EXHIBIT 10.2
[LIGAND LETTERHEAD}
8 December 2005
Xxx Xxxxxx
000 Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxx:
The purpose of this letter agreement is to document 1) the
terms of a severance package to which you will be entitled should your
employment with Ligand Pharmaceuticals Incorporated (the "Company") terminate
under certain specified circumstances and 2) the terms of a stay bonus to which
you will become entitled under certain other circumstances.
DEFINITIONS. For purposes of this letter agreement the
following definitions will be in effect:
1. "Involuntary Termination" or "Involuntarily Terminated" means
the termination of your employment with the Company:
(i) upon your involuntary discharge or dismissal, or
(ii) upon your resignation in connection with any of the
following changes to the terms and conditions of your employment:
(A) a change in your position with the Company which materially
reduces your level of responsibility, (B) a material reduction in
your level of compensation (including base salary, fringe
benefits and participation in non-discretionary bonus programs
under which awards are payable pursuant to objective financial or
performance standards, but excluding equity compensation) or (C)
a relocation of your principal place of employment by more than
fifty (50) miles.
2. "Termination for Cause" means an Involuntary Termination
or resignation of your employment with the Company by reason of
your conviction of any felony or other criminal act, your
commission of any act of fraud or embezzlement, your unauthorized
use or disclosure of confidential or proprietary information or
trade secrets of the Company or its subsidiaries, or any other
intentional misconduct on your part which adversely affects the
business or affairs of the Company in a material manner.
INVOLUNTARY TERMINATION BENEFITS. In the event you are
Involuntarily Terminated, other than a Termination for Cause, you
will receive within 10 business days of such Involuntary
Termination a lump-sum payment before taxes equal to twelve (12)
months' refular salary
as in effect at your termination date, PROVIDED you are not
also entitled by reason of such Involuntary Termination to
receive change of control severance benefits under the executive
severance letter agreement between you and the Company dated May
20, 2003 (or any successor agreement thereto).
STAY BONUS. Provided that you are continuously employed by
the Company and available for work (except normal holidays and
approved paid time off) from the date of this letter, up to and
including December 31, 2006, you will receive on or before
January 31, 2007 a lump-sum payment before taxes equal to 4
months' regular salary (the "Stay Bonus") as in effect on
December 31, 2006. In the event of your Involuntary Termination
in connection with a Change of Control (as defined in the
executive severance letter agreement between you and the Company
dated May 20, 2003 (or its successor)) prior to June 30, 2006,
you will be entitled to receive within 10 business days of such
Involuntary Termination, in addition to any benefits under such
other agreement, one half of the Stay Bonus based on your salary
as in effect at the date of such Involuntary Termination. In the
event of your Involuntary Termination in connection with a Change
of Control (as defined in the executive severance letter
agreement between you and the Company dated May 20, 2003 (or its
successor)) on or after June 30, 2006 up to and including
December 31, 2006, you will be entitled to receive within 10
business days of such Involuntary Termination, in addition to any
benefits under such other agreement, the full Stay Bonus based on
your salary as in effect at the date of such Involuntary
Termination.
MISCELLANEOUS PROVISIONS
1. Entire Agreement; Amendments. This letter agreement sets
forth the complete understanding of the parties with respect to
the subject matter hereof and merges all prior communications,
PROVIDED THAT, for clarity, this letter agreement is separate
from and in addition to (a) that executive severance letter
agreement between you and the Company dated May 20, 2003 (or any
successor thereto) (b) your regular salary and annual bonus (c)
your restatement completion bonus offer. No amendment of this
letter agreement shall be effective unless in writing and signed
by both parties.
2. Term. This letter agreement shall expire on December 31, 2006.
3. General Creditor Status. The benefits to which you may
become entitled under this letter agreement will be paid, when
due, from the general assets of the Company. Your right (or the
right of the executors or administrators of your estate) to
receive any such payments will at all times be that of a general
creditor of the Company and will have no priority over the claims
of other general creditors of the Company.
4. Death. Should you die before receipt of all benefits to
which you become entitled under this letter agreement, then the
payment of such benefits will be made, on the due date or dates
hereunder had you survived, to the executors or administrators of
your estate.
5. Miscellaneous. The provisions of this letter agreement
will be construed and interpreted under ERISA. To the extent
ERISA is inapplicable, then the laws of the State of California
shall control, without regard to that state's choice of law
provisions. If any provision of this letter agreement as applied
to any party or to any circumstance should be adjudged by an
arbitrator or court of competent jurisdiction to be void or
unenforceable for any reason, the invalidity of that provision
shall in no way affect (to the maximum extent permissible by law)
the application of such provision under circumstances different
from those so adjudicated, the application of any other provision
of this letter agreement, or the enforceability or invalidity of
this letter agreement as a whole. Should any provision of this
letter agreement become or be determined to be invalid, illegal
or unenforceable in any jurisdiction by reason of the scope,
extent or duration of its coverage, then such provision shall be
deemed amended to the extent necessary to conform to applicable
law so as to be valid and enforceable or, if such provision
cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the
remainder of this letter agreement shall continue in full force
and effect.
6. Section 409A Compliance. Notwithstanding anything to the
contrary in this Agreement, the parties acknowledge and agree
that any payment to be made, or benefit provided, pursuant to
this Agreement shall be delayed if and to the extent necessary
for this Agreement and such payment or benefit to comply with
Section 409A of the Internal Revenue Code of 1986, as amended
from time to time, and the Treasury Regulations and other
interpretive guidance issued thereunder.
7. Remedies. All rights and remedies provided pursuant to
this letter agreement or by law will be cumulative, and no such
right or remedy will be exclusive of any other. A party may
pursue any one or more rights or remedies hereunder or may seek
damages or specific performance in the event of another party's
breach hereunder or may pursue any other remedy by law or equity,
whether or not stated in this letter agreement.
8. Arbitration. Any controversy which may arise between you
and the Company with respect to the construction, interpretation
or application of any of the terms, provisions or conditions of
this letter agreement or any monetary claim arising from or
relating to this letter agreement will be submitted to and
exclusively decided by final and binding arbitration in San
Diego, California in accordance with the rules of the American
Arbitration Association then in effect.
9. No Employment or Service Contract. Nothing in this letter
agreement shall confer upon you any right to continue in the
employment of the Company for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the
Company or you, which rights are hereby expressly reserved by
each, to terminate your employment at any time for any reason
whatsoever, with or without cause.
10. Proprietary Information. You hereby acknowledge that the
Company may, from time to time during your employment with the
Company, disclose to you confidential information pertaining to
the Company's business and affairs. All information and data,
whether or not in writing, of a private or confidential nature
concerning the business or financial affairs of the Company is
and will remain subject to a separate Proprietary Information and
Inventions Agreement (or the like) between you and the Company.
Please indicate your acceptance of the foregoing provisions of
this severance agreement by signing the enclosed copy of this letter agreement
and returning it to the Company. This letter agreement is subject to approval by
the Compensation Committee, and upon such approval shall be effective as of the
first date written above.
Very truly yours,
LIGAND PHARMACEUTICALS INCORPORATED
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Chairman, President and CEO
ACCEPTED BY AND AGREED TO
Signature: /s/ Xxx X. Xxxxxx
Dated: 12/13/05
