Employment Agreement (Agreement) is entered into as of
the ___ day of ___,
2007, by and between  (Executive) and Orexigen Therapeutics, Inc. (the Company).
Whereas, the Company desires to employ Executive to provide personal services to the
Company, and wishes to provide Executive with certain compensation and benefits in return for
Executives services; and
Whereas, Executive wishes to be employed by the Company and provide personal services
to the Company in return for certain compensation and benefits.
Now, Therefore, in consideration of the mutual promises and covenants contained
herein, it is hereby agreed by and between the parties hereto as follows:
For purposes of the Agreement, the following terms are defined as follows:
1.1 Board means the Board of Directors of the Company.
1.2 Cause means the occurrence of any of the following events:
(a) Executives conviction of or plea of guilty or nolo contendere to any felony or a crime of
(b) Executives willful and continued failure or refusal to follow reasonable instructions of
the  of the Company
or reasonable policies, standards and regulations of the Company or
(c) Executives willful and continued failure or refusal to faithfully and diligently perform
the usual, customary duties of his employment with the Company or its affiliates;
(d) Unprofessional, unethical, immoral or fraudulent conduct by Executive;
(e) Conduct by Executive that materially discredits the Company or any affiliate or is
materially detrimental to the reputation, character and standing of the Company or any affiliate;
(f) Executives material breach of the Proprietary Information and Inventions Agreement.
An event described in Section 1.2(b) through Section 1.2(f) herein shall not be treated as
Cause until after Executive has been given written notice of such event, failure or conduct and
Executive fails to cure such event, failure, conduct or breach, if curable, within 30 days from
such written notice. Failure of the Company to meet financial or performance targets or goals
shall not be deemed to be a breach pursuant to Sections 1.2(b) or 1.2(c) herein.
1.3 Change in Control means the occurrence of any of the following events:
(a) the direct or indirect acquisition by any person or related group of persons (other than
the Company or a person that directly or indirectly controls, is controlled by, or is under common
control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than 50% of the total combined voting power of the
Companys outstanding securities pursuant to a tender or exchange offer made directly to the
Companys shareholders which the Board does not recommend such shareholders to accept;
(b) a change in the composition of the Board over a period of 36 months or less such that a
majority of the Board members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (i) have been Board members continuously
since the beginning of such period, or (ii) have been elected or nominated for election as Board
members during such period by at least a majority of the Board members described in clause (i) who
were still in office at the time such election or nomination was approved by the Board;
(c) the consummation of any consolidation, share exchange or merger of the Company (i) in
which the stockholders of the Company immediately prior to such transaction do not own at least a
majority of the voting power of the entity which survives/results from that transaction, or (ii) in
which a stockholder of the Company who does not own a majority of the voting stock of the Company
immediately prior to such transaction, owns a majority of the Companys voting stock immediately
after such transaction; or
(d) the liquidation or dissolution of the Company or any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or substantially all the
assets of the Company, including stock held in subsidiary corporations or interests held in
1.4 Company means Orexigen Therapeutics, Inc. or, following a Change in Control, the surviving
entity resulting from such transaction.
1.5 Constructive Termination means Executives voluntary resignation following:
(a) a material reduction in the level of responsibility associated with Executives employment
with the Company or any surviving entity (other than a change in job title or officer title);
(b) any reduction in Executives level of base salary; or
(c) a relocation of Executives principal place of employment by more than 50 miles (other
than reasonable business travel required as part of the job duties associated with Executives
provided, and only in the event that, such change, reduction or relocation is effected by the
Company without cause and without Executives consent.
1.6 Covered Termination means an Involuntary Termination Without Cause or Constructive
Termination that occurs within the one-month period before the effective date of a Change in
Control and the six-month period commencing on the effective date of a Change in Control.
1.7 Exchange Act means the Securities Exchange Act of 1934, as amended.
1.8 Involuntary Termination Without Cause means Executives dismissal or discharge other than for
Cause. The termination of Executives employment as a result of Executives death or disability
will not be deemed to be an Involuntary Termination Without Cause.
EMPLOYMENT BY THE COMPANY
2.1 Position and Duties. Subject to terms set forth herein, the Company agrees to continue to
employ Executive in the position of  and Executive hereby accepts such continued
employment. Executive shall serve in an executive capacity and shall perform such duties as are
customarily associated with the position of  and such other duties as are assigned to
Executive by the . During the term of Executives employment with the Company, Executive
will devote Executives best efforts and substantially all of Executives business time and
attention (except for vacation periods and reasonable periods of illness or other incapacities
permitted by the Companys general employment policies or as otherwise set forth in this Agreement)
to the business of the Company.
2.2 Employment at Will. Both the Company and Executive shall have the right to terminate
Executives employment with the Company at any time, with or without Cause, upon 30 days written
notice. If Executives employment with the Company is terminated, Executive will be eligible to
receive severance benefits to the extent provided in this Agreement. If applicable, upon the date
of Executives termination of employment with the Company for any reason, Executive shall
immediately resign from the Board and the board of directors or comparable body of every
subsidiary, parent or other affiliated corporation of the Company, and every committee thereof.
2.3 Employment Policies. The employment relationship between the parties shall also be governed by
the general employment policies and practices of the Company, including those relating to
protection of confidential information and assignment of inventions, except that when the terms of
this Agreement differ from or are in conflict with the Companys general employment policies or
practices, this Agreement shall control.
COMPENSATION AND BENEFITS
3.1 Base Salary. Executive shall receive for services to be rendered hereunder an annual base
salary of $ (Base Salary), payable on the regular payroll dates of the Company.
3.2 Annual Bonus. In addition to the Base Salary, Executive will be eligible for an annual
performance bonus, equal to up to 25% of the Base Salary, and which is 100% based upon the
achievement of the performance goals and objectives to be determined by the compensation committee
of the Board (Annual Bonus). Such Annual Bonus shall be evaluated and paid in January of each
3.3 [Signing Bonus. Executive has received a signing bonus of . [Such signing bonus is
subject to repayment in the event Executives employment with the Company is terminated for any
reason. Repayment of the signing bonus shall be forgiven by  on each of the first and
second anniversaries of Executives commencement of employment with the Company.]]
3.4 Vacation and Paid Time Off. Executive shall be entitled to  business days of paid
vacation each year, accruing on a monthly basis,  personal days, and  holidays
3.5 Expenses. During the term of this Agreement, the Company shall reimburse Executive for all
reasonable and necessary out-of-pocket expenses incurred by Executive in connection with services
rendered on behalf of the Company subject to Executive providing the Company with appropriate
substantiation in accordance with Company policy.
3.6 Standard Company Benefits. Executive shall be entitled to all rights and benefits for which
Executive is eligible under the terms and conditions of the standard Company benefits and
compensation practices that may be in effect from time to time and are provided by the Company to
its executive employees, employed at similar full-time or part-time status, as applicable,
SEVERANCE AND CHANGE IN CONTROL BENEFITS
4.1 Severance Benefits. If Executives employment terminates due to an Involuntary Termination
Without Cause or a Covered Termination, Executive shall receive any annual base salary that has
accrued but is unpaid as of the date of such Involuntary Termination Without Cause or Covered
Termination. In addition, provided Executive first executes and does not revoke an effective
general release in the form and substance acceptable to the Company, Executive shall also be
entitled to continue to be compensated by the Company, at Executives annual base salary as in
effect during the last regularly scheduled payroll period immediately preceding the Involuntary
Termination Without Cause or Covered Termination, for a period of nine months, payable on the
regular payroll dates of the Company and subject to applicable tax withholding.
4.2 Acceleration of Vesting of Option. In the event of a Change In Control, Executive shall vest
in and be able to exercise the stock options held by Executive as to 50% of the unvested shares of
common stock then subject to such options. Thereafter, such options shall vest and become
exercisable as to any unvested shares of common stock subject to such options in equal monthly
installments over the 12 months following the effective date of a Change in Control; provided,
however, that in the event that fewer than 12 months remain until such options are fully vested and
exercisable, the vesting period for such options shall remain unchanged by the Change in Control.
In addition, if within the period beginning on the first day of the calendar month immediately
preceding the calendar month in which the effective date of such Change in Control occurs and
ending on the last day of the twelfth calendar month following the calendar month in which the
effective date of the Change in Control occurs, Executives employment with the Company (or its
successor) terminates due to an Involuntary Termination Without Cause thereof by the Company (or
any successor) or due to a Constructive Termination, then all stock options held by Executive shall
become fully vested and exercisable as of the date of such termination of Executives employment.
If Executive holds early exercised stock options, in the event of a Change in Control, the
Repurchase Option (as shall be defined in the Early Exercise Notice and Restricted Stock Purchase
Agreement entered into by the Company and Executive upon the exercise of the such stock options)
shall expire with respect to 50% of the shares of common stock then subject to the Repurchase
Option. Thereafter, the Repurchase Option shall expire with respect to any shares of common stock
remaining subject to the Repurchase Option in equal monthly installments over the 12 months
following the effective date of a Change in Control; provided, however, that in the event that
fewer than 12 months remain until the Repurchase Option has lapsed in full, the lapsing period for
the Repurchase Option shall remain unchanged by the Change in Control. In addition, if within the
period beginning on the first day of the calendar month immediately preceding the calendar month in
which the effective date of such Change in Control occurs and ending on the last day of the twelfth
calendar month following the calendar month in which the effective date of the Change in Control
occurs, Executives employment with the Company (or its successor) terminates due to an Involuntary
Termination Without Cause thereof by the Company (or any successor) or due to a Constructive
Termination, then the Repurchase Option shall expire in full with respect to all shares of common
stock subject thereto as of the date of such termination of Executives employment.
4.3 Section 409A of the Internal Revenue Code. The foregoing notwithstanding, to the extent
required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the Code),
if Executive is deemed to be a specified employee for purposes of Section 409A(a)(2)(B) of the
Code as of the date of termination of employment, Executive agrees that the payments due to him
under Section 4.1 in connection with a termination of his employment that would otherwise have been
payable at any time during the six-month period immediately following such termination of
employment shall not be paid prior to, and shall instead be payable in a lump sum as soon as
practicable following, the expiration of such six-month period.
4.4 Failure to Perform. Notwithstanding any other provision of this Agreement, if Executive shall
be discharged by the Company for Cause or if Executive terminates employment other than as a result
of a Constructive Termination, then this Agreement shall automatically terminate (except for
Article V, Article VII, and Article VIII, which shall continue in effect), and
upon such termination, the Company shall have no further obligation to Executive his spouse or
estate, except that the Company shall pay to Executive, the amount of his base salary and vacation
pay accrued to the date of such termination.
PROPRIETARY INFORMATION OBLIGATIONS
5.1 Agreement. Executive agrees to execute and abide by the Companys standard form of Proprietary
Information and Inventions Agreement (Proprietary Information and Inventions Agreement).
5.2 Remedies. Executives duties under the Proprietary Information and Inventions Agreement shall
survive termination of Executives employment with the Company and the termination of this
Agreement. Executive acknowledges that a remedy at law for any breach or threatened breach by
Executive of the provisions of the Proprietary Information and Inventions Agreement would be
inadequate, and Executive therefore agrees that the Company shall be entitled to injunctive relief
in case of any such breach or threatened breach.
6.1 Other Activities. Except with the prior written consent of the , Executive shall not
during the term of this Agreement undertake or engage in any other employment, occupation or
business enterprise, other than ones in which Executive is a passive investor; provided that such
passive investments will not require services on the part Executive which would in any manner
impair the performance of his duties under this Agreement. Executive may engage in civic and
not-for-profit activities so long as such activities do not materially interfere with the
performance of Executives duties hereunder.
6.2 Competition/Investments. During the term of Executives employment by the Company, except on
behalf of the Company, Executive shall not directly or indirectly, whether as an officer, director,
stockholder, partner, proprietor, associate, representative, consultant, or in any capacity
whatsoever engage in, become financially interested in, be employed by or have any business
connection with any other person, corporation, firm, partnership or other entity whatsoever which
were known by Executive to compete directly with the Company, throughout the world, in any line of
business engaged in (or planned to be engaged in) by the Company.
While employed by the Company, and for one year immediately following the date on which Executive
terminates employment or otherwise ceases providing services to the Company, Executive agrees not
to interfere with the business of the Company by (i) soliciting or attempting to solicit any
employee or consultant of the Company to terminate such employees or consultants employment or
service in order to become an employee, consultant or independent
contractor to or for any competitor of the Company or (ii) soliciting or attempting to solicit any
client, customer or other person either directly or indirectly, to direct his or its purchase of
the Companys products and/or services to any person, firm, corporation, institution or other
entity in competition with the business of the Company. Executives duties under this Article VII
shall survive termination of Executives employment with the Company and the termination of this
8.1 Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon
the earlier of personal delivery (including personal delivery by facsimile) or the third day after
mailing by first class mail, to the Company at its primary office location and to Executive at
Executives address as listed on the Company payroll.
8.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained
8.3 Waiver. If either party should waive any breach of any provisions of this Agreement, they
shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any
other provision of this Agreement.
8.4 Complete Agreement. This Agreement and the documents and agreements referenced herein
constitute the entire agreement between Executive and the Company and is the complete, final, and
exclusive embodiment of their agreement with regard to the subject matter contained herein and
therein and supersede all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee or representative
of any party hereto, and any prior agreement of the parties hereto in respect of the subject matter
contained herein, including without limitation, that certain offer letter, dated as of ,
between Executive and the Company. This Agreement is entered into without reliance on any promise
or representation other than those expressly contained herein or therein, and cannot be modified or
amended except in a writing signed by an appropriate officer of the Company and Executive.
8.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need
not contain signatures of more than one party, but all of which taken together will constitute one
and the same Agreement.
8.6 Headings. The headings of the sections hereof are inserted for convenience only and shall not
be deemed to constitute a part hereof nor to affect the meaning thereof.
8.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive and the Company, and their respective successors, assigns, heirs,
executors and administrators, except that Executive may not assign any of Executives duties
hereunder and Executive may not assign any of Executives rights hereunder, without the written
consent of the Company, which shall not be withheld unreasonably.
8.8 Arbitration. Unless otherwise prohibited by law or specified below, all disputes, claims and
causes of action, in law or equity, arising from or relating to this Agreement or its enforcement,
performance, breach, or interpretation shall be resolved solely and exclusively by final and
binding arbitration held in San Diego, California through Judicial Arbitration & Mediation
Services/Endispute (JAMS) under the then existing JAMS arbitration rules. However, nothing in
this section is intended to prevent either party from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any such arbitration. Each party in any such
arbitration shall be responsible for its own attorneys fees, costs and necessary disbursement;
provided, however, that if one party refuses to arbitrate and the other party seeks to compel
arbitration by court order, if such other party prevails, it shall be entitled to recover
reasonable attorneys fees, costs and necessary disbursements. Pursuant to California Civil Code
Section 1717, each party warrants that it was represented by counsel in the negotiation and
execution of this Agreement, including the attorneys fees provision herein.
8.9 Attorneys Fees. If either party hereto brings any action to enforce rights hereunder, each
party in any such action shall be responsible for its own attorneys fees and costs incurred in
connection with such action.
8.10 Choice of Law. All questions concerning the construction, validity and interpretation of this
Agreement will be governed by the law of the State of California without regard to the conflicts of
law provisions thereof.
(Signature page follows)
In Witness Whereof, the parties have executed this Agreement on the day and year
first above written.
||OREXIGEN THERAPEUTICS, INC.
Accepted and agreed: