Exhibit 10.2

LIGAND PHARMACEUTICALS INCORPORATED

AMENDED AND RESTATED SEVERANCE PLAN

(AND SUMMARY PLAN DESCRIPTION)

This Amended and Restated Severance Plan (the “Plan”) sets forth the terms of
severance benefits for certain employees of Ligand Pharmaceuticals Incorporated
(the “Company”) in the event of a termination of employment with the Company
under the circumstances described below. For purposes of this Plan, “Company”
will include any subsidiary of the Company and any successor to substantially
all of the business, shares or assets of the Company.

The Plan is an employee welfare benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). This Plan document is also
the summary plan description of the Plan. References in the Plan to “You” or
“Your” are references to an employee of the Company.

1. Eligibility and Participation. You will be eligible for benefits under this
Plan only if, immediately prior to your date of termination, you are an employee
of the Company who is not subject to disciplinary action or on a formal
performance improvement plan. You will be considered an employee of the Company
if you are on a Company-approved leave of absence immediately prior to your date
of termination and you were employed full-time immediately prior to the
commencement of such leave. You will not be eligible for benefits under this
Plan if (a) you are a party to any individual change in control severance
agreement, employment agreement or other arrangement providing severance
benefits, in each case, as approved by the Board or a committee thereof in
effect as of the date of your termination, (b) you voluntarily terminate your
employment with the Company, (c) you are discharged by the Company for Cause (as
defined below), or (d) you decline an offer by the Company or any successor to
the Company (or any acquirer of any of the Company’s assets or product lines)
made to you at the time of your termination of employment of a similar or better
position in job content and base compensation, provided that the location of the
offered position is not more than 75 miles from your principal work location at
the time of your termination of employment.

2. Severance Benefit. If you are a participant in the Plan, and you are
discharged from employment by the Company without Cause (“Involuntary
Termination”), subject to your compliance with Sections 3 and 4, you will
receive the benefits set forth below:

(a) Accrued Obligations. On the date of your Involuntary Termination, you will
receive a lump sum payment in cash for (a) your fully earned but unpaid base
salary, through the date of such termination, at the rate then in effect, and
(b) your accrued but unused vacation through the date of such termination.

(b) Base Salary Severance Benefit. You will receive a severance benefit (your
“Base Salary Severance Benefit”) in one lump sum payment in cash equal to your
Base Salary for the Severance Period (as defined below). This payment will be
paid to you within 10 days following your Release Effective Date (as defined
below in Section 3).

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Your “Severance Period” will be equal to (a) two months plus (b) one week for
each of your Years of Service as of the date of your Involuntary Termination.

Your “Base Salary” will be the rate of your base salary from the Company as in
effect on the date of your Involuntary Termination. If you are an hourly
employee, your “Base Salary” will be your hourly wage rate (determined without
regard to overtime) on the date of your Involuntary Termination multiplied times
your annual scheduled hours determined on the date of such termination. For this
purpose, your Base Salary will not include any bonus, incentive compensation,
benefits or expense reimbursements or equity awards.

A “Year of Service” will mean each 12-month period of your continuous and
uninterrupted service with the Company (or, in the event of a partial year of
service, to the extent you provided continuous and uninterrupted service to the
Company for at least six months and one day during such year, such year shall
count as a full “Year of Service” for purposes of this Plan).

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, then the amount
of severance payable under this Plan shall be reduced by any and all such
payments made by the Company.

(c) Continued Health Benefits. If you elect continued coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Company will pay the portion of the premiums of your group health insurance
coverage, including coverage for your eligible dependents, that exceeds the
contributions required by you immediately prior to your date of Involuntary
Termination for your Severance Period; provided, however, that the Company will
pay premiums for your eligible dependents only for coverage for which those
eligible dependents were enrolled immediately prior to the date of your
Involuntary Termination. No premium payments will be made following the
effective date of your eligibility for coverage by a health insurance plan of a
subsequent employer. For the balance of the period that you are entitled to
coverage under federal COBRA law, if any, you will be entitled to maintain such
coverage at your own expense.

In no event will you receive benefits under this Plan in the event of a
termination of your employment as a result of your death or disability.

3. Release Prior to Payment of Benefits. Prior to the payment of any benefits
under this Plan, you will be required to execute a release (the “Release”)
acceptable to the Company.

As specified in the applicable Release, you will have a certain number of
calendar days to consider whether to execute such Release, and you may revoke
such Release within 7 calendar days after execution. You must execute the
Release and not revoke the Release in order to be entitled to benefits under
this Plan. With respect to each participant in the Plan, his or her “Release
Effective Date” will be the day upon which the 7 day revocation period
applicable to such Release expires without a revocation of such Release by the
participant.

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Your Release Effective Date must be within 60 days following the date of your
Involuntary Termination. If your Release Effective Date does not occur within 60
days of your Involuntary Termination, you will not be entitled to benefits under
this Plan.

4. Confidentiality Obligations. You acknowledge that you have executed and are
subject to the provisions of the Company’s standard employee confidentiality and
inventions agreement (the “Confidential Information Agreement”), which agreement
is incorporated herein by reference. If you breach or threaten to commit a
breach of the Confidential Information Agreement, the Company shall have the
right to cease all payments to you under Section 2, in addition to any other
rights and remedies available to the Company under law or in equity.

5. Effective Date of Plan; Amendment. This Plan will be effective as of December
20, 2008 (the “Effective Date”). The Compensation Committee of the Board will
have the power to amend or terminate this Plan from time to time in its sole and
absolute discretion.

6. Claims Procedures.

(a) Normally, you do not need to present a formal claim to receive benefits
payable under this Plan.

(b) If any person (the “Claimant”) believes that benefits are being denied
improperly, that the Plan is not being operated properly, that fiduciaries of
the Plan have breached their duties, or that the Claimant’s legal rights are
being violated with respect to the Plan, the Claimant must file a formal claim,
in writing, with the Plan Administrator (as defined in Section 7(a) below). This
requirement applies to all claims that any Claimant has with respect to the
Plan, including claims against fiduciaries and former fiduciaries, except to the
extent the Plan Administrator determines, in its sole discretion, that it does
not have the power to grant all relief reasonably being sought by the Claimant.

(c) A formal claim must be filed within 90 days after the date the Claimant
first knew or should have known of the facts on which the claim is based, unless
the Plan Administrator in writing consents otherwise. The Plan Administrator
will provide a Claimant, on request, with a copy of the claims procedures
established under subsection (d).

(d) The Plan Administrator has adopted procedures for considering claims (which
are set forth in Appendix A), which it may amend from time to time, as it sees
fit. These procedures will comply with all applicable legal requirements. These
procedures may provide that final and binding arbitration will be the ultimate
means of contesting a denied claim (even if the Plan Administrator or its
delegates have failed to follow the prescribed procedures with respect to the
claim). The right to receive benefits under this Plan is contingent on a
Claimant using the prescribed claims procedures to resolve any claim.

7. Plan Administration.

(a) The Plan will be administered by the Compensation Committee of the Board
and/or its delegate which will be one or more senior officers of the Company
(the “Plan Administrator”). The Plan Administrator is responsible for the
general administration and management of the Plan and will have all powers and
duties necessary to fulfill its responsibilities,

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including, but not limited to, the discretion to interpret and apply the Plan
and to determine all questions relating to eligibility for benefits. The Plan
will be interpreted in accordance with its terms and their intended meanings.
All actions taken and all determinations made in good faith by the Plan
Administrator or by Plan fiduciaries will be final and binding on all persons
claiming any interest in or under the Plan.

(b) If, due to errors in drafting, any Plan provision does not accurately
reflect its intended meaning, as demonstrated by consistent interpretations or
other evidence of intent, or as determined by the Plan Administrator in its sole
discretion, the provision will be considered ambiguous and will be interpreted
by the Plan Administrator and all Plan fiduciaries in a fashion consistent with
its intent, as determined in the sole discretion of the Plan Administrator. The
Plan Administrator will amend the Plan retroactively to cure any such ambiguity.

(c) No Plan fiduciary will have the authority to answer questions about any
pending or final business decision of the Company or any affiliate that has not
been officially announced, to make disclosures about such matters, or even to
discuss them, and no person will rely on any unauthorized, unofficial
disclosure. Thus, before a decision is officially announced, no fiduciary is
authorized to tell any person, for example, that he or she will or will not be
laid off or that the Company will or will not offer exit incentives in the
future. Nothing in this subsection will preclude any fiduciary from fully
participating in the consideration, making, or official announcement of any
business decision.

(d) This Section may not be invoked by any person to require the Plan to be
interpreted in a manner inconsistent with its interpretation by the Plan
Administrator or other Plan fiduciaries.

8. Superseding Plan. This Plan (a) will be the only plan with respect to which
benefits may be provided to you as a result of your discharge by the Company
without Cause and (b) will supersede any other plan previously adopted by the
Company with respect to severance benefits payable to you. Any of your rights
hereunder will be in addition to any rights you may otherwise have under benefit
plans or agreements of the Company (other than severance plans or agreements) to
which you are a party or in which you are a participant, including, but not
limited to, any Company-sponsored employee benefit plans and equity incentive
award plans and any awards made thereunder.

9. Limitation on Employee Rights. This Plan will not give any employee the right
to be retained in the service of the Company, nor will it interfere with or
restrict the right of the Company to discharge or otherwise terminate the
employee.

10. No Third-Party Beneficiaries. This Plan will not give any rights or remedies
to any person other than eligible employees and the Company.

11. Successors. This Plan shall be binding upon and inure to the benefit of the
successors of the Company.

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12. Governing Law and Venue. This Plan is a welfare plan subject to ERISA and it
will be interpreted, administered, and enforced in accordance with that law. To
the extent that state law is applicable, the statutes and common law of the
State of California, excluding any that mandate the use of another
jurisdiction’s laws, will apply. Any suit brought hereon shall be brought in the
federal courts sitting in the Southern District of California, and you hereby
waive any claim or defense that such forum is not convenient or proper.

13. Miscellaneous. Where the context so indicates, the singular will include the
plural and vice versa. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of the Plan. Unless
the context clearly indicates to the contrary, a reference to a statute or
document will be construed as referring to any subsequently enacted, adopted, or
executed counterpart.

14. Notice. For purposes of this Plan, notices and all other communications
provided for in this Plan will be in writing and will be deemed to have been
duly given when delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to the Company at its
primary office location and to an employee at such employee’s last known address
as listed on the Company’s records, provided that all notices to the Company
will be directed to the attention of its Secretary, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address will be effective only upon receipt.

15. Withholding. The Company will be entitled to withhold from any payments or
deemed payments to you hereunder any amount of withholding required by law.

16. Additional Information. As a participant in the Plan, you are entitled to
certain rights and protections under ERISA, as described in Appendix B.

17. Section 409A of the Code.

(a) Notwithstanding anything herein to the contrary, to the extent any payments
to you pursuant to Section 2 are treated as non-qualified deferred compensation
subject to Section 409A of the Code, then (i) no amount shall be payable
pursuant to such section unless your termination of employment constitutes a
“separation from service” with the Company (as such term is defined in Treasury
Regulation Section 1.409A-1(h) and any successor provision thereto) (a
“Separation from Service”), and (ii) if you, at the time of your Separation from
Service, are determined by the Company to be a “specified employee” for purposes
of Section 409A(a)(2)(B)(i) of the Code and the Company determines that delayed
commencement of any portion of the termination benefits payable to you pursuant
to this Plan is required in order to avoid a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code (any such delayed commencement, a “Payment
Delay”), then such portion of your termination benefits described in Section 2
shall not be provided to you prior to the earlier of (x) the expiration of the
six-month period measured from the date of employee’s Separation from Service,
(y) the date of employee’s death or (z) such earlier date as is permitted under
Section 409A. Upon the expiration of the applicable Code
Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to a
Payment Delay shall be paid in a lump sum to you within 30 days following such
expiration, and any remaining payments due under this Plan shall be paid as
otherwise provided herein. The determination of whether you are a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of
your Separation from Service shall made by the Company in accordance with the
terms of Section 409A of the Code and applicable guidance thereunder (including
without limitation Treasury Regulation Section 1.409A-1(i) and any successor
provision thereto).

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(b) Notwithstanding Section 17(a), to the maximum extent permitted by applicable
law, amounts payable to you pursuant to Section 2 shall be made in reliance upon
Treasury Regulation Section 1.409A-1(b)(9) (with respect to separation pay
plans) or Treasury Regulation Section 1.409A-1(b)(4) (with respect to short-term
deferrals).

(c) To the extent the payments and benefits under this Plan are subject to
Section 409A of the Code, this Plan shall be interpreted, construed and
administered in a manner that satisfies the requirements of Sections 409A(a)(2),
(3) and (4) of the Code and the Treasury Regulations thereunder (and any
applicable transition relief under Section 409A of the Code).

18. Funding. No provision of the Plan shall require the Company, for purposes of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Eligible Employees shall have
no rights under the Plan other than as unsecured general creditors of the
Company or its successor.

19. Transferability. No employee’s rights hereunder shall be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any
creditor’s process, whether voluntarily, involuntarily or by operation of law,
except as approved by the Plan Administrator.

20. Definitions. For purposes of this Plan, the following terms will have the
following meanings:

(a) “Board” means the board of directors of the Company.

(b) “Cause” means that, in the reasonable determination of the Company, you:

(i) have been convicted of (or entered a plea of no contest to) any felony or
any other criminal act;

(ii) commit any act of fraud or embezzlement;

(iii) permit or allow any unauthorized use or disclosure of confidential or
proprietary information or trade secrets of the Company or its subsidiaries;

(iv) commit any material violation of the Company’s policies; or

(v) commit any other intentional misconduct which adversely affects the business
or affairs of the Company in a material manner.

* * * * *

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Executed at San Diego, California, effective as of December 20, 2008.

 

LIGAND PHARMACEUTICALS INCORPORATED By:  

/s/ Charles S. Berkman

Name:   Charles S. Berkman Title:  

Vice President, General Counsel

and Secretary

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APPENDIX A

DETAILED CLAIMS PROCEDURES

1. Claims Procedure.

(a) Initial Claims. All claims will be presented to the Plan Administrator in
writing. Within 90 days after receiving a claim, a claims official appointed by
the Plan Administrator will consider the claim and issue his or her
determination thereon in writing. The claims official may extend the
determination period for up to an additional 90 days by giving the Claimant
written notice. The initial claim determination period can be extended further
with the consent of the Claimant. Any claims that the Claimant does not pursue
in good faith through the initial claims stage will be treated as having been
irrevocably waived.

(b) Claims Decisions. If the claim is granted, the benefits or relief the
Claimant seeks will be provided. If the claim is wholly or partially denied, the
claims official will, within 90 days (or a longer period, as described above),
provide the Claimant with written notice of the denial, setting forth, in a
manner calculated to be understood by the Claimant: (i) the specific reason or
reasons for the denial; (ii) specific references to the provisions on which the
denial is based; (iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, together with an explanation of
why the material or information is necessary; and (iv) appropriate information
as to the steps to be taken if the Claimant wishes to submit his or her claim
for review, including the time limits applicable to such procedures, and a
statement of the Claimant’s right to bring a civil action under Section 502(a)
of ERISA following an adverse decision upon review. If the Claimant can
establish that the claims official has failed to respond to the claim in a
timely manner, the Claimant may treat the claim as having been denied by the
claims official.

(c) Appeals of Denied Claims. Each Claimant will have the opportunity to appeal
the claims official’s denial of a claim in writing to an appeals official
appointed by the Plan Administrator (which may be a person, committee, or other
entity). A Claimant must appeal a denied claim within 60 days after receipt of
written notice of denial of the claim, or within 60 days after it was due if the
Claimant did not receive it by its due date. The Claimant (or his or her duly
authorized representative) may review pertinent documents in connection with the
appeals proceeding and may present issues, comments and documents in writing
relating to the claim. The review will take into account all comments,
documents, records and other information submitted by the Claimant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit claim determination. Any claims that the
Claimant does not pursue in good faith through the appeals stage, such as by
failing to file a timely appeal request, will be treated as having been
irrevocably waived.

(d) Appeals Decisions. The decision by the appeals official will be made not
later than 60 days after the written appeal is received by the Plan
Administrator, unless special circumstances require an extension of time, in
which case a decision will be rendered as soon as possible, but not later than
120 days after the appeal was filed, unless the Claimant agrees to a further
extension of time. The appeal decision will be in writing, will be set forth in
a manner calculated to be understood by the Claimant, and will include specific
reasons for the decision, specific references to the provisions on which the
decision is

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based, if applicable, a statement that the Claimant is entitled to receive upon
request and free of charge reasonable access to and copies of all documents,
records and other information relevant to the Claimant’s claim for benefits, as
well as a statement of the Claimant’s right to bring an action under
Section 502(a) of ERISA. If a Claimant does not receive the appeal decision by
the date it is due, the Claimant may deem his or her appeal to have been denied.

(e) Procedures. The Plan Administrator will adopt procedures by which initial
claims will be considered and appeals will be resolved; different procedures may
be established for different claims. All procedures will be designed to afford a
Claimant full and fair consideration of his or her claim.

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APPENDIX B

ADDITIONAL INFORMATION

RIGHTS UNDER ERISA

As a participant in the Plan, you are entitled to certain rights and protections
under ERISA. ERISA provides that all Plan participants will be entitled to:

Receive Information About Your Plan and Benefits

1. Examine, without charge, at the Plan Administrator’s office and at certain
Company offices, all Plan documents including collective bargaining agreements,
if any, and copies of all documents filed by the Plan with the U.S. Department
of Labor, and available at the Public Disclosure Room of the Employee Benefits
Security Administration, such as annual reports and Plan descriptions.

2. Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan, including collective bargaining agreements
and copies of the latest annual report (Form 5500 Series) and updated summary
plan description. The Plan Administrator may make a reasonable charge for the
copies.

3. Obtain upon written request to the Plan Administrator information as to
whether a particular employer or employer organization is a sponsor of the Plan
and the address of any employer or employer organization that is a plan sponsor.
Your beneficiaries also have a right to obtain this information upon written
request to the Plan Administrator.

4. Receive a summary of the Plan’s annual financial report. The Plan
Administrator is required by law to furnish each participant with a copy of this
summary annual report.

5. Receive a written explanation of why a claim for benefits has been denied, in
whole or in part, and a review and reconsideration of the claim.

6. Continue health care coverage for yourself, spouse or dependent if there is a
loss of coverage as a result of a qualifying event. You or your dependents may
have to pay for such coverage. Review this Plan and summary plan description on
the rules governing your COBRA continuation coverage rights.

Prudent Actions by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit plan.
The people who operate your Plan, called “fiduciaries” of the Plan, have a duty
to do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including the Company, your union, or any other person,
may fire you or otherwise discriminate against you in any way to prevent you
from obtaining a welfare benefit or exercising your right under ERISA. However,
this rule neither guarantees continued employment, nor affects the Company’s
right to terminate your employment for other reasons.

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Enforce Your Rights

If your claim for a welfare benefit is denied or ignored, in whole or in part,
you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require the Plan Administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the Plan Administrator. If you have a claim for benefits which is
denied or ignored, in whole or in part, you may file suit in a state or Federal
court. In addition, if you disagree with the Plan’s decision or lack thereof
concerning the qualified status of a domestic relations order or a medical child
support order, you may file suit in Federal court. If it should happen that Plan
fiduciaries misuse the Plan’s money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous.

Assistance with Your Questions

If you have any questions about your Plan, you should contact the Plan
Administrator. If you should have any questions about this statement or about
your rights under ERISA, or if you need assistance in obtaining documents from
the Plan Administrator, you should contact the nearest office of the Employee
Benefits Security Administration, U. S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquires,
Employee Benefits Security Administration, U. S. Department of Labor, 200
Constitution Avenue N. W., Washington, D. C. 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration.

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ADMINISTRATIVE INFORMATION Name of Plan:    The Ligand Pharmaceuticals
Incorporated Amended and Restated Severance Plan Plan Administrator:   

Compensation Committee of the

Board of Directors of Ligand Pharmaceuticals Incorporated

10275 Science Center Drive

San Diego, CA 92121-1117

Tel: 858-550-7500

Type of Administration:    Self-Administered Type of Plan:    Severance Pay
Employee Welfare Benefit Plan Employer Identification Number:    77-0160744
Direct Questions Regarding the Plan to:   

General Counsel

Ligand Pharmaceuticals Incorporated

10275 Science Center Drive

San Diego, CA 92121-1117

Tel: 858-550-7500

Agent for Service of Legal Process:   

General Counsel

Ligand Pharmaceuticals Incorporated

10275 Science Center Drive

San Diego, CA 92121-1117

Tel: 858-550-7500

 

Service of Legal Process may also be made upon the Plan Administrator

Plan Year:    Calendar Year Plan Number:   

502