On June 25, 2009, we held our 2009 Annual Meeting of Stockholders, where our stockholders approved (i) our 2009 Long-Term Incentive Plan, or 2009 LTIP, and
(ii) our 2009 Employee Stock Purchase Plan, or 2009 ESPP.

2009 LTIP

The 2009 LTIP as approved by our stockholders provides for the grant of a total of 7.0 million shares of Arena common stock (or "common stock"), as
(i) decreased for grants made under the Prior Plans (as defined below) between December 31, 2008 and the approval of the 2009 LTIP and (ii) increased by the number of shares subject to any stock awards under the Prior Plans that, between December 31, 2008 and the approval of the 2009 LTIP, are forfeited, expire or settled for cash and as otherwise provided in the 2009 LTIP. As of date of the stockholder approval of the 2009 LTIP, there were 6,488,112 shares available for issuance thereunder. The shares may be granted as incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance awards.

When we adopted our 2006 Long-Term Incentive Plan, as amended (the "2006 LTIP"), in June 2006, our Amended and Restated 1998 Equity Compensation Plan, Amended and Restated 2000 Equity Compensation Plan, and 2002 Equity Compensation Plan were terminated (together with the 2006 LTIP, the "Prior Plans"). Upon stockholder approval of the 2009 LTIP, the 2006 LTIP was also terminated. However, notwithstanding such termination of the Prior Plans, all outstanding awards under the Prior Plans will continue to be governed under the terms of the Prior Plans. The number of shares of common stock authorized for issuance under the 2009 LTIP may be increased by the number of shares subject to any stock awards under the Prior Plans that are forfeited, expire or otherwise terminate without the issuance of such shares and would otherwise be returned to the share reserve under the Prior Plans but for their termination and as otherwise provided in the 2009 LTIP.

Some key features of the 2009 LTIP are summarized below.

Shares Available for Issuance. There were 6,488,112 shares available for issuance under the 2009 LTIP on the date it was approved by our stockholders. Stock options and stock appreciation rights granted under the 2009 LTIP reduce the available number of shares by 1 share for every share issued while awards other than stock options and stock appreciation rights granted under the 2009 LTIP reduce the available number of shares by 1.3 shares for every share issued. In addition, shares that are released from awards granted under the Prior Plans or the 2009 LTIP because the awards expire, are forfeited or are settled for cash will increase the number of shares available under the 2009 LTIP by 1 share for each share released from a stock option or stock appreciation right and by 1.3 shares for each share released from a restricted stock award or restricted stock unit award. The following shares will not become available for issuance:
(i) shares tendered or withheld in payment of the purchase price of an option, or to satisfy any tax withholding obligation with respect to an option or stock appreciation right, (ii) shares subject to a stock appreciation right that are not issued in

Eligibility; Awards to be Granted to Certain Individuals and Groups. Awards may be granted under the 2009 LTIP to any employee, non-employee member of our Board of Directors, consultant or advisor who provides us service, except for incentive stock options which may be granted only to our employees or employees of our subsidiaries.

Certain Limits on Shares Subject to Awards. The 2009 LTIP provides that no participant may be granted, in any 36-month period, (i) options or stock appreciation rights to purchase more than 2.0 million shares of common stock, or
(ii) restricted stock awards, performance awards and/or restricted stock unit awards that are denominated in shares with respect to more than 1.0 million shares of common stock that are intended to comply with the performance-based exception under Internal Revenue Code (the "Code") Section 162(m). Shares subject to a cancelled award continue to count against the applicable limit. The maximum dollar value that may be granted to any participant for each 12 months in a performance period with respect to performance-based awards that are intended to comply with the performance-based exception under Section 162(m) of the Code and are denominated in cash is $5,000,000. The dollar value of a cancelled award will continue to count against the $5,000,000 limit.

Administration. The 2009 Plan will be administered by our Compensation Committee. The Compensation Committee has the authority to select the participants who will receive awards under the 2009 LTIP, to determine the type and terms of the awards, and to interpret and administer the 2009 LTIP. The Compensation Committee may delegate the right to make grants and otherwise take action on the Compensation Committee's behalf under the 2009 LTIP to a committee of one or more directors and, to the extent permitted by law, to an executive officer or a committee of executive officers the right to grant awards to employees who are not our executive officers.

Compensation Attributable to Performance Awards. Compensation attributable to performance awards under the 2009 LTIP will qualify as performance-based compensation under Section 162(m) of the Code, provided that: (i) the compensation is granted by a compensation committee comprised solely of "outside directors," (ii) the compensation is paid only upon the achievement of an objective performance goal established in writing by the Compensation Committee while the outcome is substantially uncertain, and (iii) the Compensation Committee certifies in writing prior to the payment of the compensation that the performance goal has been satisfied.

Exercise and Grant Price; No Repricing. Neither the exercise price of an option nor the grant price of a stock appreciation right may be less than 100% of the fair market value of the common stock on the date such option is granted, except in specified situations. The 2009 LTIP prohibits option and stock appreciation right repricings (other than to reflect stock splits, spin-offs or other corporate events described under "Adjustments upon Changes in Capitalization" below) unless stockholder approval is obtained. For purposes

Adjustments upon Changes in Capitalization. In the event of any merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other change in our corporate structure affecting our common stock or the value thereof, appropriate adjustments shall be made, in the discretion of the Compensation Committee, in the number and class of shares of stock subject to the 2009 LTIP, the number and class of shares of awards outstanding under the 2009 LTIP, the limits on the number of awards that any person may receive and the exercise price of any outstanding option or stock appreciation right.

Change in Control. The Compensation Committee may, in its discretion, determine that, upon our "Change in Control" (as that term is defined in the 2009 LTIP or otherwise defined in the agreement evidencing an award), options and stock appreciation rights outstanding as of the date of the Change in Control shall be cancelled and terminated without payment therefor if the fair market value of one share of our common stock as of the date of the Change in Control is less than the per share option exercise price or stock appreciation right grant price.

To the extent provided in an award agreement, in the event of a Change in Control in which the successor company assumes or substitutes for an option, . . .

On June 25, 2009, we held our 2009 Annual Meeting of Stockholders, where our stockholders (i) elected Jack Lief, Dominic P. Behan, Ph.D., Donald D. Belcher, Scott H. Bice, Harry F. Hixson, Jr., Ph.D., J. Clayburn La Force, Jr., Ph.D., Tina S. Nova, Ph.D., Phillip M. Schneider, Christine A. White, M.D., and Randall E. Woods to our Board of Directors to serve until the next annual meeting of stockholders and until their respective successors are elected and qualified or until their earlier resignation or removal; (ii) approved our 2009 Long-Term Incentive Plan; (iii) approved our 2009 Employee Stock Purchase Plan;
(iv) approved an amendment to our Fifth Amended and Restated Certificate of Incorporation, as amended, to increase the total number of authorized shares from 150,000,000 to 250,000,000 and the number of authorized shares of common stock from 142,500,000 to 242,500,000; and (v) ratified the appointment of Ernst & Young LLP, an independent registered public accounting firm, as our independent auditors for the year ending December 31, 2009.

(d) Exhibits.

      10.1        Arena's 2009 Long-Term Incentive Plan (incorporated by reference to
                  Exhibit 99.1 to Arena's registration statement on Form S-8 filed with
                  the Securities and Exchange Commission on June 30, 2009, Commission
                  File No. 333-160329)

      10.2        Arena's 2009 Employee Stock Purchase Plan (incorporated by reference
                  to Exhibit 99.2 to Arena's registration statement on Form S-8 filed
                  with the Securities and Exchange Commission on June 30, 2009,
                  Commission File No. 333-160329)