Exhibit 10.61

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into effective
as of June 9, 2003 (the “Effective Date”), by and between AMYLIN
PHARMACEUTICALS, INC., a corporation (the “Company”), and GINGER L. GRAHAM (the
“Executive”).  The Company and the Executive are hereinafter collectively
referred to as the “Parties”, and individually referred to as a “Party”.

 

The Company desires assurance of the association and services of the Executive
in order to retain the Executive’s experience, skills, abilities, background and
knowledge, and is willing to engage the Executive’s services on the terms and
conditions set forth in this Agreement.

 

The Executive desires to be in the employ of the Company, and is willing to
accept such employment on the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

In consideration of the foregoing recitals and the mutual promises and covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:

 

1.                                      EMPLOYMENT.

 

1.1                               Title.  The Executive shall have the title of
President and Chief Executive Officer of the Company and shall serve in such
other capacity or capacities as the Board of Directors of the Company (the
“Board”) may from time to time prescribe.  The Executive shall also serve as a
member of the Board during her employment as President and Chief Executive
Officer.

 

1.2                               Duties.  The Executive shall do and perform
all services, acts or things necessary or advisable to manage and conduct the
business of the Company and which are normally associated with the position of
President and Chief Executive Officer, consistent with the bylaws of the Company
and as required by the Board.

 

1.3                               Location.  Unless the Parties otherwise agree
in writing, the Executive shall perform services pursuant to this Agreement at
the Company’s offices located in Boulder, Colorado, San Diego, California or at
any other place at which the Company maintains an office; provided, however,
that the Company may from time to time require the Executive to travel
temporarily to other locations in connection with the Company’s business.

 

1.4                               Initial Part-Time Employment.  During the
period June 9, 2003 through August 31, 2003, the Executive’s employment with the
Company shall be part-time.  Effective September 1, 2003, the Executive shall
assume the role of President and Chief Executive Officer on a full-time basis.

 

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2.                                      LOYAL AND CONSCIENTIOUS PERFORMANCE;
NONCOMPETITION.

 

2.1                               Loyalty.  During the Executive’s employment by
the Company the Executive shall devote the Executive’s full business energies,
interest, abilities and productive time to the proper and efficient performance
of the Executive’s duties under this Agreement.

 

2.2                               Non-competition.  Except with the prior
written consent of the Company’s Board of Directors, Executive will not, while
employed by the Company, engage in competition with the Company and/or any of
its affiliates, subsidiaries, or joint ventures currently existing or which
shall be established during Executive’s employment by the Company (collectively,
“Affiliates”) either directly or indirectly, in any manner or capacity, as
adviser, principal, agent, affiliate, promoter, partner, officer, director,
employee, consultant, or otherwise, in any phase of the business of developing,
manufacturing and marketing of products or services which are in the same field
of use or which otherwise compete with the products or services or proposed
products or services of the Company and/or any of its Affiliates unless approved
by the Board.

 

2.3                               Agreement not to Participate in Company’s
Competitors.  During her employment by the Company, the Executive agrees not to
acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by Executive to be adverse or antagonistic to the
Company, its business or prospects, financial or otherwise or in any company,
person or entity that is, directly or indirectly, in competition with the
business of the Company or any of its Affiliates. Notwithstanding the foregoing,
the acquisition or ownership by the Executive, as a passive investment, of less
than two percent (2%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or publicly traded on the Nasdaq Stock Market or in the
over-the-counter market shall not constitute a breach of this paragraph.

 

3.                                      COMPENSATION.

 

3.1                               Base Salary During Part-Time Employment. 
During the period from June 9 to August 31, 2003, the Executive shall receive an
annualized base salary equivalent to One Hundred Twenty Five Thousand Dollars
($125,000.00) per year, equivalent to $2,400.00 per week, payable in regular
periodic installments in accordance with Company policy.

 

3.2                               Base Salary.  Effective September 1, 2003, the
Company shall pay the Executive a base salary of Five Hundred Thousand Dollars
($500,000.00) per year, payable in regular periodic payments in accordance with
Company policy.  Such base salary shall be prorated for any partial year of
employment on the basis of a 365-day fiscal year.  The Compensation Committee of
the Company’s Board of Directors, at its sole discretion, will review the
Executive’s salary on an annual basis.

 

3.3                               Discretionary Bonus.  In addition to the
Executive’s base salary, the Executive will be eligible to receive an annual
discretionary bonus of up to Five Hundred Thousand Dollars ($500,000.00) based
upon the achievement of corporate objectives as determined by the Board under
the Company’s bonus plan for executives then in effect.  The Board shall
determine, in its exclusive discretion, whether the Executive shall receive any
bonus

 

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in any particular year and the amount of any bonus.  Any bonus awarded by the
Board shall be paid in March of the year following the performance year.  The
target bonus shall be Four Hundred Thousand Dollars ($400,000.00).  The
Compensation Committee of the Board will review the Executive’s bonus target on
an annual basis and determine, in its sole discretion, whether changes are
appropriate.

 

3.4                               Stock Options.  The Executive shall be granted
an option to purchase five hundred thousand (500,000) shares of the Company’s
stock at an exercise price of twenty-three dollars ($23.00) per share (the
“Option”).  The option shall be an incentive stock option to the extent
permitted by applicable tax laws.  The Option is governed by the terms of the
Company’s 2001 Equity Incentive Plan and related Option Grant Notice.  The
Option shall vest as follows: (i) 350,000 shares shall vest over four (4) years
so long as the Executive remains employed by the Company, with twenty-five
percent (25%) of these shares (87,500) vesting on September 1, 2004, the first
anniversary of the Executive’s full-time employment with the Company, and the
balance of these shares (262,500) vesting 1/36th (7,291.666 shares) at the end
of each monthly period thereafter for a period of three years; (ii) 50,000
shares shall vest upon the commercial launch of SYMLIN™ (pramlintide acetate)
provided that the Executive is employed by the Company on the date of launch;
(iii) 50,000 shares shall vest upon U.S. Food and Drug Administration (“FDA”)
acceptance of an exenatide New Drug Application provided that the Executive is
employed by the Company on the date of acceptance; and (iv) 50,000 shares shall
vest upon commercial launch of exenatide provided that the Executive is employed
by the Company on the date of launch.  Commercial launch of a product shall be
deemed to occur upon the adoption of a resolution by the Board after FDA
approval of such product, such resolution authorizing the Company to enter into
commerce with such product.

 

3.5                               Annual Option Grants.  The executive shall be
eligible to receive annual stock option grants based upon corporate performance,
as determined by the Board in its exclusive discretion.

 

3.6                               Expenses.  The Company will reimburse
Executive for housing expenses in San Diego for up to $3,000 per month.  The
actual amount will be grossed-up for income tax purposes.  Executive will also
be eligible for reimbursement of other business and travel expenses.

 

3.7                               Employment Taxes.  All of the Executive’s
compensation shall be subject to customary withholding taxes and any other
employment taxes as are commonly required to be collected or withheld by the
Company.

 

3.8                               Benefits.  The Executive shall, in accordance
with Company policy and the terms of the applicable plan documents, be eligible
to participate in benefits under any executive benefit plan or arrangement which
may be in effect from time to time and made available to the Company’s executive
or key management employees, including but not limited to:  the Company’s Change
in Control Employee Severance Benefit Plan, Deferred Compensation Plan, 401K
Savings Plan, Employee Stock Purchase Plan, group health insurance, disability
insurance, life insurance, and paid personal leave.

 

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4.                                      TERM.

 

4.1                               At-Will Employment.  The Executive shall be
employed at will.  Either the Executive or the Company may terminate this
Agreement and the employment relationship at any time, with or without notice,
for any reason or no reason.

 

4.2                               Survival of Certain Provisions.  Section 5,
and to the extent applicable, Section 2.2, shall survive the termination of this
Agreement.

 

5.                                      CONFIDENTIAL AND PROPRIETARY
INFORMATION; NONSOLICITATION.

 

5.1                               As a condition of employment the Executive
agrees to execute and abide by the Company’s standard Proprietary Information
and Inventions Agreement.

 

5.2                               While employed by the Company and for one (1)
year thereafter, the Executive agrees that in order to protect the Company’s
trade secrets and confidential and proprietary information from unauthorized
use, the Executive will not, either directly or through others, solicit or
attempt to solicit any employee, consultant or independent contractor of the
Company to terminate his or her relationship with the Company in order to become
an employee, consultant or independent contractor to or for any other person or
business entity, other than any administrative assistant or other person in a
similar role employed by the Company to directly assist Executive.

 

6.                                      ASSIGNMENT AND BINDING EFFECT.

 

This Agreement shall be binding upon and inure to the benefit of the Executive
and the Executive’s heirs, executors, personal representatives, assigns,
administrators and legal representatives.  Because of the unique and personal
nature of the Executive’s duties under this Agreement, neither this Agreement
nor any rights or obligations under this Agreement shall be assignable by the
Executive.  This Agreement shall be binding upon and inure to the benefit of the
Company and its successors, assigns and legal representatives.

 

7.                                      CHOICE OF LAW.

 

This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of California.

 

8.                                      INTEGRATION.

 

This Agreement, the indemnity agreement dated January 4, 1996, and the
Proprietary Information and Inventions Agreement contains the complete, final
and exclusive agreement of the Parties relating to the terms and conditions of
the Executive’s employment and the termination of the Executive’s employment,
and supersedes all prior and contemporaneous oral and written employment
agreements or arrangements between the Parties, including without limitation any
previous letter between Executive and the Company regarding employment. To the
extent this Agreement conflicts with the Proprietary Information and Inventions
Agreement, the Proprietary Information and Inventions Agreement controls (except
with respect to the prohibition or solicitation of employees for which Section
5.2 of this Agreement shall control).

 

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9.                                      AMENDMENT.

 

This Agreement cannot be amended or modified except by a written agreement
signed by the Executive and the Chairman of the Board of the Company.

 

10.                               WAIVER.

 

No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
wavier is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.

 

11.                               SEVERABILITY.

 

The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render any
other provision of this Agreement unenforceable, invalid or illegal.  Such court
shall have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision which most
accurately represents the Parties’ intention with respect to the invalid or
unenforceable term or provision.

 

12.                               INTERPRETATION; CONSTRUCTION.

 

The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement.  This Agreement has been
drafted by legal counsel representing the Company, but the Executive has been
encouraged to consult with, and have consulted with, the Executive’s own
independent counsel and tax advisors with respect to the terms of this
Agreement.  The Parties acknowledge that each Party and its counsel has reviewed
and revised, or had an opportunity to review and revise, this Agreement, and any
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.

 

13.                               REPRESENTATIONS AND WARRANTIES.

 

The Executive represents and warrants that the Executive is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that the Executive’s
execution and performance of this Agreement will not violate or breach any other
agreements between the Executive and any other person or entity.

 

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14.                               COUNTERPARTS.

 

This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall contribute one and the same
instrument.

 

15.                               LITIGATION COSTS.

 

Should any claim be commenced between the Parties or their personal
representatives concerning any provision of this Agreement or the rights and
duties of any person in relation to this Agreement, the Party prevailing in such
action shall be entitled, in addition to such other relief as may be granted to
a reasonable sum as and for that Party’s attorney’s fees in such action.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.

 

 

AMYLIN PHARMACEUTICALS, INC.

 

 

 

 

Dated:

September 18, 2003

 

By:

 /s/ JOSEPH C. COOK JR.

 

 

 

 

Joseph C. Cook, Jr.

 

 

 

 

Chairman of the Board

 

 

 

 

Dated:

September 18, 2003

 

By:

/s/ GINGER L. GRAHAM

 

 

 

Ginger L. Graham

 

 

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