PROSPECTUS FILED PURSUANT TO RULE 424(B)(3)
LIGAND PHARMACEUTICALS INCORPORATED
FILED PURSUANT TO RULE 424(B)(3)
REGISTRATION NO. 333-131029
PROSPECTUS SUPPLEMENT NO. 6
(TO PROSPECTUS DATED APRIL 12, 2006, AS SUPPLEMENTED AND AMENDED BY THAT
PROSPECTUS SUPPLEMENT NO. 1 DATED MAY 15, 2006, THAT PROSPECTUS SUPPLEMENT
NO. 2 DATED JUNE 12, 2006, THAT PROSPECTUS SUPPLEMENT NO. 3 DATED JUNE 29,
2006, THAT PROSPECTUS SUPPLEMENT NO. 4 DATED AUGUST 4, 2006, AND THAT
PROSPECTUS SUPPLEMENT NO. 5 DATED AUGUST 9, 2006)
This Prospectus Supplement No. 6 supplements and amends the prospectus
dated April 12, 2006 (as supplemented and amended by that Prospectus Supplement
No. 1 dated May 15, 2006, that Prospectus Supplement No. 2 dated June 12, 2006,
that Prospectus Supplement No. 3 dated June 29, 2006, that Prospectus Supplement
No. 4 dated August 4, 2006, and that Prospectus Supplement No. 5 dated August 9,
2006), or the Prospectus, relating to the offer and sale of up to 7,790,974
shares of our common stock to be issued pursuant to awards granted or to be
granted under our 2002 Stock Incentive Plan, or our 2002 Plan, up to 147,510
shares of our common stock to be issued pursuant to our 2002 Employee Stock
Purchase Plan, or our 2002 ESPP, and up to 50,309 shares of our common stock
which may be offered from time to time by the selling stockholders identified on
page 110 of the Prospectus for their own accounts. Each of the selling
stockholders named in the Prospectus acquired the shares of common stock upon
exercise of options previously granted to them as an employee, director or
consultant of Ligand or as restricted stock granted to them as a director of
Ligand, in each case under the terms of our 2002 Plan. We will not receive any
of the proceeds from the sale of the shares of our common stock by the selling
stockholders under the Prospectus. We will receive proceeds in connection with
option exercises under the 2002 Plan and shares issued under the 2002 ESPP which
will be based upon each granted option exercise price or purchase price, as
applicable.
This Prospectus Supplement No. 6 includes the attached Current Report
on Form 8-K of Ligand Pharmaceuticals Incorporated dated August 31, 2006, as
filed by us with the Securities and Exchange Commission.
This Prospectus Supplement No. 6 should be read in conjunction with,
and delivered with, the Prospectus and is qualified by reference to the
Prospectus, except to the extent that the information in this Prospectus
Supplement No. 6 updates or supersedes the information contained in the
Prospectus.
Our common stock is quoted on the Nasdaq Global Market under the symbol
"LGND." On August 30, 2006, the last reported sale price of our common stock on
the Nasdaq Global Market was $9.85 per share.
INVESTING IN OUR COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 7 OF THE PROSPECTUS AND BEGINNING ON PAGE 52 OF PROSPECTUS
SUPPLEMENT NO. 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if the
Prospectus or this Prospectus Supplement No. 6 is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this Prospectus Supplement No. 6 is August 30, 2006.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 25, 2006
LIGAND PHARMACEUTICALS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-20720
(Commission File Number)
10275 SCIENCE CENTER DRIVE,
SAN DIEGO, CALIFORNIA
(Address of principal executive offices)
(858) 550-7500 (Registrant's telephone number, including area code)
77-0160744
(I.R.S. Employer Identification No.)
92121-1117
(Zip Code)
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
CHAIRMAN AND CEO COMPENSATION
On August 1, 2006, Ligand Pharmaceuticals Incorporated (the "Company")
announced the appointment of Henry F. Blissenbach as Chairman and interim Chief
Executive Officer. In connection with that appointment, the Company entered into
an agreement with Dr. Blissenbach regarding his compensation for serving in
those capacities, which included a monthly salary of $75,000, incentive
compensation of up to $100,000 based upon his performance of certain objectives
to be agreed upon and a special stock option grant to purchase 150,000 shares of
the Company's common stock. The Company also agreed to reimburse Dr. Blissenbach
for all reasonable expenses incurred in discharging his duties as interim Chief
Executive Officer.
On August 25, 2006, upon review of additional facts and circumstances,
the Compensation Committee of the Company's Board of Directors (the
"Compensation Committee") approved, and the Company and Dr. Blissenbach agreed
to, modifications to his compensation package as follows, effective
retroactively to August 1, 2006:
o Base salary changed to $40,000 per month from $75,000 per month.
o Maximum bonus changed to $100,000 from $150,000.
o All other terms remain unchanged.
SEVERANCE AGREEMENTS
On August 25, 2006, the Compensation Committee also approved and
ratified, and the Company has begun entering into additional severance
agreements with certain of its officers and executive officers as additional
retention incentives and to provide severance benefits to these officers that
are more closely equivalent to severance benefits already in place for other
executive officers.
These additional agreements consist of a) change of control severance
agreements ("Change of Control Severance Agreements") and b) "ordinary"
severance agreements that apply regardless of a change of control ("Ordinary
Severance Agreements"). Each Change of Control Severance Agreement provides for
payment of certain benefits to the officer in the event his employment is
terminated without cause in connection with a change of control of the Company.
These benefits include one year of salary, plus the average bonus (if any) for
the prior two years, payment of health care premiums for one year and
acceleration of stock options. With certain exceptions, the officer must be
available for consulting services for one year and must abide by certain
restrictive covenants, including non-competition and non-solicitation of the
Company's employees. Each Ordinary Severance Agreement provides for payment of
six months salary in the event the officer's employment is terminated without
cause, regardless of a change of control.
The Compensation Committee approved agreements for the following
officers and executive officers as shown below:
Richard Bowen: Ordinary Severance Agreement and Change of
Control Severance Agreement
Warner Broaddus: Ordinary Severance Agreement
Tod Mertes: Ordinary Severance Agreement
Matthew Witte: Ordinary Severance Agreement and Change of
Control Severance Agreement
The foregoing descriptions of the severance agreements do not purport
to be complete and are qualified in their entirety by reference to such
agreements. A copy of a form of Change of Control Severance Agreement is filed
as Exhibit 10.1 hereto and a copy of a form of Ordinary Severance Agreement is
filed as Exhibit 10.2 hereto, each of which is incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
EXHIBIT NUMBER DESCRIPTION
-------------- -------------
10.1 Form of Letter Agreement (Change of Control
Severance Agreement) by and between the Company and certain
officers dated as of August 25, 2006
10.2 Form of Letter Agreement (Ordinary Severance Agreement)
by and between the Company and certain officers dated as of
August 25, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned.
LIGAND PHARMACEUTICALS INCORPORATED
Date : August __, 2006 By: /s/ Warner R. Broaddus
Name: Warner R. Broaddus
Title: Vice President, General Counsel & Secretary
EXHIBIT 10.1
(Date)
(Name) (Address)
Dear __________:
The purpose of this letter agreement is to document the terms
of the severance package to which you will be entitled should your employment
with Ligand Pharmaceuticals Incorporated (the "Company") terminate under certain
specified circumstances.
Part One of this letter agreement sets forth certain
definitional provisions to be in effect for purposes of determining your benefit
entitlements. Part Two specifies the terms and conditions upon which you may
become entitled to receive severance benefits. Severance benefits accrue under
this letter agreement in the event your employment with the Company were to be
terminated involuntarily in connection with certain changes in control of the
Company. Part Three concludes this letter agreement with a series of general
terms and conditions applicable to your severance benefits.
PART ONE -- DEFINITIONS
DEFINITIONS. For purposes of this letter agreement, including
in particular the application of the special benefit limitations of Part Three,
the following definitions will be in effect:
1. Average Compensation means your average W-2 wages from the Company for
the five (5) calendar years completed immediately prior to the calendar
year in which the Change in Control is effected. Any W-2 wages for a
partial year of employment will be annualized, in accordance with the
frequency with which such wages are paid during such partial year,
before inclusion within your Average Compensation.
2. Board means the Company's Board of Directors.
3. Change in Control means any of the following events:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company other than in the
ordinary course of business,
(iii) any reverse merger in which the Company ceases to exist
as an independent corporation and becomes the subsidiary of another
corporation, except where there is an insubstantial change in the de
facto voting control of the Company (e.g. the creation of a holding
company),
(iv) any Hostile Take-Over,
(v) the acquisition by any person (or related group of
persons), whether by tender or exchange offer made directly to the
Company's stockholders, private purchases from one or more of the
Company's stockholders, open market purchases or any other transaction,
of beneficial
ownership of securities possessing more than thirty
percent (30%) of the total combined voting power of the Company's
outstanding securities,
(vi) the acquisition by any person (or related group of
persons), whether by tender or exchange offer made directly to the
Company's stockholders, private purchases from one or more of the
Company's stockholders, open market purchases or any other transaction,
of additional securities of the Company which increase the total
holdings of such person (or group) to a level of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities, or
(vii) the acquisition by any person (or related group of
persons), whether by tender or exchange offer made directly to the
Company's stockholders, private purchases from one or more of the
Company's stockholders, open market purchases or any other transaction,
of securities of the Company possessing sufficient voting power in the
aggregate to elect an absolute majority of the members of the Board
(rounded up to the nearest whole number).
4. COBRA means the continuation-of-coverage provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.
5. Code means the Internal Revenue Code of 1986, as amended.
6. Common Stock means the Company's common stock, par value $0.001 per
share.
7. Equity Incentive Plans means any of the following equity incentive
plans of the Company: 1992 Stock Option/Stock Issuance Plan, the 2002
Stock Incentive Plan, and the Restricted Stock Purchase Plan, together
with any amendments or successors to such plans.
8. Equity Parachute Payment means, with respect to any Option (whether
Acquisition-Accelerated or Severance-Accelerated) or unvested Stock
Issuance, the portion deemed to be a parachute payment under Code
Section 280G and the Treasury Regulations issued thereunder. Such
Equity Parachute Payment shall be calculated in accordance with the
valuation provisions established under Code Section 280G and the
applicable Treasury Regulations and will include an appropriate dollar
adjustment to reflect the lapse of your obligation to remain in the
Company's employ as a condition to your vesting in the accelerated
portion of such Option or Stock Issuance.
9. ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
10. Health Care Coverage means the health care benefits provided by the
Company to you and your eligible dependents for which you are eligible
to continue coverage under the provisions of COBRA.
11. Hostile Take-Over means either of the following events:
(i) the acquisition by any person (or related group of
persons) whether by tender or exchange offer made directly to the
Company's stockholders, private purchases from one or more of the
Company's stockholders, open market purchases or any other transaction,
of beneficial ownership of securities possessing more than thirty
percent (30%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender offer made directly to the
Company's stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason
of one or more contested elections for Board membership, to be
comprised of individuals who either (a) have been Board members
continuously since the beginning of such period or (b) have been
elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (a) who
were still in office at the time such election or nomination was
approved by the Board.
12. Involuntary Termination 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 greater than ten percent (10%) 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.
The following guidelines shall determine whether one or
more reductions in compensation should be taken into account for
purposes of clause (ii)(B):
(a) Any reduction in compensation which occurs in connection
with an across-the-board reduction in the level of
compensation payable to the Company's executive officers
or senior management shall not constitute grounds for a
clause(ii)(B) resignation, unless implemented within
eighteen(18)months after a Change in Control.
(b) In the event of a Hostile Take-Over, the greater than ten
percent (10%) standard of clause (ii)(B) shall be reduced
to zero percent (0%) so that any reduction in the level of
your compensation shall constitute grounds for a clause
(ii)(B)resignation.
In no event shall an Involuntary Termination be deemed to
occur should your employment terminate by reason of death or permanent
disability.
13. Option means any option granted to you under any of the Equity
Incentive Plans which is outstanding at the time of your Involuntary
Termination or any earlier Change in Control. Your outstanding options
are to be divided into two separate categories as follows:
(i) Acquisition-Accelerated Options: any outstanding Option (or
installment thereof) which accelerates upon a Change in Control in
accordance with the automatic acceleration provisions of the Equity
Incentive Plans.
(ii) Severance-Accelerated Options: any outstanding Option (or
installment thereof) which is not an Acquisition-Accelerated Option but
which accelerates upon your Involuntary Termination, whether or not in
connection with a Change in Control, as part of your severance benefits
under this letter agreement.
14. Other Parachute Payments mean any payments in the nature of
compensation to which you may become entitled under this letter
agreement (other than the Equity Parachute Payment) or any other
arrangement with the Company, to the extent such payments qualify as
parachute payments within the meaning of Code Section 280G(b)(2) and
the Treasury Regulations issued thereunder or would so qualify if the
aggregate present value of such payments exceeded the amount specified
in Code Section 280G(b)(2)(ii).
15. Stock Issuance means the issuance of unvested shares of Common Stock
under the Company's Restricted Stock Plan or any other Equity Incentive
Plan.
16. 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.
PART TWO -- INVOLUNTARY TERMINATION BENEFITS
You will be entitled to receive the severance benefits
specified below should there occur an Involuntary Termination of your employment
during the term of this letter agreement effected in connection with a Change in
Control, other than a Termination for Cause. However, in the absence of a
Hostile Take-Over, these benefits will continue to be paid you only for so long
as you remain available for any consulting services required of you under Part
Two, Paragraph 4 and abide by the restrictive covenants set forth in Part Two,
Paragraph 5.
1. Severance Payments. You will receive severance payments from the
Company for a period of twelve (12)months following your Involuntary
Termination in an aggregate amount equal to the sum of (A) one (1)
times the annual rate of base salary in effect for you at the time of
your Involuntary Termination or at the time of the relevant Change in
Control, whichever is higher plus (B) one (1) times the average of
the bonuses (excluding any signing bonus) paid to you for services
rendered in the two (2) fiscal years immediately preceding the fiscal
year of your Involuntary Termination (annualized if paid for a partial
fiscal year). If a bonus is paid to you for only one of those years,
then the bonus amount under Clause (B) will be equal to one (1) times
such bonus amount. The aggregate severance payments shall be paid to
you in equal installments over the twelve-month period in accordance
with the Company's normal payroll practices and subject to all
applicable withholding taxes. The severance payments will immediately
terminate if and only if (i) you should cease to remain available for
the consulting services required of you under Section 4, or (ii) you
fail to abide by the restrictive covenants set forth in Section 5 .
However, in the event your Involuntary Termination occurs in connection
with a Hostile Take-Over, your severance payments will be paid to you
in the form of a single lump sum amount within thirty (30) days after
such Involuntary Termination, and the provisions of Sections 4 and 5 of
this Part Two will not apply.
2. Health Care Coverage. The Company will, at its expense, make any COBRA
payments for you and your eligible dependents in order to continue your
Health Care Coverage until the earlier of (i) twelve (12)months after
the effective date of your Involuntary Termination (other than a
Termination for Cause) or (ii) the first date that you are covered
under another employer's (or, in the event of rehire, the Company's)
health benefit program which provides substantially the same level of
benefits without exclusion for pre-existing medical conditions. Such
payments will be in lieu of any other continued health care coverage to
which you or your dependents would otherwise be entitled pursuant to
the requirements of Code Section 4980B by reason of your termination of
employment.
3. Option Acceleration and Lapse of Restrictions. Each of your
outstanding Options under the Equity Incentive Plans will (to the
extent not then otherwise exercisable) automatically accelerate so that
each such Option will become immediately exercisable for the total
number of shares of Common Stock at the time subject to that Option.
Each such accelerated Option, together with all of your other vested
Options, will remain exercisable for a period of twelve (12) months
following your Involuntary Termination until the end of the specified
ten (10)-year option term. Such Option(s) may be exercised for any or
all of the option shares in accordance with the exercise provisions of
the option agreement evidencing the grant. In addition, all
restrictions applicable to the Stock Issuances you hold (to the
extent those restrictions have not previously lapsed in accordance with
the terms of the issuance agreements) will automatically lapse upon
your Involuntary Termination (except a Termination for Cause).
4. Consulting Services. Unless your Involuntary Termination occurs in
connection with a Hostile Take-Over, you will make yourself available
to perform consulting services reasonably requested of you during the
twelve (12)-month period following your Involuntary Termination. You
will be compensated at an hourly rate to be agreed upon by you and the
Company at the time such consulting services are to be rendered, and
you will be reimbursed for all reasonable out-of-pocket expenses
incurred in rendering such services upon your submission of appropriate
documentation for those expenses.
5. Restrictive Covenants. For the one hundred twenty (120)-day period
following your Involuntary Termination:
(i)You will not directly or indirectly, whether for your own
account or as an employee, director, consultant or advisor, provide
services to any business enterprise which is at the time in
competition with any of the Company's then existing or formally
planned product lines and which is located geographically in an area
where the Company maintains substantial business activities, unless
you obtain the prior written consent of the Board of Directors.
(ii) You will not directly or indirectly encourage or solicit any
individual to leave the Company's employ for any reason or interfere
in any other manner with the employment relationships at the time
existing between the Company and its current or prospective
employees.
(iii) You will not induce or attempt to induce any customer,
supplier, distributor, licensee or other business relation of the
Company to cease doing business with the Company or in any way
interfere with the existing business relationship between any such
customer, supplier, distributor, licensee or other business relation
and the Company.
You acknowledge that monetary damages may not be sufficient to
compensate the Company for any economic loss which may be incurred by
reason of your breach of the foregoing restrictive covenants.
Accordingly, in the event of any such breach, the Company shall, in
addition to the cessation of the severance benefits provided you under
this letter agreement and any remedies available to the Company at law,
be entitled to obtain equitable relief in the form of an injunction
precluding you from continuing to engage in such breach.
None of the foregoing restrictive covenants in this section 5 shall be
applicable in the event your Involuntary Termination occurs in
connection with a Hostile Take-Over.
6. Benefit Reduction.
(i) BENEFIT REDUCTION. If the Change in Control does not constitute a
Hostile Take-Over, first the dollar amount of your severance payment
under Paragraph 1 will be reduced to the extent necessary to assure
that the present value of those benefits will not, when added to the
present value of your Equity Parachute Payment and your Other
Parachute Payments, exceed 2.99 times your Average Compensation. In
the event of a Hostile Take-Over, no reduction will be made to your
severance payment (or any other benefit to which you become entitled
hereunder), unless necessary to provide you with the maximum
after-tax benefit available, after taking into account any parachute
excise tax which might otherwise be payable by you under Code Section
4999 and any analogous State income tax provision.
(ii) RESOLUTION OF DISPUTES. In the event there is any disagreement
between you and the Company as to whether one or more benefits to
which you become entitled (whether under this letter agreement or
otherwise) in connection with a Change in Control constitute Equity
Parachute Payments or Other Parachute Payments, such dispute is to be
resolved as follows:
A. The matter shall be submitted for resolution to
independent counsel mutually acceptable to you and the Company
("Independent Counsel"). The resolution reached by Independent
Counsel shall be final and controlling. However, should the
Independent Counsel determine that the status of the benefits in
dispute can be resolved by obtaining a private letter ruling from the
Internal Revenue Service, a formal and proper request for such ruling
shall be prepared and submitted by Independent Counsel, and the
determination made by the Internal Revenue Service in the issued
ruling shall be controlling. All expenses incurred in connection with
the retention of Independent Counsel and (if applicable) the
preparation and submission of the ruling request shall be paid by the
Company.
B. The present value of each Equity Parachute Payment and
each of the Other Parachute Payments (including your severance
payment and Health Care Coverage) shall be determined in accordance
with the provisions of Code Section 280G(d)(4) and the Treasury
Regulations issued thereunder.
The full amount of your severance benefit under Paragraph 1 shall not
be paid to you until any amounts in dispute under this Paragraph
6(ii) have been resolved in accordance herewith. However, any portion
of such severance payment which would not otherwise exceed the
benefit limitation of Paragraph 6(i) even if all amounts in dispute
under this Paragraph 6(ii) were to be resolved against you will be
paid to you in accordance with the applicable provisions of this
letter agreement.
(iii) OVERRIDING LIMITATION. You will in all events be entitled to
receive the full amount of your severance payment under Paragraph 1,
to the extent those benefits, when added to the present value of your
Equity Parachute Payment and your Other Parachute Payments (excluding
such severance payment), will nevertheless qualify as reasonable
compensation within the standards established under Code Section
280G(b)(4).
(iv) INTERPRETATION. The provisions of this Section 6 shall in all
events be interpreted in such manner as will avoid the imposition of
excise taxes under Code Section 4999, and the disallowance of
deductions under Code Section 280G(a), with respect to your severance
benefits under this letter agreement.
PART THREE -- MISCELLANEOUS PROVISIONS
1. Termination for Cause. Should your termination constitute a Termination
for Cause, then the Company shall only be required to pay you (i) any
unpaid compensation earned for services previously rendered through the
date of such termination and (ii) any accrued but unpaid vacation
benefits or sick days, (iii) any reimbursements then owed to you by the
Company and no benefits will be payable to you under this letter
agreement.
2. Term of Agreement. The provisions of this letter agreement will
continue in effect for a period of five (5) years from the date hereof.
3. General Creditor Status. The benefits to which you may become entitled
under this letter agreement (except those attributable to your Options
or Stock Issuances) 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. Should you
die before you exercise your Severance-Accelerated Options (if any) or
any other of your outstanding vested Options, then each such Option may
be exercised, during the applicable exercise period in effect hereunder
for those options at the time of your death, by the executors or
administrators of your estate or by person to whom the Option is
transferred pursuant to your will or in accordance with the laws of
inheritance.
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. This letter
agreement incorporates the entire agreement between you and the Company
relating to the subject of severance benefits and supersedes all prior
agreements and understandings with respect to such subject matter.
This letter agreement may only be amended by written instrument signed
by you and another duly-authorized officer of the Company. 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. 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.
7. 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.
8. 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.
9. 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.
Very truly yours,
LIGAND PHARMACEUTICALS INCORPORATED
Henry F. Blissenbach
Chairman and interim Chief Executive Officer
HFB:bjo
ACCEPTED BY AND AGREED TO
Signature: ___________________________________
Dated: ___________________________________
EXHIBIT 10.2
[Ligand Letterhead]
[Date]
[Insert Name and Address of Employee]
Dear ______________:
The purpose of this letter agreement is to document the terms of
severance to which you will be entitled should your employment with Ligand
Pharmaceuticals Incorporated (the "Company") terminate without cause (whether or
not in connection with a change in control of the Company).
Specifically, in the event your employment with the Company is
terminated without cause, you will be entitled severance payable in a lump sum,
equal to six months of your base salary. Payment of the severance is subject to
your signing and not revoking an effective general release of claims against the
Company and its subsidiaries. You will not be entitled to any severance if you
voluntarily leave the Company, or you are terminated for cause. Of course, in
addition to the severance you will be entitled to any accrued but unpaid salary,
unused vacation or sick days and all reimbursements then owed to you by the
Company.
For purposes of this agreement, "cause" means termination of employment
due to: (i) conviction of any felony or other criminal act, (ii) commission of
any act of fraud or embezzlement, (iii) unauthorized use or disclosure of
confidential or proprietary information or trade secrets of the Company or its
subsidiaries, or (iv) any other intentional misconduct on your part which
adversely affects the business or affairs of the Company in a material manner.
Your cash severance will be paid in a lump sum on the 8th day after you
sign and have not revoked the required general release.
All severance paid will be less any required tax and other
withholdings.
If you are entitled to receive any payments or benefits from the
Company pursuant to the requirements of the Worker Adjustment and Retraining
Notification Act and/or any similar federal, state or local law (collectively
referred to as "WARN laws") then the amount of severance payable under this
agreement shall be reduced by any and all such payments made by the Company. If
you are entitled to receive notice of termination from the Company pursuant to
WARN laws, then the severance payable under this agreement shall be reduced by
an amount equal to the amount of salary paid during the notice period provided
by the Company.
This letter does not confer upon you any right to continue in the
employment of the Company for any period or interfere with or otherwise restrict
in any way the rights of the Company or you to terminate your employment at any
time for any reason whatsoever, with or without cause.
This agreement does not interfere with, replace or otherwise impact any
other written agreements that you may have with the Company regarding retention,
severance or termination of employment in connection with a change in control of
the Company. This agreement does merge and incorporate any and all discussions,
understandings and other agreements regarding the subject matter hereof.
Please indicate your acceptance of the provisions of this severance
agreement by signing the enclosed copy of this letter agreement and returning it
to the Company.
Very truly yours,
Ligand Pharmaceuticals Incorporated
Agreed and Accepted.
[Name]
Date