA for SILENORTM has occurred, 100% of
any such cash would be paid upon the approval of the NDA for SILENORTM.

          (b) Notwithstanding anything to the contrary in the Plan, in the event of Participant’s
discharge by the Company without Cause (as defined in the Employment Agreement, dated as of ___,
___, between Participant and the Company (as amended from time to time, the “Employment
Agreement”), or Participant’s resignation for Good Reason (as defined in the Employment Agreement),
in each case following the consummation of a Change in Control but prior to the acceptance and/or
the approval of the NDA for SILENORTM, any such cash held by the Company or its successor shall be
paid in full to Participant on the date of termination.

A-7

 

     5.13 Arbitration. Any dispute or controversy between Company and Participant, arising
out of or relating to this Agreement, the breach of this Agreement, or otherwise, shall be settled
by arbitration in San Diego, California administered by the American Arbitration Association in
accordance with its National Rules for the Resolution of Employment Disputes then in effect and
judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall have the authority to award any remedy or relief that a court of
competent jurisdiction could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this arbitration provision,
apply to any court having jurisdiction over such dispute or controversy and seek interim
provisional, injunctive or other equitable relief until the arbitration award is rendered or the
controversy is otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim relief, neither a party
nor an arbitrator may disclose the existence, content or results of any arbitration hereunder
without the prior written consent of Company and Participant. The Company shall pay all of the
direct costs and expenses in any arbitration hereunder and the arbitrator’s fees and costs;
provided, however, that the arbitrator shall have the discretion to award the prevailing party
reimbursement of its, his or her reasonable attorney’s fees and costs. The Company and Participant
hereby expressly waive their right to a jury trial.

     5.14 Section 409A of the Code.

          (a) This Agreement is not intended to provide for any deferral of compensation subject to
Section 409A of the Code, and, accordingly, the payments payable under Section 5.12(b) above shall
be paid no later than the later of: (i) the fifteenth (15th) day of the third month
following Participant’s first taxable year in which such severance benefit is no longer subject to
a substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third month
following first taxable year of the Company in which such severance benefit is no longer subject to
substantial risk of forfeiture, as determined in accordance with Code Section 409A and any Treasury
Regulations and other guidance issued thereunder. To the extent applicable, this Agreement shall
be interpreted in accordance with Code Section 409A and Department of Treasury regulations and
other interpretive guidance issued thereunder.

          (b) Notwithstanding anything to the contrary in this Agreement, if at the time of
Participant’s termination of employment with the Company Participant is a “specified employee” as
defined in Section 409A of the Code, as determined by the Company in accordance with Section 409A
of the Code, to the extent that the payments or benefits under this Agreement are subject to
Section 409A of the Code and the delayed payment or distribution of all or any portion of such
amounts to which Participant is entitled under this Agreement is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, then such portion shall be paid
or distributed to Participant during the thirty (30) day period commencing on the earlier of (x)
the date that is six (6) months following Participant’s termination of employment with the Company,
(y) the date of Participant’s death, or (z) the earliest date as is permitted under Section 409A of
the Code.

A-8

 

EXHIBIT B

TO RESTRICTED STOCK AWARD GRANT NOTICE

CONSENT OF SPOUSE

     I,                                         , spouse of                     , have read and approve the
 foregoing Restricted Stock
Grant Notice and Restricted Stock Award Agreement (the “Agreement”). In consideration of issuing
to my spouse the shares of the common stock of Somaxon Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), set forth in the Agreement, I hereby appoint my spouse as my
attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound
by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares
of the common stock of the Company issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our residence as of the date of
the signing of the foregoing Agreement.

	 	 	 
	Dated:                     ,           
	 	 
	 

	 	 
	 

	 	Signature of Spouse

B-1

 

EXHIBIT C

TO RESTRICTED STOCK AWARD GRANT NOTICE

STOCK ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned,                     , hereby sells, assigns and transfers unto Somaxon
Pharmaceuticals, Inc., a Delaware corporation (the “Company”),                      shares of the common stock
of the Company standing in its name of the books of said corporation represented by Certificate No.
___ herewith and do hereby irrevocably constitute and appoint                                          to transfer the
said stock on the books of the within named corporation with full power of substitution in the
premises.

     This Stock Assignment may be used only in accordance with the Restricted Stock Award Agreement
between the Company and the undersigned dated                     ,      .

	 	 	 
	Dated:                     ,           
	 	 
	 

	 	 
	 

	 	[Name of Participant]

     INSTRUCTIONS: Please do not fill in the blanks other than the signature line. The purpose of
this assignment is to enable the Company to exercise its “Repurchase Option,” as set forth in the
Restricted Stock Award Agreement, without requiring additional signatures on the part of
Participant.

C-1

 

EXHIBIT D

TO RESTRICTED STOCK AWARD GRANT NOTICE

JOINT ESCROW INSTRUCTIONS

                    ,      

Secretary

Somaxon Pharmaceuticals, Inc.

3721 Valley Centre Drive, Suite 500

San Diego, CA 92130

Ladies and Gentlemen:

     As escrow agent (the “Escrow Agent”) for both Somaxon Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and the undersigned recipient of shares of common stock of the Company
(the “Participant”), you are hereby authorized and directed to hold in escrow the documents
delivered to you pursuant to the terms of that certain Restricted Stock Award Agreement
(“Agreement”) between the Company and the undersigned (the “Escrow”), including any stock
certificate(s) and the Assignment(s) in Blank, in accordance with the following instructions:

     1. In the event the Company and/or any assignee of the Company (referred to collectively for
convenience herein as the “Company”) exercises the Company’s Repurchase Option as defined in the
Agreement), the Company shall give to Participant and you a written notice specifying the number of
shares of stock to be purchased, the purchase price and the time for a closing hereunder at the
principal office of the Company. Participant and the Company hereby irrevocably authorize and
direct you to close the transaction contemplated by such notice in accordance with the terms of
said notice.

     2. As of the date of closing of the repurchase indicated in such notice, you are directed (a)
to date the stock assignments necessary for the repurchase and transfer in question, (b) to fill in
the number of shares being repurchased and transferred, and (c) to deliver the same, together with
the certificate evidencing the shares of stock to be repurchased and transferred, to the Company or
its assignee.

     3. Participant irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and substitutions to said
shares as defined in the Agreement. Participant does hereby irrevocably constitute and appoint you
as Participant’s attorney-in-fact and agent for the term of this escrow to execute with respect to
such securities all documents necessary or appropriate to make such securities negotiable and to
complete any transaction herein contemplated, including but not limited to the filing with any
applicable state blue sky authority of any required applications for consent to, or notice of
transfer of, the securities. Subject to the provisions of this paragraph and the Agreement,
Participant shall exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.

     4. Upon written request of Participant, but no more than once per calendar month, unless the
Company’s Repurchase Option has been exercised, you will deliver to Participant a certificate or
certificates or evidence of book entry in the name of Participant representing so many shares of
stock as are not then subject to the Repurchase Option. Within one hundred twenty (120) days after
the termination of the Company’s Repurchase Option in accordance with the terms of the Agreement,
you will deliver to Participant a certificate or certificates or evidence of book entry in the name
of Participant representing the aggregate number of shares held or issued pursuant to the Agreement
and not repurchased pursuant to the Repurchase Option set forth in Section 3.1 of the Agreement.

D-1

 

     5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Participant, you shall deliver all of the
same to the Participant and shall be discharged of all further obligations hereunder.

     6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed
by all of the parties hereto.

     7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Participant while acting in good faith, and
any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive
evidence of such good faith.

     8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you shall not be liable
to any of the parties hereto or to any other person, firm or corporation by reason of such
compliance, notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

     9. You shall not be liable in any respect on account of the identity, authorities or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.

     10. You shall not be liable for the expiration of any rights under any applicable state,
federal or local statute of limitations or similar statute or regulation with respect to these
Joint Escrow Instructions or any documents deposited with you.

     11. You shall be entitled to employ such legal counsel and other experts as you may deem
necessary properly to advise you in connection with your obligations hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation therefor. The Company will
reimburse you for any reasonable attorneys’ fees with respect thereto.

     12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
an officer or agent of the Company or if you shall resign by written notice to each party. In the
event of any such termination, the Company shall appoint a successor Escrow Agent.

     13. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.

     14. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities held by you hereunder, you are authorized
and directed to retain in your possession without liability to anyone all or any part of said
securities until such disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you shall be under no
duty whatsoever to institute or defend any such proceedings.

D-2

 

     15. Any notice to be given under the terms of this Agreement to the Company shall be addressed
to the Company in care of the Secretary of the Company, and any notice to be given to the
Participant or you shall be addressed to the address given beneath Participant’s and your
signatures on the signature page to this Agreement. By a notice given pursuant to this Section 15,
any party may hereafter designate a different address for notices to be given to that party. Any
notice, which is required to be given to Participant, shall, if the Participant is then deceased,
be given to Participant’s designated beneficiary, if any by written notice under this Section 15.
Any notice shall be deemed duly given when sent via email or when sent by certified mail (return
receipt requested) and deposited (with postage prepaid) in a post office or branch post office
regularly obtained by the United States Postal Service.

     16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Agreement.

     17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and permitted assigns.

     18. These Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, without regard to conflicts of law thereof.

(Signature Page Follows)

D-3

 

     IN WITNESS WHEREOF, the parties have executed these Joint Escrow Instructions as of the date
first written above.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	SOMAXON PHARMACEUTICALS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	3721 Valley Centre Drive, Suite 500

San Diego, CA 92130
	 
	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	Address	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

ESCROW AGENT:

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Secretary, Somaxon Pharmaceuticals, Inc.
	 	  

			
	Address:   	 	3721 Valley Centre Drive, Suite 500

San Diego, CA 92130

D-4

 

EXHIBIT E

TO RESTRICTED STOCK AWARD GRANT NOTICE

FORM OF 83(B) ELECTION AND INSTRUCTIONS

     These instructions are provided to assist you if you choose to make an election under Section
83(b) of the Internal Revenue Code, as amended, with respect to the shares of common stock of
Somaxon Pharmaceuticals, Inc. transferred to you. Please consult with your personal tax advisor as
to whether an election of this nature will be in your best interests in light of your personal tax
situation.

     The executed original of the Section 83(b) election must be filed with the Internal Revenue
Service not later than 30 days after the date the shares were transferred to you. PLEASE NOTE:
There is no remedy for failure to file on time. The steps outlined below should be followed to
ensure the election is mailed and filed correctly and in a timely manner. ALSO, PLEASE NOTE: If
you make the Section 83(b) election, the election is irrevocable.

	1.	 	Complete Section 83(b) election form (attached as Attachment 1) and make four (4)
copies of the signed election form. (Your spouse, if any, should sign Section 83(b) election
form as well.)
	 
	2.	 	Prepare the cover letter to the Internal Revenue Service (sample letter attached as
Attachment 2).
	 
	3.	 	Send the cover letter with the originally executed Section 83(b) election form and one (1)
copy via certified mail, return receipt requested to the Internal Revenue Service at the
address of the Internal Revenue Service where you file your personal tax returns. We suggest
that you have the package date-stamped at the post office. The post office will provide you
with a white certified receipt that includes a dated postmark. Enclose a self-addressed,
stamped envelope so that the Internal Revenue Service may return a date-stamped copy to you.
However, your postmarked receipt is your proof of having timely filed the Section 83(b)
election if you do not receive confirmation from the Internal Revenue Service.
	 
	4.	 	One (1) copy must be sent to Somaxon Pharmaceuticals, Inc. for its records and one (1) copy
must be attached to your federal income tax return for the applicable calendar year.
	 
	5.	 	Retain the Internal Revenue Service file stamped copy (when returned) for your records.

     Please consult your personal tax advisor for the address of the office of the Internal Revenue
Service to which you should mail your election form.

E-1

 

ATTACHMENT 1 TO EXHIBIT E

ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

     The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code
of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount
of any compensation taxable to taxpayer in connection with taxpayer’s receipt of shares (the
“Shares”) of Common Stock of Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”).

	1.	 	The name, address and taxpayer identification number of the undersigned taxpayer are:
	 
	 	 	                                                                      
	 
	 	 	                                                                      
	 
	 	 	SSN:                                                             
	 
	 	 	The name, address and taxpayer identification number of the Taxpayer’s spouse are (complete
if applicable):
	 
	 	 	                                                                      
	 
	 	 	                                                                      
	 
	 	 	                                                                      
	 
	 	 	SSN:                                                             
	 
	2.	 	Description of the property with respect to which the election is being made:
	 
	 	 	                                         (___) shares of Common Stock of the Company.
	 
	3.	 	The date on which the property was transferred was                     . The taxable year to which
this election relates is calendar year ___.
	 
	4.	 	Nature of restrictions to which the property is subject:
	 
	 	 	The Shares are subject to repurchase at their original purchase price if unvested as of the
date of termination of employment, directorship or consultancy with the Company.
	 
	5.	 	The fair market value at the time of transfer (determined without regard to any lapse
restrictions, as defined in Treasury Regulation Section 1.83-3(a)) of the Shares was
$                     per Share.
	 
	6.	 	The amount paid by the taxpayer for Shares was
____ per  share.
	 
	7.	 	A copy of this statement has been furnished to the Company.

	 	 	 	 	 
	Dated:                     ,      

	 	Taxpayer Signature	 	 
	 

	 	 	 	 

E-1-1

 

The undersigned spouse of Taxpayer joins in this election. (Complete if applicable).

	 	 	 	 	 
	Dated:                     ,      

	 	Spouse’s Signature	 	 
	 

	 	 	 	 

Signature(s) Notarized by:

                                                                 

                                                                 

E-1-2

 

ATTACHMENT 2 TO EXHIBIT E

SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE

                    ,      

VIA CERTIFIED MAIL

RETURN RECEIPT REQUESTED

Internal Revenue Service

[Address where taxpayer files returns]

	 	 	 	 	 	 	 	 	 	 	 
	Re:	 	Election under Section 83(b) of the Internal Revenue Code of 1986
	 

	 	Taxpayer:	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Taxpayer’s Social Security Number:	 	 	 
	 	 	 	 	 	 	 	 
	 	 	Taxpayer’s Spouse:	 	 	 	 	 
	 	 	 	 	 	 
	 	 	Taxpayer’s Spouse’s Social Security Number:		 	 
	 

	 	 	 	 	 	 	 	 	 

Ladies and Gentlemen:

     Enclosed please find an original and one copy of an Election under Section 83(b) of the
Internal Revenue Code of 1986, as amended, being made by the taxpayer referenced above. Please
acknowledge receipt of the enclosed materials by stamping the enclosed copy of the Election and
returning it to me in the self-addressed stamped envelope provided herewith.

Very truly yours,

    
            
          
           
           
          
          
            

Enclosures

			
	cc:      	 	Somaxon Pharmaceuticals, Inc.

E-2-1

 

Agreements
entered into with:

Meg M.
McGilley

Sugan E. Dubé

Jeffrey W. Raser 

Philip Jochelson, M.D.

James J. L’Italien, Ph.D.

Matthew W. Onaitis

Brain T. Dorsey

Robert L. JonesExhibit 10.31

 

Exhibit 10.31

RELEASE

     Certain capitalized terms used in this Release are defined in the Employment Agreement by and
between Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Kenneth
Cohen (“Executive”) dated as of August 15, 2003 (as amended to date, the “Agreement”), which
Executive has previously executed and of which this Release is a part. This Release shall be
effective on the eighth (8th) day following Executive’s execution hereof (the “Effective
Date”).

     Pursuant to the Agreement, and in consideration of and as a condition precedent to the
payments and benefits provided under Section 7(d) of the Agreement, Executive hereby furnishes the
Company with this Release.

     1. Termination of Employment and Director Status. Executive’s employment by the
Company shall terminate effective as of December 31, 2007 (the “Termination Date”). Executive
hereby irrevocably resigns from his position as President and Chief Executive Officer (and any
other titles or officer positions he may hold) of the Company (and any of its affiliates and
subsidiaries) effective as of the Termination Date, and as a member of the Board of Directors of
the Company effective as of the earlier of the date that the Company announces a new, permanent
Chief Executive Officer or the Company’s 2008 annual meeting of stockholders. Executive shall
execute any additional documentation necessary to effectuate such resignations. Executive’s
personnel file at the Company will reflect that Executive voluntarily resigned. Notwithstanding
the foregoing, the Company shall not oppose Executive’s claim for unemployment benefits on the
grounds that he resigned and Executive’s termination shall be treated as involuntary for all other
purposes under the Agreement.

     2. Compensation Through Termination Date. On the Termination Date, the Company shall
issue Executive his final paycheck, reflecting (a) his earned but unpaid base salary at the
annualized rate of $350,000 per year through the Termination Date, and (b) all accrued, unused
vacation and sick leave due Executive through the Termination Date. Subject to Section 4 below,
Executive acknowledges and agrees that with his final check, and the expense reimbursements
described in the following paragraph, Executive will have received all monies, bonuses,
commissions, expense reimbursement, vacation pay, or other compensation he earned or was due during
his employment by the Company. Except as provided in Section 4 below, Executive’s entitlement to
benefits from the Company, and eligibility to participate in the benefit plans of the Company,
shall cease on the Termination Date.

     3. Expense Reimbursements. The Company, within thirty (30) days after the Termination
Date, will reimburse Employee for any and all reasonable and necessary business expenses incurred
by Employee in connection with the performance of his job duties prior to the Termination Date,
which expenses shall be submitted to the Company with supporting receipts and/or documentation no
later than fifteen (15) days after the Termination Date.

     4. Severance Benefits.

          (a) Cash Severance and Medical Benefits. Contingent upon the effectiveness of this
Release, the Company shall provide to Executive the following severance benefits, which shall be
the exclusive severance benefits payable to Executive:

               (i) A cash payment equal to $70,000, representing Executive’s annual bonus for 2007, payable
in a lump sum within ten (10) days following the later of (A) the Termination Date, or (B) the
Effective Date;

 

 

               (ii) A cash payment equal to $345,937, representing an amount equal to Executive’s annual base
salary for the twelve (12) months prior to the Termination Date, payable in a lump sum within ten
(10) days following the later of (A) the Termination Date, or (B) the Effective Date;

               (iii) The Company shall pay all costs which the Company would otherwise have incurred to
maintain all of Executive’s health, welfare and retirement benefits (either on the same or
substantially equivalent terms and conditions) if Executive had continued to render services to the
Company for twelve (12) continuous months after the Termination Date; and

               (iv) Notwithstanding any provision to the contrary in Executive’s options under the Option
Plan or other plan (including, without limitation, the expiration dates or vesting provisions
thereof), the unvested portion, if any, of Executive’s outstanding options (and any unvested shares
issued upon the exercise of such stock options) shall be deemed to have vested on the Termination
Date with respect to the number of shares that would have vested had Executive remained employed by
the Company through December 31, 2008, and, subject to such acceleration of vesting, vesting of
such options (and shares) shall cease as of the Termination Date. Executive shall have 180 days
from the last day of Executive’s service on the Company’s Board of Directors. Subject to the
foregoing, as of the Termination Date, all of Executive’s unvested options will terminate.
Executive acknowledges that, to the extent he exercises any of his incentive stock options (within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended) more than ninety (90)
days following the Termination Date, such incentive stock options will become non-qualified stock
options and, upon exercise, such options will be taxed at exercise like non-qualified stock
options;

               (v) The Company shall pay to Executive a contingent cash payment of $70,000, which payment
will be payable only if the U.S. Food and Drug Administration accepts the Company’s New Drug
Application (“NDA”) for SILENORTM (the “NDA Bonus”). The NDA bonus will
not be payable if such acceptance does not occur on or prior to December 31, 2009. In the event of
a Change in Control prior to acceptance of the NDA for SILENORTM, the NDA Bonus shall be
paid upon consummation of the Change in Control.

     5. Confirmation of Continuing Obligations. Executive hereby confirms his obligations
under Sections 8, 9 and 10 of the Agreement and the Company’s proprietary information and
inventions agreement.

     6. Release. On Executive’s own behalf and on behalf of Executive’s heirs, estate and
beneficiaries, Executive hereby waives, releases, acquits and forever discharges the Company, and
each of its Subsidiaries and affiliates, and each of their respective past or present officers,
directors, agents, servants, employees, shareholders, predecessors, successors and assigns, and all
persons acting by, through, under, or in concert with them, or any of them, of and from any and all
suits, debts, liens, contracts, agreements, promises, claims, liabilities, demands, causes of
action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and
nature, in law, equity, or otherwise, known and unknown, fixed or contingent, suspected and
unsuspected, disclosed and undisclosed (“Claims”), from the beginning of time to the date hereof,
including without limitation, Claims that arose as a consequence of Executive’s employment with the
Company, or arising out of the termination of such employment relationship, or arising out of any
act committed or omitted during or after the existence of such employment relationship, all up
through and including the date on which this Release is executed, including, but not limited to,
Claims which were, could have been, or could be the subject of an administrative or judicial
proceeding filed by Executive or on Executive’s behalf under federal, state or local law, whether
by statute, regulation, in contract or tort. This Release includes, but is not limited to: (1)
Claims for intentional and negligent infliction of emotional distress; (2) tort Claims for personal
injury; (3) Claims or demands related to salary, bonuses, commissions, stock, stock options, or any
other

2

 

ownership interest in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, front pay, back pay or any other form of compensation; (4) Claims for breach of
contract; (5) Claims for any form of retaliation, harassment, or discrimination; (6) Claims
pursuant to any federal, state or local law or cause of action including, but not limited to, the
federal Civil Rights Act of 1964, as amended, the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”), the federal Employee Retirement Income Security Act of 1974, as amended,
the federal Americans with Disabilities Act of 1990, the California Fair Employment and Housing
Act, as amended, and the California Labor Code; and (7) all other Claims based on tort law,
contract law, statutory law, common law, wrongful discharge, constructive discharge, fraud,
defamation, emotional distress, pain and suffering, breach of the implied covenant of good faith
and fair dealing, compensatory or punitive damages, interest, attorneys’ fees, and reinstatement or
re-employment. If any court rules that Executive’s waiver of the right to file any administrative
or judicial charges or complaints is ineffective, Executive agrees not to seek or accept any money
damages or any other relief upon the filing of any such administrative or judicial charges or
complaints.

     Executive acknowledges that he has 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.”
Executive hereby expressly waives and relinquishes all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to his release of any unknown Claims
Executive may have against the Company.

     Notwithstanding the foregoing, nothing in this Release shall constitute a release by Executive
of any claims or damages based on any right Executive may have to enforce the Company’s executory
obligations under the Agreement, any right Executive may have to vested or earned compensation and
benefits, or Executive’s eligibility for indemnification under applicable law, Company governance
documents, Executive’s indemnification agreement with the Company or under any applicable insurance
policy with respect to Executive’s liability as an employee or officer of the Company.

     If Executive is forty (40) years of age or older, Executive acknowledges that he is knowingly
and voluntarily waiving and releasing any rights he may have under ADEA. Executive also
acknowledges that the consideration given under the Agreement for the Release is in addition to
anything of value to which he was already entitled. Executive further acknowledges that he has
been advised by this writing, as required by the ADEA, that: (A) his waiver and release do not
apply to any rights or claims that may arise on or after the date he executes this Release;
(B) Executive has the right to consult with an attorney prior to executing this Release;
(C) Executive has twenty-one (21) days to consider this Release (although he may choose to
voluntarily execute this Release earlier); (D) Executive has seven (7) days following the execution
of this Release to revoke the Release; and (E) this Release shall not be effective until the date
upon which the revocation period has expired, which shall be the 8th day after this Release is
executed by Executive, without Executive’s having given notice of revocation.

     Executive further acknowledges that Executive has carefully read this Release, and knows and
understands its contents and its binding legal effect. Executive acknowledges that by signing this
Release, Executive does so of Executive’s own free will, and that it is Executive’s intention that
Executive be legally bound by its terms. Executive further acknowledges that if he does not sign
this release within fifty (50) days following the Termination Date, or revokes this Release within
the foregoing revocation period, if applicable, Executive shall not be entitled to the payments and
benefits provided under Sections 7(d) of the Agreement.

3

 

     7. Section 409A of the Code.

          (a) The Agreement and this Release are not intended to provide for any deferral of
compensation subject to Section 409A of the Code, and, accordingly, the severance payments payable
under Section 7(d) of the Agreement shall be paid no later than the later of: (i) the fifteenth
(15th) day of the third month following Executive’s first taxable year in which such
severance benefit is no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth
(15th) day of the third month following first taxable year of the Company in which such
severance benefit is no longer subject to substantial risk of forfeiture, as determined in
accordance with Code Section 409A and any Treasury Regulations and other guidance issued
thereunder. To the extent applicable, this Agreement shall be interpreted in accordance with Code
Section 409A and Department of Treasury regulations and other interpretive guidance issued
thereunder.

          (b) As provided in Internal Revenue Notice 2006-79, notwithstanding any other provision of
this Agreement, with respect to an election or amendment to change a time and form of payment under
this Agreement made on or after January 1, 2007 and on or before December 31, 2007, the election or
amendment may apply only to amounts that would not otherwise be payable in 2007 and may not cause
an amount to be paid in 2007 that would not otherwise be payable in 2007.

	 	 	 	 	 
	 

	 	/s/ Kenneth M. Cohen
	 	 
	 

	 	 	 	 
	 

	 	Kenneth M. Cohen	 	 
	 
	 	 	 	 
	 

	 	Date: December 6, 2007	 	 

	 	 	 	 	 
	ACCEPTED AND AGREED:	 	 
	 
	 	 	 	 
	SOMAXON PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ David F. Hale
	 	 
	 

	 	 	 	 
	Name:

	 	David F. Hale	 	 
	Title:

	 	 Chairman of the Board of Directors	 	 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]