EMPLOYMENT AGREEMENT
EXHIBIT 10.66
This Amended and Restated Employment Agreement (this “Agreement”) is effective as
of December 4, 2006 (the “Effective Date”), and is entered into by and between Xxxxxxx
Xxxxxx (“Employee”) and La Jolla Pharmaceutical Company (the “Company”).
WHEREAS, the Company offered Employee employment pursuant to an offer letter and agreement
dated July 10, 2006 (the “Offer Letter”);
WHEREAS, the parties hereto desire to amend and restate the terms of Employee’s
employment in this Agreement.
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Title; Other Consulting. Employee shall have the title of EVP & Chief Medical
Officer. In this capacity, Employee will report to the Company’s Chief Executive Officer.
Employee will be permitted to provide consulting services to other entities and persons during his
employment hereunder provided (i) such consulting does not interfere with Employee’s ability to
perform his duties and responsibilities hereunder, and (ii) such consulting does not involve
anything pertaining to research, diagnosis or treatment of lupus, including but not limited to any
therapeutics for lupus.
2. Compensation,
(a) Annual Base Salary. As compensation for all services to be rendered by Employee under
this Agreement, the Company shall pay Employee a base annual salary of $325,000, which salary
shall be paid in conformity with the Company’s pay practices generally applicable to Company
executives.
(b) Bonus. Employee will be eligible for a target bonus of up to 40% of his base annual
salary, with any bonus for 2006 to be prorated. The bonus for each year will be determined by
the achievement of goals established for (i) Employee’s position, and (ii) overall Company
performance, and is subject to approval by the Company’s Board of Directors.
(c) Benefits. During the term of his employment, Executive shall be entitled to
participate in all employee benefit plans and programs, including paid vacations, to the same
extent generally available to Company executives, in accordance with the terms of those plans
and programs. The Company shall have the right to terminate or change any such plan or program
at any time.
(d) Health Insurance. If Employee declines to participate in the Company’s group health
plan, then for each full year of non-participation, the Company will pay Employee $9600 to
compensate him for the purchase of supplemental medical coverage. Said payment will be made in
a lump sum on or before August 1 of each year of employment hereunder.
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(d) Stock Options. In connection with this Agreement, Employee has been granted a stock
option to purchase 87,000 shares of the Company’s stock pursuant to the terms of the Company’s
2004 Equity Incentive Plan. This option is in addition to an earlier option to purchase
113,000 shares pursuant to the same Plan.
3. Termination; Severance.
(a) If (i) Employee’s employment is terminated by the Company without Cause or (ii) if a
Change in Control of the Company occurs and Employee’s employment with the Company or its
successor Terminates In Connection With a Change in Control, and in the absence of any event or
circumstance constituting Cause, then, in either case:
(A) Employee will be entitled to receive from the Company an amount in severance equal to 9
months of Employee’s then-current base salary (the “Severance Amount”). The
Severance Amount will be paid in a lump sum promptly after Employee has executed and delivered to
the Company a release, in form and substance satisfactory to the Company, of all claims arising in
connection with Employee’s employment with the Company and termination thereof;
(B) Provided that Employee has elected not to be covered by the Company’s group health
insurance plan, Employee will be paid $800 for each month during the 9-month severance period that
Employee has not previously received payment to compensate him for his supplemental medical
coverage.
(C) Notwithstanding anything to the contrary in the option plan pursuant to which Employee’s
options were granted, all options granted to Employee prior to the Termination Date (the
“Options”) shall automatically vest and become fully exercisable as of the Termination Date
notwithstanding any vesting or performance conditions applicable thereto, and such Options shall
remain exercisable for (i) one year following the Termination Date or (ii) if the plan or grant
agreement pursuant to which certain Options were granted provides that such Options will be
exercisable for a period longer than one year in circumstances where Employee is terminated
without Cause or Employee’s employment Terminates In Connection With a Change in Control, then
such longer exercise period shall apply with respect to such Options; provided that, in either
case, (A) in no event will Options be exercisable beyond the duration of the original term thereof
and (B) if the Options qualify 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.
(b) “Change in Control” of the Company has the meaning set forth in the La Jolla
Pharmaceutical Company 2004 Equity Incentive Plan.
(c) “Cause” means the occurrence of one or more of the following: (i) Employee
commits a felony or any crime involving moral turpitude, embezzlement, fraud or misappropriation;
(ii) Employee breaches this Agreement or any other agreement entered into with the Company, or
breaches a material policy of the Company;
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(iii) Employee engages in a dishonest act or willful misconduct ; or (iv) Employee fails,
after receipt of written notice and after receiving a period of at least 10 days following such
notice, to follow a lawful direction of the CEO or Board of Directors.
(d) Employee’s employment with the Company or its successor will be deemed a “Termination
In Connection With” a Change in Control if, within 180 days after the consummation of the
Change of Control: (i) Employee is removed from Employee’s employment by, or resigns his employment
upon the request of, a person exercising practical voting control over the Company or its successor
following the Change in Control or a person acting upon authority or at the instruction of such
person; (ii) Employee’s position is eliminated as a result of a reduction in force made to reduce
over-capacity or unnecessary duplication of personnel and Employee is not offered a replacement
position with the Company 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) Employee 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 the Company’s
headquarters.
4. Section 409A.
(a) Notwithstanding any provision of this Agreement to the contrary, if, at the time of
Employee’s termination of employment with the Company, Employee is a “specified employee” as
defined in Section 409A of the Internal Revenue Code (the “Code”), and one or more of the payments
or benefits received or to be received by Employee pursuant to this Agreement or otherwise would
constitute deferred compensation subject to Section 409A, then no such payment will be made under
this Agreement until the earliest of (i) the date which is six months after Employee’s “separation
from service” for any reason, other than “death” or “disability” (as such terms are used in Section
409A(a)(2) of the Code), (ii) the date of Employee’s “death” or “disability” (as such terms are
used in Section 409A(a)(2) of the Code), or (iii) the effective date of a “change in the ownership
or effective control” of the Company (as such term is used in Section 409A(a)(2)(A)(v) of the
Code).
(b) The provisions of this Section 4 shall only apply to the extent required to avoid
Employee’s incurrence of any penalty tax or interest under Section 409A of the Code or any
regulations or United States Treasury guidance promulgated thereunder. In addition, if any
provision of this Agreement would cause Employee to incur any penalty tax or interest under Section
409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company may
reform such provision to maintain to the maximum extent practicable the original intent of the
applicable provision without violating the provisions of Section 409A of the Code.
5. Arbitration of Disputes. If any dispute arises which cannot be resolved by mutual
discussion between the Company and Employee, each party hereto agrees to resolve that dispute by
binding arbitration before an arbitrator experienced in employment law. Said arbitration will be
conducted in accordance with the rules applicable to employment disputes of the Judicial
Arbitration and Mediation Service (JAMS) or such other arbitration service as the Company and
Employee agree upon, and the substantive law of California. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation and enforcement
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of such arbitration proceeding. The Company will be responsible for paying any filing fee and
the fees and costs of the arbitrator, unless Employee initiates the claim, in which case he will
contribute an amount equal to the filing fee for a claim initiated in a state court of general
jurisdiction in California. The Company and Employee agree that this promise to arbitrate covers
any disputes that the Company may have against Employee, or that Employee may have against the
Company and all of its affiliated entities and their directors, officers and employees, arising out
of or relating to this Agreement, the employment relationship or termination of employment,
including any claims concerning the validity, interpretation, effect or violation of this
Agreement; violation of any federal, state or local law; any tort; and any other aspect of
Employee’s compensation or employment. The Company and Employee further agree that arbitration as
provided in this Section 5 shall be the exclusive and binding remedy for any such dispute and will
be used instead of any court action, which is hereby expressly waived, except for any request by
either party hereto for temporary or preliminary injunctive relief pending arbitration in
accordance with applicable law, or an administrative claim with an administrative agency. The
Company and Employee agree that any such arbitration shall be conducted in the San Diego,
California metropolitan area unless otherwise mutually agreed.
6. Miscellaneous.
(a) Captions. The captions of this Agreement are inserted for convenience and do
not constitute a part hereof.
(b) Entire Agreement. This Agreement constitutes the entire agreement, and supersedes
all prior written agreements, arrangements, communications and understandings and all prior and
contemporaneous oral agreements, arrangements, communications and understandings, among the parties
with respect to the subject matter of this Agreement. For the sake of clarity, this Agreement
supersedes and replaces the terms set forth in the Offer Letter. This Agreement shall be binding
upon and inure solely to the benefit of each of the parties and their respective successors and
assigns.
(c) Amendment. This Agreement may not be amended, modified or supplemented in any
manner, whether by course of conduct or otherwise, except by an instrument in writing signed on
behalf of each party hereto.
(d) Severability. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein and there shall be deemed substituted for such invalid, illegal or
unenforceable provision such other provision as will most nearly accomplish the intent of the
parties to the extent permitted by the applicable law. In case this Agreement, or any one or more
of the provisions hereof, shall be held to be invalid, illegal or unenforceable within any
governmental jurisdiction or subdivision thereof, this Agreement or any such provision thereof
shall not as a consequence thereof be deemed to be invalid, illegal or unenforceable in any other
governmental jurisdiction or subdivision thereof.
(e) Further Assurances. Each party hereto shall promptly execute and deliver such
further instruments and take such further actions as the other party may
reasonably require or request in order to carry out the intent of this Agreement.
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(f) No Change in Terms of Employment. Employee will continue to be bound by the
Company’s policies and this Agreement does not change Employee’s employment status with the
Company. As with all employees at the Company, Employee or the Company may, subject to the terms of
this Agreement, terminate Employee’s employment at any time for any reason whatsoever, with or
without cause or advance notice.
(g) Withholding Taxes. The Company may withhold from any compensation and benefits
payable under this Agreement all federal, state, city and other taxes or amounts as shall be
determined by the Company to be required to be withheld pursuant to applicable laws, or
governmental regulations or rulings.
(h) Governing Law. This Agreement and all disputes or controversies arising out of or
relating to this Agreement or the transactions contemplated hereby shall be governed by, and
construed in accordance with, the internal laws of the State of California.
(i) Counterparts. This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party. This
Agreement may be executed by facsimile signature and a facsimile signature shall constitute an
original for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered effective as of the day and year first written above in San Diego, California.
| LA JOLLA PHARMACEUTICAL COMPANY | ||||||||
| By: | /s/ Xxxxxxx Xxxxxxxxx | 12/1/2006 | ||||||
| Xxxxxxx Xxxxxxxxx
President and CEO |
Date | |||||||
| EMPLOYEE | ||||||||
| By: | /s/ Xxxxxxx Xxxxxx | 12/1/2006 | ||||||
| Xxxxxxx Xxxxxx | Date | |||||||
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