On November 2, 2012, Dr. Thomas Chan, Chief Scientific Officer of ArQule Inc. executed a separation agreement with ArQule under which his employment with ArQule will terminate on November 22, 2012. The separation agreement becomes effective on November 10, 2012 in accordance with statutory notice provisions under federal law. Dr. Chan will receive no payments or benefits under his current employment agreement following his termination date; however, he will continue to receive his current salary and other benefits pursuant to the separation agreement through and including November 22, 2012.

Dr. Chan's departure is not the result of any disagreement with management or the ArQule Board of Directors. His decision is related to his plans to establish a new company.