Document:

ex10-46.htm

Exhibit 10.46

 

	 	
932 Southwood Boulevard

Incline Village, NV  89451

Phone:  (775) 832-8500

Fax:      (775) 832-8502

 

December 9, 2011

Christine Larson

	
  

	
Re:

	
Separation Agreement

Dear Cris:

This letter, upon your signature, will constitute the Separation Agreement (“Agreement”) between you and PDL BioPharma, Inc. or any of its affiliates (“PDL” or “the Company”) and co-employer TriNet HR Corporation (with the Company, collectively referred to as “Releasees”) and the terms of your separation from employment with the Company.

 

1.           Resignation Date.  You agree that you will resign from employment with the Company effective December 9, 2011.  Your last day of work will be December 9, 2011 (the “Resignation Date”).  From and after that date, you will no longer represent to anyone that you are still an employee of the Company and you will not say or do anything purporting to bind the Releasees.

2.           Effective Date and Rescission.  You have up to 21 days after you receive this Agreement to review it and acknowledge that you received a copy of this Agreement on December 9, 2011.  You are advised to consult an attorney of your own choosing (at your own expense) before signing this Agreement. Furthermore, you have up to seven days after you sign this Agreement to revoke it.  If you wish to revoke this Agreement after signing it, you may do so by delivering a letter of revocation to me.  If you do not revoke this Agreement, the eighth day after the date you sign it will be the “Effective Date.”  Because of the seven-day revocation period, no part of this Agreement will become effective or enforceable until the Effective Date.

3.           Salary and Benefits Paid.  You acknowledge that you have been paid your earned salary, accrued vacation pay, and all other amounts PDL owes you through the Resignation Date and that the amount of $64,617.60 was paid to you by check in full satisfaction of such obligations of PDL.  You will receive by separate cover information regarding your rights to health insurance continuation under the terms of COBRA and your retirement benefits.  To the extent that you have such rights, nothing in this Agreement will impair those rights.  You acknowledge that the only payments and benefits that you are entitled to receive from the Releasees in the future are those specified in this Agreement.

 

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4.           Return of Property.  You will immediately return to the Company any building key(s), security pass, or other access or identification cards (including business cards) and any Company property that is currently in your possession, including any documents, computer equipment other than the Sony laptop and Apple iPad, and any information you have about the Company’s practices, procedures, trade secrets, customer lists, or product marketing.  By no later than December 15, 2011, you will also clear all expense accounts.

 

5.           Representation regarding Property. You represent that as of December 15, 2011, you will have returned to the Company all property that belongs to the Company, including (without limitation) the Company-issued laptop other than the Sony laptop, mobile phones and devices other than the Apple iPad, copies of documents that belong to the Company and files stored on your computer(s) that contain information belonging to the Company.

6.           Severance Payment.  In consideration of your acceptance of all the terms of this Agreement, but without otherwise admitting your entitlement to such payments, the Company will pay you as follows:

a.           $700,000 (seven hundred thousand dollars) plus 12 months of COBRA coverage from your resignation date.   The Company’s payment to you under this sub-paragraph is contingent upon your irrevocable agreement that this payment is in lieu of and will forever extinguish your right to claim that the Releasees have an obligation to make any further payment to you.

b.           Customary payroll deductions shall be made from payments described in 6.a.  Payment shall be paid within 10 business days of the "Effective Date" of this Agreement as defined in paragraph 2 above.

c.           The Company shall be entitled to recover all or a portion of the amounts provided in subsection 6.a. if the Company in good faith determines that you (i) intentionally or knowingly, through fraud or intentional misconduct, misstated financial information determined necessary for the proper functioning of the Company, (ii) are aware of any significant misstated financial information or other significant inaccuracy with respect to the Company’s financial information, whether used internally or disclosed to the public, and have failed to attempt to remedy such misstatement and report same to the current management of the Company, whether or not such misstatement or inaccuracy requires restatement of the Company’s public disclosures, or (iii) have violated any of the terms of this Agreement, including any of sections 9, 11 or 12 hereof.  In the event that the Company, in its discretion, demands repayment of such amounts under this subsection, you will be obligated to repay such amount in cash within ten (10) days of the Company’s written demand.  The Company’s rights under this subsection are not in lieu of and are not a waiver or release regarding any further or separate legal action for damages or other legal remedies based on fraud, intentional misconduct or gross negligence committed by you during your employment at the Company.

 

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7.           Release.  In consideration for the payments and benefits described in Section 6 above, you on your own behalf and on behalf of your heirs, executors, administrators and assigns hereby fully and forever waive, release, discharge and promise never to assert any claims or causes of action, whether or not now known, against the Releasees or each of its predecessors, successors or past or present subsidiaries, affiliates, branches, representative offices or parents (collectively, including the Releasees, the “entities”) and the entities’ stockholders, directors, officers, employees, consultants, attorneys, agents, assigns, and employee benefit plans with respect to any matter, including (without limitation) any matter related to your employment with the Releasees or the resignation of that employment, including (without limitation) claims to attorneys’ fees or costs, claims of wrongful discharge, constructive discharge, emotional distress, defamation, invasion of privacy, interference with a leave of absence, personal injury, fraud, breach of contract or breach of the covenant of good faith and fair dealing and any claims of discrimination or harassment based on sex, age, race, national origin, disability, or any other basis under Title VII of the Civil Rights Act of 1964, the Fair Labor Standards Act, the Equal Pay Act of 1963, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the Family Medical Leave Act, or any other federal, state, municipal or local law or regulation relating to employment or employment discrimination, as well as claims for unemployment benefits, and including any claims you may have related to your Severance Agreement signed on June 14, 2011 or your offer of employment letter dated December 18, 2008 or any other agreement which you have signed in relation to your employment at the Company.  You further understand and agree that this waiver includes all claims, known and unknown, to the greatest extent permitted by applicable law. However, this release covers claims arising prior to the execution of this Agreement and only those claims that may be waived by applicable law.

8.           Promise not to make Claims.  You also waive and release and promise never to assert any such claims, even if you do not believe that you have such claims.  You understand and agree that claims or facts in addition to or different from those which are now known or believed by you to exist may hereafter be discovered, but it is your intention to release all claims you have or may have against the Releasees and the entities, their officers, directors, employees, agents, and representatives, whether known or unknown, suspected or unsuspected.

9.           Proprietary Information; No Solicitation.  You acknowledge that, because of your position with the Company, you have specific knowledge of many types of information which is proprietary to the Company, including, but not limited to, its current and planned technology; its current and planned corporate strategies; strategic customers and business partners; and the identity, skills, compensation and interest of its employees.  You further agree to the following:

a.           You will not, directly or indirectly, solicit, recruit, or induce to leave the employ of the Company any employee, agent, independent contractor or consultant of the Company;

b.           You will not, unless required or otherwise permitted by law, disclose to others any proprietary information of the Company including, but not limited to, the Company’s current and planned technology; current and planned corporate strategies; strategic customers and business partners; and the identity, skills, compensation and interest of its employees.  You agree to keep and treat all such proprietary information as confidential; and

 

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c.           You acknowledge and agree (i) that any violation of this Section 9 would cause immediate and irreparable damage to PDL, and (ii) that determining the amount of damage caused to PDL by any such violation would be extremely difficult or impossible.  You therefore agree that PDL’s remedies at law are inadequate, and you consent to the issuance of injunctive relief, including but not limited to, a temporary restraining order, a preliminary injunction, and a permanent injunction, by a court of appropriate jurisdiction in order to restrain any actual or threatened violation of this Section without limiting any remedy PDL may have at law or equity.

10.           Disputes.  To ensure the rapid and economical resolution of disputes that may arise in connection with your employment, you and the Releasees agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment, or the resignation of your employment, shall be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration in Carson City, Nevada conducted by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) or its successor, under the then applicable rules of JAMS.  You acknowledge that by agreeing to this arbitration procedure, both you and the Releasees waive the right to resolve any such dispute through a trial by jury or judge or by administrative proceeding.  The arbitrator shall:  (i) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (ii) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award.  The Company shall pay all JAMS’ arbitration fees in excess of those administrative fees you would be required to pay if the dispute were decided in a court of law.  Nothing in this Letter is intended to prevent either you or the Releasees from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any arbitration.  Notwithstanding the provisions of this paragraph, any claims by either party arising under the Employee Proprietary Information and Invention Assignment Agreement or involving trade secrets shall be resolved through the courts and not through the arbitration procedure described above.  This provision shall supersede all prior agreements between the parties relating to dispute resolution, including mediation or arbitration.

11.           Confidentiality of Agreement.  In consideration of this Agreement, you also agree to keep confidential and not disclose the terms of this Agreement, the benefit being paid under it or the fact of its payment, except that you may disclose this information to your spouse, domestic partner, attorney, accountant or other professional advisor to whom you must make the disclosure in order for them to render professional services to you.  In addition, you are entitled to disclose the terms of this Agreement to federal and state unemployment officials, but only to the extent that such disclosure is necessary for you to receive unemployment benefits.  You will instruct them, however, to maintain the confidentiality of this information just as you must.

12.           No Disparagement.  You agree that you shall not make any negative or disparaging remarks about the Company, its officers, employees, directors, products, services or business practices.

13.           Breach.  In the event that you breach any of your obligations under this Agreement or as otherwise imposed by law, the Releasees will be entitled to recover the benefit paid under the Agreement and to obtain all other relief provided by law or equity and to recover reasonable attorney’s fees and costs incurred in any litigation, arbitration or other proceeding brought to enforce the terms of this Agreement.

 

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14.           References.  If contacted by a prospective employer for reference information, the Releasees will confirm only your dates of employment and position held.

15.           Entire Agreement; Governing Law.  You agree that no promise, inducement or other agreement not expressly contained in this Agreement or referred to in this Agreement, has been made conferring any benefit upon you, and that this Agreement contains the entire agreement between you and the Releasees with respect to its subject matter, including but not limited to the resignation of your employment.  All prior agreements, understandings, representations, oral agreements and writings are expressly superseded hereby and are of no further force and effect, and you expressly agree that you are not relying on any representations that are not contained in this Agreement.  This Agreement is entered into and governed by the laws of the State of Nevada.

16.           No Admission of Wrongdoing.  Nothing contained in this Agreement will constitute or be treated as an admission by you, the Releasees or the entities of liability, any wrongdoing or any violation of law.

17.           Contractual Relationship.  You acknowledge that any employment or contractual relationship between PDL and you ended on December 9, 2011, and that you have no further employment or contractual relationship except as may arise out of this Agreement and that you waive any right or claim to reinstatement as an employee of PDL or to seek employment in the future with PDL or any Releasee(s).

18.           Tax Liability.  You agree that you shall be exclusively liable for the payment of all federal and state taxes which may be due as a result of the consideration received from this severance package, and you hereby represent that you shall make payments on such taxes at the time and in the amount required of you.  In addition, you agree to defend, indemnify and hold harmless Releasees and each of them from payment of taxes, interest and/or penalties that are required of them by any government agency at any time as the result of payment of the consideration set forth herein.

19.           Counterparts; Paragraph Headings; Facsimilies; Modifications.  You agree that this Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one agreement. Paragraph headings are for reference only, and are not to be deemed or construed as limiting or expanding the content of any particular paragraph or provision.  Execution of a facsimile copy shall have the same force and effect as execution of an original, and a facsimile signature shall be deemed an original and valid signature. This Agreement may be modified only in a written document signed by you and an officer of the Company.

 

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Very truly yours,

/s/ John McLaughlin                                              

John McLaughlin

Chief Executive Officer

By my signature below, I acknowledge that I have had the opportunity to review this Agreement carefully with an attorney of my choice; that I understand the terms of the Agreement; and that I voluntarily agree to them.

/s/ Christine Larson                                                 

Christine Larson

Date: 12/16/11                                                            

Page 6 of 6ex10-47.htm

Exhibit 10.47

PDL BIOPHARMA, INC.

2013 Long-Term Incentive Plan

 

This 2013 Long-Term Incentive Plan (the “Plan”) is intended to enhance stockholder value by promoting a connection between the performance of PDL BioPharma, Inc. (the “Company”) and the compensation of personnel of the Company and retaining high performing personnel.  This Plan is the second long-term incentive plan in a series of long-term incentive plans, each plan overlapping the previous plan and having a subsequent vesting date to provide maximum continuity and retention effects.  The Plan will be administered by the Compensation Committee of the Board of Directors of the Company (the “Committee”).  The Committee shall have all powers and discretion necessary to administer the Plan and to control its operation, and may delegate any and all such powers and discretion to any officer of the Company.  The Plan is effective as of January 1, 2012 (the “Effective Date”), and will fully vest on December 31, 2013 (the “Vesting Period”).  The Plan will terminate when all payments and benefits under the Plan have been made.

1.           Eligibility

 

The employees of the Company set forth in Exhibit A (each, a “Participant”) are eligible to receive a long-term incentive for the period ending December 31, 2013, according to this Plan.  To be eligible, a Participant must be employed by the Company as of December 31, 2013, or otherwise eligible because of separation from the Company entitling such Participant to acceleration, vesting and payment of the Plan under any outstanding severance agreement.

 

2.           Incentive

 

The long-term incentive shall consist of (i) a target cash payment, as increased by the Adjustments in Section 3, and (ii) a grant of restricted stock pursuant to the Company’s 2005 Equity Incentive Plan.  All incentives shall vest and pay on December 31, 2013, subject to compliance with Section 409A of the Internal Revenue Code and except as accelerated by a Change in Control.

 

Each Participant’s incentive as of the Effective Date is set forth in Exhibit A.

 

3.           Adjustments

 

The cash component of each Participant’s incentive may be increased based on Company performance.  If any of the performance goals set forth in Exhibit B are achieved on or before December 31, 2013, the Participant may receive an additional cash payment equal to a percentage of the Participant’s target cash payment (the “Adjustment”).  The amount of the Adjustment and the achievement of each performance goal will be determined by the Committee in its sole discretion, provided that the aggregate maximum cash payment that any Participant may receive under the Plan may not exceed two times his or her target cash payment.

 

  

  

  

 

The following examples demonstrate the calculation of the Adjustments.  If, at December 31, 2013, Mr. McLaughlin remains employed by the Company and the Company has successfully protected its European Union Queen et al. patent rights and completed royalty rights acquisitions that the Committee determined to be subject to a 30% Adjustment, then Mr. McLaughlin’s cash payment will be equal to $797,300 ($469,000 (employment through December 31, 2013) + $187,600 (protection of European patents) + $140,700 (royalty right acquisition subject to 30% Adjustment) = $797,300).

 

Alternatively, if, at December 31, 2013, Mr. McLaughlin remains employed by the Company and the Company successfully achieved maximum performance of all of the performance goals on or before December 31, 2013, then, while the cash payment would be equal to $1,125,600 ($469,000 (employment through December 31, 2013) + $187,600 (protection of European patents) + $234,500 (royalty right acquisition subject to 50% Adjustment) + $234,500 (sale of Company subject to 50% Adjustment) = $1,125,600), the maximum cash payment would be limited to two times the target cash amount or $938,000 (two times his target cash payment of $469,000).

 

4.           Restricted Stock

 

The restricted stock award will fully vest on December 31, 2013, provided the Participant remains employed by the Company through such date.  Dividend payments and other distributions made on the restricted stock during the Vesting Period will accrue through the Vesting Period and will be paid, plus interest (based on the prevailing interest rate of the Merrill Lynch FFI Select Institutional Fund), to the Participant upon vesting of the restricted stock award.  The number of shares underlying the restricted stock award shall be determined based on the closing price of the Company’s common stock on January 18, 2012.

 

5.           Change in Control

 

Notwithstanding the foregoing, in the event of a Change in Control, (i) the vesting of the restricted stock award, (ii) the payment of any accrued but unpaid dividends or other distributions, plus interest (at the rate set forth above), and (iii) the payment of the target cash payment, plus any Adjustments that the Committee determines has been earned as of the Change in Control, will accelerate and pay in connection with the Change in Control.

 

For purposes of this Plan, “Change in Control” shall be deemed to have occurred as of the first day after the Effective Date that any one or more of the following conditions is satisfied:

 

(a)           any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (i) the outstanding shares of common stock of the Company or (ii) the combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of directors; or

 

  

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(b)           the Company (i) is party to a merger, consolidation or exchange of securities which results in the holders of voting securities of the Company outstanding immediately prior thereto failing to continue to hold at least 50% of the combined voting power of the voting securities of the Company, the surviving entity or a parent of the surviving entity outstanding immediately after such merger, consolidation or exchange, or (ii) sells or disposes of all or substantially all of the Company’s assets (or any transaction or combination of transactions having similar effect is consummated), or (iii) the individuals constituting the Board of Directors immediately prior to such merger, consolidation, exchange, sale or disposition shall cease to constitute at least 50% of the Board of Directors, unless the election of each director who was not a director prior to such merger, consolidation, exchange, sale or disposition was approved by a vote of at least two-thirds of the directors then in office who were directors prior to such merger, consolidation, exchange, sale or disposition.

 

Notwithstanding the foregoing, a transaction will not be considered a Change in Control unless the transaction qualifies as a “change in control” as defined in Treasury Regulation Section 1.409A-3(i)(5)(i).

 

6.           409A

 

This Plan is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), pursuant to the short term deferral exemption of Code Section 409A, so that none of the payments or benefits under this Plan, or shares of Company common stock issuable pursuant to this Plan, will be subject to the additional tax, penalties or other sanctions imposed under Code Section 409A and this Plan shall in all respects be administered, and any ambiguities herein will be interpreted, to be so exempt.  For purposes of Code Section 409A, each payment under this Plan shall be treated as a separate payment. In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan.

 

7.           Miscellaneous

 

The Company shall withhold all applicable taxes from any payment paid or benefit provided under the Plan, including any federal, state and local taxes.

 

Nothing in this Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. Nothing in this Plan should be construed as an employment agreement or create any entitlement to any Participant for any incentive payment or benefit hereunder.

 

This Plan and all awards shall be construed in accordance with and governed by the laws of the State of Nevada, without regard to its conflict of law provisions.

 

Payments under this Plan shall be unsecured, unfunded obligations of the Company.  To the extent a Participant has any rights under this Plan, the Participant’s rights shall be those of a general unsecured creditor of the Company.

 

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