Separation Agreement

SEPARATION AGREEMENT AND GENERAL RELEASE


This Separation Agreement and General Release ("Agreement") is made and entered into by and between Dr. Leonard Borrmann ("Borrmann") and ACADIA Pharmaceuticals, Inc. (the "Company"), as of September 20, 2000 (the "Effective Date"). Borrmann and the Company hereby agree as follows:


1. SEPARATION DATE. Effective on the last date signed below, Borrmann has tendered and the Company has accepted Borrmann's resignation as an employee and a director and any and all other positions Borrmann may have held with the Company and/or its affiliates (the "Separation Date").


2. ACCRUED SALARY AND VACATION. The Company agrees that immediately upon execution of this Agreement it will pay Borrmann all accrued salary, and all accrued and unused vacation benefits earned through the Separation Date, if any, subject to standard payroll deductions, withholding taxes and other obligations.


3. EXPENSE REIMBURSEMENT. Within thirty (30) business days of Borrmann's execution of this Agreement, Borrmann agrees that Borrmann will submit Borrmann's final documented expense reimbursement statement reflecting all business expenses Borrmann incurred prior to and including the Separation Date, if any, for which Borrmann seeks reimbursement. The Company shall reimburse Borrmann's expenses pursuant to Company policy and regular business practice.


4. SALARY AND BENEFIT CONTINUATION. In exchange for Borrmann's resignation and the releases and waivers given pursuant to this Agreement, the Company agrees to provide Borrmann with the benefits specified in paragraph 7 of Borrmann's employment letter agreement dated April 17, 1998, a copy of which is annexed to this Agreement as Exhibit A, consisting of continuation of Borrmann's base salary, less standard deductions and withholdings, paid twice monthly on the fifteenth (15th) day of each month and on the final day of each month for one year following the Separation Date (the "Salary Continuation Period") and continuation of standard Company benefits of group health insurance coverage for Borrmann and Borrmann's family, travel accident insurance coverage during the Salary Continuation Period, payment of four weeks of vacation which is the sum of $18,569.00, less standard deductions and withholdings, within fifteen (15) days following the Separation Date, and the continuation of Borrmann's and Borrmann's family's right to participate in the Company's group dental plan and the Company's Section 125 Flexible Spending Plan (provided that Borrmann agrees to contribute the same amount he contributed to the dental plan and 125 Flexible Spending Plans during his employment), and the Company's 401k plan during the Salary Continuation Period, subject to the terms of the applicable plans and COBRA where applicable. In addition, pursuant to paragraph 7 of Borrmann's employment letter, the Company will pay Borrmann a bonus payment equal to sixty thousand three hundred fifty-three dollars ($60,353.00), less standard deductions and withholdings, within ninety (90) days following the Separation Date. The Company also agrees to continue Borrmann's base salary, less standard deductions and withholdings, and continue Borrmann's standard Company benefits of group health insurance coverage for Borrmann and Borrmann's family and Borrmann's travel accident insurance


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coverage, and provide Borrmannn and Borrmann's family the right to participate in the Company's group dental plan and the Company's Section 125 Flexible Spending Plan (provided that Borrmann agrees to contribute the same amount he contributed to the dental plan and 125 Flexible Spending Plans during his employment), pursuant to the terms of the applicable plans and COBRA where applicable, beyond the last day of the Salary Continuation Period of up to a maximum of six months, determined on a month to month basis, provided that Borrmann is not gainfully employed during such six month period despite his reasonable good faith efforts to obtain gainful employment. Any such payments beyond the last day of the Salary Continuation Period shall be made only once a month. The Company has the right to request proof of Borrmann's efforts to obtain gainful employment.


5. STOCK OPTIONS. In exchange for the promises and covenants set forth herein, the Company agrees to accelerate the vesting of the stock options held by Borrmann as to 31,250 shares of the Company's common stock such that, as of the Separation Date, the number of shares vested under such stock options shall equal 200,000 shares. The Company also agrees to extend the exercise period of Bormann's stock options to September 20, 2007. Borrmann understands that to the extent he does not exercise his vested stock options within three (3) months of the Separation Date, any of the stock options originally granted as incentive stock options will no longer be treated as such, but instead will be treated for tax purposes as if they were non-qualified stock options. Borrmann acknowledges that the Company has advised him to seek guidance from a tax advisor in the event he has questions regarding the tax treatment of his stock options and agrees to hold the Company harmless for any tax consequences he may incur as a result of the extension of the exercise period of his options.


6. OTHER COMPENSATION AND BENEFITS. Except as expressly provided herein, Borrmann acknowledges and agrees that Borrmann is not entitled to and will not receive any additional compensation, severance, stock options, stock or benefits from the Company. Borrmann agrees and understands that all vesting under any stock compensation award (e.g., incentive stock option, nonqualified stock option, stock purchase agreement, or restricted stock bonus agreement) from the Company shall cease upon the Separation Date.


7. NON-COMPETE AND NON-SOLICITATION.


(a) NON-COMPETE: In exchange for the promises and covenants herein, Borrmann agrees that during the Salary Continuation Period.


(i) Borrmann will not act as an owner, employee, officer, director, agent or consultant, in the geographic area of the United States, with a company whose primary business is the discovery of drugs for the treatment of neuro-psychiatric disease, provided, however, that the ownership of two percent (2%) or less of the stock of a company whose shares are listed on a national securities exchange or are quoted on the National Association of Securities Dealers Automated Quotation System sh ...