Pharmacopeia Drug Discovery (PCOP)

ARTICLE 4
PLAN ADMINISTRATION

4.1.                 Members. Members of the Committee shall be appointed by and hold office at the pleasure of the Board. Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee may be filled by the Board.

4.2.                 Responsibility. The Committee shall have total and exclusive responsibility to control, operate, manage and administer the Plan, in accordance with its terms.

4.3.                 Authority of the Committee. The Committee shall have all the authority that may be necessary or helpful to enable it to discharge its responsibilities with respect to the Plan. Without limiting the generality of the preceding sentence, the Committee shall have the exclusive right to: (a) select the Participants and determine the type of Awards to be made to Participants, the number of shares subject to Awards and the terms, conditions, restrictions and limitations of the Awards; (b) interpret the Plan; (c) determine eligibility for participation in the Plan; (d) decide all questions concerning eligibility for and the amount of Awards payable under the Plan; (e) construe any ambiguous provision of the Plan; (f) correct any default; (g) supply any omission; (h) reconcile any inconsistency; (i) issue administrative guidelines as an aid to administer the Plan and make changes in such guidelines as it from time to time deems proper; (j) make regulations for carrying out the Plan and make changes in such regulations as it from time to time deems proper; (k) determine whether Awards should be granted singly, in combination or in tandem; (l) to the extent permitted under the Plan, grant waivers of Plan terms, conditions, restrictions, and limitations, (m) accelerate the vesting, exercise, or payment of an Award or the performance period of an Award when such action or actions would be in the best interest of the Company; (n) subject to Section 17.3, grant Awards in replacement of Awards previously granted under this Plan or any other executive compensation plan of the Company; (o) establish; and administer the-Performance Goals and certify whether, and to what extent, they have been attained; (p) determine the terms and provisions of any agreements entered into hereunder; (q) take any and all other action it deems necessary or advisable for the proper operation or administration of the Plan; and (r) make all other determinations it deems necessary or advisable for the administration of the Plan, including factual determinations. Notwithstanding anything herein to the contrary and except as expressly provided by the adjustment provisions of Section 6.2, Options and SARs granted under the Plan shall not be directly or indirectly repriced, replaced or regranted through cancellation without shareholder approval, including, but not limited to, an exchange of an Option or SAR with an exercise price or base price less than Fair Market Value for cash, restricted stock, stock options or other stock awards.

4.4.                 Discretionary Authority. The Committee shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan including, without limitation, its construction of the terms of the Plan and its determination of eligibility for participation and Awards under the Plan. It is the

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ARTICLE 4
PLAN ADMINISTRATION

4.1.                Members.   Members of the Committee shall be appointed by and hold office at the pleasure of the Board. Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee may be filled by the Board.

4.2.                Responsibility.   The Committee shall have total and exclusive responsibility to control, operate, manage and administer the Plan, in accordance with its terms.

4.3.                Authority of the Committee.   The Committee shall have all the authority that may be necessary or helpful to enable it to discharge its responsibilities with respect to the Plan. Without limiting the generality of the preceding sentence, the Committee shall have the exclusive right to: (a) select the Participants and determine the type of Awards to be made to Participants, the number of shares subject to Awards and the terms, conditions, restrictions and limitations of the Awards; (b) interpret the Plan; (c) determine eligibility for participation in the Plan; (d) decide all questions concerning eligibility for and the amount of Awards payable under the Plan; (e) construe any ambiguous provision of the Plan; (f) correct any default; (g) supply any omission; (h) reconcile any inconsistency; (i) issue administrative guidelines as an aid to administer the Plan and make changes in such guidelines as it from time to time deems proper; (j) make regulations for carrying out the Plan and make changes in such regulations as it from time to time deems proper; (k) determine whether Awards should be granted singly, in combination or in tandem; (l) to the extent permitted under the Plan, grant waivers of Plan terms, conditions, restrictions, and limitations, (m) accelerate the vesting, exercise, or payment of an Award or the performance period of an Award when such action or actions would be in the best interest of the Company; (n) subject to Section 17.3, grant Awards in replacement of Awards previously granted under this Plan or any other executive compensation plan of the Company; (o) establish; and administer the-Performance Goals and certify whether, and to what extent, they have been attained; (p) determine the terms and provisions of any agreements entered into hereunder; (q) take any and all other action it deems necessary or advisable for the proper operation or administration of the Plan; and (r) make all other determinations it deems necessary or advisable for the administration of the Plan, including factual determinations. Notwithstanding anything herein to the contrary and except as expressly provided by the adjustment provisions of Section 6.2, Options and SARs granted under the Plan shall not be directly or indirectly repriced, replaced or regranted through cancellation without shareholder approval, including, but not limited to, an exchange of an Option or SAR with an exercise price or base price less than Fair Market Value for cash, restricted stock, stock options or other stock awards.

4.4.                Discretionary Authority.   The Committee shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan including, without limitation, its construction of the terms of the Plan and its determination of eligibility for participation and Awards under the Plan. It is the intent of Plan that the decisions of the Committee and its actions with respect to the Plan shall be final, binding and conclusive upon all persons having or claiming to have any right or interest in or under the Plan.

4.5.                Section 162(m) of the Code.   With regards to all Covered Employees, the Plan shall, for all purposes, be interpreted and construed in accordance with Section 162(m) of the Code.

4.6.                Action by the Committee.   The Committee may act at a meeting only by a majority of its members. Any determination of the Committee may be made, without a meeting, by a writing or writings signed by all of the members of the Committee. In addition, the Committee may authorize any one or more of its number to execute and deliver documents on behalf of the Committee.

4.7.                Allocation and Delegation of Authority.   The Committee may allocate all or any portion of its responsibilities and powers under the Plan to any one or more of its members, the CEO or the

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Secondary Committee as the Committee deems appropriate and may delegate all or any part of its responsibilities and powers to any such person or persons, provided that any such allocation or delegation be in writing; provided, however, that only the Committee may select and grant Awards to Participants who are subject to Section 16 of the Exchange Act or are Covered Employees. The Committee may revoke any such allocation or delegation at any time for any reason with or without prior notice.

Plan Administration

The deferred compensation plan will be approved and administered at the direction of the Compensation Committee of Pharmacopeia’s Board of Directors.