1
EXHIBIT 10.40
August 5, 1999
Xxxxxxx Xxxxxx, Ph.D.
XX Xxx 00000
Xxx Xxxxx, XX 00000-0000
Dear Matt,
As a supplement to the offer letter and agreement dated January 13, 1998
between La Jolla Pharmaceutical Company ("LJP") and Xxxxxxx Xxxxxx, Ph.D.
("Linnik") related to Linnik's employment by LJP, Linnik and LJP hereby agree as
follows:
In connection with his employment with LJP, Linnik's new title will be
Executive Vice President of Research.
If Linnik's employment is terminated by LJP without cause (as defined
below), or if a Change in Control of LJP (as defined below) occurs and Linnik's
employment with LJP or its successor "terminates in connection with" (as defined
below) that Change in Control and in the absence of any event or circumstance
constituting Cause, then:
(i) Linnik will be entitled to receive from LJP a severance payment
equal to his then-current base salary for a period of nine full
calendar months from the date of termination, payable consistent
with LJP's normal payroll practices, provided that such payment
will be contingent upon execution and delivery by Linnik and LJP
of a mutual release, in form satisfactory to LJP, of all claims
arising in connection with Linnik's employment with LJP and
termination thereof, and
(ii) LJP will be entitled to receive for a period of nine full
calendar months from the date of termination medical and dental
benefits coverage for Linnik and/or his dependents through the
Company's available plans at the time and Linnik will be
responsible to continue payment of all applicable deductions for
premium costs. After the Company's obligation to pay the
premiums for health and dental coverage Linnik and/or his
dependents will be eligible to continue plan participation under
COBRA.
(iii) Notwithstanding anything to the contrary in the option plan (the
"PLAN") pursuant to which all of Linnik's existing options were
granted, the Options shall automatically vest and become fully
exercisable as of the date of termination of Executive's
employment (the TERMINATION DATE"), notwithstanding any vesting
or performance conditions applicable thereto, and shall remain
exercisable for a period of one year following the Termination
Date or such longer period as is provided by the Plan or grant
pursuant to which the Options were granted. However,
notwithstanding the foregoing, in no case will the Options be
exercisable beyond the duration of the original term thereof,
and if the Options qualify
2
as an incentive stock option under the Internal Revenue Code and
applicable regulations thereunder, the exercise period thereof
shall not be extended in such a manner as to cause the Options
to cease to qualify as an incentive stock option unless
Executive elects to forego incentive stock option treatment and
extend the exercise period thereof as provided herein.
For purposes hereof, "CHANGE IN CONTROL" of LJP has the meaning set
forth in the Plan in its form as the date of grant of the Options.
For purposes hereof, "CAUSE" means Linnik has (i) engaged in serious
criminal activity or other wrongful conduct that has an adverse impact
on LJP, (ii) disregarded instructions given to him under the authority
of LJP's Board of Directors, (iii) performed services for any person or
entity other than LJP and appropriate civic organizations, or (iv)
otherwise materially breached his employment or fiduciary
responsibilities to LJP.
For purposes hereof, Linnik's employment with LJP or its successor will
be deemed to "TERMINATE IN CONNECTION WITH" a Change in Control if,
within 180 days after the consummation of the Change of Control, (i)
Linnik is removed from Linnik's employment by, or resigns his employment
upon the request of, a person exercising practical voting control over
LJP or its successor following the Change in Control or a person acting
upon authority or at the instruction of such person; or (ii) Linnik's
position is eliminated as a result of a reduction in force made to
reduce over-capacity or unnecessary duplication of personnel and Linnik
is not offered a replacement position with LJP or its successor as a
Vice President with compensation and functional duties substantially
similar to the compensation and duties in effect immediately before the
Change in Control; or (iii) Linnik resigns his employment with the
Company or its successor rather than comply with a relocation of his
primary work site more than 50 miles from LJP's headquarters.
In Witness Whereof, LJP and Linnik have entered into this
agreement as of August 5, 1999.
LA JOLLA PHARMACEUTICAL COMPANY
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxxx
-------------------------- ---------------------------
Xxxxxx X. Xxxxx Xxxxxxx Xxxxxx, Ph.D.
Chairman & CEO Executive Vice President of
Research
