Exhibit 10.1

 

December 15, 2008

 

Ms. Christine Larson

 

Dear Christine:

 

On behalf of PDL BioPharma, Inc. (‘PDL’ or ‘we’), I am pleased to extend to you
an employment offer for the position of Senior Financial Advisor.  Your
employment with PDL will begin on December 15, 2008 (the ‘Employment Date’).

 

As we have discussed, PDL is undertaking to spin off of its biotechnology
operations into a separate publicly traded company, currently named Facet
Biotech Corporation (‘Facet’ and such spin-off transaction, the ‘Spin-off’). 
You and PDL agree that, subject to and in connection with the Spin-off, PDL
shall appoint you, effective as of the Spin-off date, as its Vice President and
Chief Financial Officer, reporting to its President and Chief Executive Officer
(the ‘CEO’), and you would continue to be employed on the terms and conditions
set forth in this offer letter (the ‘Offer Letter’) and you agree to accept such
appointment on such terms and conditions.  While we plan to complete the
Spin-off by the end of 2008, it is possible for various reasons that the
Spin-off may not occur by that time or at all.  If PDL does not complete the
Spin-off, for any reason, within six (6) months following the Employment Date
(the ‘Spin-off Period’), you will be entitled to resign and PDL will pay to you,
within five (5) days of your separation from service, a special lump sum
severance amount equal to six (6) months’ Base Salary; provided, however, that
you tender your resignation no later than three (3) months following the end of
the Spin-off Period.

 

You agree that you will devote your full business time and efforts to PDL.  You
agree that you will not engage in any other business or serve in any position
with or as a consultant or adviser to any other corporation or entity (including
as a member of such corporation’s or entity’s board of directors or other
governing or advising body), without the prior written consent of the Board. 
Notwithstanding the foregoing, but only for so long as such activities in the
aggregate do not materially interfere with your duties hereunder or create a
business or fiduciary conflict, you will not be prohibited from
(i) participating in charitable, civic, educational, professional, community or
industry affairs (including membership on boards of directors), (ii) managing
your passive personal investments, and (iii) continuing your service in the
positions that you held as of the date of this Offer Letter, which positions you
have disclosed to the Board, provided that any such service obligation is not
materially increased beyond what you have disclosed to us.

 

Your monthly base salary (as in effect from time to time, ‘Base Salary’) will be
$350,000 annually, less applicable taxes and withholdings, and will be payable
in accordance PDL’s

 

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payroll procedures.  Your Base Salary shall be reviewed each year but will not
be subject to decrease unless such decrease is part of an overall reduction
effected for executive officers of PDL.  Your annual target bonus will be set at
forty percent (40%) of your annual Base Salary.  Your bonus will be based on
your contribution to PDL’s achievement of its goals and objectives and your
individual performance during this period as determined by the CEO and the
Compensation Committee of the Board.

 

Effective fifteen (15) days following the Spin-off date, PDL will grant you a
special retention incentive award (the ‘Special Retention Incentive’) comprised
of two components: (i) the right to receive $420,000 in cash; and (ii) a number
of unvested restricted shares of PDL common stock with a Grant Value equal to
$180,000.  For this purpose, ‘Grant Value’ means the average of the closing
prices of PDL’s common stock for the first ten (10) trading days following the
Spin-off date.  Subject to your continued employment, the Special Retention
Incentive will vest and become payable upon the earlier to occur of (i) the
second anniversary of the Spin-off date, or (ii) a Monetization Event.  For
purposes of this Offer Letter, ‘Monetization Event’ means (i) a merger or sale
of PDL or a sale of all or substantially all of PDL’s assets, or (ii) any
securitization or other monetization of all or substantially all of PDL’s
assets.  In the event any dividends or other distributions are paid on PDL’s
common stock following the grant of the Special Retention Incentive but prior to
the vesting and payment thereof, the amount of the dividends or other
distributions payable on the restricted stock component of the Special Retention
Incentive shall be withheld, credited to an account in your name, and shall vest
and become payable if and when the Special Retention Incentive vests and becomes
payable.

 

If you are terminated without Cause or resign for Good Reason following your
accession to the Chief Financial Officer position, but prior to your entitlement
to the Special Retention Incentive, you will receive, within five (5) days of
your separation from service, a lump sum cash payment equal to fifty percent
(50%) of the sum of your annual base salary and target bonus.

 

For purposes of this Offer Letter, ‘Cause’ means the occurrence of any of the
following: (i) your intentional theft, dishonesty, willful misconduct, breach of
fiduciary duty for personal profit, or falsification of any PDL documents or
records; (ii) your material failure to abide by the PDL’s code of conduct or
other written policies (including, without limitation, policies relating to
confidentiality and reasonable workplace conduct); (iii) your material and
intentional unauthorized use, misappropriation, destruction or diversion of any
tangible or intangible asset or corporate opportunity of PDL (including, without
limitation, your improper use or disclosure of PDL confidential or proprietary
information); (iv) any willful act by you that has a material detrimental effect
on PDL’s reputation or business; (v) your repeated failure or inability to
perform any reasonable assigned duties after written notice from the CEO of, and
a reasonable opportunity to cure, such failure or inability; (vi) any material
breach by you of any employment, service, non-disclosure, non-competition,
non-solicitation or other similar agreement between you and PDL, which breach is
not cured pursuant to the terms of such agreement or within twenty (20) days of
receiving written notice of such breach; (vii) your conviction (including any
plea of guilty or nolo contendere) of any criminal act involving fraud,
dishonesty, misappropriation or moral turpitude, or which impairs your ability
to perform your duties with PDL.  For purposes of the foregoing, no act or
omission will be deemed ‘willful’ unless done, or

 

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omitted to be done, by you without a reasonable good faith belief that you were
acting in the best interest of PDL.

 

For purposes of this Offer Letter, ‘Good Reason’ means the occurrence of any of
the following conditions without your informed written consent: (i) a material
diminution in your authority, duties or responsibilities, causing your position
to be of materially lesser rank or responsibility within PDL; (ii) a requirement
that you report to a corporate officer or other employee rather than directly to
the CEO; (iii) a material reduction in your Base Salary or bonus, unless
reductions comparable in amount and duration are concurrently made for all other
PDL officers; or (iv) any action or inaction by a PDL that constitutes, with
respect to the you, a material breach of this Offer Letter.

 

We currently also offer to our employees a welfare benefits package, including a
comprehensive medical policy and dental plan, as well as life insurance
coverage, in which you will be eligible to participate in accordance with PDL
guidelines.  You acknowledge that in connection with the Spin-off, PDL will
transfer its welfare benefit plans to Facet and PDL would need to establish a
new set of welfare benefit plans following the Spin-off.  The new welfare
benefit plans to be established following the Spin-off will be reasonably
comparable to those currently maintained by the company, and to the extent the
transition involves your making a COBRA or similar election in connection with
the Spin-off and PDL’s transfer of its welfare benefit plans to Facet, PDL will
reimburse you for the incremental cost of the transitional coverage provided
pursuant to any such election.

 

Because PDL is re-domiciling PDL in Nevada and because of the difficulties in
selling a home in the Bay Area at an acceptable price, PDL will provide
assistance to you to rent housing in Nevada proximate to PDL’s offices.  PDL
will pay you a housing allowance of $4,000 per month for the duration of your
employment by PDL.  In addition, to defray your moving expenses, PDL will
reimburse you for such expenses up to $10,000.

 

Your employment with PDL will not be for a set term, and you will be an at-will
employee.  As a PDL employee, you will be free to resign at any time, just as we
will be free to terminate your employment at any time, with or without Cause. 
There will be no express or implied agreements to the contrary.  By signing this
Offer Letter, you agree to waive any right to participate in the PDL Executive
Retention and Severance Plan or any other severance plan maintained by PDL from
time to time.

 

PDL intends that payments and benefits provided to you pursuant to this Offer
Letter be exempt from or comply with all applicable requirements of Section 409A
of the Internal Revenue Code of 1986, as amended.  Any ambiguities in this Offer
Letter shall be construed in a manner consistent with such intent.

 

For purposes of federal immigration law, you will be required to provide PDL
documentary evidence of your identity and eligibility for employment in the
United States.

 

To indicate your acceptance of our offer, please sign and date this Offer Letter
in the space provided below and return it, along with a signed copy of the
enclosed Proprietary Information

 

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and Invention Assignment Agreement, to John McLaughlin.  By executing this Offer
Letter, you hereby represent that your execution hereof and performance of your
obligations hereunder do not and will not contravene or otherwise conflict with
any other agreement to which you are a party or any other legal obligation
applicable to you.  This Offer Letter, along with the Proprietary Information
and Invention Assignment Agreement, supersedes any prior representations or
agreements, whether written or oral, with respect to our offer of employment to
you.  This Offer Letter may not be modified or amended except by a written
agreement, signed by PDL and you.

 

We are very excited at the prospect of your joining PDL.

 

 

Sincerely,

 

PDL BioPharma, Inc.

 

Accepted by:

 

 

 

 

 

 

 

 

 

/s/ John P. McLaughlin

 

/s/ Christine Larson

John P. McLaughlin

 

Christine Larson

 

President & CEO

 

 

 

PDL BioPharma, Inc. (post-spin-off)

 

 

 

 

 

12/15/08

 

 

Date

 

 

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