[PAIN THERAPEUTICS, INC. LETTERHEAD]
CONSULTING AGREEMENT, SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Consulting Settlement Agreement and Mutual Release ("Agreement") is made by and between Pain
Therapeutics, Inc. (the "Company") and Barry Sherman, MD ("Employee").
WHEREAS, Employee was employed by the Company; and
WHEREAS, the Company and Employee have mutually agreed to terminate the employment relationship, release
each other from any claims arising from or related to the employment relationship, and enter into a consulting
relationship for a six month transition period;
NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Employee
(collectively referred to as "the Parties") hereby agree as follows:
1. Resignation. Employee has resigned from his position as the Company's Executive Vice President, Chief
Medical Officer and member of the Scientific Advisory Board, effective October 19, 2001.
(a) Upon execution of this Agreement, the Company agrees to pay Employee $32,251.67, less applicable taxes,
in respect of his unpaid salary and accrued and unused paid time off earned through October 19, 2001 plus an
advance payment of the fee for the first month of his consultancy described herein. In addition, the Company
agrees to pay Employee at the rate of $21,666.67 per month, less applicable withholding, for the period
commencing on October 19, 2001 and ending on April 19, 2002, unless earlier terminated as provided in clause
(b) below (the "Payment Period"), in each case in accordance with the Company's payroll practices; provided,
however, that the parties acknowledge and agree that the first monthly payment has been delivered to Employee
as an advance upon signing this Agreement. During the Payment Period, options to purchase Company common
stock held by Employee will no longer continue to vest in accordance with applicable option agreements and
Company option plans.
(b) During the Payment Period, Employee shall, upon