Exhibit 10.3


 


	
  

  	
  PDL BioPharma, Inc.

  1400 Seaport Blvd.

  Redwood City, CA 94063

  



 


CONFIDENTIAL SEPARATION AGREEMENT
AND GENERAL RELEASE


 


This
Confidential Separation Agreement and General Release (this “Agreement”) is made and entered into
by and between Richard Murray, an individual (“Dr. Murray”),
and PDL BioPharma, Inc., a Delaware corporation (the “Company”), and is effective as of
the Effective Date set forth below.


 


1.             Employee
Status. Dr. Murray’s
employment with the Company ended effective September 5, 2008 (the “Termination Date”).


 


2.             Purpose
of Release. By this
Agreement, the parties intend to fully and finally resolve all issues, claims
and obligations between them and provide Dr. Murray with certain benefits
that Dr. Murray would not otherwise be entitled to receive upon
termination of employment with the Company. The parties have entered into this
Agreement based on the promises and covenants contained in this Agreement. The
benefits offered in this Agreement are not intended to create a practice or
policy of the Company, and will only be made available to Dr. Murray if he
signs and returns this Agreement as provided in Section 15.


 


3.             Consideration. In exchange for Dr. Murray entering
into this Agreement and his cooperation with the smooth transition of his
duties, and provided Dr. Murray does not revoke this Agreement pursuant to
Section 14.7 or otherwise, PDL will provide to Dr. Murray the
consideration set forth in this Section 3.


 


3.1          Separation
Payment. PDL will pay to Dr. Murray
a lump sum payment equal to Two Hundred Twenty One Thousand, Two Hundred
Twenty-Five Dollars ($221,225) which equals six months of Dr.Murray’s annual
gross base pay, less withholding for taxes and other authorized or mandatory
withholdings, which would be paid within 10 days following the Effective Date.


 


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3.2          2008
Bonus Plan Related Payment. A lump sum payment equal to the
sum of One Hundred Ten Thousand, Six Hundred Thirteen Dollars ($110,613), which
equals six months of Dr. Murray’s annual bonus, at 100% of target, less
withholding for taxes and other authorized or mandatory withholdings, which
would be paid within 10 days following the Effective Date.


 


3.3          Retention
Bonus Payment. A lump sum payment equal to Eighty-One Thousand
Dollars ($81,000), less withholding for taxes and other authorized or mandatory
withholdings, which would be paid within 10 days following the Effective Date.


 


3.4          COBRA
Premiums. If Dr. Murray timely elects continued
health coverage, and provided that this Agreement shall have become effective,
the Company will pay the health insurance premiums for COBRA coverage under the
Company’s plans on his behalf for the first twelve (12) months. In the event Dr. Murray
is entitled to continued COBRA coverage following the conclusion of the
foregoing 12-month period, the full cost of premiums for such continued
coverage, if elected, shall be borne by Dr. Murray.


 


3.5          Outplacement
Services. The Company will provide to Dr. Murray, at
no cost to Murray, up to six (6) continuous months of outplacement services
with Right Management Associates, provided that Dr. Murray
activates such services on or before November 5th, 2008.


 


3.6          Amendment
to Options. The company will enter into the Amendment to
Stock Option Agreements in the form of Exhibit A.


 


4.             No
Independent Obligation to Pay Consideration. Dr. Murray agrees and acknowledges that the
payments and benefits set forth in Section 3 above are amounts in excess
of anything to which Dr. Murray is otherwise entitled and that his
execution and non-revocation of this Agreement are material conditions to the
Company’s obligation to make the payments and provide the benefits set forth in
Section 3.


 


5.             No
Release of Obligation to Pay Wages Due. Dr. Murray understands that regardless of
whether or not he executes this Agreement, the Company has paid him for any and
all wages due for time worked through the Termination Date, including any
unused vacation and personal


 


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days
as calculated under the Company’s policies addressing accrual of vacation or
personal time off. Dr. Murray further understands that his decision to
execute this Agreement will not affect his vested rights, if any, in his
account balances in the Company’s 401k plan.


 


6.             Waiver
of Future Employment. Dr. Murray
agrees he has no right to and hereby waives any right of future employment with
the Company or any affiliates of the Company.


 


7.             Employment
References. Should any
prospective employer of Dr. Murray seek a job reference for him with
respect to his employment with the Company, Dr. Murray agrees to direct
such person or persons to the Company’s Director of Human Resources or her
designee, who shall provide only the dates of Dr. Murray’s employment with
the Company and the last Company position he held. Dr. Murray agrees that
the Company may make the statements listed in Exhibit C to prospective employers that may contact the
Company to seek a job reference for him with respect to his employment with the
Company.


 


8.             Confidentiality
of Company Information. Dr. Murray
acknowledges agrees and warrants that he will continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall, except as provided in Section 9, abide by the terms and
conditions of the Employee Agreement Regarding Proprietary Information and
Inventions between him and the Company, the form of which is attached hereto as
Exhibit B. Dr. Murray further warrants and
represents that he will return to the Company all confidential and proprietary
information in his custody or possession no later than the Termination Date. He
further agrees that if he discovers that he has retained any tangible or
electronically stored property of the Company, he shall promptly notify the
Company of such in writing and will take reasonable steps in accordance with
the Company’s instructions to return such property to the Company and, with
respect to electronically stored data of the Company, delete all such data and
related files. The provisions of this paragraph shall remain in effect at all
times including after the Termination Date.


 


9.             Confidentiality
of Release. Dr. Murray
warrants and agrees, absolutely and unconditionally, that he has and will keep
the terms and conditions of this Agreement, the


 


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negotiations
leading up to the execution of this Agreement and the amount of money and
consideration he is entitled to receive pursuant to the terms and conditions of
this Agreement completely confidential, with the exception that he may disclose
or have disclosed its terms and/or the amount of money and/or consideration he
is receiving pursuant to this Agreement in confidence to his spouse; attorneys
and tax preparers with a need to know such information; and governmental
authorities, as may be required by law. In no event shall Dr. Murray
disclose the aforementioned information to any current or former employee of
the Company. Before making a disclosure to one of the permitted individuals
identified above, Dr. Murray shall advise him/her of the confidential
nature of the information and obtain that person’s consent not to further
disclose the information. Notwithstanding the foregoing, Dr. Murray
acknowledges that the Company may be required to publicly disclose the terms
and conditions of this Agreement pursuant to rules and regulations
promulgated by the Securities and Exchange Commission, provided, however,
that after such disclosure by the Company, Dr. Murray may disclose the
terms and conditions of this Agreement to the extent of the Company’s public
disclosure.


 


10.          No Admission of Liability. Nothing in this Agreement or in the payment of the benefits described
in this Agreement shall be construed as an admission by the Company of any
liability of any kind to Dr. Murray or anyone.


 


11.          Non-Disparagement. Dr. Murray agrees that he will not make any disparaging or
defamatory statements about the Company, its affiliates, or their respective
managers, directors, officers, employees, agents or representatives to anyone
in the future, unless such statements are made truthfully in response to a
subpoena or other legal process.


 


12.          Non-Solicitation. Dr. Murray hereby agrees that for a period of one year following
the Termination Date, he will not directly or indirectly solicit, entice or
encourage any then current employee of the Company or any successor of the
Company to work for or consult with any individual or entity outside of the
Company or any successor company, provided, however, that the term “indirect”
does not include a solicitation set forth in a periodical of general
circulation.


 


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This
provision supersedes and replaces Section 2 of the Employee Agreement
Regarding Proprietary Information and Inventions.


 


13.          Release.


 


13.1        Dr. Murray hereby agrees that all rights
under section 1542 of the Civil Code of the State of California (“Civil Code section 1542”) and any similar federal, state and/or local
laws are hereby waived by him. Civil Code section 1542 provides 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.


 


13.2        Dr. Murray
agrees that nothing in this Agreement is to be construed to interfere with Dr. Murray’s
ability to engage in any activity protected by the Sarbanes-Oxley Act, 18
U.S.C.§ 1514A, or from filing a charge or complaint with or from participating
in an investigation or proceeding conducted by the EEOC, NLRB, or any other
federal, state, or local agency charged with the enforcement of any employment
laws, although by signing this release he acknowledges that he is waiving his
right to individual relief, including but not limited to monetary relief, based
on claims asserted in such a charge or complaint. Dr. Murray agrees that
nothing in this release applies to any claims or rights that might arise after
the date he signs this release, the consideration for this release, and any
claims that as a matter of law cannot be waived.


 


13.3        Notwithstanding
the provisions of Civil Code section 1542 or any similar federal, state and/or
local laws, in order to provide a complete and full release, Dr. Murray
hereby irrevocably and unconditionally releases and forever discharges the
Company and each and all of its affiliates, and each of their respective
officers, agents, directors, stockholders, managers, insurers, employees and
representatives as well as each of their heirs, successors and assigns(all of
which are collectively referred to herein as the “Releasees”), from all
claims,


 


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issues
and obligations, known and unknown, suspected and unsuspected, statutory and
nonstatutory, which Dr. Murray at any time heretofore had or claimed to
have or which he may have or claim to have regarding events that have occurred
prior to the time he executes this Agreement, including, but not limited to,
claims, issues and/or obligations in any way connected with or based on Dr. Murray’s
employment with the Company or the termination of that employment. This release
includes but is not limited to releasing all claims Dr. Murray might have
under all state, federal and local laws pertaining to discrimination,
harassment, retaliation, the federal Workers Adjustment and Retraining
Notification Act, the Employee Retirement Income Security Act of 1974, the
California Fair Employment and Housing Act, the California Unfair Practices
Act, the California Labor Code, family and medical leave laws, wage and hour
laws, disability laws, civil rights laws, state and federal securities laws, as
well as laws pertaining to claims of or for emotional distress, fraud, invasion
of privacy, defamation, breach of contract, breach of covenant of good faith
and fair dealing, as well as equal pay laws and laws pertaining to wrongful
discharge. It is expressly understood by Dr. Murray that among the various
rights and claims being waived in this release are those arising under the Age
Discrimination in Employment Act of 1967 and the Older Workers Benefit
Protection Act.


 


13.4        Dr. Murray covenants to refrain from,
directly or indirectly, threatening, asserting or maintaining any claim,
arbitration, litigation or other similar proceeding or commencing, instituting
or causing to be commenced any Claim of any kind against any Releasee (each, a “Claim”), based upon any matters
released by this Agreement, except as provided in Section 13.2 above.


 


13.5        Dr. Murray represents that he has no
Claims of any kind (including workers’ compensation claims) presently pending,
nor any present intent to file a Claim of any kind after the execution of this
Agreement, against any of the Releasees. Dr. Murray further represents
that he does not possess any claims under the federal Family and Medical Leave
Act and/or the California Family Rights Act or for workers’ compensation
benefits. Dr. Murray agrees that he


 


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shall
not, at any time in the future, discuss, encourage or voluntarily assist or
cooperate in the prosecution of any Claims against any of the Releasees, except
as may be required by law.


 


13.6        Dr. Murray
represents and warrants that he has not assigned or transferred to any person
or entity any Claim released by this Agreement and agrees to indemnify and hold
harmless the Releasees from and against any and all Claims based on, arising
out of or connected with any such transfer or assignment.


 


13.7        Dr. Murray
acknowledges that he or his representatives may hereafter discover claims or
facts in addition to or different from those that he now knows or believes to
exist with respect to the subject matter of this Agreement, but that it is Dr. Murray
’s intention in executing this Agreement and in receiving the consideration
called for by this Agreement to fully, finally and forever settle and release
all matters identified below, to the fullest extent permitted by law. In
furtherance of this intention, the release herein granted shall be and remain
in effect notwithstanding the discovery of any such additional or different
claim or fact.


 


14.          Release
of Age Discrimination Claims.
Dr. Murray understands that this Agreement includes a release of any
claims he might bring pursuant to the federal Age Discrimination in Employment
Act (ADEA) and that this Agreement is intended to comply with federal law
provisions necessary to waive such claims. This agreement is also intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29
U.S.C. sec 626 (f) Dr. Murray acknowledges that he:


 


14.1        Has
carefully read and fully understands all of the provisions of this Agreement;


 


14.2        Is,
through this Agreement, releasing the Company and its officers, agents,
directors, supervisors, employees and representatives, and their successors and
assigns and all persons acting by, through, under or in concert with any of
them from any and all claims he may have against them;


 


14.3        Knowingly
and voluntarily agrees to all of the terms set forth in this Agreement; 


 


14.4        Knowingly
and voluntarily intends to be legally bound by the same;


 


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14.5        Has
been advised to and has had the opportunity to consult with and obtain the
advice of legal counsel of his choice prior to executing this Agreement;


 


14.6        Has
received this Agreement on August 14, 2008 and that Dr. Murray had a
period of twenty-one (21) days from that date to consider and execute this
Agreement and, if Dr. Murray has chosen to execute this Agreement in less
than twenty-one (21) days from the time he was originally given this Agreement,
he hereby acknowledges that he has done so voluntarily and knowingly; and


 


14.7        May,
within seven (7) calendar days after he has executed this Agreement,
revoke his assent to this Agreement by notifying Gwen Carscadden, Director,
Human Resources, in writing, at PDL BioPharma, Inc., 1400 Seaport
Boulevard, Redwood City, California 94063. If this Agreement is revoked, it
shall become null and void and the Company shall have no obligation hereunder
including to pay, deliver or provide any of the consideration identified in Section 3.
This Agreement will only become effective and enforceable upon the expiration
of the foregoing seven (7) day revocation period, provided that Dr. Murray
has not revoked this Agreement (the “Effective Date”).


 


15.          Execution
and Effectiveness.  Under no circumstance may Dr. Murray
execute this Agreement prior to September 5, 2008, the Termination Date.
In order for this Agreement to be effective, Dr. Murray (1) must
execute and date this Agreement in the spaces provided at its end after the Termination
date, initial the lower right-hand corner of each page of this
Agreement and deliver an executed, dated and initialed original copy of
this Agreement to Gwen Carscadden, Director of Human Resources of the Company
(or her designee) on or after his Termination Date but before September 12,
2008 and (2) must not revoke this Agreement during the period in which it
may be revoked as set forth in Section 13.7.


 


16.          Entire
Agreement. This Agreement
sets forth the entire understandings between the parties hereto, and supersedes
any other statements, agreements or understandings between the parties
whatsoever, including, but not limited to, any prior offer of employment with
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Company.
In executing this Agreement, neither the Company nor Dr. Murray has relied
upon any representations by or on behalf of the other party that are not set
forth in this Agreement.


 


17.          Severability. If any term, clause or provision of this
Agreement is construed to be or adjudged invalid, void or unenforceable, such
term, clause of provision will be deemed amended, limited or stricken to the
extent necessary to permit the maximum enforceability or validation of the
term(s), and the remaining terms, clauses and provisions will remain in full
force and effect to the fullest extent permitted by law.


 


18.          Modification. This Agreement may be modified only in a
writing signed by both parties. This Agreement shall be binding upon and inure
to the benefit of the parties hereto or the respective heirs, assigns, legal
representatives, and successors in interest.


 


19.          Governing
Law. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
state of California, without reference to the conflicts of law principles
thereof.


 


PLEASE READ THIS RELEASE CAREFULLY. IT
INCLUDES A RELEASE OF ALL CLAIMS, WHETHER KNOWN OR UNKNOWN, YOU MAY HAVE
IN CONNECTION WITH YOUR EMPLOYMENT WITH PDL BIOPHARMA, INC., INCLUDING THE
TERMINATION OF YOUR EMPLOYMENT.


 


 


	
  /s/
  Richard Murray

  	
   

  	
  September 19, 2008

  
	
  Richard
  Murray, Ph.D.

  	
   

  	
  DATE

  
	
   

  	
   

  	
   

  
	
  PDL BioPharma, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Andrew Guggenhime

  	
   

  	
  September 19, 2008

  
	
  Andrew
  Guggenhime

  	
   

  	
  DATE

  
	
  SVP
  and Chief Financial Officer

  	
   

  	
   

  



 


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Exhibit A


 


Amendment to Stock Option
Agreements


 

















 


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Exhibit B


 


Employee Agreement Regarding
Proprietary Information and Inventions

(See Attached)


 

















 


Exhibit C


 


Authorized Reference Check
Statement


 


Dr. Richard
Murray joined PDL in April of 2003 and resigned his duties in September 2008.
He joined PDL as VP of Research, was promoted to SVP & CSO, then to
EVP & CSO during his tenure at PDL. He served on the Board of
Directors from February 2007 to May 2008. During his tenure and under
his leadership:


 


·      The strategy, implementation and FDA approval
of new formulations of the anti-hypertensive drug Cardene was realized


 


·      A novel antibody drug program, volociximab,
was brought into PDL from the acquisition of Eos biotechnology (where Dr Murray
was a co-founder) and entered clinical studies. This antibody represents one of
two products that are currently part of a co-development collaboration with
Biogen-Idec.


 


·      A novel antibody drug program, Elotuzumab was
discovered and translated into a clinical program. Elotuzumab, and an
additional novel pre-clinical program, PDL241, formed the basis of a
co-development collaboration with BMS.


 


·      A novel antibody program, PDL192 was
discovered and translated into clinical studies.


 


·      Multiple CMC IND amendments were submitted
and accepted by the FDA for site and scale changes to antibody manufacturing
processes.