Exhibit
10.3
EMPLOYEE MATTERS
AGREEMENT
dated as of
April 30,
2004
between
PHARMACOPEIA, INC.
and
PHARMACOPEIA DRUG
DISCOVERY, INC.
TABLE OF CONTENTS
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EMPLOYEE MATTERS
AGREEMENT
THIS IS AN EMPLOYEE
MATTERS AGREEMENT, dated as of April 30, 2004 (the “Agreement”),
by and between Pharmacopeia, Inc., a Delaware corporation (together with its
successors and permitted assigns, “Supplier”), and Pharmacopeia Drug
Discovery, Inc., a Delaware corporation (together with its successors and
permitted assigns, “Spinco”) (collectively, the “Parties” or
individually, a “Party”).
Background
WHEREAS, the Board of Directors of Supplier
has authorized a distribution of Spinco’s common stock to all holders of
outstanding stock of the Supplier (the “Distribution”).
WHEREAS, in connection with the
Distribution, Supplier and Spinco will enter into a number of agreements that
will govern certain matters relating to the Distribution and the relationship
of Supplier and Spinco and their respective subsidiaries and affiliates
following the Distribution.
WHEREAS, this Agreement sets forth the
arrangements between the Parties relating to certain employee benefit and
compensation matters.
NOW, THEREFORE, in consideration of the
foregoing and the respective covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
The following words and
phrases used in this Agreement shall have the meanings set forth below unless a
different meaning is plainly required by the context.
1.1 “Active
Spinco Employee” means:
(a) Any
Employee who is performing services for Spinco on the Distribution Date,
including any such Employee who is not actively performing such service as a
result of sick leave, workers’ compensation leave, short-term disability or
other authorized leave of absence; and
(b) Any
Employee of Supplier who is designated by Supplier and Spinco as an Employee to
whom Spinco offers employment beginning on or before the Distribution Date and
who has accepted such offer.
1.2 “ASO
Contract” means an administrative services only contract or
other contract with a third-party administrator or service provider that
pertains to any Supplier Welfare Plan or Spinco Welfare Plan.
1.3 “Beneficiary”
means the individual(s) designated by an Employee, former Employee, by
operation of law or otherwise, as the party entitled to compensation, benefits,
insurance coverage or any other goods or services under any Plan.
1.4 “COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1986
1.5 “Code”
means the Internal Revenue Code of 1986, as amended.
1.6 “Distribution
Agreement” means the Master Separation and Distribution
Agreement between Supplier and Spinco of even date herewith.
1.7 “Distribution
Date” means the date upon which Supplier completes the
distribution of Spinco’s Common Stock.
1.8 “Employee”
means any individual who performs services pursuant to a common-law
employer-employee relationship.
1.9 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
1.10 “Foreign
Plan,” when immediately preceded by “Supplier,” means a Plan
maintained by Supplier or when immediately preceded by “Spinco,” a Plan
maintained by Spinco, in either case for the benefit of Employees who perform
services and/or are compensated under a payroll that is administered outside
the United States, its territories and possessions, and the District of
Columbia.
1.11 “Former
Spinco Employee” means an Employee whose employment with Spinco
terminated for any reason (including retirement or long-term disability) before
the Distribution Date and who, as of the Distribution Date, is not employed by
Supplier or an affiliate of Supplier; provided, however, that any Employee who
terminated employment at any time prior to the Distribution Date and subsequently
became employed by Supplier after such termination (and did not return to
employment with Spinco), shall not be a Former Spinco Employee for any purpose
hereunder.
1.12 “Governmental
Authority” means any federal, state or local court, government,
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority, including, without limitation, the
United States Department of Labor (“DOL”), and the Internal Revenue
Service (“IRS”).
1.13 “Group
Insurance Policy” means a group insurance policy issued under
any Supplier Welfare Plan or any Spinco Welfare Plan, as applicable.
1.14 “HIPAA”
means the Health Insurance Portability and Accountability Act of
1996, as amended (“HIPAA”),
1.15 “HMO”
means a health maintenance organization that provides benefits under the
Supplier Welfare Plans or the Spinco Welfare Plans.
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1.16 “HMO
Agreements” means contracts, letter agreements, practices and
understandings with HMOs that provide medical services under the Supplier
Welfare Plans or Spinco Welfare Plans.
1.17 “Key
Recipient” means the holders of Supplier Options set forth on
Schedule I, attached hereto and made a part hereof.
1.18 “Liabilities”
means any and all losses, claims, charges, compensation, benefits, debts,
demands, actions, costs and expenses (including, without limitation,
administrative and related costs and expenses of any Plan, program or
arrangement), of any nature whatsoever, whether absolute or contingent, matured
or unmatured, liquidated or unliquidated, accrued or unaccrued, known or
unknown, whenever arising.
1.19 “Person”
means an individual, a general or limited partnership, a corporation, a trust,
a joint venture, an unincorporated organization, a limited liability entity or
any other entity.
1.20 “Plan”
means any plan, policy, program, payroll practice or other arrangement, whether
written or unwritten, providing benefits to Employees or former Employees of
Supplier or Spinco.
1.21 “Spinco
Common Stock” means the shares of common stock, par value $0.01
per share, of Spinco.
1.22 “Spinco
Welfare Plans” means the welfare benefit plans, programs, and
policies that are sponsored by Spinco for all periods after the Distribution
Date.
1.23 “Subsidiary”
means, with respect to any specified Person, any corporation or other legal
entity of which such Person or any of its Subsidiaries owns or controls,
directly or indirectly, more than 50% of the stock or other equity interest
entitled to vote on the election of members to the board of directors or
similar governing body.
1.24 “Supplier
Common Stock” means the shares of common stock, par value
$0.0001 per share, of Supplier.
1.25 “Supplier
Non-Qualified Plan” means the Pharmacopeia, Inc. Non-Qualified
Defined Compensation Plan.
1.26 “Supplier
Savings Plans” means the Employees Tax-Deferred Savings Plan of
Pharmacopeia, Inc.
1.27 “Supplier
Stock Incentive Plans” means, collectively, the Pharmacopeia,
Inc. 1994 Incentive Stock Plan, the Pharmacopeia, Inc. 2000 Stock Option Plan
and the Pharmacopeia, Inc. 1994 Director Option Plan.
1.28 “Supplier
Welfare Plans,” means the welfare benefit plans, programs, and
policies listed that are sponsored by Supplier.
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1.29 “Transition
End Date” means December 31, 2004, or such other date as
the parties mutually agree in writing.
The Transition End Date may be different for different plans, programs
or arrangements if the Parties so provide in writing.
1.30 “Transition
Period” means the period beginning on the Distribution Date and
ending on the Transition End Date. The
Transition Period may be different for different plans, programs or
arrangements if the Parties so provide in writing.
ARTICLE II
EMPLOYEES AND ALLOCATIONS OF LIABILITIES
2.1 Identification and Employment. Effective as of the Distribution Date,
Supplier and Spinco shall jointly compile a list by name, social security
number, job title and assigned location of all Active Spinco Employees. Effective as of the Distribution Date,
Spinco shall employ all such identified Active Spinco Employees. Effective as of the Distribution Date,
Supplier and Spinco shall jointly compile a list by name and social security
number of all Former Spinco Employees who are identifiable at such time. An individual who would be classified as a
Former Spinco Employee shall be treated as such for all purposes of this
Agreement notwithstanding that such individual is not on the list provided for
in the preceding sentence.
2.2 Spinco Assumption
of Liabilities. Except as
specifically provided otherwise in this Agreement, Spinco shall, on behalf of
itself and its Subsidiaries, assume (i) all Liabilities related to Active
Spinco Employees and Former Spinco Employees incurred in connection with their
employment by Spinco or Supplier prior to the Distribution Date; (ii) all
Liabilities related to Active Spinco Employees and Former Spinco Employees
arising on or after the Distribution Date relating to employment with any affiliate
of Spinco; and (iii) all other Liabilities related to, arising out of, or
resulting from obligations, liabilities and responsibilities assumed or
retained by Spinco under this Agreement or a Plan sponsored or maintained by
Spinco.
3.1 Transition
Period
(a) Spinco
will take all such actions as are necessary to adopt the Supplier Savings Plan,
effective as of the Distribution Date, as another participating “Employer,”
within the meaning of the Supplier Savings Plan; such adoption shall be limited
by this Agreement and shall solely relate to the Spinco Employees and any new
employees of Spinco who become eligible to participate in the Supplier Savings
Plan. Supplier hereby consents to the
adoption of the Plan by Spinco and agrees to take all such actions as are
reasonably necessary to facilitate the adoption of the Plan by Spinco. Supplier and Spinco agree to cooperate and
share the costs on a pro rata basis (determined by number of participants in
the Savings Plan who are Active or Former Spinco or Supplier Employees) of (i)
communicating with the trustee, recordkeepers and all other providers with
respect to the Supplier Savings Plan, and (ii) communicating with Supplier
Savings Plan participants, including providing any summary of material
modifications necessary under ERISA.
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(b) Spinco
and Supplier acknowledge and understand that the Supplier Savings Plan will be
a “multiple employer plan” within the meaning of section 413(c) of the
Code for the period that both Spinco and Supplier participate in the Plan
simultaneously.
(c) Spinco
hereby agrees to: (i) to withhold all elective deferrals, and make any required
matching contributions as described in the Supplier Savings Plan, and deliver
them to the trustee of the Supplier Savings Plan; (ii) in its discretion,
make any other contributions (such as qualified non-elective or qualified
matching contributions) as described in the Supplier Savings Plan, and deliver
them to the Trustee of the Plan; (iii) provide Spinco Employees who are
participants in the Supplier Savings Plan (or become participants) with access
to their accounts and opportunity to make investment fund elections in
accordance with the terms of the Plan; and (iv) account for all hours of
service earned under the Supplier Savings Plan, hirings, terminations and
attainment of eligibility under the Supplier Savings Plan, and communicate such
events as necessary with the recordkeeper or trustee of the Supplier Savings
Plan.
(d) Supplier,
as the primary employer under the Supplier Savings Plan, hereby agrees to
retain sole responsibility for (i) amending the Supplier Savings Plan for
purposes of maintaining tax-qualification under the Code and compliance with
the provisions of ERISA; (ii) communicating with the recordkeeper, trustee,
custodian and other similar service providers for the Supplier Savings Plan
(except as set forth above); and (iii) (A) correcting any qualification
failures or plan document failures (as described in the IRS Employee Plans
Compliance Resolution System), and (B) correcting any fiduciary violations with
the DOL (including corrections under the Voluntary Fiduciary Compliance
Program). Supplier shall share a pro
rata portion (relating to the period after adoption by Supplier with respect to
Supplier’s employees and former employees who participate or participated in
the Supplier Savings Plan due to their employment with Supplier) of the costs
and expenses associated with each of the foregoing provisions, except paragraph
(iii). The costs of paragraph (iii) shall be borne by the party at fault (and
shared based upon fault if both parties are at fault).
(e) Effective
as of the Distribution Date, Supplier shall amend the Supplier Savings Plan to
provide that (i) any matching contributions to be made on or after the
Distribution Date with respect to Active Spinco Employees shall be made in
Spinco Common Stock, and (ii) any matching contributions to be made on or after
the Distribution Date with respect to any Supplier employees shall be made in
Supplier Common Stock; provided, however, that Supplier and Spinco shall be
permitted to exercise their discretion to permit the investment of matching
contributions in any other investment fund available under the Supplier Savings
Plan excluding the common stock fund of the other Party.
(f) As
of the Distribution Date, any matching contributions or other amounts credited
to Spinco Employees’ accounts under the Supplier Savings Plan that are invested
in Supplier Common Stock, shall receive a distribution of Spinco Common Stock
in accordance with the Distribution Agreement.
After the Distribution Date, such amounts shall be invested in
accordance with the terms of the Plan, as amended by either Party.
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3.2 Establishment of and
Transfer to the Spinco Savings Plan.
(a) Spinco
shall only be an employer participating in the Plan with respect to the Spinco
Employees for the period beginning on the Distribution Date and ending on the
Transition End Date. Effective as of
the Transition End Date, Spinco shall establish a separate savings plan for the
benefit of Spinco Employees (“Spinco Savings Plan”).
(b) Effective
as of the Transition End Date, Spinco shall adopt the Spinco Savings Plan,
which shall provide benefits with respect to Active Spinco Employees, their
Beneficiaries and their respective alternate payees immediately after the
Transition End Date. For purposes of
eligibility and vesting, all service recognized under the Supplier Savings Plan
(for periods immediately before the Transition End Date) shall, as of
immediately after the Distribution Date, be recognized and taken into account
under the Spinco Savings Plan.
(c) Effective
as of the Transition End Date, Spinco shall establish or cause to be
established with respect to the Spinco Savings Plan, a trust, which shall be
exempt from taxation under Code section 501(a).
(d) As
soon as practicable after the Transition End Date, but no later than 30 days
after the Transition End Date, Supplier shall cause the accounts (if any) of
the Active Spinco Employees and Former Spinco Employees, their Beneficiaries
and their respective alternate payees, if any, under the Supplier Savings Plan
that are held by its related trust to be transferred to the Spinco Savings Plan
and its related trust, and Spinco shall cause such transferred accounts to be
accepted by such plan and trust, in accordance with Section 414(l) of the
Code to the extent applicable. The
transfer of such accounts shall be made:
(A) in kind, to the extent the assets consist of investments in the
Spinco Common Stock Fund and (B) otherwise in cash, interests in mutual funds,
securities, or other property or in a combination thereof, as the Parties may
agree, but, to the extent practicable, shall be invested initially in
comparable investment options in the Spinco Savings Plan as such accounts were
invested immediately before the date of transfer. Any outstanding loan balances under any Supplier Savings Plans to
Active Spinco Employees and Former Spinco Employees shall also be transferred
with the underlying accounts. After the
transfer, (i) Active and Former Spinco Employees will be able to sell the
Supplier Common Stock held in their account under the Spinco Savings Plan, and
(ii) Active and Former Supplier Employees will be able to sell the Spinco
Common Stock held in their account under the Supplier Savings Plan.
(e) Spinco
shall apply to the IRS for favorable determination letters with respect to the
tax-qualified status of the Spinco Savings Plan as soon as practicable after
the Transition End Date, and Spinco, consistent with the
terms of this Agreement, shall make such amendments to such Savings Plans as
may be required by the IRS in order for Spinco to receive favorable
determination letters with respect to these Plans.
(f) After
the Transition End Date, all beneficiary designations made by Active Spinco
Employees or their respective alternate payees with respect to the Supplier
Savings Plan shall be transferred to and be in full force and effect under the
Spinco Savings Plans until such beneficiary designations are replaced or
revoked by the individual who made such beneficiary designation.
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3.3 Governmental
Filings. Supplier and Spinco
shall cooperate to make any and all filings required with respect to the
Supplier Savings Plans and the Spinco Savings Plans under the Code or ERISA or
in connection with any of the transactions described in this Article III.
4.1 Continuation in Supplier
Welfare Plans
(a) Spinco
will take all such actions as are necessary to adopt the Supplier Welfare
Plans, effective as of the Distribution Date; such adoption shall be limited by
this Agreement and shall solely relate to the Spinco Employees and any new
employees of Spinco who become eligible to participate in the Supplier Welfare
Plan. Supplier hereby consents to the
adoption of the Plan by Spinco and agrees to take all such actions as are
reasonably necessary to facilitate the adoption of the Welfare Plans by
Spinco. Supplier and Spinco agree to
cooperate and share the costs on a pro rata basis (determined by number of
participants in the relevant Welfare Plan who are Active or Former Spinco or
Supplier Employees) of (i) communicating with the insurance companies, HMOs and
all other providers or third-party administrators with respect to the benefits
provided under the Welfare Plans, and (ii) communicating with Welfare Plan
participants, including providing any summary of material modifications
necessary under ERISA. Spinco and
Supplier acknowledge and understand that the Supplier Welfare Plans will be
“multiple employer welfare arrangements” within the meaning of Section 3
(40) ERISA.
(b) Supplier,
as the primary employer under the Welfare Plan, hereby agrees to retain sole
responsibility for (i) amending the Plan for purposes of maintaining compliance
with the provisions of ERISA and (ii) correcting any fiduciary violations with
the DOL. Supplier and Spinco shall
share a pro rata portion (determined by number of participants in the relevant
Welfare Plan who are Active or Former Spinco or Supplier Employees) of the
costs and expenses associated with each of the foregoing provisions (relating
to the period after adoption by Supplier with respect to Supplier’s employees
and former employees who participate or participated in the Plans due to their
employment with Supplier), except paragraph (ii). The costs of paragraph (ii)
shall be borne by Supplier.
(c) Spinco
hereby agrees to (i) withhold all employee contributions and make all employer
contributions as required by any applicable Supplier Welfare Plan, and pay such
contributions as directed by the Supplier and (ii) notify the Supplier regarding
any changes of status or termination of employment by any Spinco Employees,
Spinco Former Employees or Beneficiaries who are participants in the Welfare
Plans, within the meaning of section 125 of the Code and the regulations
thereunder.
(d) Vendor
Contracts.
(i) Before
the Distribution Date, Supplier shall take such steps as are necessary under
each ASO Contract, Group Insurance Policy and HMO Agreement in existence as of
the date of this Agreement to permit Spinco to participate in the terms and
conditions of such ASO Contract, Group Insurance Policy or HMO Agreement
beginning immediately after the Distribution Date.
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(ii) Supplier
shall determine, and shall promptly notify Spinco of, the manner in which
Spinco’s participation in the terms and conditions of ASO Contracts, Group
Insurance Policies and HMO Agreements, as set forth above is to be
effectuated. Spinco hereby authorizes
Supplier to act on its behalf to extend to Spinco the terms and conditions of
the ASO Contracts, Group Insurance Policies and HMO Agreements during the
Transition Period. Spinco shall fully
cooperate with Supplier in such efforts.
(iii) Supplier
and Spinco shall use their reasonable best efforts to cause each of the insurance
companies, HMOs, paid provider organizations and third-party administrators
providing services and benefits under the Supplier Welfare Plans and the Spinco
Welfare Plans to maintain the premium and/or administrative rates, based on the
aggregate number of participants in both the Supplier Welfare Plans, during the
Transition Period, and the Spinco Welfare Plans.
(iv) For
the Transition Period, Spinco shall be responsible, subject to the direction
and control of Supplier, for the management of the existing contractual and
other arrangements pertaining to the administration of the Spinco Welfare
Plans. Immediately after the
Distribution Date, Spinco shall be responsible for the management and control
of the ASO contracts, Group Insurance Policies and HMO Agreements and other
vendor contracts and relationships to the extent such contracts, policies and
agreements apply to the Spinco Welfare Plans.
Notwithstanding the foregoing, nothing contained in this Section 4.1(d)(iv)
shall permit Spinco to direct any insurance carrier, third-party vendor or
claims administrator with respect to any contractual arrangement, policy or
agreement under any Supplier Welfare Plan.
(e) For
the period before the Distribution Date and for the Transition Period, Supplier
shall be responsible for administering compliance with the continuation
coverage requirements for “group health plans” under Title X of COBRA, and the
portability requirements under HIPAA, with respect to Active Spinco Employees,
Former Spinco Employees and their Beneficiaries and shall be responsible for
furnishing all necessary employee change notices with respect to these persons
in accordance with applicable Supplier policies and procedures. Following the time periods described in the
preceding sentence, Spinco shall be solely responsible for administering
compliance with and satisfying any outstanding COBRA or HIPAA obligation with
respect to Active Spinco Employees, Former Spinco Employees and their
Beneficiaries.
(f) If
Spinco recovers any amounts through subrogation or reimbursement for claims
paid by Supplier to Active Spinco Employees, Former Spinco Employees or their
Beneficiaries, Spinco shall pay such amounts to Supplier.
4.2 Establishment of Welfare
Plans. Effective as of the
Transition End Date, Spinco shall take all actions necessary or appropriate to
establish the Spinco Welfare Plans to provide Active Spinco Employees (and
Former Spinco Employees, if applicable) those benefits it determines in its
sole discretion. Spinco shall provide
coverage to Active Spinco Employees (and Former Spinco Employees, if
applicable) under such Spinco Welfare Plans without the need to undergo a
physical examination or otherwise provide evidence of insurability, will not
impose pre-existing condition exclusions and will recognize and maintain all
irrevocable assignments
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and elections made by Active Spinco Employees (and
Former Spinco Employees, if applicable) in connection with any life insurance
coverage under the Supplier Welfare Plans.
4.3 Vacation and Sick Pay
Liabilities. Effective as of
the Distribution Date, Spinco shall assume all Liabilities for vacation, sick
leave and other paid time off in respect of all Active Spinco Employees (and
Former Spinco Employees, if applicable) as of the Distribution Date.
4.4 Medical
Spending/Dependent Care Accounts. As
soon as practicable after the Transition End Date, Supplier shall reimburse
Spinco for the aggregate contributions to such accounts withheld by Supplier
from Active Spinco Employees (and Former Spinco Employees, if applicable) prior
to the Distribution Date to the extent that Supplier did not exhaust such
contributions by providing benefits to Active Spinco Employees (and Former
Spinco Employees, if applicable) prior to the Distribution Date, or if benefits
paid by Supplier to Active Spinco Employees (and Former Spinco Employees, if
applicable) prior to the Distribution Date exceeds the contributions withheld
by Supplier from Active Spinco Employees (and Former Spinco Employees, if
applicable), Spinco shall reimburse Supplier for such difference.
4.5 Severance. The Parties agree that, with
respect to Active Spinco Employees who, in connection with the Distribution,
cease to be employees of Supplier and become Employees of Spinco, such
cessation shall not be deemed a severance of employment for purposes of any
Plan that provides for the payment of severance, salary continuation or similar
benefits. The Parties shall take all
such action, including, but not limited to, amending any Plan to give effect to
the provisions of this Section.
4.6 Workers’
Compensation and Unemployment Compensation. Effective as of the Distribution
Date, Spinco shall assume all Liabilities for Active Spinco Employees and Former
Spinco Employees related to any and all workers’ compensation and unemployment
compensation matters under any law of any state, territory, or possession of
the United States or the District of Columbia and Spinco shall be fully
responsible for the administration of all such claims. If Spinco is unable to assume any of such
Liabilities or the administration of any such claim because of the operation of
applicable state law or for any other reason, Spinco shall reimburse Supplier
for all such Liabilities.
4.7 HIPAA Business
Associate Provisions.
(a) Definitions. For purposes of this Section 4.7, the
following words and phrases shall have the meanings set forth below.
(i) “Designated
Record Set” shall have the meaning set out in its definition at 45 C.F.R.
§164.501, as such provision is currently drafted and as subsequently amended.
(ii) “Record”
means any item, collection, or grouping of information that includes Protected
Health Information and is maintained, collected, used, or disseminated by or
for Spinco.
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(iii) “Individually
Identifiable Health Information” shall have the meaning set out in its
definition at 45 C.F.R. §164.501, as such provision is currently drafted and as
subsequently amended.
(iv) “Privacy
Standards” shall mean the Standards for Privacy of Individually
Identifiable Health Information promulgated under HIPAA.
(v) “Protected
Health Information” or (“PHI”) shall have the meaning set out in its
definition at 45 C.F.R. §164.501, as such provision is currently drafted and as
subsequently amended.
(b) Use and
Disclosure of PHI. Supplier
may use and disclose PHI received from Spinco or created or received by
Supplier on behalf of Spinco solely as permitted or required by this Agreement
or as otherwise required by law.
Supplier shall not use and disclose PHI received from Spinco or created
or received by Supplier on behalf of Spinco in any manner that would constitute
a violation of the Privacy Standards if used in such manner by Spinco.
(c) Safeguards. Supplier agrees that it will use
commercially reasonable efforts to safeguard PHI and to prevent use or
disclosure of PHI other than as provided for under this Section 4.7.
(d) Reporting of
Disclosures of PHI. Supplier
shall report to Spinco any use or disclosure of PHI in violation of this
Section 4.7 of which it becomes aware.
(e) Agreements
with Third Parties. Supplier
shall obtain agreement with any agent or subcontractor that will have access to
PHI that is received from, or created or received by Supplier on behalf of
Spinco, to be bound by the same restrictions, terms, and conditions that apply
to Supplier pursuant to this Section 4.7 with respect to such PHI.
(f) Access to
Information. Within twenty-five (25) days of receipt of a request by
Spinco for access to PHI in a Designated Record Set concerning an individual
whose PHI is held by Supplier under this Agreement, Supplier will provide such
access to an individual in accordance with 45 C.F.R. § 164.524.
(g) Availability
of PHI for Amendment. Within
fifty (50) days of receipt of a request from Spinco for the amendment of an
individual’s PHI contained in a Designated Record Set, Supplier agrees to make
any amendment to PHI in a Designated Record Set that Spinco directs or agrees
to pursuant to 45 C.F.R. §164.526.
(h) Accounting
of Disclosures. Within fifty
(50) days of receipt of a notice from Spinco to Supplier stating that Spinco
has received a request for an accounting of disclosures of PHI regarding an
individual, Supplier shall make available to Spinco such information as is in
Supplier’s possession and is required for Spinco to make the accounting under
45 C.F.R. §164.528. Supplier
agrees to document such disclosures of PHI and information related to such
disclosures as would be required for Spinco to respond to a request by an
individual for an accounting of disclosures of PHI in accordance with
45 C.F.R. § 164.528.
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(i) Availability
of Books and Records.
Supplier agrees to make its internal policies, procedures, practices,
books, records and agreements relating to the use and disclosure of PHI
received from, or created or received by Supplier on behalf of, Spinco
available to the Secretary of the Department of Health and Human Services (“Secretary”)
for purposes of determining Spinco’s compliance with the Privacy Standards,
subject to attorney-client and other applicable legal privileges.
(j) Return of
PHI upon Termination. Upon
termination of the Agreement for any reason, Supplier shall return to Spinco
all PHI received from Spinco or created or received by Supplier on behalf of
Spinco and which Supplier still maintains in any form. Prior to doing so, Supplier further agrees
to recover any PHI in the possession of its subcontractors or agents. Supplier shall not retain any copies of such
PHI. If it is not feasible to return
such PHI as determined by Spinco, Supplier agrees to extend any and all
protections, limitations, and restrictions in this Section 4.7 to Supplier’s
use and disclosure of any PHI retained after the termination of the Agreement,
and to limit any further uses and disclosures to the purpose or purposes that
make the return of PHI infeasible. If
it is not feasible for Supplier to obtain from a subcontractor or agent any PHI
in the possession of the subcontractor or agent, Supplier will require the
subcontractor and/or agent to agree to extend any and all protections,
limitations, and restrictions in this Section 4.7 to the subcontractors’ and/or
agents’ use and disclosure of any PHI retained after the termination of the
Agreement, and to limit any further uses and disclosures to the purposes that
make the return of the PHI infeasible.
(k) Termination. Pursuant to 45 C.F.R.
§164.504(e)(2)(iii), Spinco may upon ten (10) days notice terminate the
provisions of any agreement that relates to the administration of any Welfare
Plan determined to be a health plan under the Privacy Standards if Spinco
determines that Supplier has breached a material term of this
Section 4.7. Alternatively, Spinco
may (i) provide Supplier with 30 days written notice of the existence of
an alleged material breach; and (ii) afford Supplier an opportunity to
cure said alleged material breach to Spinco’s satisfaction within the stated
time period. Failure to cure the
alleged breach is grounds for immediate termination of the provisions of any
agreement that relates to the administration of any Welfare Plan determined to
be a health plan under the Privacy Standards; provided, however, that in the
event that Spinco determines that such termination is not feasible, Supplier
hereby acknowledges that Spinco shall have the right to report the breach to
the Secretary, notwithstanding any other provision of the Agreement to the
contrary. Spinco reserves the right to
cure any breach by Supplier of any provision of this Section 4.7;
provided, however, that Spinco retains its right to terminate relevant
provision of an agreement as provided under this Section 4.7(k) and its
right to seek related remedies, even if Spinco is able to cure the breach.
(l) Spinco’s
Obligations. Spinco shall
notify Supplier of any limitation(s) in its notice of privacy practices, to the
extent that such limitation may affect Supplier’s use or disclosure of PHI. Spinco also shall notify Supplier of any
changes in, or revocation of, permission by an individual to use or disclose
PHI, to the extent that such changes may affect Supplier’s use or disclosure of
PHI. Spinco also shall notify Supplier
of any restriction to the use or disclosure of PHI that Spinco has agreed to in
accordance with 45 C.F.R. § 164.522, to the extent that such restriction
may affect Supplier’s use or disclosure of PHI.
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(m) Management and
Administration. Except as
otherwise limited in this Agreement, Supplier may use PHI for the proper
management and administration of the Spinco health plan or to carry out the
legal responsibilities of Supplier.
Except as otherwise limited in this Agreement, Supplier may disclose PHI
for the proper management and administration of the Spinco health plan,
provided that disclosures are required by law, or Supplier obtains reasonable
assurances from the person to whom the information is disclosed that it will
remain confidential and used or further disclosed only as required by law or
for the purposes for which it was disclosed to the person. The person also must agree to notify
Supplier of any instances of which it is aware in which the confidentiality of
the information has been breached.
(n) Amendment. The parties agree to take such action as is
necessary to amend this Section 4.7 from time to time as is necessary for
Spinco to comply with the requirements of the Privacy Standards.
ARTICLE V
EXECUTIVE COMPENSATION PROGRAMS
5.1 Supplier
Non-Qualified Plan.
(a) All
Active Spinco Employees shall cease to be eligible to participate in the
Supplier Non-Qualified Plan as of the Distribution Date.
(b) Effective
as of the Distribution Date, (i) Spinco shall assume all Liabilities in
connection with the Supplier Non-Qualified Plan for Active Spinco Employees
(and Former Spinco Employees, if applicable) and Supplier shall have no
responsibility with respect to such Liabilities, (ii) to the extent those Liabilities
are funded by a rabbi trust, the assets relating to Active Spinco Employees
(and Former Spinco Employees, if applicable), shall be transferred to Spinco or
a rabbi trust designated by Spinco as soon as practicable following the
Distribution Date, (iii) Spinco shall establish a non-qualified deferred
compensation plan on such terms as it determines in its sole discretion (“Spinco
Non-Qualified Plan”), and (iv) as applicable, all service recognized under
the Supplier Non-Qualified Plan (for periods immediately before the
Distribution Date) shall, as of immediately after the Distribution Date, be
recognized and taken into account under the Spinco Non-Qualified Plan.
5.2 Bonus Plans. Spinco shall assume all
Liabilities for or related to Active Spinco Employees (and Former Spinco
Employees, if applicable) payable under any bonus plan sponsored or maintained
by Spinco or Supplier with respect to the period prior to the Distribution
Date; provided, however, that Supplier and Spinco may jointly make such adjustments
to the financial goals, targets, payments and forms of payment as they deem
appropriate to reflect the Distribution.
As of the Distribution Date, Spinco may establish a bonus plan covering
such of its Active Spinco Employees as it in its sole discretion deems
appropriate.
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ARTICLE VI
STOCK INCENTIVE PLANS
6.1 Stock Option
Awards.
(a) Effective
as of the Distribution Date, Spinco shall establish an equity-based incentive
plan for the benefit of Spinco’s employees, consultants and directors (“Spinco
Stock Incentive Plan”), with such terms as Spinco determines, in its sole
discretion.
(b) Except as provided in Section 6.1(c) for Key
Recipients and Section 6.1(d) for Director Recipients, employees and
consultants who have received unexercised options (whether vested or unvested)
to purchase Supplier Common Stock (“Supplier Options”) under the
Supplier Stock Incentive Plans before the Distribution Date, and who become
employees or consultants of Spinco on the Distribution Date, will have each of
their unexercised Supplier Options converted into options to purchase Spinco
Common Stock (“Spinco Options”) under the Spinco Stock Incentive Plan as
of the Distribution Date, subject to the following terms and conditions:
(i) The terms of the conversion described in this
Section will be determined by reference to, and in consideration of, the
ratio of the market price of Supplier common stock and Spinco Common Stock
immediately before or after the distribution.
The conversion will preserve the then intrinsic value of the existing
Supplier Options. Following the
conversion contemplated by this Section, the aggregate market value of the
Spinco Common Stock purchasable under the Spinco Options immediately after the
Distribution will be approximately equal to the aggregate market value of the
Supplier Common Stock that was purchasable under the Supplier Options
immediately before the distribution, with the aggregate exercise price of the
Spinco Options being the same as the Supplier Options (except to the extent the
number of shares purchasable is rounded down to the nearest whole share).
(ii) The term, vesting and other terms of the Spinco
Options will be the same as the terms of the current Supplier Options; notwithstanding
any contrary provision of the Spinco Stock Incentive Plan.
(c) Each Key Recipient of Supplier Options under the
Supplier Stock Incentive Plans before the Distribution Date who becomes an
employee or consultant of Spinco on the Distribution Date, will, have 30% of
his or her unexercised vested Supplier Options converted into Spinco Options
under the Spinco Stock Incentive Plan as of the Distribution Date. The remaining 70% of his or her vested,
unexercised Supplier Options shall remain under the terms of the Supplier Stock
Incentive Plan (“Key Supplier Options”). Unvested Supplier Options held by Key Recipients (other than the
Designated Key Recipient identified on Schedule I) will be converted into
Spinco Options in accordance with Section 6.1(b). Unvested Supplier Options held by the
Designated Key Recipient identified on Schedule I will remain under the
terms of the Supplier Stock Incentive Plan as unvested Key Supplier Options. Supplier will administer the applicable
Supplier Stock Incentive Plan to provide that the holders of the Key Supplier
Options will not be treated as terminating employment or service with Supplier
due to the Distribution, solely for purposes of determining the terms
applicable to the Key Supplier
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Options after the Distribution
Date. The term, vesting and other terms
of the Spinco Options will be the same as the terms of the current Supplier
Options. The valuation and determination
of the number of Spinco Options and Supplier Options will be made in the same
manner as described in Section 6.1(b)(i).
(d) Each recipient of Supplier Options who is a
director of Supplier (“Director Recipient”) before the Distribution Date
will have 30% of his or her unexercised Supplier Options converted into Spinco
Options under the Spinco Stock Incentive Plan as of the Distribution Date. The remaining 70% of his or her unexercised
Supplier Options shall remain under the terms of the Supplier Stock Incentive
Plan (“Director Supplier Options”).
Supplier will administer the applicable Supplier Stock Plan to provide
that the holders of the Director Supplier Options who do not remain as
directors of Supplier after the Distribution will not be treated as terminating
service from Supplier due to the Distribution, solely for purposes of
determining the terms applicable to the Director Supplier Options after the
Distribution Date. The term, vesting
and other terms of the Spinco Options will be the same as the terms of the
current Supplier Options. The valuation
and determination of the number of Spinco Options and Supplier Options will be
made in the same manner as described in Section 6.1(b)(i).
(e) Spinco
shall make such additional awards under the Spinco Stock Incentive Plan to
Active Spinco Employees, consultants and directors as it in its sole discretion
deems appropriate.
6.2 Employee Stock
Purchase Plan.
(a) Effective
as of the Distribution Date, Spinco shall establish an employee stock purchase
plan (the “Spinco ESPP”) that will provide benefits that are similar to
those provided under the Supplier Employee Stock Purchase Plan (the “Supplier
ESPP”) immediately before the Distribution Date.
(b) Effective
as of the Distribution Date, Supplier shall amend the Supplier ESPP to provide
that any amounts contributed by Active Spinco Employees to the Supplier ESPP
shall be transferred to Spinco and shall be applied to the purchase of Spinco
Common Stock under the Spinco ESPP. The
rights to purchase Supplier Common Stock, which have been earned under the
Supplier ESPP shall be converted, in accordance with the procedures described
in Section 6.1(b) and applicable law, into rights to purchase Spinco
Common Stock under the Spinco ESPP effective as of the Closing Date. The initial “purchase period” under the
Spinco ESPP will end on the same date that such period is scheduled to end
under the Supplier ESPP. Additional
purchase periods under the Spinco ESPP will be subject to the terms and
conditions determined by Spinco in its sole discretion.
7.1 Foreign Retirement
Plans. Supplier and Spinco
shall use their reasonable best efforts so that, as soon as practicable after
the Distribution Date, all Supplier Foreign Plans which provide retirement
benefits solely to Active Spinco Employees and Former Spinco Employees shall be
assumed by Spinco together with all related assets and liabilities and neither
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Supplier nor any Supplier Group Plan shall retain any
liability with respect to such Foreign Plans.
7.2 Foreign Welfare
Plans. Supplier and Spinco
shall use their reasonable best efforts, effective as of the Distribution Date,
and to the extent allowed under foreign laws, to handle the Foreign Plans which
provide welfare benefits in a manner which mirrors the approach outlined in
this Agreement for the various employee benefit plans.
8.1 Payment of and
Accounting Treatment for Expenses.
(a) Except
as specifically provided in this Agreement, all expenses (and the accounting
treatment related to such expenses) related to liabilities through the
Distribution Date regarding matters addressed in this Agreement shall be
handled and administered in the ordinary course by Supplier and Spinco in accordance
with past Supplier accounting and financial practices and procedures pertaining
to such matters. To the extent such
expenses are unpaid as of the Distribution Date that pertain to Active Spinco
Employees or Former Spinco Employees, Spinco shall be solely responsible for
such payment, without regard to any accounting treatment to be accorded such
expense by Supplier or Spinco on their respective books and records. The accounting treatment to be accorded all
such expenses, whether such expenses are paid by Supplier or Spinco, shall be
determined by Supplier.
(b) Spinco
shall assume any balance sheet liability for any Liabilities assumed by it
under this Agreement as of the Distribution Date or thereafter, with respect to
any Active Spinco Employee or Former Spinco Employees. The determination of any balance sheet
liability as of the close of business on the Distribution Date shall be
determined by Supplier consistent with past accounting practices, consistently applied.
8.2 Accounting
Adjustments. Before the
Distribution Date, Spinco will have established on its books for financial
accounting purposes liabilities and reserves for deferred compensation, welfare
and other employee benefit plan obligations that will be retained or assumed by
Spinco under this Agreement, and Supplier will have adjusted the liabilities
and reserves on its books for financial accounting purposes to take into
account Spinco’s assumption or retention of Liabilities under this
Agreement. The initial adjustments as
of the Distribution Date will be made on an estimated basis. After the Parties have finally calculated
the actual liabilities under this Agreement, each Party shall appropriately
adjust its liabilities and reserves to reflect the amount of the liabilities
and reserves that are properly allocable to that Party.
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ARTICLE IX
AUDITS; INFORMATION SHARING
9.1 Audits.
(a) Each
of Supplier and Spinco, and their duly authorized representatives, shall have
the right to conduct audits at any time upon reasonable prior notice, at their
own expense, with respect to all information provided to it or to any Plan
trustee, recordkeeper or third-party administrator by the other Party. The Party conducting the audit shall have
the sole discretion to determine the procedures and guidelines for conducting
audits and the selection of audit representatives under this Section. The auditing Party shall have the right to
make copies of any records at its expense.
The Party being audited shall provide the auditing Party’s
representatives with reasonable access during normal business hours to its
operations, computer systems and paper and electronic files, and provide
workspace to its representatives. After
any audit is completed, the Party being audited shall have the right to review
a draft of the audit findings and to comment on those findings in writing
within ten business days after receiving such draft.
(b) The
auditing Party’s audit rights under this Section shall include the right to
audit, or participate in an audit facilitated by the Party being audited, of
any Subsidiaries and affiliates of the Party being audited and of any benefit
providers and third parties with whom the Party being audited has a
relationship, or agents of such Party, to the extent any such persons are
affected by or addressed in this Agreement.
The Party being audited shall, upon written request from the auditing
Party, provide an individual (at the auditing Party’s expense) to supervise any
audit of any such benefit provider or third-party. The auditing Party shall be responsible for supplying, at its
expense, additional personnel sufficient to complete the audit in a reasonably
timely manner.
9.2 Sharing of
Participant Information. Subject
to any limitations expressly provided for herein, Supplier and Spinco shall
share, Supplier shall cause each applicable affiliate of Supplier to share, and
Spinco shall cause each applicable affiliate of Spinco to share, with each
other and their respective agents and vendors (without obtaining releases) all
participant information necessary for the efficient and accurate administration
of each of the Supplier Plans and the Spinco Plans. Supplier and Spinco and their respective authorized agents shall,
subject to applicable laws on confidentiality, be given reasonable and timely
access to, and may make copies of, all information relating to the subjects of
this Agreement in the custody of the other Party, to the extent necessary for
such administration.
10.1 Notices. All notices, requests, claims and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
by hand, by reputable overnight courier service, by facsimile
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transmission, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
addresses listed below:
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if to Supplier, to:
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Pharmacopeia, Inc.
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9685 Scranton Road
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San Diego, CA
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Attn.:
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Vice President, Human
Resources
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Fax:
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(858) 799-5100
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if to Spinco, to:
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Pharmacopeia Drug
Discovery, Inc.
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3000 Eastpark Blvd.
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Cranbury, NJ 08512
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Attn:
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Executive Vice
President, Human Resources
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Fax:
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(609) 452-3671
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or to such other address
as any Party may, from time to time, designate in a written notice given in
accordance with this Section. Notice
given by hand shall be deemed delivered when received by the recipient. Notice given by mail as set out above shall
be deemed delivered five calendar days after the date the same is mailed. Notice given by reputable overnight courier
shall be deemed delivered on the next following business day after the same is
sent. Notice given by facsimile
transmission shall be deemed delivered on the day of transmission provided
telephone confirmation of receipt is obtained promptly after completion of
transmission.
10.2 Amendment and
Waiver. This Agreement may
not be altered or amended, nor may rights hereunder be waived, except by an
instrument in writing executed by the Party or Parties to be charged with such
amendment or waiver. No waiver of any
term, provision or condition of or failure to exercise or delay in exercising
any rights or remedies under this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, provision, condition, right or remedy or as a waiver of any other
term, provision or condition of this Agreement.
10.3 Entire
Agreement. This
Agreement constitutes the entire understanding of the Parties with respect to
the subject matter herein addressed, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject
matter.
10.4 Parties in
Interest. Neither
of the Parties may assign its rights or delegate any of its duties under this
Agreement without the prior written consent of the other Party (which consent
shall not be unreasonably withheld or delayed). This Agreement shall be binding upon, and shall inure to the
benefit of, the Parties and their respective successors and permitted assigns.
10.5 No Third-Party
Beneficiaries; No Termination of Employment.
No provision of this Agreement shall be construed to create
any right, or accelerate entitlement, to any compensation or benefit whatsoever
on the part of any Active Spinco Employee or Former Spinco Employee under any
Supplier Plan or Spinco Plan or otherwise.
Without limiting the generality of the foregoing, neither the
Distribution nor the termination of the controlled group status of a affiliate
of Spinco shall cause any Employee to be deemed to have incurred a
17
termination of employment that by itself entitles such
individual to the commencement of benefits under any of the Supplier Plans, any
of the Spinco Plans, or any individual agreements.
10.6 Right to Amend or
Terminate Any Plans. Nothing
in this Agreement other than those provisions specifically set forth in this
Agreement to the contrary shall preclude Spinco or Supplier, at any time after
the Distribution Date, from amending, merging, modifying, terminating,
eliminating, reducing, or otherwise altering in any respect any Spinco plan or
Supplier Plan, respectively, any benefit under any Plan or any trust, insurance
policy or funding vehicle related to any Spinco Plan or Supplier Plan.
10.7 Effect if
Distribution Does Not Occur. If
the Distribution does not occur, then all actions and events that are, under
this Agreement, to be taken or occur effective as of the Distribution Date,
immediately after the Distribution Date, or otherwise in connection with the
Distribution, shall not be taken or occur except to the extent specifically
agreed to in writing by Spinco and Supplier.
10.8 Relationship of
Parties. Nothing in this
Agreement shall be deemed or construed by the Parties or any third party as
creating the relationship of principal and agent, or a partnership or joint
venture between the Parties, it being understood and agreed that no provision
contained in this Agreement, and no act of the Parties, shall be deemed to
create any relationship between the Parties other than the relationship set
forth in this Agreement.
10.9 Affiliates. Each of Supplier and Spinco shall
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth in this Agreement to be performed by
affiliates of Supplier or affiliates of Spinco, respectively, where relevant.
10.10 Further Assurances
and Consents In addition to
the actions specifically provided for elsewhere in this Agreement, each of the
Parties will use its reasonable best efforts to (a) execute and deliver such
further instruments and documents and take such other actions as any other
Party may reasonably request in order to effectuate the purposes of this
Agreement and to carry out the terms of this Agreement and (b) take, or cause
to be taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and
agreements or otherwise to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable best efforts to obtain any consents and approvals and to make any
filings and applications necessary or desirable in order to consummate the
transactions contemplated by this Agreement; provided that no Party shall be
obligated to pay any consideration therefor (except for filing fees and other
similar charges) to any third-party from whom such consents, approvals and
amendments are requested or to take any action or omit to take any action if
the taking of or the omission to take such action would be unreasonably
burdensome to the Party.
10.11 Severability. The provisions of this Agreement
are severable and should any provision of this Agreement be void, voidable or
unenforceable under any applicable law, such provision shall not affect or
invalidate any other provision of this Agreement, which shall continue to
govern the relative rights and duties of the Parties as though such void,
voidable or unenforceable provision were not part of this Agreement.
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10.12 Governing
Law. Subject
to federal law, this Agreement shall be construed in accordance with, and
governed by, the laws of the State of Delaware, without regard to the conflicts
of law rules of such state.
10.13 Counterparts. This Agreement may be executed in
one or more counterparts each of which shall be deemed an original instrument,
but all of which together shall constitute but one and the same Agreement.
(a) Resolution
of any and all disputes arising from or in connection with this Agreement, whether
based on contract, tort, statute or otherwise, including, but not limited to,
disputes in connection with claims by third parties (collectively, “Disputes”),
shall be subject to the provisions of this Section 10.14; provided,
however, that nothing contained in this Agreement shall preclude either Party
from seeking or obtaining (i) injunctive relief or (ii) equitable or other
judicial relief to enforce the provisions of this Agreement or to preserve the
status quo pending resolution of Disputes hereunder.
(b) Either
Party may give the other Party written notice of any Dispute not resolved in
the normal course of business. The
parties shall attempt in good faith to resolve any Dispute promptly by
negotiation between executives of the parties who have authority to settle the
controversy and who are at a higher level of management than the persons with
direct responsibility for administration of this Agreement. Within 30 days after delivery of the notice,
the foregoing executives of both parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary for a
period not to exceed 15 business days, to attempt to resolve the Dispute. All reasonable requests for information made
by one Party to the other will be honored.
If the parties do not resolve the Dispute within such 45 business day
period (the “Initial Negotiation Period”), the Parties shall attempt in
good faith to resolve the Dispute by negotiation between (a) in the case of
Supplier, the Chief Financial Officer and (b) in the case of Spinco, the Chief
Financial Officer (collectively, “Designated Officers”). Such officers shall meet at a mutually
acceptable time and place (but in any event no later than 15 business days
following the expiration of the Initial Negotiation Period) and thereafter as
often as they reasonably deem necessary for a period not to exceed 15 business
days, to attempt to resolve the Dispute.
(c) If
the Dispute has not been resolved by negotiation within 75 business days of the
first Party’s notice, or if the Parties failed to meet within 30 business days
of the first Party’s notice, or if the Designated Officers failed to meet
within 60 business days of the first Party’s notice, either Party may commence
any litigation or other procedure allowed by law.
10.15 Assignment. Neither of the parties may assign
or delegate any of its rights or duties under this Agreement without the prior
written consent of the other party, which consent will not be unreasonably
withheld; provided that Supplier may, at any time, assign or delegate its
rights or duties hereunder to Accelrys, Inc without obtaining the consent of
Spinco. This Agreement shall be binding
upon, and shall inure to the benefit of, the Parties and their respective
successors and permitted assigns.
Notwithstanding the foregoing, Spinco may, and hereby gives notice to
Supplier that it intends to, pledge its rights and obligations under this
19
Agreement to its lenders as collateral to secure
indebtedness outstanding under its senior secured credit facility and all
renewals, refundings, refinancings and replacements thereof.
10.16 Interpretation. Words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other genders as the context requires. The word “including” and words of similar import when used in
this Agreement means “including, without limitation,” unless the context
otherwise requires or unless otherwise specified.
10.17 Headings. The Article and
Section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the Parties and shall not in any
way affect the meaning or interpretation of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the
Parties have executed and delivered this Agreement as of the day and year first
above written.
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PHARMACOPEIA,
INC.
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By:
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/s/ John J. Hanlon
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Name: John J. Hanlon
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Title: Chief Financial Officer
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PHARMACOPEIA
DRUG DISCOVERY, INC.
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By:
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/s/ Joseph A. Mollica, Ph.D.
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Name: Joseph A. Mollica, Ph.D.
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Title: President and Chief Executive Officer
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