EXHIBIT 10.5

ljpc10kimages00016.jpg [ljpc10kimages00016.jpg]

February 25, 2019

Darryl Wellinghoff
144 Jefferson’s Hundred
Williamsburg, VA 23185

RE: Offer of Employment

Dear Darryl,

La Jolla Pharmaceutical Company (the “Company”) is pleased to offer you the
regular, full-time, exempt position of Chief Commercial Officer reporting to
Chief Executive Officer. Your anticipated start date of employment (“Employment
Start Date”) will tentatively be March 18, 2019. This offer and your employment
relationship will be subject to the terms and conditions of this letter.

If you decide to join us, your initial annual base salary will be $382,000 less
applicable withholdings and deductions paid in accordance with the Company’s
normal payroll practices. Thereafter, you will be considered for annual
increases in base salary in accordance with Company policy and subject to review
and approval.

Additionally, you will be eligible for an annual bonus in a target amount equal
to 40% of your annual base salary, subject to achievement of individual and
Company goals established annually beginning with fiscal year 2019 which runs
from January to December. Any annual bonus payment made to you may be pro-rated
for your first year of service. Payment of annual bonuses are conditioned upon
your continued employment with the Company through the date of payment; you will
not be eligible for bonus payments for completed fiscal years if your service
terminates prior to the date of payment.

Please understand that this offer of employment is contingent upon the
satisfactory outcome of a personal background check, which, depending upon your
position and department, may include professional references, verification of
previous employment and education, criminal background check, drug screening,
Food & Drug Administration (FDA) debarment, Office of the Inspector General
(OIG) exclusion check and a department of motor vehicles (DMV) check.

Subject to approval and your commencement of employment, you will be eligible to
receive an option under the Company’s equity compensation plan to purchase up to
80,000 shares of the Company’s common stock, at a price per share equal to the
fair value of the common stock on the date of grant (the “Option”). The Option
will vest with respect to 1/4th of the underlying shares on the first
anniversary of your commencement of employment, and the remainder will vest with
respect to 1/48th of the underlying shares monthly thereafter over the next
three years, so that the Option is fully vested and exercisable over a period of
four years, subject to your continued service during this time. The Option will
be subject to the terms and conditions of the Company’s equity compensation
plans and stock option agreements.

During your employment, you will be eligible to participate in any and all
employee benefit plans made

--------------------------------------------------------------------------------

available by the Company from time to time to its employees generally, subject
to plan terms and generally applicable Company policies. In addition to holidays
observed by the Company, you will be eligible for vacation in accordance with
the policies of the Company, as in effect from time to time. You are also
eligible to use up to 40 hours of sick time per year. The Company reserves the
right to change or eliminate its benefits on a prospective basis at any time.

You will be expected to devote your full business time and your best
professional efforts, judgment, knowledge and skill exclusively to the
performance of your duties and responsibilities for the Company and its
affiliates, and to abide by all Company policies and codes of conduct, as in
effect from time to time. You will be expected to perform the duties of your
position and such other duties as may be assigned to you from time to time.

If you accept our offer, your employment with the Company will be “at-will.”
This means your employment is not for any specific period of time and can be
terminated by you at any time for any reason. Likewise, the Company may
terminate the employment relationship at any time, for any reason, with or
without cause or advance notice. In addition, the Company reserves the right to
modify your position, duties or reporting relationship to meet business needs,
and to use its managerial discretion in deciding on appropriate discipline when
it deems circumstances so warrant.

If, within one year from the Employment Start Date, your employment is
terminated by the Company without Cause, or by you for Good Reason, and such
termination occurs following a Change in Control, then you shall be entitled to
receive the “Change of Control Severance Payments” (defined below), subject to
your execution and delivery of a fully effective and irrevocable Release and
Waiver in the form attached hereto as Exhibit A (which shall be delivered within
45 days following termination of your employment). For purposes of this
agreement, the Change of Control Severance Payments shall mean the sum of: (i) a
series of payments over a six-month period (payable on the Company’s normal
payroll dates) equal in the aggregate to the sum of: (A) six months of the Base
Salary then in effect, and (B) one-half of the then-applicable Target Bonus, in
each case less required deductions and withholdings; [(ii) accelerated
time-based vesting of shares subject to all stock awards issued by the Company,
for the number of shares which would have vested accordingly had you continued
employment with the Company for a period of six months after termination; and
(iii) to the extent permissible under applicable law, reimbursement for or
continuation of payment by the Company of its portion of the health insurance
benefits provided to you immediately prior to termination pursuant to the terms
of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) or other applicable law for a period of up to 6 months from the date
of termination.

For purposes of this agreement, “Cause” means that, in the reasonable
determination of the Company, you have:
(i)
been indicted for or convicted of or pleaded guilty or no contest to any felony
or crime involving dishonesty that is likely to inflict or has inflicted
demonstrable and material injury on the business of the Company;

(ii)
participated in any fraud against the Company;

(iii)
willfully and materially breached a Company policy;

(iv)
intentionally damaged any property of the Company thereby causing demonstrable
and material injury to the business of the Company; or

(v)
engaged in conduct that, in the reasonable determination of the Company,
demonstrates gross unfitness to serve.

For purposes of this Agreement, “Change in Control” means the occurrence of any
of the following: the consummation of an Ownership Change Event or a series of
related Ownership Change Events (collectively, a “Transaction”) in which the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as
their ownership of shares of the Company’s voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting securities of
the Company or such surviving entity immediately outstanding after the

--------------------------------------------------------------------------------

Transaction, or, in the case of an applicable Ownership Change Event the entity
to which the assets of the Company were transferred (the “Transferee”), as the
case may be. For purposes of the preceding sentence, indirect beneficial
ownership shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or other business
entities which own the Company or the Transferee, as the case may be, either
directly or through one or more subsidiary corporations or other business
entities. The Board shall have the right to determine whether multiple sales or
exchanges of the voting securities in the Company or multiple Ownership Change
Events are related, and its determination shall be final, binding and
conclusive. “Ownership Change Event” means the consummation of any of the
following with respect to the Company: (i) the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than 50% of the voting stock of the Company; (ii) a merger
or consolidation in which the Company is a party; or (iii) the sale, exchange,
or transfer of all or substantially all of the assets of the Company.
For purposes of this agreement, “Good Reason” shall mean the occurrence of any
of the following events without your consent:
(i)
a material reduction (which shall mean 20% or more) by the Company of the Base
Salary as initially set forth herein or as the same may be increased from time
to time;

(ii)
a material reduction by the Company of your management responsibilities;

(iii)
a material breach of this Agreement by the Company; provided however, that your
resignation due to any of the foregoing conditions shall only be deemed for Good
Reason if: (i) you give the Company written notice of the intent to terminate
for Good Reason within 90 days following the first occurrence of the
condition(s) that you believe constitutes Good Reason, which notice shall
describe such condition(s); (ii) the Company fails to remedy, if remediable,
such condition(s) within 30 days following receipt of the written notice (the
“Cure Period”) of such condition(s) from you; and (iii) you actually resign your
employment within the first 30 days after expiration of the Cure Period.
Notwithstanding anything to the contrary set forth herein, any payments and
benefits provided under this Agreement that constitute the payment of “deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) and the regulations and other guidance thereunder
and any state law of similar effect (collectively “Section 409A”) that are
payable upon termination of employment shall not commence in connection with
your termination of employment unless and until you have also incurred a
“separation from service” (as such term is defined in Treasury Regulation
Section 1.409A-1(h) (“Separation From Service”)).

It is intended that each installment payment provided for in this Agreement is a
separate
“payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the
avoidance of doubt, it is intended that payments of the severance benefits set
forth herein (consisting of either the Severance Payments or the Change of
Control Severance Payments, and collectively referred to as the “Severance
Benefits”) satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A provided under Treasury Regulation Sections 1.409A-
1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company (or, if
applicable, the successor entity thereto) determines that the Severance Benefits
constitute “deferred compensation” under Section 409A that is not exempt from
Section 409A and you are, at the time of your Separation From Service, a
“specified employee” of the Company or any successor entity thereto, as such
term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the
extent necessary to avoid the incurrence of the adverse personal tax

--------------------------------------------------------------------------------

consequences under Section 409A, the timing of the Severance Benefit payments
shall be delayed until the earlier to occur of: (i) the date that is six months
and one day after your Separation From Service or (ii) the date of your death
(such applicable date, the “Specified Employee Initial Payment Date”), and the
Company (or the successor entity thereto, as applicable) shall (A) pay to you a
lump sum amount equal to the sum of the Severance Benefit payments that you
would otherwise have received through the Specified Employee Initial Payment
Date if the commencement of the payment of the Severance Benefits had not been
so delayed pursuant to this Section and (B) commence paying the balance of the
Severance Benefits in accordance with the applicable payment schedules set forth
in this Agreement.

Except to the extent that payments may be delayed until the Specified Employee
Initial Payment Date pursuant to the preceding paragraph, on the first regular
payroll pay day following the effective date of the Release and Waiver, the
Company will pay you the Severance Benefits you would otherwise have received
under the Agreement on or prior to such date but for the delay in payment
related to the effectiveness of the Release and Waiver, with the balance of the
Severance Benefits being paid as originally scheduled. All amounts payable under
the Agreement will be subject to standard payroll taxes and deductions.

This offer is contingent upon the following:
•
You signing and abiding by the Company’s Proprietary Information, Nondisclosure,
and

Assignment Agreement (see enclosed);
•
You signing the Company’s Mutual Agreement to Arbitrate (see enclosed);

•
Your compliance with federal I-9 requirements (although you have three days to
complete this process, please provide suitable documentation on your first day
of work verifying your identity and legal authorization to work in the United
States).

This letter, including the enclosed Proprietary Information, Nondisclosure, and
Assignment Agreement and Mutual Agreement to Arbitrate, constitutes the entire
agreement between you and the Company relating to this subject matter, and
supersedes all prior or contemporaneous agreements, understandings, negotiations
and representations, whether oral or written, express or implied, on this
subject. This letter may not be modified or amended, and no breach is to be
regarded as waived, unless agreed to in a specific, written agreement signed by
you and the
Company. This letter shall be governed and construed in accordance with the laws
of the State of California, without regard to the conflict of laws principles
thereof.

To indicate your acceptance of the Company’s offer on the terms and conditions
set forth in this letter, please sign and date this letter in the space provided
below and return it to our offices at 4550 Towne Centre Ct., San Diego CA 92121
or by email to svedrick@ljpc.com. If you do accept as provided, this letter will
take effect as a binding agreement between you and the Company on the date it is
received, provided that you sign, date and return the Company’s Proprietary
Information, Nondisclosure, and Assignment Agreement and Mutual Agreement to
Arbitrate and satisfy the other conditions set forth above no later than 5:00
p.m. (Pacific Time) on February 27, 2019.

We hope your employment with the Company will prove mutually rewarding, and we
look forward to having you join us. If you have any questions, please feel free
to call Sandra Vedrick, Director, HR & IR at (858) 207-4264 Ext. 1135.

Sincerely,

/s/ George F. Tidmarsh
George F. Tidmarsh
Chief Executive Officer

--------------------------------------------------------------------------------

 
 
 
Date:
February 27, 2019
/s/ Darryl Wellinghoff
 
 
Darryl Wellinghoff
 
 
Chief Financial Officer
 
 
(Principal Executive, Principal Financial and Accounting Officer)

--------------------------------------------------------------------------------

EXHIBIT A
RELEASE AND WAIVER OF CLAIMS

TO BE SIGNED AT TIME OF TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON
In consideration of the severance payments and other post-employment benefits
set forth in that certain employment offer letter, dated     , to which this
form is attached (the “Employment Agreement”), I, Darryl Wellinghoff . hereby
furnish La Jolla Pharmaceutical Company (the “Company”), with the following
release and waiver (the “Release and Waiver”).

In exchange for the consideration provided to me by the Employment Agreement
that I am not otherwise entitled to receive, I hereby generally and completely
release the Company and its directors, officers, employees, stockholders,
partners, agents, attorneys, predecessors, successors, parent and subsidiary
entities, insurers, Affiliates, and assigns from any and all claims, liabilities
and obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing
this Release and Waiver. This general release includes, but is not limited to:
(1) all claims arising out of or in any way related to my employment with the
Company or the termination of that employment; (2) all claims related to my
compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment
and Housing Act (as amended).

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

I hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to any
claims I may have against the Company.

I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and Waiver is in addition to
anything of value to which I was already entitled as an executive of the
Company. If I am 40 years of age or older upon execution of this Release and
Waiver, I further acknowledge that I have been advised, as

--------------------------------------------------------------------------------

required by the Older Workers Benefit Protection Act, that: (a) the release and
waiver granted herein does not relate to claims under the ADEA which may arise
after this Release and Waiver is executed; (b) I should consult with an attorney
prior to executing this Release and Waiver; (c) I have twenty-one (21) days in
which to consider this Release and Waiver (although I may choose voluntarily to
execute this Release and Waiver earlier); (d) I have seven (7) days following
the execution of this Release and Waiver to revoke my consent to this Release
and Waiver; and (e) this Release and Waiver shall not be effective until the
eighth day after I execute this Release and Waiver and the revocation period has
expired (the “Effective Date”).

I understand that among other things, I must not use or disclose any
confidential or proprietary information of the Company and I must immediately
return all Company property and documents (including all embodiments of
proprietary information) and all copies thereof in my possession or control.

This Release and Waiver constitutes the complete, final and exclusive embodiment
of the entire agreement between the Company and me with regard to the subject
matter hereof. I am not relying on any promise or representation by the Company
that is not expressly stated herein. This Release and Waiver may only be
modified by a writing signed by both me and a duly authorized officer of the
Company.

 
 
 
 
Date:
 
By:
 
 
 
 
Darryl Wellinghoff