Document:

<PAGE>

                                                                    EXHIBIT 4.2

                          SOMAXON PHARMACEUTICALS, INC.
                        2005 EQUITY INCENTIVE AWARD PLAN

                                   ARTICLE 1

                                     PURPOSE

      The purpose of the Somaxon Pharmaceuticals, Inc. 2005 Equity Incentive
Award Plan (the "PLAN") is to promote the success and enhance the value of
Somaxon Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"), by
linking the personal interests of the members of the Board, Employees, and
Consultants to those of Company stockholders and by providing such individuals
with an incentive for performance to generate returns to Company stockholders.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of members of the Board,
Employees, and Consultants upon whose judgment, interest, and special effort the
successful conduct of the Company's operation is largely dependent.

      All share numbers set forth in this Plan give effect to the reverse stock
split to be implemented by the Company in connection with its initial public
offering.

                                   ARTICLE 2

                          DEFINITIONS AND CONSTRUCTION

      Wherever the following terms are used in the Plan they shall have the
meanings specified below, unless the context clearly indicates otherwise. The
singular pronoun shall include the plural where the context so indicates.

      2.1 "ADMINISTRATOR" means the entity that conducts the general
administration of the Plan as provided herein. With reference to the
administration of the Plan with respect to Awards granted to Independent
Directors, the term "ADMINISTRATOR" shall refer to the Board. With reference to
the administration of the Plan with respect to any other Award, the term
"ADMINISTRATOR" shall refer to the Committee unless the Board has assumed the
authority for administration of the Plan generally as provided in Section 13.1.
With reference to the duties of the Committee under the Plan which have been
delegated to one or more persons pursuant to Section 13.5, the term
"ADMINISTRATOR" shall refer to such person(s) unless the Committee or the Board
has revoked such delegation.

      2.2 "AWARD" means an Option, a Restricted Stock award, a Stock
Appreciation Right award, a Dividend Equivalents award, a Stock Payment award, a
Restricted Stock Unit award or a Performance-Based Award granted to a
Participant pursuant to the Plan.

      2.3 "AWARD AGREEMENT" means any written or electronic agreement, contract,
or other instrument or document evidencing an Award.

      2.4 "BOARD" means the Board of Directors of the Company.

      2.5 "CAUSE," unless otherwise defined in an employment or services
agreement between the Participant and the Company or any Parent or Subsidiary,
means (i) a Participant's breach of any confidentiality or proprietary
information agreement between the Participant and the Company or any Parent or
Subsidiary; (ii) a Participant's conviction by, or entry of a plea of guilty or
nolo contendere in, a court of competent and final jurisdiction for any crime
involving moral turpitude or punishable by imprisonment in the jurisdiction
involved; (iii) a Participant's commission of an act of fraud, whether

<PAGE>

prior to or subsequent to the date hereof upon the Company or any Parent or
Subsidiary; (iv) a Participant's continuing repeated willful failure or refusal
to perform his or her duties (including, without limitation, a Participant's
inability to perform his or her duties as a result of chronic alcoholism or drug
addiction and/or as a result of any failure to comply with any laws, rules or
regulations of any governmental entity with respect to a Participant's
employment by the Company or any Parent or Subsidiary); (v) a Participant's
gross negligence, insubordination or material violation of any duty of loyalty
to the Company or any Parent or Subsidiary or any other material misconduct on
the part of a Participant; (vi) a Participant's intentional commission of any
act which he or she knows (or reasonably should know) is likely to be materially
detrimental to the Company's or any Parent's or Subsidiary's business or
goodwill; or (vii) a Participant's material breach of any other provision of any
agreement between the Participant and the Company or any Parent or Subsidiary,
provided that termination of a Participant's employment pursuant to this
subsection (vii) shall not constitute valid termination for good cause unless
such Participant shall have first received written notice from the Board or its
designee stating with specificity the nature of such breach and affording the
Participant at least fifteen days to correct the breach alleged.

      The foregoing definition shall not in any way preclude or restrict the
right of the Company or any successor or Parent or Subsidiary thereof to
discharge or dismiss any Participant in the service of such entity for any other
acts or omissions, but such other acts or omissions shall not be deemed, for
purposes of this Plan, to constitute grounds for termination for Cause.

      2.6 "CHANGE IN CONTROL" means and includes each of the following:

            (a) the acquisition, directly or indirectly, by any "person" or
"group" (as those terms are defined in Sections 3(a)(9), 13(d) and 14(d) of the
Exchange Act and the rules thereunder) of "beneficial ownership" (as determined
pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote
generally in the election of directors ("VOTING SECURITIES") of the Company that
represent 50% or more of the combined voting power of the Company's then
outstanding voting securities, other than:

                  (i) an acquisition by a trustee or other fiduciary holding
      securities under any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any person controlled by the Company or by
      any employee benefit plan (or related trust) sponsored or maintained by
      the Company or any person controlled by the Company, or

                  (ii) an acquisition of voting securities by the Company or a
      corporation owned, directly or indirectly by the stockholders of the
      Company in substantially the same proportions as their ownership of the
      stock of the Company, or

                  (iii) an acquisition of voting securities pursuant to a
      transaction described in subsection (c) below that would not be a Change
      in Control under subsection (c), or

                  (iv) an acquisition of voting securities pursuant to the
      Company's initial public offering of the Stock;

            Notwithstanding the foregoing, the following event shall not
constitute an "acquisition" by any person or group for purposes of this Section
2.6: an acquisition of the Company's securities by the Company which causes the
Company's voting securities beneficially owned by a person or group to represent
50% or more of the combined voting power of the Company's then outstanding
voting securities; provided, however, that if a person or group shall become the
beneficial owner of 50% or more of the combined voting power of the Company's
then outstanding voting securities by reason of share

                                        2
<PAGE>

acquisitions by the Company as described above and shall, after such share
acquisitions by the Company, become the beneficial owner of any additional
voting securities of the Company, then such acquisition shall constitute a
Change in Control; or

            (b) during any period of two consecutive years, individuals who, at
the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have entered
into an agreement with the Company to effect a transaction described in
subsections (a) or (c) of this Section 2.6 whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the two year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

            (c) the consummation by the Company (whether directly involving the
Company or indirectly involving the Company through one or more intermediaries)
of (x) a merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of the Company's assets or
(z) the acquisition of assets or stock of another entity, in each case other
than a transaction:

                  (i) which results in the Company's voting securities
      outstanding immediately before the transaction continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the Company or the person that, as a result of the
      transaction, controls, directly or indirectly, the Company or owns,
      directly or indirectly, all or substantially all of the Company's assets
      or otherwise succeeds to the business of the Company (the Company or such
      person, the "SUCCESSOR ENTITY") directly or indirectly, at least a
      majority of the combined voting power of the Successor Entity's
      outstanding voting securities immediately after the transaction, and

                  (ii) after which no person or group beneficially owns voting
      securities representing 50% or more of the combined voting power of the
      Successor Entity; provided, however, that no person or group shall be
      treated for purposes of this paragraph (ii) as beneficially owning 50% or
      more of combined voting power of the Successor Entity solely as a result
      of the voting power held in the Company prior to the consummation of the
      transaction; or

            (d) the Company's stockholders approve a liquidation or dissolution
of the Company.

            For purposes of subsection (a) above, the calculation of voting
power shall be made as if the date of the acquisition were a record date for a
vote of the Company's stockholders, and for purposes of subsection (c) above,
the calculation of voting power shall be made as if the date of the consummation
of the transaction were a record date for a vote of the Company's stockholders.

            The Administrator shall have full and final authority, which shall
be exercised in its discretion, to determine conclusively whether a Change in
Control of the Company has occurred pursuant to the above definition, and the
date of the occurrence of such Change in Control and any incidental matters
relating thereto.

      2.7 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations issued thereunder.

      2.8 "COMMITTEE" means the committee of the Board described in Article 13.

                                        3
<PAGE>

      2.9 "CONSULTANT" means any consultant or adviser if:

            (a) The consultant or adviser renders bona fide services to the
Company or any Parent or Subsidiary;

            (b) The services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities; and

            (c) The consultant or adviser is a natural person who has contracted
directly with the Company or any Parent or Subsidiary to render such services.

      2.10 "COVERED EMPLOYEE" means an Employee who is, or is likely to become,
a "covered employee" within the meaning of Section 162(m)(3) of the Code.

      2.11 "DISABILITY" means a permanent and total disability within the
meaning of Section 22(e)(3) of the Code, as it may be amended from time to time.

      2.12 "DIVIDEND EQUIVALENTS" means a right granted to a Participant
pursuant to Article 8 to receive the equivalent value (in cash or Stock) of
dividends paid on Stock.

      2.13 "EFFECTIVE DATE" shall mean the date immediately prior to the Public
Trading Date.

      2.14 "ELIGIBLE INDIVIDUAL" means any person who is a member of the Board,
a Consultant or an Employee, as determined by the Administrator.

      2.15 "EMPLOYEE" means any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company or any Parent or
Subsidiary.

      2.16 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.

      2.17 "EXISTING PLAN" has the meaning set forth in Section 3.1(a).

      2.18 "EXPIRATION DATE" has the meaning set forth in Section 14.3.

      2.19 "FAIR MARKET VALUE" means, as of any date, the value of Stock
determined as follows:

            (a) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock as quoted on such exchange or
system for the last market trading day prior to the date of determination for
which a closing sales price is reported, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;

            (b) If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean of the closing bid and asked prices for the Stock on the date prior to the
date of determination as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or

            (c) In the absence of an established market for the Stock, the Fair
Market Value thereof shall be determined in good faith by the Administrator.

                                        4
<PAGE>

      2.20 "GOOD REASON" means a Participant's voluntary resignation following
any one or more of the following that is effected without the Participant's
written consent: (i) a change in his or her position following the Change of
Control that materially reduces his or her duties or responsibilities, (ii) a
reduction in his or her base salary following a Change of Control, unless the
base salaries of all similarly situated individuals are similarly reduced, or
(iii) a relocation of such Participant's place of employment of more than fifty
miles following a Change of Control. However, if the term or concept of "Good
Reason" has been defined in an agreement between a Participant and the Company
or any successor or parent or Subsidiary thereof, then "Good Reason" shall have
the definition set forth in such agreement. unless otherwise defined in an
employment or services agreement between the Participant and the Company or any
Parent or Subsidiary, means any of the following:

      2.21 "INCENTIVE STOCK OPTION" means an Option that is intended to be an
incentive stock option and meets the requirements of Section 422 of the Code or
any successor provision thereto.

      2.22 "INDEPENDENT DIRECTOR" means a member of the Board who is not an
Employee.

      2.23 "NON-EMPLOYEE DIRECTOR" means a member of the Board who qualifies as
a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor definition adopted by the Board.

      2.24 "NON-QUALIFIED STOCK OPTION" means an Option that is not intended to
be or otherwise does not qualify as an Incentive Stock Option.

      2.25 "OPTION" means a right granted to a Participant pursuant to Article 5
of the Plan to purchase a specified number of shares of Stock at a specified
price during specified time periods. An Option may be either an Incentive Stock
Option or a Non-Qualified Stock Option.

      2.26 "PARENT" means any "parent corporation" as defined in Section 424(e)
of the Code and any applicable regulations promulgated thereunder of the Company
or any other entity which beneficially owns, directly or indirectly, a majority
of the outstanding voting stock or voting power of the Company.

      2.27 "PARTICIPANT" means any Eligible Individual who, as a member of the
Board, a Consultant or an Employee, has been granted an Award pursuant to the
Plan.

      2.28 "PERFORMANCE-BASED AWARD" means an Award granted to selected Covered
Employees pursuant to Articles 6 and 8, but which is subject to the terms and
conditions set forth in Article 9.

      2.29 "PERFORMANCE CRITERIA" means the criteria that the Administrator
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), 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), return on net assets, return on stockholders' equity,
return on sales, gross or net profit margin, working capital, earnings per share
and price per share of Stock, 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 Administrator 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.

      2.30 "PERFORMANCE GOALS" means, for a Performance Period, the goals
established in writing by the Administrator for the Performance Period based
upon the Performance Criteria. Depending on the

                                        5
<PAGE>

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 Subsidiary, division or other operational unit. The
Administrator, 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 (i) in the event of, or in anticipation of, any unusual
or extraordinary corporate item, transaction, event, or development, or (ii) 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.

      2.31 "PERFORMANCE PERIOD" means the one or more periods of time, which may
be of varying and overlapping durations, as the Administrator 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.

      2.32 "PLAN" means this Somaxon Pharmaceuticals, Inc. 2005 Equity Incentive
Award Plan, as it may be amended from time to time.

      2.33 "PUBLIC TRADING DATE" means the first date upon which the Company is
subject to the reporting requirements of Section 13 or 15(d)(2) of the Exchange
Act.

      2.34 "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.

      2.35 "RESTRICTED STOCK" means Stock awarded to a Participant pursuant to
Article 6 that is subject to certain restrictions and may be subject to risk of
forfeiture or repurchase.

      2.36 "RESTRICTED STOCK UNIT" means a right to receive a share of Stock
during specified time periods granted pursuant to Section 8.3.

      2.37 "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.

      2.38 "SECTION 409A AWARD" has the meaning set forth in Section 10.1.

      2.39 "STOCK" means the common stock of the Company and such other
securities of the Company that may be substituted for Stock pursuant to Article
12.

      2.40 "STOCK APPRECIATION RIGHT" or "SAR" means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a
specified number of shares of Stock on the date the SAR is exercised over the
Fair Market Value of such number of shares of Stock on the date the SAR was
granted as set forth in the applicable Award Agreement.

      2.41 "STOCK PAYMENT" means (a) a payment in the form of shares of Stock,
or (b) an option or other right to purchase shares of Stock, as part of any
bonus, deferred compensation or other arrangement, made in lieu of all or any
portion of the compensation, granted pursuant to Section 8.2.

      2.42 "SUBSIDIARY" means any "subsidiary corporation" as defined in Section
424(f) of the Code and any applicable regulations promulgated thereunder of the
Company or any other entity of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Company.

                                       6
<PAGE>

      2.43 "SUCCESSOR ENTITY" has the meaning set forth in Section 2.6(c).

      2.44 "TERMINATION OF CONSULTANCY" means the time when the engagement of a
Participant as a Consultant to the Company or a Parent or Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, by resignation, discharge, death or retirement, but excluding
terminations where there is a simultaneous commencement of employment with the
Company or any Parent or Subsidiary. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a discharge for
good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Consultancy. Notwithstanding any other provision of
the Plan, the Company or any Parent or Subsidiary has an absolute and
unrestricted right to terminate a Consultant's service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.

      2.45 "TERMINATION OF DIRECTORSHIP" shall mean the time when a Participant
who is a Non-Employee Director ceases to be a member of the Board for any
reason, including, but not by way of limitation, a termination by resignation,
failure to be elected, death or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship with respect to Non-Employee Directors.

      2.46 "TERMINATION OF EMPLOYMENT" shall mean the time when the
employee-employer relationship between a Participant and the Company or any
Parent or Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding: (a) terminations
where there is a simultaneous reemployment or continuing employment of a
Participant by the Company or any Parent or Subsidiary, (b) at the discretion of
the Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Parent or Subsidiary with the former
employee. The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for good cause, and all questions of
whether a particular leave of absence constitutes a Termination of Employment;
provided, however, that, with respect to Incentive Stock Options, unless
otherwise determined by the Administrator in its discretion, a leave of absence,
change in status from an employee to an independent contractor or other change
in the employee-employer relationship shall constitute a Termination of
Employment if, and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of Section 422(a)(2) of
the Code and the then applicable regulations and revenue rulings under said
Section.

                                   ARTICLE 3

                           SHARES SUBJECT TO THE PLAN

      3.1 Number of Shares.

            (a) Subject to Article 12 and Section 3.1(b), the aggregate number
of shares of Stock which may be issued or transferred pursuant to Awards under
the Plan shall be the sum of: (i) 2,000,000 shares; plus (ii) the number of
shares of Stock remaining available for issuance and not subject to awards
granted under the Somaxon Pharmaceuticals, Inc. 2004 Equity Incentive Award Plan
(the "EXISTING PLAN") as of the Effective Date; plus (iii) with respect to
awards granted under the Existing Plan on or before the Effective Date that
expire or are canceled without having been exercised in full or shares of

                                        7
<PAGE>

Stock that are forfeited or repurchased pursuant to the terms of awards granted
under the Existing Plan, the number of shares of Stock subject to each such
award as to which such award was not exercised prior to its expiration or
cancellation or which are forfeited or repurchased by the Company. The aggregate
number of shares of Stock authorized for issuance under the Existing Plan was
1,250,000 shares and, accordingly, the total number of shares of Stock under
clauses (ii) and (iii) in the preceding sentence shall not exceed 1,250,000
shares. In addition, subject to Article 12, commencing on January 1, 2007, and
on each January 1 thereafter during the term of the Plan, the number of shares
of Stock which shall be made available for sale under the Plan shall be
increased by that number of shares of Stock equal to the least of (i) 5% of the
Company's outstanding shares on such date, (ii) 2,000,000 shares, or (iii) a
lesser amount determined by the Board. Accordingly, the number of shares of
Stock which shall be available for sale under the Plan shall be subject to
increase under the preceding sentence only on January 1, 2007 and on each
subsequent January 1 through and including January 1, 2015. Notwithstanding
anything in this Section 3.1(a) to the contrary, the number of shares of Stock
that may be issued or transferred pursuant to Awards under the Plan shall not
exceed an aggregate of 21,250,000 shares, subject to Article 12.

            (b) To the extent that an Award terminates, expires, or lapses for
any reason, any shares of Stock subject to the Award shall again be available
for the grant of an Award pursuant to the Plan. Additionally, any shares of
Stock tendered or withheld to satisfy the grant or exercise price or tax
withholding obligation pursuant to any Award shall again be available for the
grant of an Award pursuant to the Plan. If any shares of Restricted Stock are
surrendered by a Participant or repurchased by the Company pursuant to Section
6.3 hereof, such shares shall again be available for the grant of an Award
pursuant to the Plan. The payment of Dividend Equivalents in cash in conjunction
with any outstanding Awards shall not be counted against the shares available
for issuance under the Plan.

            (c) Notwithstanding the provisions of this Section 3.1, no shares of
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an Incentive Stock Option under
Section 422 of the Code.

      3.2 Stock Distributed. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury stock
or Stock purchased on the open market.

      3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Article 12, the maximum
number of shares of Stock with respect to one or more Awards that may be granted
to any one Participant during any calendar year shall be 2,000,000; provided,
however, that the foregoing limitation shall not apply prior to the Public
Trading Date and, following the Public Trading Date, the foregoing limitation
shall not apply until the earliest of: (a) the first material modification of
the Plan (including any increase in the number of shares reserved for issuance
under the Plan in accordance with Section 3.1); (b) the issuance of all of the
shares of Stock reserved for issuance under the Plan; (c) the expiration of the
Plan; (d) the first meeting of stockholders at which members of the Board are to
be elected that occurs after the close of the third calendar year following the
calendar year in which occurred the first registration of an equity security of
the Company under Section 12 of the Exchange Act; or (e) such other date
required by Section 162(m) of the Code and the rules and regulations promulgated
thereunder.

                                   ARTICLE 4

                          ELIGIBILITY AND PARTICIPATION

      4.1 Eligibility. Persons eligible to participate in this Plan include
Employees, Consultants and members of the Board, as determined by the
Administrator.

                                        8
<PAGE>

      4.2 Participation. Subject to the provisions of the Plan, the
Administrator may, from time to time, select from among all Eligible Individuals
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No individual shall have any right to be granted an Award
pursuant to this Plan.

                                   ARTICLE 5

                                  STOCK OPTIONS

      5.1 General. The Administrator is authorized to grant Options to Eligible
Individuals on the following terms and conditions:

            (a) Exercise Price. The exercise price per share of Stock subject to
an Option shall be determined by the Administrator and set forth in the Award
Agreement; provided that the exercise price per share for any Option shall not
be less than 100% of the Fair Market Value per share of the Stock on the date of
the grant.

            (b) Time and Conditions of Exercise. The Administrator shall
determine the time or times at which an Option may be exercised in whole or in
part; provided that the term of any Option granted under the Plan shall not
exceed ten years. The Administrator shall also determine the performance or
other conditions, if any, that must be satisfied before all or part of an Option
may be exercised. The Administrator may extend the term of any outstanding
Option in connection with any Termination of Employment, Termination of
Directorship or Termination of Consultancy of the Participant holding such
Option, or amend any other term or condition of such Option relating to such a
Termination of Employment, Termination of Directorship or Termination of
Consultancy.

            (c) Payment. The Administrator shall determine the methods, terms
and conditions by which the exercise price of an Option may be paid, and the
form and manner of payment, including, without limitation, payment in the form
of cash, a promissory note bearing interest at no less than such rate as shall
then preclude the imputation of interest under the Code, shares of Stock, or
other property acceptable to the Administrator and payment through the delivery
of a notice that the Participant has placed a market sell order with a broker
with respect to shares of Stock then issuable upon exercise of the Option, and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price; provided that payment of such proceeds is then made to the Company upon
settlement of such sale, and the methods by which shares of Stock shall be
delivered or deemed to be delivered to Participants. Notwithstanding any other
provision of the Plan to the contrary, no Participant who is a member of the
Board or an "executive officer" of the Company within the meaning of Section
13(k) of the Exchange Act shall be permitted to pay the exercise price of an
Option in any method which would violate Section 13(k) of the Exchange Act.

            (d) Evidence of Grant. All Options shall be evidenced by an Award
Agreement between the Company and the Participant. The Award Agreement shall
include such additional provisions as may be specified by the Administrator.

      5.2 Incentive Stock Options. Incentive Stock Options may be granted only
to employees (as defined in accordance with Section 3401(c) of the Code) of the
Company or a Subsidiary which constitutes a "subsidiary corporation" of the
Company within Section 424(f) of the Code or a Parent which constitutes a
"parent corporation" of the Company within the meaning of Section 424(e) of the
Code, and the terms of any Incentive Stock Options granted pursuant to the Plan
must comply with the following additional provisions of this Section 5.2 in
addition to the requirements of Section 5.1:

                                        9
<PAGE>

            (a) Ten Percent Owners. An Incentive Stock Option shall be granted
to any individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company or any "subsidiary corporation" of the Company or "parent corporation"
of the Company (each within the meaning of Section 424 of the Code) only if such
Option is granted at an exercise price per share that is not less than 110% of
the Fair Market Value per share of the Stock on the date of the grant and the
Option is exercisable for no more than five years from the date of grant.

            (b) Transfer Restriction. An Incentive Stock Option shall not be
transferable by the Participant other than by will or by the laws of descent or
distribution.

            (c) Right to Exercise. During a Participant's lifetime, an Incentive
Stock Option may be exercised only by the Participant.

            (d) Failure to Meet Requirements. Any Option (or portion thereof)
purported to be an Incentive Stock Option which, for any reason, fails to meet
the requirements of Section 422 of the Code, shall be considered a Non-Qualified
Stock Option.

      5.3 Substitution of Stock Appreciation Rights. The Administrator may
provide in the Award Agreement evidencing the grant of an Option that the
Administrator, in its sole discretion, shall have to right to substitute a Stock
Appreciation Right for such Option at any time prior to or upon exercise of such
Option, subject to the provisions of Article 7 hereof; provided that such Stock
Appreciation Right shall be exercisable for the number of shares of Stock for
which such substituted Option would have been exercisable.

      5.4 Paperless Exercise. In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
exercise of Options, such as a system using an internet website or interactive
voice response, then the paperless exercise of Options by a Participant may be
permitted through the use of such an automated system.

                                   ARTICLE 6

                             RESTRICTED STOCK AWARDS

      6.1 Grant of Restricted Stock. The Administrator is authorized to make
Awards of Restricted Stock to any Eligible Individual selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator. All Awards of Restricted Stock shall be
evidenced by an Award Agreement.

      6.2 Issuance and Restrictions. Restricted Stock shall be subject to such
repurchase restrictions, forfeiture restrictions, restrictions on
transferability and other restrictions as the Administrator 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 or installments or otherwise as the Administrator determines
at the time of the grant of the Award or thereafter. Alternatively, these
restrictions may lapse pursuant to the satisfaction of one or more Performance
Goals or other specific performance goals as the Administrator determines to be
appropriate at the time of the grant of the Award or thereafter, in each case on
a specified date or dates or over any period or periods determined by the
Administrator.

      6.3 Repurchase or Forfeiture. Except as otherwise determined by the
Administrator at the

                                       10
<PAGE>

time of the grant of the Award or thereafter, upon a Participant's Termination
of Employment, Termination of Directorship or Termination of Consultancy during
the applicable restriction period, Restricted Stock that is at that time subject
to restrictions shall be forfeited or subject to repurchase by the Company (or
its assignee) under such terms as the Administrator shall determine; provided,
however, that the Administrator may (a) 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 a Participant's
Termination of Employment, Termination of Directorship or Termination of
Consultancy under certain circumstances, and (b) in other cases waive in whole
or in part restrictions or forfeiture conditions relating to Restricted Stock.

      6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant
to the Plan may be evidenced in such manner as the Administrator 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 or the Award Agreement may provide that the shares shall be held in escrow
by an escrow agent designated by the Company.

                                    ARTICLE 7

                            STOCK APPRECIATION RIGHTS

      7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be
granted to any Eligible Individual selected by the Administrator. A Stock
Appreciation Right shall be subject to such terms and conditions not
inconsistent with the Plan as the Administrator shall impose and shall be
evidenced by an Award Agreement.

      7.2 Terms of Stock Appreciation Rights.

            (a) A Stock Appreciation Right shall be exercisable in such
installments as the Administrator may determine. A Stock Appreciation Right
shall cover such number of shares of Stock as the Administrator may determine.
The exercise price per share of Stock subject to each Stock Appreciation Right
shall be set by the Administrator.

            (b) A Stock Appreciation Right shall entitle the Participant (or
other person entitled to exercise the Stock Appreciation Right pursuant to the
Plan) to exercise all or a specified portion of the Stock Appreciation Right (to
the extent then exercisable pursuant to its terms) and to receive from the
Company an amount determined by multiplying (i) the amount (if any) by which the
Fair Market Value of a share of Stock on the date of exercise of the Stock
Appreciation Right exceeds the exercise price per share of the Stock
Appreciation Right, by (ii) the number of shares of Stock with respect to which
the Stock Appreciation Right shall have been exercised, subject to any
limitations the Administrator may impose.

      7.3 Payment.

            (a) Subject to Sections 7.3(b) and (c), payment of the amounts
determined under Section 7.2(b) above shall be in cash, in Stock (based on its
Fair Market Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Administrator.

            (b) To the extent payment for a Stock Appreciation Right is to be
made in cash, the Award Agreement shall, to the extent necessary to comply with
the requirements of Section 409A of the

                                       11
<PAGE>

Code, specify the date of payment, which may be different than the date of
exercise of the Stock Appreciation Right. If the date of payment for a Stock
Appreciation Right is later than the date of exercise, the Award Agreement may
specify that the Participant be entitled to earnings on such amount until paid.

            (c) To the extent any payment under Section 7.2(b) is effected in
Stock, it shall be made subject to satisfaction of all provisions of Article 5
above pertaining to Options.

                                   ARTICLE 8

                              OTHER TYPES OF AWARDS

      8.1 Dividend Equivalents.

            (a) Any Eligible Individual selected by the Administrator may be
granted Dividend Equivalents based on the dividends on the shares of Stock that
are subject to any Award, to be credited as of dividend payment dates, during
the period between the date the Award is granted and the date the Award is
exercised, vests or expires, as determined by the Administrator. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such
formula and at such time and subject to such limitations as may be determined by
the Administrator.

            (b) Dividend Equivalents granted with respect to Options or SARs
that are intended to be Qualified Performance-Based Compensation shall be
payable, with respect to pre-exercise periods, regardless of whether such Option
or SAR is subsequently exercised.

      8.2 Stock Payments. Any Eligible Individual selected by the Administrator
may receive Stock Payments in the manner determined from time to time by the
Administrator; provided, that unless otherwise determined by the Administrator
such Stock Payments shall be made in lieu of base salary, bonus, or other cash
compensation otherwise payable to such Eligible Individual. The number of shares
shall be determined by the Administrator and may be based upon the Performance
Goals or other specific performance goals determined appropriate by the
Administrator.

      8.3 Restricted Stock Units. The Administrator is authorized to make Awards
of Restricted Stock Units to any Eligible Individual selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator. At the time of grant, the Administrator 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. Alternatively, Restricted Stock Units may become fully vested
and nonforfeitable pursuant to the satisfaction of one or more Performance Goals
or other specific performance goals as the Administrator determines to be
appropriate at the time of the grant of the Restricted Stock Units or
thereafter, in each case on a specified date or dates or over any period or
periods determined by the Administrator. At the time of grant, the Administrator
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 Eligible Individual to whom the Award
is granted. On the maturity date, the Company shall transfer to the Participant
one unrestricted, fully transferable share of Stock for each Restricted Stock
Unit that is vested and scheduled to be distributed on such date and not
previously forfeited. The Administrator shall specify the purchase price, if
any, to be paid by the Participant to the Company for such shares of Stock.

      8.4 Term. Except as otherwise provided herein, the term of any Award of
Dividend Equivalents, Stock Payments or Restricted Stock Units shall be set by
the Administrator in its discretion.

                                       12
<PAGE>

      8.5 Exercise or Purchase Price. The Administrator may establish the
exercise or purchase price, if any, of any Award of Stock Payments or Restricted
Stock Units; provided, however, that such price shall not be less than the par
value of a share of Stock on the date of grant, unless otherwise permitted by
applicable state law.

      8.6 Form of Payment. Payments with respect to any Awards granted under
Sections 8.1, 8.2 or 8.3 shall be made in cash, in Stock or a combination of
both, as determined by the Administrator.

      8.7 Award Agreement. All Awards under this Article 8 shall be subject to
such additional terms and conditions as determined by the Administrator and
shall be evidenced by a written Award Agreement.

                                   ARTICLE 9

                            PERFORMANCE-BASED AWARDS

      9.1 Purpose. The purpose of this Article 9 is to provide the Administrator
the ability to qualify Awards other than Options and SARs and that are granted
pursuant to Articles 6 and 8 as Qualified Performance-Based Compensation. If the
Administrator, in its discretion, decides to grant a Performance-Based Award to
a Covered Employee, the provisions of this Article 9 shall control over any
contrary provision contained in Articles 6 or 8; provided, however, that the
Administrator 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 Article 9.

      9.2 Applicability. This Article 9 shall apply only to those Covered
Employees selected by the Administrator 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.

      9.3 Procedures with Respect to Performance-Based Awards. To the extent
necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles 6 and 8 which may be granted to one or more Covered
Employees, no later than ninety (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 Administrator 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 Administrator 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 Administrator 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
Administrator may deem relevant to the assessment of individual or corporate
performance for the Performance Period.

      9.4 Payment of Performance-Based Awards. Unless otherwise provided in the
applicable Award Agreement, a Participant must be employed by the Company or a
Parent or Subsidiary on the day

                                       13
<PAGE>

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.

      9.5 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.

                                   ARTICLE 10

                    COMPLIANCE WITH SECTION 409A OF THE CODE

      10.1 Awards subject to Code Section 409A. Any Award that constitutes, or
provides for, a deferral of compensation subject to Section 409A of the Code (a
"SECTION 409A AWARD") shall satisfy the requirements of Section 409A of the Code
and this Article 10, to the extent applicable. The Award Agreement with respect
to a Section 409A Award shall incorporate the terms and conditions required by
Section 409A of the Code and this Article 10.

      10.2 Distributions under a Section 409A Award.

            (a) Subject to subsection (b), any shares of Stock or other property
or amounts to be paid or distributed upon the grant, issuance, vesting, exercise
or payment of a Section 409A Award shall be distributed in accordance with the
requirements of Section 409A(a)(2) of the Code, and shall not be distributed
earlier than:

                  (i) the Participant's separation from service, as determined
      by the Secretary of the Treasury;

                  (ii) the date the Participant becomes disabled;

                  (iii) the Participant's death;

                  (iv) a specified time (or pursuant to a fixed schedule)
      specified under the Award Agreement at the date of the deferral
      compensation;

                  (v) to the extent provided by the Secretary of the Treasury, a
      change in the ownership or effective control of the Company, or in the
      ownership of a substantial portion of the assets of the Company; or

                  (vi) the occurrence of an unforeseeable emergency with respect
      to the Participant.

            (b) In the case of a Participant who is a specified employee, the
requirement of paragraph (a)(i) shall be met only if the distributions with
respect to the Section 409A Award may not be made before the date which is six
months after the Participant's separation from service (or, if earlier, the date
of the Participant's death). For purposes of this subsection (b), a Participant
shall be a specified employee if such Participant is a key employee (as defined
in Section 416(i) of the Code without regard

                                       14
<PAGE>

to paragraph (5) thereof) of a corporation any stock of which is publicly traded
on an established securities market or otherwise, as determined under Section
409A(a)(2)(B)(i) of the Code and the Treasury Regulations thereunder.

            (c) The requirement of paragraph (a)(vi) shall be met only if, as
determined under Treasury Regulations under Section 409A(a)(2)(B)(ii) of the
Code, the amounts distributed with respect to the unforeseeable emergency do not
exceed the amounts necessary to satisfy such unforeseeable emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such unforeseeable
emergency is or may be relieved through reimbursement or compensation by
insurance or otherwise or by liquidation of the Participant's assets (to the
extent the liquidation of such assets would not itself cause severe financial
hardship).

            (d) For purposes of this Section, the terms specified therein shall
have the respective meanings ascribed thereto under Section 409A of the Code and
the Treasury Regulations thereunder.

      10.3 Prohibition on Acceleration of Benefits. The time or schedule of any
distribution or payment of any shares of Stock or other property or amounts
under a Section 409A Award shall not be accelerated, except as otherwise
permitted under Section 409A(a)(3) of the Code and the Treasury Regulations
thereunder.

      10.4 Elections under Section 409A Awards.

            (a) Any deferral election provided under or with respect to an Award
to any Eligible Individual, or to the Participant holding a Section 409A Award,
shall satisfy the requirements of Section 409A(a)(4)(B) of the Code, to the
extent applicable, and, except as otherwise permitted under paragraph (i) or
(ii) below, any such deferral election with respect to compensation for services
performed during a taxable year shall be made not later than the close of the
preceding taxable year, or at such other time as provided in Treasury
Regulations.

                  (i) In the case of the first year in which an Eligible
      Individual or a Participant holding a Section 409A Award, becomes eligible
      to participate in the Plan, any such deferral election may be made with
      respect to services to be performed subsequent to the election with thirty
      (30) days after the date the Eligible Individual, or the Participant
      holding a Section 409A Award, becomes eligible to participate in the Plan,
      as provided under Section 409A(a)(4)(B)(ii) of the Code.

                  (ii) In the case of any performance-based compensation based
      on services performed by an Eligible Individual, or the Participant
      holding a Section 409A Award, over a period of at least twelve (12)
      months, any such deferral election may be made no later than six months
      before the end of the period, as provided under Section 409A(a)(4)(B)(iii)
      of the Code.

            (b) In the event that a Section 409A Award permits, under a
subsequent election by the Participant holding such Section 409A Award, a delay
in a distribution or payment of any shares of Stock or other property or amounts
under such Section 409A Award, or a change in the form of distribution or
payment, such subsequent election shall satisfy the requirements of Section
409A(a)(4)(C) of the Code, and:

                  (i) such subsequent election may not take effect until at
      least twelve months after the date on which the election is made,

                                       15
<PAGE>

                  (ii) in the case such subsequent election relates to a
      distribution or payment not described in Section 10.2(a)(ii), (iii) or
      (vi), the first payment with respect to such election may be deferred for
      a period of not less than five years from the date such distribution or
      payment otherwise would have been made, and

                  (iii) in the case such subsequent election relates to a
      distribution or payment described in Section 10.2(a)(iv), such election
      may not be made less than twelve months prior to the date of the first
      scheduled distribution or payment under Section 10.2(a)(iv).

      10.5 Compliance in Form and Operation. A Section 409A Award, and any
election under or with respect to such Section 409A Award, shall comply in form
and operation with the requirements of Section 409A of the Code and the Treasury
Regulations thereunder.

                                   ARTICLE 11

                         PROVISIONS APPLICABLE TO AWARDS

      11.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan
may, in the discretion of the Administrator, be granted either alone, in
addition to, or in tandem with, any other Award granted pursuant to the Plan.
Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.

      11.2 Award Agreement. Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include the term of an Award, the provisions applicable in the event
of the Participant's Termination of Employment, Termination of Directorship or
Termination of Consultancy, and the Company's authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind an Award.

      11.3 Limits on Transfer.

            (a) Except as otherwise provided by the Administrator pursuant to
Section 11.3(b), no right or interest of a Participant in any Award may be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Company or a Parent or Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company or a
Parent or Subsidiary. Except as otherwise provided by the Administrator pursuant
to Section 11.3(b), no Award shall be assigned, transferred, or otherwise
disposed of by a Participant other than by will or the laws of descent and
distribution, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such
shares have lapsed.

            (b) Notwithstanding Section 11.3(a), the Administrator, in its sole
discretion, may permit an Award (other than an Incentive Stock Option) to be
transferred to, exercised by and paid to any one or more Permitted Transferees
(as defined below), subject to the following terms and conditions: (i) an Award
transferred to a Permitted Transferee shall not be assignable or transferable by
the Permitted Transferee other than by will or the laws of descent and
distribution; (ii) any Award which is transferred to a Permitted Transferee
shall continue to be subject to all the terms and conditions of the Award as
applicable to the original Participant (other than the ability to further
transfer the Award); and (iii) the Participant and the Permitted Transferee
shall execute any and all documents requested by the Administrator, including,
without limitation documents to (A) confirm the status of the transferee as a
Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal and state securities laws and (C) evidence the
transfer. For purposes of this Section 11.3(b),

                                       16
<PAGE>

"PERMITTED TRANSFEREE" shall mean, with respect to a Participant, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Participant's household (other than a
tenant or employee), a trust in which these persons (or the Participant) control
the management of assets, and any other entity in which these persons (or the
Participant) own more than fifty percent of the voting interests, or any other
transferee specifically approved by the Administrator.

      11.4 Beneficiaries. Notwithstanding Section 11.3, a Participant may, in
the manner determined by the Administrator, designate a beneficiary to exercise
the rights of the Participant and to receive any distribution with respect to
any Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan and Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Administrator. If the Participant is married and resides in a
community property state, a designation of a person other than the Participant's
spouse as his or her beneficiary with respect to more than 50% of the
Participant's interest in the Award shall not be effective without the prior
written consent of the Participant's spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Administrator.

      11.5 Stock Certificates; Book-Entry Procedures.

            (a) Notwithstanding anything herein to the contrary, the Company
shall not be required to issue or deliver any certificates evidencing shares of
Stock pursuant to the exercise of any Award, unless and until the Board has
determined, with advice of counsel, that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Administrator deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The
Administrator may place legends on any Stock certificate to reference
restrictions applicable to the Stock. In addition to the terms and conditions
provided herein, the Administrator may require that a Participant make such
reasonable covenants, agreements, and representations as the Administrator, in
its discretion, deems advisable in order to comply with any such laws,
regulations, or requirements. The Administrator shall have the right to require
any Participant to comply with any timing or other restrictions with respect to
the settlement or exercise of any Award, including a window-period limitation,
as may be imposed in the discretion of the Administrator.

            (b) Notwithstanding any other provision of the Plan, unless
otherwise determined by the Administrator or required by applicable law, rule or
regulation, the Company shall not deliver to any Participant certificates
evidencing shares of Stock issued in connection with any Award and instead such
shares of Stock shall be recorded in the books of the Company (or, as
applicable, its transfer agent or stock plan administrator).

                                       17
<PAGE>

                                   ARTICLE 12

                          CHANGES IN CAPITAL STRUCTURE

      12.1 Adjustments.

            (a) In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off, recapitalization,
distribution of Company assets to stockholders (other than normal cash
dividends), or any other corporate event affecting the Stock or the share price
of the Stock, the Administrator may make such proportionate adjustments, if any,
as the Administrator in its discretion may deem appropriate to reflect such
change with respect to (i) the aggregate number and type of shares that may be
issued under the Plan (including, but not limited to, adjustments of the
limitations in Sections 3.1 and 3.3); (ii) the terms and conditions of any
outstanding Awards (including, without limitation, any applicable performance
targets or criteria with respect thereto); and (iii) the grant, exercise or
purchase price per share for any outstanding Awards under the Plan. 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.

            (b) In the event of any transaction or event described in Section
12.1(a) or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the
Company or any affiliate (including without limitation any Change in Control),
or of changes in applicable laws, regulations or accounting principles, and
whenever the Administrator determines that such action is appropriate in order
to prevent the dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any Award under
the Plan, to facilitate such transactions or events or to give effect to such
changes in laws, regulations or principles, the Administrator, in its sole
discretion and on such terms and conditions as it deems appropriate, either by
the terms of the Award or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Participant's request,
is hereby authorized to take any one or more of the following actions:

                        (i) To provide for either (A) termination of any such
Award in exchange for an amount of cash, if any, equal to the amount that would
have been received upon the exercise of such Award or realization of the
Participant's rights (and, if as of the date of the occurrence of the
transaction or event described in this Section 12.1(b) the Administrator
determines in good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant's rights, then such
Award may be terminated by the Company without payment) or (B) the replacement
of such Award with other rights or property selected by the Administrator in its
sole discretion;

                        (ii) To provide that such Award be assumed by the
successor or survivor corporation, or a parent or subsidiary thereof, or shall
be substituted for by similar options, rights or awards covering the stock of
the successor or survivor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices; and

                        (iii) To make adjustments in the number and type of
shares of Stock (or other securities or property) subject to outstanding Awards,
and in the number and kind of outstanding Restricted Stock and/or in the terms
and conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, rights and awards and options, rights and
awards which may be granted in the future;

                                       18
<PAGE>

                        (iv) To provide that such Award shall be exercisable or
payable or fully vested with respect to all shares covered thereby,
notwithstanding anything to the contrary in the Plan or the applicable Award
Agreement; and

                        (v) To provide that the Award cannot vest, be exercised
or become payable after such event.

      12.2 Acceleration Upon a Change in Control.

            (a) Notwithstanding Section 12.1(b), and except as may otherwise be
provided in any applicable Award Agreement or other written agreement between
the Company and a Participant, if a Change in Control occurs and a Participant's
Awards are not continued, converted, assumed, or replaced by (i) the Company or
a Parent or Subsidiary of the Company, or (ii) a Successor Entity, such Awards
shall become fully exercisable and/or payable, as applicable, and all
forfeiture, repurchase and other restrictions on such Awards shall lapse
immediately prior to such Change in Control. Upon, or in anticipation of, a
Change in Control, the Administrator may cause any and all Awards outstanding
hereunder to terminate at a specific time in the future, including but not
limited to the date of such Change in Control, and shall give each Participant
the right to exercise such Awards during a period of time as the Administrator,
in its sole and absolute discretion, shall determine.

            (b) In the event of a Change in Control where a Participant's Awards
are continued, converted, assumed, or replaced by (i) the Company or a Parent or
Subsidiary of the Company, or (ii) a Successor Entity, then 50% of such
Participant's unvested Awards shall become fully exercisable and/or payable, as
applicable, and all forfeiture, repurchase and other restrictions on such Awards
shall lapse, immediately prior to such Change in Control.

            (c) Except as otherwise provided in the Agreement evidencing the
Award, any such Awards that are continued, converted, assumed, or replaced by
(i) the Company or a Parent or Subsidiary of the Company, or (ii) a Successor
Entity, in a Change in Control and do not otherwise accelerate at that time
shall become fully exercisable and/or payable, as applicable, and all
forfeiture, repurchase and other restrictions on such Awards shall lapse in the
event that the Participant has a Termination of Employment, Termination of
Directorship or Termination of Consultancy (i) in connection with the Change in
Control or (ii) subsequently within twelve months following such Change in
Control, unless such termination is by reason of the Participant's discharge by
the Company or a Parent or Subsidiary or a Successor Entity for Cause or by
reason of the Participant's voluntary resignation without Good Reason.

      12.3 No Other Rights. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the
Administrator under the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to an Award or the grant or exercise price of
any Award.

                                   ARTICLE 13

                                 ADMINISTRATION

      13.1 Administrator. The Administrator of the Plan shall be the
Compensation Committee of the Board (or another committee or a subcommittee of
the Board to which the Board delegates

                                       19
<PAGE>

administration of the Plan) (such committee, the "COMMITTEE"), which Committee
shall consist solely of two or more members of the Board each of whom is both an
"outside director," within the meaning of Section 162(m) of the Code, a
Non-Employee Director and an "independent director" under the rules of the
Nasdaq Stock Market. Notwithstanding the foregoing: (a) the full Board, 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 "ADMINISTRATOR" as used in this Plan shall be
deemed to refer to the Board, and (b) the Committee may delegate its authority
hereunder to the extent permitted by Section 13.5. Appointment of Committee
members shall be effective upon acceptance of appointment. In its sole
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 except with respect to
matters which under Rule 16b-3 under the Exchange Act or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be
determined in the sole discretion of the Committee. Committee members may resign
at any time by delivering written notice to the Board. Vacancies in the
Committee may only be filled by the Board.

      13.2 Action by the Administrator. A majority of the Administrator shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and, subject to applicable law and the
Bylaws of the Company, acts approved in writing by a majority of the
Administrator in lieu of a meeting, shall be deemed the acts of the
Administrator. Each member of the Administrator is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any
officer or other employee of the Company or any Parent or Subsidiary, the
Company's independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

      13.3 Authority of Administrator. Subject to any specific designation in
the Plan, the Administrator has the exclusive power, authority and discretion
to:

            (a) Designate Participants to receive Awards;

            (b) Determine the type or types of Awards to be granted to each
Participant;

            (c) Determine the number of Awards to be granted and the number of
shares of Stock to which an Award will relate;

            (d) Determine the terms and conditions of any Award granted pursuant
to the Plan, including, but not limited to, the exercise price, grant price, or
purchase price, any reload provision, any restrictions or limitations on the
Award, any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, any provisions
related to non-competition and recapture of gain on an Award, based in each case
on such considerations as the Administrator in its sole discretion determines;
provided, however, that the Administrator shall not have the authority to
accelerate the vesting or waive the forfeiture of any Performance-Based Awards;

            (e) Determine whether, to what extent, and pursuant to what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;

            (f) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;

            (g) Decide all other matters that must be determined in connection
with an Award;

                                       20
<PAGE>

            (h) Establish, adopt, or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan;

            (i) Interpret the terms of, and any matter arising pursuant to, the
Plan or any Award Agreement; and

            (j) Make all other decisions and determinations that may be required
pursuant to the Plan or as the Administrator deems necessary or advisable to
administer the Plan.

      13.4 Decisions Binding. The Administrator's interpretation of the Plan,
any Awards granted pursuant to the Plan, any Award Agreement and all decisions
and determinations by the Administrator with respect to the Plan are final,
binding, and conclusive on all parties.

      13.5 Delegation of Authority. To the extent permitted by applicable law,
the Committee may from time to time delegate to a committee of one or more
members of the Board or one or more officers of the Company the authority to
grant or amend Awards to Participants other than (a) senior executives of the
Company who are subject to Section 16 of the Exchange Act, (b) Covered
Employees, or (c) officers of the Company (or members of the Board) to whom
authority to grant or amend Awards has been delegated hereunder. Any delegation
hereunder shall be subject to the restrictions and limits that the Committee
specifies at the time of such delegation, and the Committee may at any time
rescind the authority so delegated or appoint a new delegatee. At all times, the
delegatee appointed under this Section 13.5 shall serve in such capacity at the
pleasure of the Committee.

                                   ARTICLE 14

                         EFFECTIVE AND EXPIRATION DATES

      14.1 Effective Date. The Plan will be effective as of the Effective Date.

      14.2 Approval of Plan by Stockholders. 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 or awarded
prior to such stockholder approval, provided, that such Awards shall not be
exercisable nor shall such Awards vest 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 or awarded under the Plan shall thereupon be canceled and become null
and void. In addition, if the Board determines that Awards other than Options or
Stock Appreciation Rights which may be granted to Section 162(m) Participants
should continue to be eligible to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code, the Performance Criteria must be
disclosed to and approved by the Company's stockholders no later than the first
stockholder meeting that occurs in the fifth year following the year in which
the Company's stockholders previously approved the Plan, as amended and restated
to include the Performance Criteria.

      14.3 Expiration Date. The Plan will expire on, and no Award may be granted
pursuant to the Plan after, the earlier of the tenth anniversary of (i) the date
this Plan is approved by the Board or (ii) the date this Plan is approved by the
Company's stockholders (the "EXPIRATION DATE"). Any Awards that are outstanding
on the tenth anniversary of the Effective Date shall remain in force according
to the terms of the Plan and the applicable Award Agreement.

                                       21
<PAGE>

                                   ARTICLE 15

                    AMENDMENT, MODIFICATION, AND TERMINATION

      15.1 Amendment, Modification, And Termination. The Board may terminate,
amend or modify the Plan; provided, however, that (a) to the extent necessary to
comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required, and (b) stockholder approval is required for any
amendment to the Plan that increases the number of shares available under the
Plan (other than any adjustment as provided by Article 12). Notwithstanding any
provision in this Plan to the contrary, absent approval of the stockholders of
the Company, no Option may be amended to reduce the per share exercise price of
the shares subject to such Option below the per share exercise price as of the
date the Option is granted and, except as permitted by Article 12, no Option may
be granted in exchange for, or in connection with, the cancellation or surrender
of an Option having a higher per share exercise price.

      15.2 Awards Previously Granted. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted pursuant to the Plan without the prior written consent of the
Participant.

                                   ARTICLE 16

                               GENERAL PROVISIONS

      16.1 No Rights to Awards. No Participant, Employee, or other person shall
have any claim to be granted any Award pursuant to the Plan, and neither the
Company nor the Administrator is obligated to treat Participants, Employees, and
other persons uniformly.

      16.2 No Stockholders Rights. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.

      16.3 Withholding. The Company or any Parent or Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company an amount sufficient to satisfy federal, state, local and foreign
taxes (including the Participant's employment tax obligations) required by law
to be withheld with respect to any taxable event concerning a Participant
arising as a result of this 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
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 statutory
withholding rates for federal, state, local and foreign income tax and payroll
tax purposes that are applicable to such supplemental taxable income.

      16.4 No Right to Employment or Services. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company or
any Parent or Subsidiary to terminate any

                                       22
<PAGE>

Participant's employment or services at any time, nor confer upon any
Participant any right to continue in the employ or service of the Company or any
Parent or Subsidiary.

      16.5 Unfunded Status of Awards. The Plan is intended to be an unfunded
plan for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Parent or Subsidiary.

      16.6 Indemnification. To the extent allowable pursuant to applicable law,
the Administrator (and each member thereof) shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act pursuant to the Plan and against and from any and all amounts paid by him
or her in satisfaction of judgment in such action, suit, or proceeding against
him or her; provided he or she gives the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled pursuant to the Company's Certificate of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.

      16.7 Relationship to other Benefits. No payment pursuant to the Plan shall
be taken into account in determining any benefits pursuant to any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Parent or Subsidiary except to the extent otherwise
expressly provided in writing in such other plan or an agreement thereunder.

      16.8 Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.

      16.9 Titles and Headings. The titles and headings of the Sections in the
Plan are for convenience of reference only and, in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

      16.10 Fractional Shares. No fractional shares of Stock shall be issued and
the Administrator shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.

      16.11 Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to any
Participant who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule.

      16.12 Government and Other Regulations. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register pursuant
to the Securities Act any of the shares of Stock paid pursuant to the Plan. If
the shares paid pursuant to the Plan may in certain circumstances be exempt from
registration pursuant to the Securities Act, the Company may restrict the
transfer of such shares in such manner as it deems advisable

                                       23
<PAGE>

to ensure the availability of any such exemption.

      16.13 Governing Law. The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of California, without
regard to the conflicts of law principles thereof.

      16.14 Acceleration Upon Death or Disability. With respect to Participants
who are Employees or members of the Board of the Company, in the event of a
Participant's Termination of Employment or Termination of Directorship, as
applicable, on account of Disability or death, that number of Participant's
unvested Awards that would have become fully vested, exercisable and/or payable,
as applicable, over the twelve months following the Participant's Termination of
Employment or Termination of Directorship, as applicable, under the vesting
schedules applicable to such Awards had the Participant remained continuously
employed by the Company during such period shall immediately become so vested,
exercisable and/or payable, as applicable, on the date of termination.

                                       24
<PAGE>

                          SOMAXON PHARMACEUTICALS, INC.

                        2005 EQUITY INCENTIVE AWARD PLAN

                          STOCK OPTION GRANT NOTICE AND
                             STOCK OPTION AGREEMENT

      Somaxon Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"),
pursuant to its 2005 Equity Incentive Award Plan (the "PLAN"), hereby grants to
the holder listed below ("PARTICIPANT"), an option to purchase the number of
shares of the Company's Stock set forth below (the "OPTION"). This Option is
subject to all of the terms and conditions as set forth herein and in the Stock
Option Agreement attached hereto as Exhibit A (the "STOCK OPTION 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 Stock Option Agreement.

PARTICIPANT:               ____________________________________________
GRANT DATE:                ____________________________________________
EXERCISE PRICE PER SHARE:  $___________________________________________
TOTAL EXERCISE PRICE:      $___________________________________________
TOTAL NUMBER OF SHARES
SUBJECT TO THE OPTION:     ____________________________________________
EXPIRATION DATE:           ____________________________________________

TYPE OF OPTION:   [ ] Incentive Stock Option    [ ] Non-Qualified Stock Option

VESTING SCHEDULE: [To be specified in individual agreements]

      By his or her signature, Participant agrees to be bound by the terms and
conditions of the Plan, the Stock Option Agreement and this Grant Notice.
Participant has reviewed the Stock Option 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 Stock Option 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 or the Option.

SOMAXON PHARMACEUTICALS, INC.            PARTICIPANT

By: _________________________________    By: ___________________________________
Print Name:__________________________    Print Name: ___________________________
Title: ______________________________
Address: 12750 High Bluff Drive, Suite   Address: ______________________________
         310 San Diego, CA   92130                ______________________________

<PAGE>

                                    EXHIBIT A

                          TO STOCK OPTION GRANT NOTICE

                             STOCK OPTION AGREEMENT

      Pursuant to the Stock Option Grant Notice ("GRANT NOTICE") to which this
Stock Option Agreement (this "AGREEMENT") is attached, Somaxon Pharmaceuticals,
Inc., a Delaware corporation (the "COMPANY"), has granted to Participant an
option under the Company's 2005 Equity Incentive Award Plan (the "PLAN") to
purchase the number of shares of Stock 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 Option is subject to the terms
and conditions of the Plan which are incorporated herein by reference.

                                   ARTICLE II

                                 GRANT OF OPTION

      2.1   Grant of Option. 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 Option to purchase any part or all of an aggregate of the
number of shares of Stock set forth in the Grant Notice, upon the terms and
conditions set forth in the Plan and this Agreement. Unless designated as a
Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive
Stock Option to the maximum extent permitted by law.

      2.2   Exercise Price. The exercise price of the shares of Stock subject to
the Option shall be as set forth in the Grant Notice, without commission or
other charge; provided, however, that if this Option is designated as an
Incentive Stock Option, the price per share of the shares subject to the Option
shall not be less than the greater of (i) 100% of the Fair Market Value of a
share of Stock on the Grant Date, or (ii) 110% of the Fair Market Value of a
share of Stock on the Grant Date in the case of a Participant then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any "subsidiary
corporation" of the Company or any "parent corporation" of the Company (each
within the meaning of Section 424 of the Code).

      2.3   Consideration to the Company. In consideration of the grant of the
Option 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 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

                                      A-1
<PAGE>

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

                            PERIOD OF EXERCISABILITY

      3.1   Commencement of Exercisability.

            (a) Subject to Sections 3.3 and 5.8, the Option shall become vested
and exercisable in such amounts and at such times as are set forth in the Grant
Notice.

            (b) No portion of the Option which has not become vested and
exercisable at the date of Participant's Termination of Employment, Termination
of Directorship or Termination of Consultancy shall thereafter become vested and
exercisable, except as may be otherwise provided by the Administrator or as set
forth in a written agreement between the Company and Participant [FOR EXECUTIVE
OFFICERS ONLY: , including, without limitation, that certain Employment
Agreement dated as of ___________, between Participant and the Company (the
"EMPLOYMENT AGREEMENT")].

      3.2 Duration of Exercisability. The installments provided for in the
vesting schedule set forth in the Grant Notice are cumulative. Each such
installment which becomes vested and exercisable pursuant to the vesting
schedule set forth in the Grant Notice shall remain vested and exercisable until
it becomes unexercisable under Section 3.3.

      3.3 Expiration of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:

            (a) The expiration of ten years from the Grant Date;

            (b) If this Option is designated as an Incentive Stock Option and
Participant owned (within the meaning of Section 424(d) of the Code), at the
time the Option was granted, more than 10% of the total combined voting power of
all classes of stock of the Company or any "subsidiary corporation" of the
Company or "parent corporation" of the Company (each within the meaning of
Section 424 of the Code), the expiration of five years from the date the Option
was granted; or

            (c) Except as set forth in a written agreement with the Company [FOR
EXECUTIVE OFFICERS ONLY: , including, without limitation, the Employment
Agreement,] the expiration of three months following the date of Participant's
Termination of Employment, Termination of Directorship or Termination of
Consultancy, unless such termination occurs by reason of Participant's death,
Disability or Participant's discharge for Cause;

            (d) The expiration of one year following the date of Participant's
Termination of Employment, Termination of Directorship or Termination of
Consultancy by reason of Participant's death or Disability; or

            (e) The date of Participant's Termination of Employment, Termination
of Directorship or Termination of Consultancy by the Company or any Parent or
Subsidiary by reason of Participant's discharge for Cause.

                                      A-2
<PAGE>

      Participant acknowledges that an Incentive Stock Option exercised more
than three months after Participant's Termination of Employment, other than by
reason of death or Disability, will be taxed as a Non-Qualified Stock Option.

      3.4   Special Tax Consequences. Participant acknowledges that, to the
extent that the aggregate Fair Market Value (determined as of the time the
Option is granted) of all shares of Stock with respect to which Incentive Stock
Options, including the Option, are exercisable for the first time by Participant
in any calendar year exceeds $100,000 (or such other limitation as imposed by
Section 422(d) of the Code), the Option and such other options shall be treated
as not qualifying under Section 422 of the Code but rather shall be considered
Non-Qualified Stock Options. Participant further acknowledges that the rule set
forth in the preceding sentence shall be applied by taking Options and other
"incentive stock options" into account in the order in which they were granted,
as determined under Section 422(d) of the Code and the Treasury Regulations
thereunder.

                                   ARTICLE IV

                               EXERCISE OF OPTION

      4.1   Person Eligible to Exercise. Except as provided in Sections 5.2(b)
and 5.2(c), during the lifetime of Participant, only Participant may exercise
the Option or any portion thereof. After the death of Participant, any
exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by Participant's personal
representative or by any person empowered to do so under the deceased
Participant's will or under the then applicable laws of descent and
distribution.

      4.2   Partial Exercise. Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in whole or in part
at any time prior to the time when the Option or portion thereof becomes
unexercisable under Section 3.3.

      4.3   Manner of Exercise. The Option, or any exercisable portion thereof,
may be exercised solely by delivery to the Secretary of the Company or the
Secretary's office of all of the following prior to the time when the Option or
such portion thereof becomes unexercisable under Section 3.3:

            (a)   An Exercise Notice in writing signed by Participant or any
other person then entitled to exercise the Option or portion thereof, stating
that the Option or portion thereof is thereby exercised, such notice complying
with all applicable rules established by the Administrator. Such notice shall be
substantially in the form attached as Exhibit B to the Grant Notice (or such
other form as is prescribed by the Administrator); and

            (b)   Subject to Section 5.1(c) of the Plan:

                  (i)   Full payment (in cash or by check) for the shares with
      respect to which the Option or portion thereof is exercised; or

                  (ii)  Such payment may be made, in whole or in part, through
      the delivery of shares of Stock which have been owned by Participant for
      at least six months, duly endorsed for transfer to the Company with a Fair
      Market Value on the date of delivery equal to the aggregate exercise price
      of the Option or exercised portion thereof; or

                  (iii) Through the delivery of a notice that Participant has
      placed a market sell order with a broker with respect to shares of Stock
      then issuable upon exercise of the Option, and

                                      A-3
<PAGE>

      that the broker has been directed to pay a sufficient portion of the net
      proceeds of the sale to the Company in satisfaction of the Option exercise
      price; provided, that payment of such proceeds is made to the Company upon
      settlement of such sale; or

                  (iv)  Subject to any applicable laws, any combination of the
      consideration provided in the foregoing paragraphs (i), (ii) and (iii);
      and

            (c)   A bona fide written representation and agreement, in such form
as is prescribed by the Administrator, signed by Participant or the other person
then entitled to exercise such Option or portion thereof, stating that the
shares of Stock are being acquired for Participant's own account, for investment
and without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act and then
applicable rules and regulations thereunder and any other applicable law, and
that Participant or other person then entitled to exercise such Option or
portion thereof will indemnify the Company against and hold it free and harmless
from any loss, damage, expense or liability resulting to the Company if any sale
or distribution of the shares by such person is contrary to the representation
and agreement referred to above. The Administrator may, in its absolute
discretion, take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state securities
laws or regulations and any other applicable law. Without limiting the
generality of the foregoing, the Administrator may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Securities Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing Stock
issued on exercise of the Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; and

            (d)   The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax, which may be in the form of
consideration used by Participant to pay for such shares under Section 4.3(b),
subject to Section 16.3 of the Plan; and

            (e)   In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than Participant,
appropriate proof of the right of such person or persons to exercise the Option.

      4.4   Conditions to Issuance of Stock Certificates. The shares of Stock
deliverable upon the exercise of the Option, 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
of Stock purchased upon the exercise of the Option or portion thereof 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

            (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

                                      A-4
<PAGE>

            (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 any applicable withholding tax, which may be in the form of
consideration used by Participant to pay for such shares under Section 4.3(b),
subject to Section 16.3 of the Plan; and

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

      4.5   Rights as Stockholder. The holder of the Option shall not be, nor
have any of the rights or privileges of, a stockholder of the Company in respect
of any shares purchasable upon the exercise of any part of the Option unless and
until such shares shall have been issued by the Company to such holder (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
shares are issued, except as provided in Article 12 of the Plan.

                                   ARTICLE V

                                OTHER PROVISIONS

      5.1   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 Option. 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.

      5.2   Option Not Transferable.

            (a)   Subject to Section 5.2(b), the Option may not be sold,
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution, unless and until the shares underlying the Option have
been issued, and all restrictions applicable to such shares have lapsed. Neither
the Option nor any interest or right therein shall be liable for the debts,
contracts or engagements of Participant or his or her successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

            (b)   Notwithstanding any other provision in this Agreement, with
the consent of the Administrator and to the extent the Option is not intended to
qualify as an Incentive Stock Option, the Option may be transferred to one or
more Permitted Transferees, subject to the terms and conditions set forth in
Section 11.3(b) of the Plan.

            (c)   Unless transferred to a Permitted Transferee in accordance
with Section 5.2(b), during the lifetime of Participant, only Participant may
exercise the Option or any portion thereof. Subject to such conditions and
procedures as the Administrator may require, a Permitted Transferee may

                                      A-5
<PAGE>

exercise the Option or any portion thereof during Participant's lifetime. After
the death of Participant, any exercisable portion of the Option may, prior to
the time when the Option becomes unexercisable under Section 3.3, be exercised
by Participant's personal representative or by any person empowered to do so
under the deceased Participant's will or under the then applicable laws of
descent and distribution.

      5.3   Lock-Up Period. Participant hereby agrees that, if so requested by
the Company or any representative of the underwriters (the "MANAGING
UNDERWRITER") in connection with any registration of the offering of any
securities of the Company under the Securities Act, Participant shall not sell
or otherwise transfer any shares of Stock or other securities of the Company
during such period as may be requested in writing by the Managing Underwriter
and agreed to in writing by the Company (which period shall not be longer than
one hundred eighty days) (the "MARKET STANDOFF PERIOD") following the effective
date of a registration statement of the Company filed under the Securities Act;
provided, however, that such restriction shall apply only to the first
registration statement of the Company to become effective under the Securities
Act that includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the Securities Act.

      5.4   Restrictive Legends and Stop-Transfer Orders.

            (a)   The share certificate or certificates evidencing the shares of
Stock purchased hereunder shall be endorsed with any legends that may be
required by state or federal securities laws.

            (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 of Stock 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 of Stock 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   Shares to Be Reserved. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of Stock as
will be sufficient to satisfy the requirements of this Agreement.

      5.6   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 the Company's authorized
officer 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 5.6, either 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
Participant is then deceased, be given to the person entitled to exercise his or
her Option pursuant to Section 4.1 by written notice under this Section 5.6. 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.

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

                                      A-6
<PAGE>

      5.8   Stockholder Approval. The Plan will be submitted for approval by the
Company's stockholders within twelve months after the date the Plan was
initially adopted by the Board. The Option may not be exercised to any extent by
anyone prior to the time when the Plan is approved by the stockholders, and if
such approval has not been obtained by the end of said twelve month period, the
Option shall thereupon be canceled and become null and void.

      5.9   Governing Law; Severability. This Agreement shall be administered,
interpreted and enforced under the laws of the State of California, without
regard to the conflicts of law principles 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.

      5.10  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 Option is granted and may be
exercised, 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.

      5.11  Amendments. This Agreement may not be modified, amended or
terminated except by an instrument in writing, signed by Participant or such
other person as may be permitted to exercise the Option pursuant to Section 4.1
and by a duly authorized representative of the Company.

      5.12  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.

      5.13  Notification of Disposition. If this Option is designated as an
Incentive Stock Option, Participant shall give prompt notice to the Company of
any disposition or other transfer of any shares of Stock acquired under this
Agreement if such disposition or transfer is made (a) within two years from the
Grant Date with respect to such shares or (b) within one year after the transfer
of such shares to him. Such notice shall specify the date of such disposition or
other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by Participant in such disposition or other
transfer.

      5.14  Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan or this Agreement, if Participant is subject to
Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.

      5.15  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.

                                      A-7
<PAGE>

                                    EXHIBIT B

                          TO STOCK OPTION GRANT NOTICE

                             FORM OF EXERCISE NOTICE

      Effective as of today,__________________, ___________ the undersigned
("PARTICIPANT") hereby elects to exercise Participant's option to purchase
shares of the Stock (the "SHARES") of Somaxon Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), under and pursuant to the Somaxon Pharmaceuticals,
Inc. 2005 Equity Incentive Award Plan (the "PLAN") and the Stock Option Grant
Notice and Stock Option Agreement dated (the "OPTION AGREEMENT"). Capitalized
terms used herein without definition shall have the meanings given in the Option
Agreement.

GRANT DATE:                  _____________________________________
NUMBER OF SHARES AS TO WHICH
OPTION IS EXERCISED:         _____________________________________
EXERCISE PRICE PER SHARE:    $____________
TOTAL EXERCISE PRICE:        $____________
CERTIFICATE TO BE ISSUED
IN NAME OF:                  _____________________________________
PAYMENT DELIVERED HEREWITH:  $______________ (Representing the full Exercise
                                              Price for the Shares, as well
                                              as any applicable withholding tax)

                                              Form of Payment: _________________
                                                               (Please specify)

TYPE OF OPTION:   [ ] Incentive Stock Option     [ ] Non-Qualified Stock Option

      Participant acknowledges that Participant has received, read and
understood the Plan and the Option Agreement. Participant agrees to abide by and
be bound by their terms and conditions. Participant understands that Participant
may suffer adverse tax consequences as a result of Participant's purchase or
disposition of the Shares. Participant represents that Participant has consulted
with any tax consultants Participant deems advisable in connection with the
purchase or disposition of the Shares and that Participant is not relying on the
Company for any tax advice. The Plan and Option Agreement are incorporated
herein by reference. This Agreement, the Plan and the Option Agreement
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.

ACCEPTED BY:                             SUBMITTED BY:
SOMAXON PHARMACEUTICALS, INC.

By: __________________________________   By:  __________________________________
Print Name: __________________________   Print Name: ___________________________
Title: _______________________________
                                         Address: ______________________________
                                                  ______________________________

<PAGE>

                          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:               __________________________________________
PURCHASE PRICE PER SHARE: $___________ per share
TOTAL NUMBER OF SHARES
 OF RESTRICTED STOCK:     __________________________________________
VESTING SCHEDULE:         [To be specified in individual agreements]

      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: 12750 High Bluff Drive, Suite     Address: ____________________________
         310 San Diego, CA 92130                    ____________________________

<PAGE>

                                    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. 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
<PAGE>

            (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. 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; provided, however, that any and all cash dividends paid on such Shares
and any and all shares of Stock, capital stock or other securities received by
or distributed to Participant with respect to 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 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.

      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 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 Employment, Termination of Directorship or
Termination of Consultancy 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 Employment, Termination of Directorship or Termination of
Consultancy (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 Employment,

                                      A-2
<PAGE>

Termination of Directorship or Termination of Consultancy, 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 Employment, Termination of Directorship or
Termination of Consultancy. 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,
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.

                                   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

                                      A-3
<PAGE>

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 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. If
any dividends or other distributions are paid on the Unreleased Shares held by
the escrow agent pursuant to this Section 4.1 and the Joint Escrow Instructions,
such dividends or other distributions 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 dividends or other distributions were paid
from the Company's Repurchase Option.

      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

                                      A-4
<PAGE>

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.

      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.

      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.

                                      A-5
<PAGE>

      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.

                                      A-6
<PAGE>

                                    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
<PAGE>

                                    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
<PAGE>

                                    EXHIBIT D

                     TO RESTRICTED STOCK AWARD GRANT NOTICE

                            JOINT ESCROW INSTRUCTIONS

                                                          ________________, ____

Secretary
Somaxon Pharmaceuticals, Inc.
12750 High Bluff Drive, Suite 310
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
the stock certificate and the Assignment 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 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 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
<PAGE>

      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
<PAGE>

      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
<PAGE>

      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:  12750 High Bluff Drive, Suite 310
                                           San Diego, CA  92130

                                 PARTICIPANT:

                                 _______________________________________________

                                 Address _______________________________________
                                         _______________________________________

ESCROW AGENT:

By: __________________________________________
    Secretary, Somaxon Pharmaceuticals, Inc.

Address: 12750 High Bluff Drive, Suite 310
         San Diego, CA  92130

                                      D-4
<PAGE>

                                    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
<PAGE>

                            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
<PAGE>

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

Dated: ______________, ____          Spouse's Signature ________________________

Signature(s) Notarized by:

        ___________________________
        ___________________________

                                     E-1-2
<PAGE>

                            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<PAGE>

                                                                    EXHIBIT 4.3

                          SOMAXON PHARMACEUTICALS, INC.
                        2005 EMPLOYEE STOCK PURCHASE PLAN

                                   ARTICLE I

                                     PURPOSE

      The purposes of this Somaxon Pharmaceuticals, Inc. 2005 Employee Stock
Purchase Plan (the "PLAN") are to assist Eligible Employees of Somaxon
Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY") and its
Subsidiaries in acquiring a stock ownership interest in the Company pursuant to
a plan which is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423(b) of the Code, and to help Eligible Employees
provide for their future security and to encourage them to remain in the
employment of the Company and its Subsidiaries.

      All share numbers set forth in this Plan give effect to the reverse stock
split implemented by the Company in connection with its initial public offering.

                                   ARTICLE II

                          DEFINITIONS AND CONSTRUCTION

      Wherever the following terms are used in the Plan they shall have the
meanings specified below, unless the context clearly indicates otherwise. The
singular pronoun shall include the plural where the context so indicates.

      2.1 "ADMINISTRATOR" means the entity that conducts the general
administration of the Plan as provided herein. The term "ADMINISTRATOR" shall
refer to the Committee unless the Board has assumed the authority for
administration of the Plan generally as provided in Article 3.

      2.2 "BOARD" shall mean the Board of Directors of the Company.

      2.3 "CHANGE IN CONTROL" means and includes each of the following:

            (a) the acquisition, directly or indirectly, by any "person" or
"group" (as those terms are defined in Sections 3(a)(9), 13(d) and 14(d) of the
Exchange Act and the rules thereunder) of "beneficial ownership" (as determined
pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote
generally in the election of directors ("VOTING SECURITIES") of the Company that
represent 50% or more of the combined voting power of the Company's then
outstanding voting securities, other than:

                  (i) an acquisition by a trustee or other fiduciary holding
      securities under any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any person controlled by the Company or by
      any employee benefit plan (or related trust) sponsored or maintained by
      the Company or any person controlled by the Company, or

                  (ii) an acquisition of voting securities by the Company or a
      corporation owned, directly or indirectly by the stockholders of the
      Company in substantially the same proportions as their ownership of the
      stock of the Company,

                  (iii) an acquisition of voting securities pursuant to a
      transaction described in subsection (b) below that would not be a Change
      in Control under subsection (b), or

<PAGE>

                  (iv) an acquisition of voting securities pursuant to the
      Company's initial public offering of the Stock;

         Notwithstanding the foregoing, the following event shall not constitute
an "acquisition" by any person or group for purposes of this Section 2.3: an
acquisition of the Company's securities by the Company which causes the
Company's voting securities beneficially owned by a person or group to represent
50% or more of the combined voting power of the Company's then outstanding
voting securities; provided, however, that if a person or group shall become the
beneficial owner of 50% or more of the combined voting power of the Company's
then outstanding voting securities by reason of share acquisitions by the
Company as described above and shall, after such share acquisitions by the
Company, become the beneficial owner of any additional voting securities of the
Company, then such acquisition shall constitute a Change in Control; or

            (b) the consummation by the Company (whether directly involving the
Company or indirectly involving the Company through one or more intermediaries)
of (x) a merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of the Company's assets or
(z) the acquisition of assets or stock of another entity, in each case other
than a transaction:

                  (i) which results in the Company's voting securities
      outstanding immediately before the transaction continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the Company or the person that, as a result of the
      transaction, controls, directly or indirectly, the Company or owns,
      directly or indirectly, all or substantially all of the Company's assets
      or otherwise succeeds to the business of the Company (the Company or such
      person, the "SUCCESSOR ENTITY") directly or indirectly, at least a
      majority of the combined voting power of the Successor Entity's
      outstanding voting securities immediately after the transaction, and

                  (ii) after which no person or group beneficially owns voting
      securities representing 50% or more of the combined voting power of the
      Successor Entity; provided, however, that no person or group shall be
      treated for purposes of this paragraph (ii) as beneficially owning 50% or
      more of combined voting power of the Successor Entity solely as a result
      of the voting power held in the Company prior to the consummation of the
      transaction; or

            (c) the Company's stockholders approve a liquidation or dissolution
of the Company.

         For purposes of subsection (a) above, the calculation of voting power
shall be made as if the date of the acquisition were a record date for a vote of
the Company's stockholders, and for purposes of subsection (b) above, the
calculation of voting power shall be made as if the date of the consummation of
the transaction were a record date for a vote of the Company's stockholders.

         The Administrator shall have full and final authority, which shall be
exercised in its discretion, to determine conclusively whether a Change in
Control of the Company has occurred pursuant to the above definition, and the
date of the occurrence of such Change in Control and any incidental matters
relating thereto.

      2.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations issued thereunder.

                                       2

<PAGE>

      2.5 "COMMITTEE" means the committee of the Board described in Article 3.

      2.6 "COMPANY" shall mean Somaxon Pharmaceuticals, Inc., a Delaware
corporation.

      2.7 "COMPENSATION" of an Eligible Employee shall mean the gross base
compensation received by such Eligible Employee as compensation for services to
the Company or any Designated Subsidiary, excluding overtime payments, sales
commissions, incentive compensation, bonuses, expense reimbursements, fringe
benefits and other special payments.

      2.8 "DESIGNATED SUBSIDIARY" shall mean any Subsidiary designated by the
Administrator in accordance with Section 3.3(ii).

      2.9 "ELIGIBLE EMPLOYEE" shall mean an Employee of the Company or a
Designated Subsidiary: (i) who does not, immediately after any rights under this
Plan are granted, own (directly or through attribution) stock possessing 5% or
more of the total combined voting power or value of all classes of Stock or
other stock of the Company, a Parent or a Subsidiary (as determined under
Section 423(b)(3) of the Code); (ii) whose customary employment is for more than
twenty hours per week; and (iii) whose customary employment is for more than
five months in any calendar year; provided, however, that the Administrator may
provide in an Offering Document that (x) Employees who are highly compensated
employees within the meaning of Section 423(b)(4)(D) of the Code, and/or (y)
Employees who have not met a service requirement designated by the Administrator
pursuant to Section 423(b)(4)(A) of the Code (which service requirement may not
exceed two years), shall not be eligible to participate in an Offering Period.
For purposes of clause (i) above, the rules of Section 424(d) of the Code with
regard to the attribution of stock ownership shall apply in determining the
stock ownership of an individual, and stock which an Employee may purchase under
outstanding options shall be treated as stock owned by the Employee. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Company or a Designated Subsidiary and meeting the requirements of
Treasury Regulation Section 1.421-7(h)(2).

      2.10 "EMPLOYEE" means any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company or any Designated
Subsidiary.

      2.11 "ENROLLMENT DATE" shall mean the first day of each Offering Period.

      2.12 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.

      2.13 "FAIR MARKET VALUE" shall mean, as of any date, the value of Stock
determined as follows:

         (a) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock as quoted on such exchange or
system for the last Trading Day prior to the date of determination for which a
closing sales price was reported, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

         (b) If the Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value shall be the mean of
the closing bid and asked prices for the Stock on the date prior to the date of
determination as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

                                       3

<PAGE>

         (c) In the absence of an established market for the Stock, the Fair
Market Value thereof shall be determined in good faith by the Administrator.

      2.14 "OFFERING DOCUMENT" shall have the meaning given to such term in
Section 5.1.

      2.15 "OFFERING PERIOD" shall mean each Offering Period designated by the
Administrator in the applicable Offering Document pursuant to Section 5.1.

      2.16 "PARENT" means any corporation, other than the Company, in an
unbroken chain of corporations ending with the Company if, at the time of the
determination, each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

      2.17 "PARTICIPANT" means any Eligible Employee who has executed a
participation agreement and been granted rights to purchase Stock pursuant to
the Plan.

      2.18 "PLAN" shall mean this Somaxon Pharmaceuticals, Inc. 2005 Employee
Stock Purchase Plan, as it may be amended from time to time.

      2.19 "PURCHASE DATE" shall mean the last day of each Purchase Period.

      2.20 "PURCHASE PERIOD" shall mean each Purchase Period designated by the
Administrator in the applicable Offering Document pursuant to Section 5.1. A new
Purchase Period will begin on the day immediately following a Purchase Date.

      2.21 "PURCHASE PRICE" shall mean the purchase price designated by the
Administrator in the applicable Offering Document (which purchase price shall
not be less than 85% of the Fair Market Value of a share of Stock on the
Enrollment Date or on the Purchase Date, whichever is lower); provided, however,
that, in the event no purchase price is designated by the Administrator in the
applicable Offering Document, the purchase price for the Offering Periods
covered by such Offering Document shall be 85% of the Fair Market Value of a
share of Stock on the Enrollment Date or on the Purchase Date, whichever is
lower); provided, further, that the Purchase Price may be adjusted by the
Administrator pursuant to Article 9; provided, further, that the Purchase Price
shall not be less than the par value of a share of Stock.

      2.22 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.

      2.23 "STOCK" means the common stock of the Company and such other
securities of the Company that may be substituted for Stock pursuant to Article
9.

      2.24 "SUBSIDIARY" shall mean any corporation, other than the Company, in
an unbroken chain of corporations beginning with the Company if, at the time of
the determination, each of the corporations other than the last corporation in
an unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

      2.25 "TRADING DAY" shall mean a day on which national stock exchanges and
the Nasdaq System are open for trading.

                                       4

<PAGE>

                                  ARTICLE III

                                 ADMINISTRATION

      3.1 Administrator. The Administrator of the Plan shall be the Compensation
Committee of the Board (or another committee or a subcommittee of the Board to
which the Board delegates administration of the Plan) (such committee, the
"COMMITTEE"), which Committee shall consist solely of two or more members of the
Board each of whom is a "non-employee director" within the meaning of Rule 16b-3
which has been adopted by the Securities and Exchange Commission under the
Exchange Act and which Committee is otherwise constituted to comply with
applicable law. Appointment of Committee members shall be effective upon
acceptance of appointment. The Board may abolish the Committee at any time and
revest in the Board the administration of the Plan. Committee members may resign
at any time by delivering written notice to the Board. Vacancies in the
Committee may only be filled by the Board.

      3.2 Action by the Administrator. A majority of the Administrator shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and, subject to applicable law and the
Bylaws of the Company, acts approved in writing by a majority of the
Administrator in lieu of a meeting, shall be deemed the acts of the
Administrator. Each member of the Administrator is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any
officer or other employee of the Company or any Designated Subsidiary, the
Company's independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

      3.3 Authority of Administrator. The Administrator shall have the power,
subject to, and within the limitations of, the express provisions of the Plan:

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

            (ii) To designate from time to time which Subsidiaries of the
Company shall be Designated Subsidiaries, which designation may be made without
the approval of the stockholders of the Company.

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

            (iv) To amend the Plan as provided in Article 10.

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

      3.4 Decisions Binding. The Administrator's interpretation of the Plan, any
rights granted pursuant to the Plan, any participation agreement and all
decisions and determinations by the Administrator with respect to the Plan are
final, binding, and conclusive on all parties.

                                       5

<PAGE>

                                   ARTICLE IV

                           SHARES SUBJECT TO THE PLAN

      4.1 Number of Shares. Subject to Article 9, the aggregate number of shares
of Stock which may be issued pursuant to rights granted under the Plan shall be
300,000 shares. In addition to the foregoing, subject to Article 9, commencing
on January 1, 2007, and on each January 1 thereafter during the term of the
Plan, the number of shares of Stock which shall be made available for sale under
the Plan shall be increased by that number of shares of Stock equal to the least
of (a) 1% of the Company's outstanding shares on such date, (b) 300,000 shares,
or (c) a lesser amount determined by the Board. Accordingly, the number of
shares of Stock which shall be available for sale under the Plan shall be
subject to increase under the preceding sentence only on January 1, 2007 and on
each subsequent January 1 through and including January 1, 2015. If any right
granted under the Plan shall for any reason terminate without having been
exercised, the Stock not purchased under such right shall again become available
for the Plan. Notwithstanding anything in this Section 4.1 to the contrary, the
number of shares of Stock that may be issued or transferred pursuant to rights
granted under the Plan shall not exceed an aggregate of 3,000,000 shares,
subject to Article 9.

      4.2 Stock Distributed. Any Stock distributed pursuant to the Plan may
consist, in whole or in part, of authorized and unissued Stock, treasury stock
or Stock purchased on the open market.

                                   ARTICLE V

              OFFERING PERIODS; OFFERING DOCUMENTS; PURCHASE DATES

      5.1 Offering Periods. The Administrator may from time to time grant or
provide for the grant of rights to purchase Stock of the Company under the Plan
to Eligible Employees during one or more periods (each, an "OFFERING PERIOD")
selected by the Administrator commencing on such dates (each, an "ENROLLMENT
DATE") selected by the Administrator. The terms and conditions applicable to
each Offering Period shall be set forth in an "OFFERING DOCUMENT" adopted by the
Administrator, which Offering Document shall be in such form and shall contain
such terms and conditions as the Administrator shall deem appropriate and shall
be incorporated by reference into and made part of the Plan and shall be
attached hereto as part of the Plan. The Administrator shall establish in each
Offering Document one or more dates during an Offering Period (the "PURCHASE
DATE(S)") on which rights granted under the Plan shall be exercised and
purchases of Stock carried out during such Offering Period in accordance with
such Offering Document and the Plan. The provisions of separate Offering Periods
under the Plan need not be identical.

      5.2 Offering Documents. Each Offering Document with respect to an Offering
Period shall specify (through incorporation of the provisions of this Plan by
reference or otherwise):

            (i) the length of the Offering Period, which period shall not exceed
twenty-seven months;

            (ii) the Enrollment Date for such Offering Period;

            (iii) the Purchase Date(s) during such Offering Period;

            (iv) the maximum number of shares that may be purchased by any
Eligible Employee during such Offering Period;

                                       6

<PAGE>

            (v) in connection with each Offering Period that contains more than
one Purchase Date, the maximum aggregate number of shares which may be purchased
by any Eligible Employee on any given Purchase Date during the Offering Period;
and

            (vi) such other provisions as the Administrator determines are
appropriate, subject to the Plan.

                                   ARTICLE VI

                                  PARTICIPATION

      6.1 Eligibility. Any Eligible Employee who shall be employed by the
Company or a Designated Subsidiary on the day immediately preceding a given
Enrollment Date for an Offering Period shall be eligible to participate in the
Plan during such Offering Period, subject to the requirements of this Article 6
and the limitations imposed by Section 423(b) of the Code.

      6.2 Enrollment in Plan. Except as otherwise set forth in an Offering
Document, an Eligible Employee may become a Participant in the Plan for an
Offering Period by delivering a participation agreement to the Company prior to
the Enrollment Date for such Offering Period (or such other date specified in
the Offering Document), in such form as the Administrator provides. Each such
agreement shall designate a whole percentage of such Eligible Employee's
Compensation to be withheld by the Company or the Designated Subsidiary
employing such Eligible Employee on each payday during the Offering Period as
payroll deductions under the Plan. An Eligible Employee may designate any whole
percentage of Compensation which is not less than 1% and not more than the
maximum percentage specified by the Administrator in the applicable Offering
Document (which percentage shall be 20% in the absence of any such designation)
as payroll deductions. The payroll deductions made for each Participant shall be
credited to an account for such Participant under the Plan and shall be
deposited with the general funds of the Company. A Participant may change the
percentage of Compensation designated in his or her participation agreement,
subject to the limits of this Section 6.2, or may suspend his or her payroll
deductions, or may resume payroll deductions pursuant to a new participation
agreement, at any time during an Offering Period; provided, however, that the
Administrator may limit the number of changes a Participant may make to his or
her payroll deduction elections during each Offering Period and/or Purchase
Period in the applicable Offering Document. Any such change, suspension or
resumption of payroll deductions shall be effective with the first full payroll
period following five business days after the Company's receipt of the new
participation agreement (or such shorter or longer period as may be specified by
the Administrator in the applicable Offering Document). In the event a
Participant suspends his or her payroll deductions, such Participant's
cumulative payroll deductions prior to the suspension shall remain in his or her
account and shall not be paid to such Participant unless he or she withdraws
from participation in the Plan pursuant to Article 8. Except as otherwise set
forth in an Offering Document, a Participant may participate in the Plan only by
means of payroll deduction and may not make contributions by lump sum payment
for any Offering Period.

      6.3 Payroll Deductions. Except as otherwise provided in the applicable
Offering Document, payroll deductions for a Participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the Participant as provided in Article 9.

      6.4 Effect of Enrollment. A Participant's completion of a participation
agreement will enroll such Participant in the Plan for each successive Purchase
Period and each subsequent Offering Period on the terms contained therein until
the Participant either submits a new participation agreement, withdraws from
participation under the Plan as provided in Article 8 or otherwise becomes
ineligible to participate in the Plan.

                                       7

<PAGE>

      6.5 Limitation on Purchase of Stock. An Eligible Employee may be granted
rights under the Plan only if such rights, together with any other rights
granted to such Eligible Employee under "employee stock purchase plans" of the
Company, any Parent or any Subsidiary, as specified by Section 423(b)(8) of the
Code, do not permit such employee's rights to purchase stock of the Company or
any Parent or Subsidiary to accrue at a rate which exceeds $25,000 of fair
market value of such stock (determined as of the first day of the Offering
Period during which such rights are granted) for each calendar year in which
such rights are outstanding at any time. This limitation shall be applied in
accordance with Section 423(b)(8) of the Code.

      6.6 Decrease of Payroll Deductions. Notwithstanding the foregoing, to the
extent necessary to comply with Section 423(b)(8) of the Code and Section 6.5, a
Participant's payroll deductions may be suspended by the Administrator at any
time during an Offering Period.

                                  ARTICLE VII

                          GRANT AND EXERCISE OF RIGHTS

      7.1 Grant of Rights. On the Enrollment Date of each Offering Period, each
Eligible Employee participating in such Offering Period shall be granted a right
to purchase the maximum number of shares of Stock specified under Section
5.2(iv) and shall have the right to buy, on each Purchase Date during such
Offering Period (at the applicable Purchase Price), such number of shares of the
Company's Stock as is determined by dividing (a) such Participant's payroll
deductions accumulated prior to such Purchase Date and retained in the
Participant's account as of the Purchase Date, by (b) the applicable Purchase
Price. The right shall expire on the last day of the Offering Period.

      7.2 Exercise of Rights. On each Purchase Date, each Participant's
accumulated payroll deductions and any other additional payments specifically
provided for in the applicable Offering Document will be applied to the purchase
of whole shares of Stock of the Company, up to the maximum number of shares
permitted pursuant to the terms of the Plan and the applicable Offering
Document, at the Purchase Price. No fractional shares shall be issued upon the
exercise of rights granted under the Plan, unless the Offering Document
specifically provides otherwise. The amount, if any, of accumulated payroll
deductions remaining in each Participant's account after the purchase of shares
on each Purchase Date shall be distributed in full to the Participant after such
Purchase Date.

      7.3 Pro Rata Allocation of Shares. If the Administrator determines that,
on a given Purchase Date, the number of shares of Stock with respect to which
rights are to be exercised may exceed (i) the number of shares of Stock that
were available for issuance under the Plan on the Enrollment Date of the
applicable Offering Period, or (ii) the number of shares of Stock available for
issuance under the Plan on such Purchase Date, the Administrator may in its sole
discretion provide that the Company shall make a pro rata allocation of the
shares of Stock available for purchase on such Enrollment Date or Purchase Date,
as applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all Participants for whom
rights to purchase Stock are to be exercised pursuant to this Article 7 on such
Purchase Date, and shall either (x) continue all Offering Periods then in
effect, or (y) terminate any or all Offering Periods then in effect pursuant to
Article 10. The Company may make pro rata allocation of the shares available on
the Enrollment Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional shares for issuance
under the Plan by the Company's stockholders subsequent to such Enrollment Date.
The balance of the amount credited to the account of each Participant which has
not been applied to the purchase of shares of stock shall be paid to such
Participant in one lump sum in cash as soon as reasonably practicable after the
Purchase Date.

      7.4 Withholding. At the time a Participant's rights under the Plan are
exercised, in whole or in part, or at the time some or all of the Stock issued
under the Plan is disposed of, the Participant must

                                       8

<PAGE>

make adequate provision for the Company's federal, state, or other tax
withholding obligations, if any, which arise upon the exercise of the right or
the disposition of the Stock. At any time, the Company may, but shall not be
obligated to, withhold from the Participant's compensation the amount necessary
for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Stock by the Participant.

      7.5 Conditions to Issuance of Stock. The Company shall not be required to
issue or deliver any certificate or certificates for shares of Stock purchased
upon the exercise of rights under the Plan prior to fulfillment of all of the
following conditions:

         (a) The admission of such shares to listing on all stock exchanges, if
any, on which the Stock is then listed; and

         (b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or 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 payment to the Company of all amounts which it is required to
withhold under federal, state or local law upon exercise of the rights, if any;
and

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

                                  ARTICLE VIII

              WITHDRAWAL; TERMINATION OF EMPLOYMENT OR ELIGIBILITY

      8.1 Withdrawal. A Participant may withdraw all but not less than all of
the payroll deductions credited to his or her account and not yet used to
exercise his or her rights under the Plan at any time by giving written notice
to the Company in a form acceptable to the Administrator. All of the
Participant's payroll deductions credited to his or her account during the
Offering Period shall be paid to such Participant as soon as reasonably
practicable after receipt of notice of withdrawal and such Participant's rights
for the Offering Period shall be automatically terminated, and no further
payroll deductions for the purchase of shares shall be made for such Offering
Period. If a Participant withdraws from an Offering Period, payroll deductions
shall not resume at the beginning of the next Offering Period unless the
Participant delivers to the Company a new participation agreement.

                                       9

<PAGE>

      8.2 Future Participation. A Participant's withdrawal from an Offering
Period shall not have any effect upon his or her eligibility to participate in
any similar plan which may hereafter be adopted by the Company or a Designated
Subsidiary or in subsequent Offering Periods which commence after the
termination of the Offering Period from which the Participant withdraws.

      8.3 Cessation of Eligibility. Upon a Participant's ceasing to be an
Eligible Employee, for any reason, he or she shall be deemed to have elected to
withdraw from the Plan pursuant to this Article 8 and the payroll deductions
credited to such Participant's account during the Offering Period shall be paid
to such Participant or, in the case of his or her death, to the person or
persons entitled thereto under 13.4, as soon as reasonably practicable and such
Participant's rights for the Offering Period shall be automatically terminated.

                                   ARTICLE IX

                        ADJUSTMENTS UPON CHANGES IN STOCK

      9.1 Changes in Capitalization. Subject to Section 9.3, in the event of any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation, spin-off, recapitalization, distribution of Company assets to
stockholders (other than normal cash dividends), or any other corporate event
affecting the Stock or the share price of the Stock, the Administrator may make
such proportionate adjustments, if any, as the Administrator in its discretion
may deem appropriate to reflect such change with respect to (i) the aggregate
number and type of shares of Stock (or other securities or property) that may be
issued under the Plan (including, but not limited to, adjustments of the
limitations in Section 3.1 and the limitations established in each Offering
Document pursuant to Section 5.2 on the maximum number of shares of Stock that
may be purchased); (ii) the class(es) and number of shares and price per share
of Stock subject to outstanding rights; and (iii) the Purchase Price with
respect to any outstanding rights.

      9.2 Other Adjustments. Subject to Section 9.3, in the event of any
transaction or event described in Section 9.1 or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company, or
the financial statements of the Company or any affiliate (including without
limitation any Change in Control), or of changes in applicable laws, regulations
or accounting principles, and whenever the Administrator determines that such
action is appropriate in order to prevent the dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any right under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles, the
Administrator, in its sole discretion and on such terms and conditions as it
deems appropriate, is hereby authorized to take any one or more of the following
actions:

         (a) To provide for either (i) termination of any outstanding right in
exchange for an amount of cash, if any, equal to the amount that would have been
obtained upon the exercise of such right had such right been currently
exercisable or (ii) the replacement of such outstanding right with other rights
or property selected by the Administrator in its sole discretion;

         (b) To provide that the outstanding rights under the Plan be assumed by
the successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar rights covering the stock of the successor
or survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and

         (c) To make adjustments in the number and type of shares of Stock (or
other securities or property) subject to outstanding rights under the Plan
and/or in the terms and conditions of outstanding rights and rights which may be
granted in the future;

                                       10

<PAGE>

         (d) To provide that Participants' accumulated payroll deductions may be
used to purchase Stock prior to the next occurring Purchase Date on such date as
the Administrator determines in its sole discretion and the Participants' rights
under the ongoing Offering Period(s) terminated; and

         (e) To provide that all outstanding rights shall terminate without
being exercised.

      9.3 No Adjustment Under Certain Circumstances. No adjustment or action
described in this Article 9 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the Plan to
fail to satisfy the requirements of Section 423 of the Code.

      9.4 No Other Rights. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the
Administrator under the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to an Award or the grant or exercise price of
any Award.

                                   ARTICLE X

                     AMENDMENT, MODIFICATION AND TERMINATION

      10.1 Amendment, Modification and Termination. The Administrator may amend,
suspend or terminate the Plan at any time and from time to time; provided,
however, that approval by a vote of the holders of the outstanding shares of the
Company's capital stock entitled to vote shall be required to amend the Plan to:
(a) change the aggregate number of shares that may be sold pursuant to rights
under the Plan under Section 4.1 (other than any adjustment as provided by
Article 9); (b) change the corporations or classes of corporations whose
employees may be granted rights under the Plan; or (c) change the Plan in any
manner that would cause the Plan to no longer be an "employee stock purchase
plan" within the meaning of Section 423(b) of the Code.

      10.2 Rights Previously Granted. Except as provided in Article 9 or this
Article 10, no termination, amendment or modification may make any change in any
right theretofore granted which adversely affects the rights of any Participant
without the consent of such Participant, provided that an Offering Period may be
terminated, amended or modified by the Administrator if the Administrator
determines that the termination of the Offering Period or the Plan is in the
best interests of the Company and its stockholders.

      10.3 Certain Changes to Plan. Without stockholder consent and without
regard to whether any Participant rights may be considered to have been
adversely affected, to the extent permitted by Section 423 of the Code, the
Administrator shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Stock for each
Participant properly correspond with amounts withheld from the Participant's
Compensation, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable which are consistent
with the Plan.

                                       11

<PAGE>

                                   ARTICLE XI

                                  TERM OF PLAN

      The Plan shall be effective on the date the Plan is first adopted by the
Board (the "EFFECTIVE DATE"). The effectiveness of the Plan shall be subject to
approval of the Plan by the stockholders of the Company in accordance with this
Article 11. The Plan shall be in effect until the tenth anniversary of the
Effective Date, unless sooner terminated under Article 10. No rights may be
granted under the Plan during any period of suspension of the Plan or after
termination of the Plan. The Plan shall be submitted for the approval of the
Company's stockholders within twelve months after the Effective Date. No right
may be granted under the Plan prior to such stockholder approval.

                                  ARTICLE XII

                                  MISCELLANEOUS

      12.1 Restriction upon Assignment. A right granted under the Plan shall not
be transferable other than by will or the laws of descent and distribution, and
is exercisable during the Participant's lifetime only by the Participant. Except
as provided in Section 12.4 hereof, a right under the Plan may not be exercised
to any extent except by the Participant. The Company shall not recognize and
shall be under no duty to recognize any assignment or alienation of the
Participant's interest in the Plan, the Participant's rights under the Plan or
any rights thereunder.

      12.2 Rights as a Stockholder. With respect to shares of Stock subject to a
right granted under the Plan, a Participant shall not be deemed to be a
stockholder of the Company, and the Participant shall not have any of the rights
or privileges of a stockholder, until such shares have been issued to the
Participant or his or her nominee following exercise of the Participant's rights
under the Plan. No adjustments shall be made for dividends (ordinary or
extraordinary, whether in cash securities, or other property) or distribution or
other rights for which the record date occurs prior to the date of such
issuance, except as otherwise expressly provided herein.

      12.3 Interest. No interest shall accrue on the payroll deductions or lump
sum contributions of a Participant under the Plan.

      12.4 Designation of Beneficiary.

         (a) A Participant may, in the manner determined by the Administrator,
file a written designation of a beneficiary who is to receive any shares and
cash, if any, from the Participant's account under the Plan in the event of such
Participant's death subsequent to a Purchase Date on which the Participant's
rights are exercised but prior to delivery to such Participant of such shares
and cash. In addition, a Participant may file a written designation of a
beneficiary who is to receive any cash from the Participant's account under the
Plan in the event of such Participant's death prior to exercise of the
Participant's rights under the Plan. If the Participant is married and resides
in a community property state, a designation of a person other than the
Participant's spouse as his or her beneficiary shall not be effective without
the prior written consent of the Participant's spouse.

                                       12

<PAGE>

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

      12.5 Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

      12.6 Equal Rights and Privileges. All Eligible Employees of the Company or
any Designated Subsidiary will have equal rights and privileges under this Plan
so that this Plan qualifies as an "employee stock purchase plan" within the
meaning of Section 423 of the Code. Any provision of this Plan that is
inconsistent with Section 423 of the Code will, without further act or amendment
by the Company, the Board or the Administrator, be reformed to comply with the
equal rights and privileges requirement of Section 423 of the Code.

      12.7 Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

      12.8 Reports. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

      12.9 No Employment Rights. Nothing in the Plan shall be construed to give
any person (including any Eligible Employee or Participant) the right to remain
in the employ of the Company or any Parent or Subsidiary or to affect the right
of the Company or any Parent or Subsidiary to terminate the employment of any
person (including any Eligible Employee or Participant) at any time, with or
without cause.

      12.10 Notice of Disposition of Shares. Each Participant shall give prompt
notice to the Company of any disposition or other transfer of any shares of
stock purchased upon exercise of a right under the Plan if such disposition or
transfer is made: (a) within two years from the Enrollment Date of the Offering
Period in which the shares were purchased or (b) within one year after the
Purchase Date on which such shares were purchased. Such notice shall specify the
date of such disposition or other transfer and the amount realized, in cash,
other property, assumption of indebtedness or other consideration, by the
Participant in such disposition or other transfer.

      12.11 Governing Law. The validity and enforceability of this Plan shall be
governed by and construed in accordance with the laws of the State of California
without regard to otherwise governing principles of conflicts of law.

                                       13
<PAGE>
                               OFFERING DOCUMENT

                                   ----------

                          SOMAXON PHARMACEUTICALS, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

This document (this "OFFERING DOCUMENT") is hereby adopted by the Compensation
Committee of the Board of Directors of Somaxon Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), in its capacity as Administrator of the Somaxon
Pharmaceuticals, Inc. Employee Stock Purchase Plan (the "PLAN"). This Offering
Document is adopted pursuant to Article 5 of the Plan and is hereby incorporated
by reference into and made a part of the Plan. A copy of this Offering Document
shall be attached to the Plan. Defined terms used herein without definition
shall have the meanings specified in the Plan, except as otherwise provided
herein.

This Offering Document shall apply with respect to Offering Periods under the
Plan until this Offering Document is terminated, amended or modified by the
Administrator or a new Offering Document is adopted by the Administrator.

<TABLE>
<CAPTION>
<S>                                             <C>
LENGTH OF OFFERING PERIODS:                     Six months

                                                However, the initial Offering Period under the Plan (the
                                                "INITIAL OFFERING PERIOD") shall commence on the date on
                                                which the Company's registration statement on Form S-8
                                                filed with respect to the Plan becomes effective (such
                                                date, the "INITIAL ENROLLMENT DATE") and shall end on
                                                the first occurring May 31 or November 30 thereafter.

OFFERING PERIODS
WILL COMMENCE ON EACH:                          June 1 and December 1

PURCHASE DATES WILL OCCUR ON EACH:              May 31 and November 30

MAXIMUM NUMBER OF SHARES OF STOCK
THAT MAY BE PURCHASED BY ANY
ELIGIBLE EMPLOYEE DURING AN
OFFERING PERIOD:                                10,000 shares

                                                The maximum aggregate number of shares of Stock that may be
                                                purchased by all Eligible Employees during an Offering Period
                                                is the total number of shares of Stock that are reserved for
                                                issuance under the Plan as of the Enrollment Date for such
                                                Offering Period.

PURCHASE PRICE:                                 On each Purchase Date, the purchase price for a share of common
                                                stock will be 95% of the Fair Market Value per share of the Stock
                                                on the Purchase Date.

CONTRIBUTIONS:                                  A Participant may elect to have up to 20% of his or her
                                                "Compensation" deducted on each payday on an after-tax basis for use in
                                                purchasing Stock pursuant to the Plan.
</TABLE>
                                       1
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>
INCREASES/DECREASES IN CONTRIBUTION RATES:      Participants may increase or decrease their rate of
                                                contributions effective as of the first day of each
                                                Offering Period.  Any such change must be made at
                                                least ten days prior to the first day of such
                                                Offering Period.  In addition, Participants may
                                                decrease to 0% their rate of contributions at any
                                                time during each Offering Period.

SPECIAL ENROLLMENT PROVISIONS FOR INITIAL
OFFERING PERIOD ONLY:                           Each Eligible Employee who is employed by the
                                                Company or a Designated Subsidiary on the calendar
                                                day immediately preceding the Initial Enrollment
                                                Date shall automatically become a Participant in
                                                the Plan with respect to the Initial Offering
                                                Period.  Each such Participant shall be granted a
                                                right to purchase shares of Stock and shall be
                                                enrolled in such Initial Offering Period to the
                                                extent of 20% of his or her Compensation for the
                                                paydays during the Initial Offering Period (or, if
                                                less, the maximum amount of contributions permitted
                                                to be made by such Participant for such Offering
                                                Period by payroll deduction under the terms of this
                                                Plan).  Following the Initial Enrollment Date, each
                                                such Participant may, during the period designated
                                                from time to time by the Administrator for such
                                                purpose, (i) elect to make such contributions (or a
                                                lesser amount of contributions) for the Initial
                                                Offering Period by payroll deductions in accordance
                                                with Article 6 of the Plan, (ii) elect to make such
                                                contributions (or a lesser amount of contributions)
                                                for the Initial Offering Period by making a lump
                                                sum cash payment to the Company not later than ten
                                                calendar days before the last day of such Offering
                                                Period, and each such payment may be made in an
                                                amount not exceeding 20% of such Participant's
                                                Compensation for the paydays occurring during such
                                                Offering Period and occurring prior to such lump
                                                sum payment, or (iii) elect to make no
                                                contributions for such Offering Period; provided,
                                                however, that, to make contributions by payroll
                                                deductions, such Participant must complete the form
                                                of participation agreement provided by the Company
                                                for the Initial Offering Period under this Plan
                                                during the time designated by the Administrator for
                                                such purpose.  If (i) during the initial Offering
                                                Period, such a Participant elects to make
                                                contributions by payroll deduction, or elects to
                                                make no contributions for such Offering Period, or
                                                (ii) on or prior to the tenth calendar day before
                                                the last day of such Offering Period, such a
                                                Participant fails to make any lump sum cash
                                                payment, such Participant shall be deemed to have
                                                elected not to make contributions by lump sum
                                                payment with respect to the Initial Offering Period.
</TABLE>

                                       2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]