Document:

Exhibit
10.39

 

 

April 9, 2003

 

Glen Y. Sato

1470 Kings Lane

Palo Alto, CA 94303

 

Dear Glen:

 

On behalf of Protein Design Labs, Inc., subject to approval by the PDL
Board of Directors, I am pleased to extend to you an offer for the position of
Senior Vice President and Chief Financial Officer, reporting to Mark McDade,
Chief Executive Officer.

 

The monthly salary for this position is $25,833.34
($310,000.00/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 $100,000.00
payable and included with your first paycheck from PDL.  If your employment with PDL is terminated
for any reason prior to your first anniversary with PDL, the entire $100,000.00
will be immediately due and payable to PDL. 
If your employment with PDL is terminated for any reason after your
first anniversary and prior to your second anniversary, $50,000.00 will be
immediately due and payable to PDL.

 

Finally, in addition to our salary and benefits packages, I am pleased
to offer to you options to purchase 250,000 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 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.

 

In the event that your employment is terminated by PDL
without Cause (as defined in the ERSP) and if you execute and deliver to the
Company, within thirty (30) days following such termination, a general release
of all known and unknown claims against the Company existing as of the date of
execution of the release, in a form reasonably satisfactory to the Company (which
release shall also obligate you to refrain from soliciting employees,
contractors, vendors, strategic partners, and customers to terminate their
relationships with the Company), you will be entitled to (x) salary and bonus

 

 

continuation at the same level as the most recently awarded bonus or at
the maximum bonus rate if such termination occurs prior to your first bonus,
but excluding other employment benefits, for six months or until you accept a
full time position with another company, whichever occurs first, from the date
of such termination, less standard withholdings and deductions; and (y) if such
termination occurs prior to the end of your first year of employment, then the
vesting of one-fourth of the Options (i.e., options to purchase 62,500 shares)
will be accelerated as of the date of such termination.

 

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 Bernie Pangelinan,
in the enclosed envelope by the date indicated below.  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. This offer will remain open until April 14, 2003, at
which time it will expire if not previously accepted.  A start date will be determined by April 14, 2003, as well.

 

Sincerely,

 

	
   

  	
   

  	
   

  
	
  /s/ Mark McDade

  	
   

  	
   

  	
  /s/ Glen Y. Sato

  	
   

  
	
  Mark McDade

  	
   

  	
  Glen Y. Sato

  
	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
  4/10/2003

  	
   

  
	
   

  	
   

  	
  Date

  
					

 

2Exhibit
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

  	
   

  
	
   

  	
   

  	
  DateExhibit
10.45

 

Confidential

 

[...] =      Certain confidential information contained
in this document, marked by brackets, has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

CONFIDENTIAL
PROVISIONS MARKED

 

EXHIBIT 10.45  (CONFIDENTIAL)

 

AMENDMENT
NO. 1 TO THE PATENT LICENSING MASTER AGREEMENT

 

This AMENDMENT NO. 1 TO THE PATENT LICENSING MASTER AGREEMENT (the
“Amendment”), is entered into as of September 18, 2003 by and between
Genentech, Inc. (“GNE”), a Delaware corporation having offices at 1 DNA Way,
South San Francisco, California 94080 and PROTEIN DESIGN LABS, INC., a Delaware
corporation having offices at 34801 Campus Drive, Fremont, California 94555 (“PDL”)
and amends that certain Patent Licensing Master Agreement dated September 25,
1998 (the “Agreement”).  Except as
expressly provided herein, capitalized terms shall have the meaning set forth
in the Agreement.

 

RECITALS

 

A.            WHEREAS, GNE and PDL
are parties to the Agreement; and

 

B.            WHEREAS, GNE and PDL
desire to amend the Agreement to extend the period during which GNE may obtain
nonexclusive license rights under the PDL Licensed Patents and PDL may obtain
nonexclusive license rights under the GNE Licensed Patents.

 

AGREEMENT

 

NOW THEREFORE, the parties agree as follows:

 

Except as expressly set forth herein, capitalized terms and references
to Sections, Exhibits and Articles shall be deemed references to the Agreement.

 

1.             AMENDMENT OF AGREEMENT.

 

Section 2.2 is
amended to read in full as follows:

 

2.2
Number of Licensed Antigens; Term of Rights.

 

(a)  Limit on Number of Antigens.  Except as provided in Section 2.2(c), GNE’s
right to obtain licenses pursuant to Section 2.1 may be exercised for
Antibodies directed against a maximum total of six (6) Antigens (provided that,
GNE has already exercised a license with respect to the Antigen, HER-2, and
therefore, has the right, except as provided otherwise in Section 2.2(c), to
obtain licenses for Antibodies directed against five (5) additional Antigens),

 

(b)  Expiration of Rights to Elect.  Except as provided in Section 2.2(c), GNE’s
right to obtain licenses pursuant to Section 2.1 shall expire on December 31,
2008; provided that

 

 

GNE may elect to extend the
expiration period for each license right under Section 2.1 not exercised by
December 31, 2008 for an additional [...] year period by written notice and
payment of the GNE Antigen Extension Fee to PDL prior to December 31, 2008 as
provided in Section 3.4(a).

 

(c)  Double Up Right.  Upon written notice to PDL and payment of
the GNE Double Up Fee at any time prior to [...], GNE may elect up to an
additional [...] Antigens under Section 2.1 for a period of [...] years following
the date of such notice; provided that rights to elect licenses with respect to
the remaining [...] Antigens shall expire as of [...] unless otherwise extended
pursuant to Section 2.2(b).  By way of
illustration and without limitation, if GNE elects to exercise its right
hereunder but has exercised rights to licenses with respect to only [...]
Antigens under Section 2.1 (including the license exercised by GNE with respect
to the Antigen, HER-2) as of [...] (and has not extended the designation of the
remaining [...] Antigens pursuant to Section 2.2(b)), then the cumulative number
of Antigens subject to election by GNE under this Agreement through [...] shall
be [...] Antigens.

 

Section 5.2 is amended to
read in full as follows:

 

5.2
Number of Licensed Antigens; Term of Rights.

 

(a)  Limit of Number of Antigens.  Except as provided in Section 5.2(c), PDL’s
right to obtain licenses pursuant to Section 5.1 may be exercised for
Antibodies directed against a maximum total of six (6) Antigens.

 

(b)  Expiration of Rights to Elect.  Except as provided in Section 5.2(c), PDL’s
right to obtain licenses pursuant to Section 5.1 shall expire on December 31,
2008, provided, however, that PDL may elect to extend the expiration period for
each license right under Section 5.1 not exercised by December 31, 2008 for an
additional [...] year period by written notice and payment of the PDL Antigen
Extension Fee to GNE prior to December 31, 2008 as provided in Section 6.4(a).

 

(c)  Double Up Right.  Upon written notice to GNE and payment of
the PDL Double Up Fee at any time prior to [...], PDL may elect up to an
additional [...] Antigens under Section 5.1 for a period of [...] years following
the date of such notice; provided that rights to elect licenses with respect to
the first [...] Antigens shall expire as of [...] unless otherwise extended pursuant
to Section 5.2(b).  By way of
illustration and without limitation, if PDL elects to exercise its right
hereunder but has exercised rights to licenses with respect to only [...]
Antigens under Section 5.1 as of [...] (and has not extended the designation of
the remaining [...] Antigens pursuant to Section 5.2(b)) then the cumulative
number of Antigens subject to election by PDL under this Agreement through [...]
shall be [...] Antigens.

 

2.             NO
OTHER CHANGES.  On and after
the date hereof, each reference in the Agreement to “this Patent Licensing
Master Agreement,” “hereunder,” “hereof,” or words of like import referring to
the Agreement, shall mean and be a reference to the

 

 

Agreement as amended hereby.  Except as specifically amended above, all other terms and
conditions of the Agreement shall continue to be in full force and effect.

 

3.             PUBLIC
DISCLOSURE.  Except as
required by law or regulation, neither party shall publicly disclose the terms
and conditions of this Amendment unless expressly authorized to do so by the
other party, which authorization shall not be unreasonably withheld.  In the event that disclosure shall be agreed
upon then the parties will work together to develop a mutually acceptable
disclosure.

 

IN WITNESS WHEREOF, the
parties have executed this Amendment through their duly authorized
representatives as of the date set forth above.

 

	
  Protein Design
  Labs, Inc.

  	
  Genentech, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mark McDade

  	
   

  	
  By:

  	
  /s/ Joseph S. McCracken

  	
   

  
	
   

  	
  Mark McDade

  	
   

  	
  Joseph S. McCracken

  
	
   

  	
   

  	
   

  	
   

  
	
  Title: Chief Executive
  Officer

  	
  Title: VP Business & Market Development

  
						

 

 

[...] =      Certain confidential information contained
in this document, marked by brackets, has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

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