Exhibit
10.40


 


 


September 10, 2003


 


Ms. Laurie Torres


615 Church Street


Half Moon Bay, CA 94019


 


Dear Laurie:


 


On behalf of Protein Design Labs, Inc., I am pleased
to extend to you an offer for the position of Vice President, Human Resources
reporting to me, PDL’s Chief Executive Officer. Of course, your appointment as an officer of
PDL is subject to approval by PDL’s Board of Directors.


 


The monthly salary for
this position is $16,666.67 
($200,000.00/annually).  We offer
our employees an attractive benefits package, including a comprehensive medical
policy and dental plan, as well as life insurance coverage.


 


In addition, PDL is
prepared to offer you a hiring bonus of $35,000, plus an additional amount to
compensate you for the tax liability you will incur as a result of receipt of
the bonus such that the amount you will receive shall be $35,000 (the “Bonus
Amount”). Such Bonus Amount shall be payable and included with your first
paycheck from PDL.  If you voluntarily
terminate your employment with PDL or if your employment is involuntarily
terminated for cause prior to your second anniversary with PDL, the $35,000 will be immediately due and payable to PDL as
follows:


 


	
  Termination
  prior to the first year anniversary

  	
   

  	
  100% due and payable

  	
   

  
	
  Termination
  prior to the second year anniversary

  	
   

  	
  50% due and payable

  	
   

  
	
  Termination
  following the second year anniversary

  	
   

  	
  0% due and payable

  	
   

  



 


Furthermore, in the event
you move your primary residence, PDL agrees to provide you a relocation bonus
of $115,000.00, plus an additional amount to compensate you for the tax
liability you will incur as a result of receipt of such amount such that the
amount you will receive shall be $115,000 (the “Relocation Amount”). Such
Relocation Amount shall be used towards the purchase of a home in the Bay Area
in closer proximity to PDL, and shall be paid only upon closing of your
purchase of that home.  The Relocation
Amount must be used no later than November 3, 2004.  If you voluntarily terminate your employment with PDL or if your
employment is involuntarily terminated for cause prior to your second year
anniversary, the $115,000 will be immediately due and payable to PDL as
follows:


 


	
  Termination
  prior to the first year anniversary

  	
   

  	
  100% due and payable

  	
   

  
	
  Termination
  prior to the second year anniversary

  	
   

  	
  50% due and payable

  	
   

  
	
  Termination
  following the second year anniversary

  	
   

  	
  0% due and payable

  	
   

  



 

















 


Finally, in addition to
our salary and benefits packages, I am pleased to offer to you options to
purchase 105,000 shares of Protein Design Labs Common Stock under a PDL stock
option plan.  This offer is subject to
the approval of the Board of Directors (or an appropriate committee of the Board) and your execution of
our standard Stock Option Agreement. 
The options will vest over four years, with one-fourth of the options
vesting after one year of employment and the remainder vesting in equal monthly
increments over the remaining three years. 
The exercise price will be equal to the fair market value of the stock
at the close of the market on the date you join PDL.


 


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.  Such documentation must be provided to us
within three (3) business days of your date of hire.


 


As a Protein Design Labs
employee, you are free to resign at any time, just as Protein Design Labs is
free to terminate your employment at any time, with or without cause.


 


To indicate your acceptance of our offer, please sign and date one copy
of this letter in the space provided below and return it to Kurt Eggimann, in
the enclosed envelope by the date indicated below.  PDL agrees to not make public, without prior authorization from
you, your acceptance of this offer.  This
letter, along with an agreement relating to proprietary rights between you and
PDL, sets forth the terms of your employment with PDL and supersedes any prior
representations or agreements, whether written or oral.  This letter may not be modified or amended
except by a written agreement, signed by PDL and by you.


 


We are very excited at the prospect of your joining Protein Design Labs
as a key contributor starting November 3, 2003. This offer will remain open
until September 15, 2003, at which time it will expire if not previously
accepted.


 


Sincerely,


 


	
   

  	
   

  	
   

  
	
  /s/ Mark McDade

  	
   

  	
   

  	
  /s/ Laurie Torres

  	
   

  
	
  Mark McDade

  	
   

  	
  Laurie Torres

  
	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
  9/12/2003

  	
   

  
	
   

  	
   

  	
  Date