EXECUTIVE EMPLOYMENT AGREEMENT

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EXHIBIT 10.7

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement ("Agreement"), dated January 1, 2002,

by and between Structural GenomiX, Inc., with its principal place of business at

10505 Roselle Street, San Diego, California 92121 ("SGX"), a Delaware

corporation, and Stephen Burley, M.D., D. Phil., who resides at ________________

__________________________________________ ("Executive").

The parties agree as follows:

1. Employment. SGX hereby employs Executive, and Executive hereby accepts

such employment, upon the terms and conditions set forth herein.

2. Duties.

2.1. Position; Duties and Responsibilities. Executive is employed in

the position of Senior Vice President of Research and Chief Scientific Officer

and shall have the duties and responsibilities assigned by SGX. Executive is

responsible for directing all research and development strategies and programs

to insure that activities are carried out in accordance with established

specifications, schedules, and budgets. Executive shall serve as a key member of

the executive team, as the principal advisor to the team on the scientific

vision and direction for the Company, including overall management of the

Company's core technology and shall report directly to the Chief Executive

Officer. Executive shall perform faithfully and diligently such duties, as well

as such other duties as SGX shall reasonably assign from time to time. SGX

reserves the right to modify Executive's position and duties at any time in its

sole and reasonable discretion, provided that such modified position is an

executive position of at least the same general scope and responsibilities as

originally provided herein.

2.2 Best Efforts/Full-time. Executive will expend Executive's best

reasonable efforts on behalf of SGX, and will abide by all policies and

decisions made by SGX, as well as all applicable federal, state and local laws,

regulations or ordinances. Executive will act in the best interest of SGX at all

times. Other than as provided in Exhibit "A" hereto, Executive shall devote

Executive's full business time and efforts to the performance of Executive's

assigned duties, unless Executive notifies SGX in advance of Executive's intent

to engage in other paid work and receives SGX' express written consent to do so.

Executive must not engage in any work, paid or unpaid, that creates an actual or

potential conflict of interest with SGX. If SGX believes a conflict exists, and

presents Executive with reasonable proof of the same, SGX may ask Executive to

choose whether to discontinue the other work or resign employment with SGX.

2.3. Work Location and Effective Date. Executive's principal place of

work shall be located in San Diego, California, at SGX' offices or as reasonably

assigned by SGX. Executive will use his best efforts to take up residence at the

Work Location by January 1, 2002, but in any case shall arrive and start work no

later than January 29, 2002. This Agreement shall be effective ("Effective

Date") on Executive's start date of employment with SGX.

3. Term. The employment relationship pursuant to this Agreement shall

be for an initial term commencing on the Effective Date set forth above and

continuing for the period of three (3) years and for consecutive one (1) year

terms thereafter unless sooner terminated in accordance with paragraph 7 below.

4. Compensation.

4.1. Salary. As compensation for the proper and satisfactory

performance of all duties to be performed by Executive hereunder, SGX shall pay

to Executive an initial annualized Base Salary of Three Hundred Thousand

($300,000), payable in accordance with the normal payroll practices of SGX, less

required deductions for state and federal withholding tax, social security and

all other employment taxes and payroll deductions. Other than as provided in

Article 7 herein, in the event Executive's employment under this Agreement is

terminated by either party, for any reason, Executive will be entitled to

receive the Base Salary prorated to the date of termination.

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4.2. Incentive Compensation. Executive will be eligible to receive

incentive compensation. If SGX, in its sole and absolute discretion, grants

executive incentive compensation, the terms, amount and payment of such, if any,

will be determined solely by SGX.

4.3. Stock Options. Executive will receive an option to purchase

200,000 shares of SGX common stock at a price per share equal to its fair market

value as of first meeting of the Board of Directors (the "Board") immediately

following or contemporaneous with Executive's start date, as determined by the

Board in its sole and absolute discretion, with a four year vesting schedule

subject to the terms and conditions of the SGX 2000 Equity Incentive Plan (the

"Incentive Plan"). The effective grant date of the options is the start date of

employment. The offer of these shares is conditioned upon Executive's acceptance

of SGX' offer of employment and will be in accordance with the terms and

requirements of the Incentive Plan and the Company's form of stock option

agreement.

4.4. Conditional Compensation. In recognition of Executive's

acceptance of employment with SGX under the terms and conditions of this

Agreement, Executive will receive a one-time payment of one hundred thousand

dollars $100,000 ("Payment"), included in Executive's first SGX paycheck, and

subject to appropriate federal, state, and payroll tax withholdings. This

Payment will be subject to the following conditions: (1) if prior to the first

anniversary of the Effective Date, Executive voluntarily terminates Executive's

employment pursuant to paragraph 7.3 below, or (2) Executive is terminated for

cause pursuant to paragraph 7.1 below, Executive will reimburse SGX the full

amount of the Payment at the time of termination.

4.5. Bonus Stock Options. Executive will receive an additional option

to purchase 40,000 shares of SGX common stock at a price per share equal to its

fair market value as of the first meeting of the Board immediately following or

contemporaneous with Executive's start date, as determined by the Board in its

sole and absolute discretion. These options will vest as of the grant date and

otherwise be subject to the terms and conditions of the Incentive Plan. The

effective grant date is the start date of employment. The offer of these shares

is conditioned upon Executive's acceptance of SGX' offer of employment and will

be in accordance with the terms and requirements of the Incentive Plan and the

Company's form of stock option agreement.

4.6. Additional Stock Options. To the extent that any of the options

Executive received in Executive's capacity as a Founder of Prospect Genomics,

Inc. do not vest as a result of some or all of the Earnout Milestones (as set

forth in Section 1.9(a) of the Agreement and Plan of Merger and Reorganization

among Structural GenomiX, Inc., SGX Acquisition Corp., and Prospect Genomics,

Inc. dated as of April 2, 2001) not being achieved, SGX will grant Executive an

option to purchase additional shares of common stock. The number of shares which

will be subject to this option will equal the number of shares which did not

vest as a result of the Earnout Milestones not being fully achieved, up to a

maximum of 112,168 shares. The grant of this option will be subject to approval

by the Board and the price per share will equal the fair market value of SGX'

common stock as of the first meeting of the Board immediately following or

contemporaneous with Executive's start date. The offer of these shares will be

subject to the terms and requirements of the Incentive Plan and the Company's

form of stock option agreement.

4.7 Cash Bonus Program. As Senior Vice President of Research and Chief

Scientific Officer, Executive is eligible to earn a cash bonus equal to 30% of

Executive's base salary, or $90,000 in year one (1), provided Executive meets

the eligibility requirements and performance objectives set forth in SGX' bonus

program, which are determined in SGX' sole and absolute discretion.

4.8 Performance and Salary Review. SGX will periodically review

Executive's performance. Executive's salary and/or other compensation will be

reviewed yearly by SGX and may be adjusted from time to time in SGX' sole and

absolute discretion.

4.9. Loan Payment. SGX will provide to Executive the sum of three

hundred thousand dollars ($300,000) constituting an interest-free unforgivable

personal loan to Executive (the "Loan") subject to the terms and conditions of

the Burley Employee Loan Agreement ("Loan Agreement").

5. Benefits.

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5.1 Fringe Benefits. Executive will be eligible for all customary and

usual fringe benefits generally available to executives of SGX subject to the

terms and conditions of SGX' benefit plan documents, including, but not limited

to, medical, dental, vision, life insurance, AD&D insurance, long-term and

short-term disability insurance and a 401(k) plan. SGX reserves the right to

modify or eliminate the fringe benefits on a prospective basis, at any time,

effective upon notice to Executive. Executive shall accrue vacation on a pay

period basis at the annual rate of one-hundred-twenty (120) hours. SGX shall

also provide Executive with five (5) days of sick time per year. SGX covenants

that it has, and at all times will maintain, adequate insurance, including

liability insurance and Director's and Officer's insurance to cover any claim or

obligation that Executive may reasonably be expected to incur as a result of his

employment by SGX. Further, SGX shall indemnify and defend Executive against any

claims, demands, liability, suits, losses, damages (including special, punitive,

incidental and consequential damages), costs and expenses, including actual

attorneys' fees and court costs, which may be incurred by him and which result

from his employment as an executive, officer and employee of SGX.

5.2 Relocation Expenses and Benefits.

(a) SGX shall reimburse Executive for expenses related to the

relocation of Executive and his family to San Diego as

follows:

(i) Reasonable travel and living expenses associated with one

(1) trip of up to seven (7) days (including travel) to San

Diego for the purpose of securing a temporary place to live.

If needed, a second trip of like scope will be made

available upon reasonable request. Original receipts are

required for reimbursement.

(ii) Reasonably documented moving expenses up to thirty-five

thousand dollars ($35,000) (including packing, shipping and

temporary storage of household goods and one family

vehicle).

(iii) Up to six (6) months of temporary housing and costs

associated with a rental car until Executive's vehicle

arrives in San Diego.

(iv) Normal and customary non-recurring closing costs, including

sales commissions, Coop Board Fees and attorney fees, for

the sale of Executive's apartment in New York City, up to

ten percent (10%) of the price of the apartment. Executive

shall provide SGX with reasonable documentation

substantiating the costs associated with the sale of

Executive's New York apartment.

(v) Normal and customary non-recurring closing costs, including

sales commissions and attorney fees, associated with the

purchase of Executive's new home in San Diego up to three

percent (3%) of the purchase price.

(vi) Reasonable transportation costs for Executive and his family

associated with their final move trip to San Diego.

(vii) SGX will provide Executive with a moving allowance of

twenty thousand dollars ($20,000), to be paid with

Executive's first paycheck, and subject to appropriate

federal, state, and payroll tax withholdings, from SGX.

(viii) SGX will provide Executive with a company paid-for

relocation consultant to provide Executive with a variety of

relocation assistance, including, but not limited to,

finding a moving company, interim housing, real estate

professionals and information about the San Diego area.

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(b) SGX will gross-up all of the reimbursements, payments and

costs of services described in 5.2(a) above, except for item

(vii), (to the extent such items are considered taxable

income) for income and employment taxes. The income tax

gross-up will be calculated using the supplemental wage

rates in effect when payment is made. SGX will be reimbursed

for the pro-rated portion of the above payments and costs

from Executive, other than the services provided by the

relocation consultant, should Executive's employment be

terminated prior to the completion of one (1) year of

service pursuant to subparagraphs 7.1 or 7.3 herein. SGX

shall withhold such amount from Executive's final paycheck.

5.3 Interim Consultation. Prior to Executive's relocation and start

date with SGX, Executive will continue to provide SGX with

consulting services, and receive payment for the same, under the

Executive's Founding Scientific Associate and Consulting

Agreement with Prospect Genomics, Inc., of March 1, 2000, as

amended on May 4, 2001. Executive's interim consultation will be

for the exchange of ideas only. Under no circumstances, will

Executive direct research at SGX prior to his start date of

employment.

6. Business Expenses. Executive will be reimbursed for all out-of-pocket

business expenses reasonably incurred in the performance of Executive's duties

on behalf of SGX. Executive will be permitted to fly business class (or first

class if business class is not available) on any business flights with greater

than two (2) hours of flight time. To obtain reimbursement, expenses must be

submitted promptly with appropriate supporting documentation in accordance with

SGX' policies.

7. Termination of Employment.

7.1. Termination for Cause by SGX. Although SGX anticipates a mutually

rewarding employment relationship with Executive, SGX may terminate Executive's

employment immediately at any time for cause. Cause includes, but is not limited

to, one or more of the following: (a) acts or omissions deemed by SGX to

constitute gross negligence, recklessness, willful misconduct or dishonesty on

the part of Executive with respect to Executive's obligations under this

Agreement or otherwise relating to the business of SGX; (b) Executive's willful,

material breach of this Agreement; (c) Executive's conviction or entry of a plea

of guilty or nolo contendere for fraud, misappropriation or embezzlement, or of

any felony; or engaging in any conduct which SGX, in its discretion, determines

has or may adversely impact SGX; (d) Executive's material breach of fiduciary

duty toward SGX; (e) Executive's material breach of any element of SGX'

Confidential Information and Invention Assignment Agreement, including without

limitation, Executive's theft, dilution, or other misappropriation or careless

treatment of SGX' proprietary information; (f) Executive's inability to perform

all of the essential functions and duties of Executive's position, with or

without reasonable accommodation other than for reason of temporary illness; or

(g) Executive's death. In the event Executive's employment is terminated in

accordance with this subparagraph 7.1, Executive shall be entitled to receive

only the Base Salary then in effect, prorated to the date of termination, and

any benefits, including any benefits under the bonus program and Incentive Plan,

and expense reimbursements to which Executive is entitled by virtue of his prior

employment with SGX (collectively referred to as "Standard Entitlements."). All

other SGX obligations to Executive pursuant to this Agreement will become

automatically terminated and completely extinguished. Executive will not be

entitled to receive the Severance Payment or any part thereof described in

subparagraph 7.2 below.

7.2. Termination Without Cause By SGX/Severance. SGX may terminate

Executive's employment under this Agreement without cause at any time on thirty

(30) days' advance written notice to Executive, including the failure of SGX to

renew Executive's term of employment under paragraph 3 of this Agreement. In the

event of such termination, Executive will receive the Standard Entitlements,

plus a severance payment equivalent to twelve months of Executive's Base Salary

then in effect on the date of termination (the "Severance Payment") payable in

accordance with SGX' regular payroll cycle, including continuation of

Executive's benefits in accordance with SGX's regular payroll deductions. In

addition, the vesting of any outstanding stock options, including, but not

limited to, options granted under paragraphs 4.3 and 4.6, as well as any

subsequently granted incentive or evergreen stock options, will be accelerated

by 12 months, provided that Executive: (a) is in material compliance with all

surviving provisions of this Agreement as specified in

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subparagraph 16.7 below; (b) executes a full general release, releasing all

claims, known or unknown, that Executive may have against SGX arising out of or

any way related to Executive's employment or termination of employment with SGX;

and (c) agrees to act as a consultant for SGX for up to a maximum of sixty (60)

days, without additional compensation, if requested to do so by SGX. All other

SGX obligations to Executive pursuant to this Agreement will become

automatically terminated and completely extinguished, except for obligations

accruing prior to termination, including SGX's obligation to indemnify, defend

and insure Executive pursuant to subparagraph 5.1 hereunder.

7.3. Voluntary Resignation By Executive. Executive may voluntarily

resign Executive's position with SGX at any time on thirty (30) days advance

written notice. In the event of Executive's resignation, Executive shall be

entitled to receive only the Base Salary then in effect, prorated to the date of

resignation, and the Standard Entitlements. All other SGX obligations to

Executive pursuant to this Agreement will become automatically terminated and

completely extinguished, except for obligations accruing prior to termination,

including SGX's obligation to indemnify, defend and insure Executive pursuant to

subparagraph 5.1 hereunder. In addition, Executive will not be entitled to

receive the Severance Payment described in paragraph 7.2 above.

7.4. Termination of Executive Following Change Of Control.

(a) Severance Payment. If Executive's employment is terminated

by SGX without cause, or if Executive resigns because SGX substantially changes

all of Executive's duties and responsibilities which existed prior to a Change

in control, within one (1) year after a Change of Control (as that term is

defined below), Executive shall be entitled to receive the Standard

Entitlements, plus the Severance Payment and other benefits described in

subparagraph 7.2 above, and the vesting of any outstanding stock options,

including, but not limited to, options granted under paragraphs 4.3 and 4.6, as

well as any subsequently granted incentive or evergreen stock options, will be

accelerated by twenty-four (24) months, provided Executive complies with the

conditions in subparagraph 7.2 above. All other SGX obligations to Executive

pursuant to this Agreement will become automatically terminated and completely

extinguished, except for obligations accruing prior to termination, including

SGX's obligation to indemnify, defend and insure Executive pursuant to

subparagraph 5.1 hereunder.

(b) 280G. If, due to the benefits provided under subparagraph

7.4(a) above, and/or any other benefits, Executive is subject to any excise tax

due to characterization of any amounts payable under subparagraph 7.4(a) and/or

any other benefits, as excess parachute payments pursuant to Section 4999 of the

Internal Revenue Code of 1986, as amended (the "Code"), Executive may elect, in

Executive's sole discretion, to reduce the amounts payable under subparagraph

7.4(a)and/or any other benefits, in order to avoid any "excess parachute

payment" under Section 280G(b)(1) of the Code.

(c) Change of Control. A Change of Control is defined as any one

of the following occurrences:

(i) Any "person" (as such term is used in Sections 13(d)

and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other

than a trustee or other fiduciary holding securities of SGX under an employee

benefit plan of SGX, becomes the "beneficial owner" (as defined in Rule 13d-3

promulgated under the Exchange Act), directly or indirectly, of the securities

of SGX representing more than 50% of (a) the outstanding shares of common stock

of SGX or (b) the combined voting power of SGX' then-outstanding securities; or

(ii) The sale or disposition of all or substantially all of

SGX' assets (or any transaction having similar effect is consummated) other than

to an entity of which SGX owns at least 50% of the Voting Stock so long as the

sale or disposition is not under duress of SGX' financial hardship; or

(iii) SGX is party to a merger or consolidation that results

in the holders of voting securities of SGX outstanding immediately prior thereto

failing to continue to represent (either by remaining outstanding or by being

converted into voting securities of the surviving entity) less than 50% of the

combined voting power of the voting securities of SGX or such surviving entity

outstanding immediately after such merger or consolidation.

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8. Competitive Employment. During the term of Executive's employment with

SGX and during any period in which Executive is receiving payments (other than

any dividends on stock) from SGX or acting as a consu