EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (“Agreement”) is made
effective as of May 10, 2007 (“Effective Date”),
by and between La Jolla Pharmaceutical Company
(“Company”) and Niv Caviar
(“Executive”).
The
parties agree as follows:
1. Employment . Company hereby
employs Executive, and Executive hereby accepts such employment,
upon the terms and conditions set forth herein.
2. Duties .
2.1
Position . Executive is employed as Chief Financial Officer,
Chief Business Officer and Executive Vice-President and shall have
the duties and responsibilities assigned by Company’s Chief
Executive Officer (“CEO”) both upon initial hire and as
may be reasonably assigned from time to time. Executive’s
initial duties shall include management of Finance/Accounting,
IR/PR, IT, Commercial and Corporate Business Development functions.
Executive shall perform faithfully and diligently all duties
assigned to Executive. Company reserves the right to modify
Executive’s position and duties in its discretion to meet
business needs, subject to subsection 7.3 below.
2.2
Best Efforts/Full-time . Executive will expend
Executive’s best efforts on behalf of Company, and will abide
by all policies and decisions made by Company, as well as all
applicable federal, state and local laws, regulations or
ordinances. Executive will act in the best interest of Company at
all times. Executive shall devote Executive’s full business
time and efforts to the performance of Executive’s assigned
duties for Company.
2.3
Work Location . Executive’s principal place of work
shall be located in San Diego, California, or such other location
as the parties may agree upon from time to time.
3. At-Will Employment Relationship
. Executive’s employment with Company is not for any
specified period and may be terminated at any time, with or without
cause or advance notice, by either Executive or Company. No
representative of Company, other than the CEO, has the authority to
alter the at-will employment relationship. Any change to the
at-will employment relationship must be by specific, written
agreement signed by Executive and Company’s CEO. Nothing in
this Agreement is intended to or should be construed to contradict,
modify or alter this at-will relationship.
4. Compensation .
4.1
Base Salary . As compensation for Executive’s
performance of Executive’s duties hereunder, Company shall
pay to Executive an initial Base Salary of $275,000 per year,
payable in accordance with the normal payroll practices of Company,
less required deductions for state and federal withholding tax,
social security and all other employment taxes and payroll
deductions. In the event Executive’s employment under this
Agreement is terminated by either party, for any reason, Executive
will earn the Base Salary prorated to the date of
termination.
4.2
Sign-On Bonus . Executive will be eligible to earn a Sign-On
bonus of $50,000 in two installments as follows: $25,000 will be
earned and paid on Company’s first regularly scheduled payday
in January 2008, provided Executive remains employed
with Company through and including the payment date; and $25,000
will be earned and paid on the first payday following
Executive’s relocation of his primary residence to San Diego,
California, provided such relocation occurs within fifteen
(15) months of the Effective Date and Executive remains
employed with Company through the payment date (“the Sign-On
Bonus”). The Sign-On Bonus is subject to required deductions
for state and federal withholding tax, social security and all
other employment taxes and payroll deductions. The Sign-On Bonus
installments will not be prorated for partial service.
4.3
Annual Bonus . Executive will be eligible to earn an annual
bonus based on achievement of specified performance goals and
objectives in accordance with Company’s bonus plan.
Executive’s target bonus for calendar year 2007 will be 35%
of the Base Salary prorated for Executive partial year of service
based on the Effective Date.
4.4
Stock Options . Subject to the Board of Directors’
approval, Executive will be granted an option to purchase 180,000
shares of Company’s Common Stock under Company’s 2004
Equity Incentive Plan (the “Plan”) at an exercise price
equal to the fair market value of that stock on the date of the
grant (the “Initial Option”). The Initial Option will
be subject to the terms and conditions of the Plan and the standard
stock option agreement provided pursuant to the Plan, which
Executive will be required to sign as a condition of receiving the
Initial Option. In addition, Executive will be eligible for
subsequent annual grants of stock options that may be awarded by
the Compensation Committee of Company’s Board of Directors in
its sole and absolute discretion (the “Subsequent
Options”). Any Subsequent Options will be granted at an
exercise price equal to the fair market value of that stock on the
date of the grant and will be subject to the terms and conditions
of the Plan and the standard stock option agreement provided
pursuant to the Plan for the Subsequent Options.
4.5
Relocation Assistance . Company agrees to provide Executive
with relocation and temporary housing assistance as
follows:
(a) Shipping and Storage Expenses .
Company will pay directly for shipment and storage of
Executive’s household goods to a new residence in the San
Diego area up to a maximum of $5000, provided Executive
relocates to San Diego within fifteen (15) months of the
Effective Date and provided further Executive remains employed with
Company through the payment date; and,
(b) Relocation Bonus . Company will
pay Executive a one-time bonus of $35,000, less required deductions
for state and federal withholding tax, social security and all
other employment taxes and payroll deductions, to help defray the
costs associated with relocation from Executive’s existing
residence in Laguna Niguel, California to San Diego, California,
and the costs associated with temporary housing in San Diego prior
to relocation and the taxes associated with this payment (the
“Relocation Bonus”). The Relocation Bonus will be paid
in a lump sum on the second payday of the first month of
Executive’s employment with Company. The Relocation Bonus may
be used for any excess costs associated with the shipment and
storage of Executive’s household goods, closing costs, loan
fees and/or realtor fees associated with the sale of
Executive’s current residence and purchase of a new home in
San Diego, temporary lodging and meals, payment of all applicable
taxes, or any other purpose, as determined by Executive. For the
avoidance of doubt, Executive understands and agrees that the
Relocation Bonus is intended to be a fully taxable payment and that
Executive will under no circumstances be entitled to a tax
reimbursement payment, a tax gross-up payment, or any additional
payment from Company in respect of the Relocation Bonus and its
taxability. Executive further understands and agrees that Executive
has sole and exclusive responsibility for determining if and the
extent to which the Relocation Bonus is deductible to Executive for
individual tax purposes, and Executive should consult with his own
personal tax or financial advisor in connection with such
individual tax issues. In the event Executive voluntarily resigns
employment with Company within fifteen (15) months of the
Effective Date, Executive agrees to repay Company a prorated
portion of the Relocation Bonus (based on Executive’s full
months of completed service) within 30 days following demand
by Company for repayment.
4.6
Performance and Salary Review . Executive’s
performance will be reviewed on no less than an annual basis.
Adjustments to salary or other compensation, if any, will be made
by Company in its sole and absolute discretion. No reduction in
Base Salary will be made without Executive’s consent, unless
such reduction is made a part of, and is generally consistent with,
a general reduction of all senior executive salaries and does not
exceed 15%.
5. Customary Fringe Benefits .
Executive will be eligible for all customary and usual fringe
benefits generally available to executives of Company subject to
the terms and conditions of Company’s benefit plan documents.
Company reserves the right to change or eliminate the fringe
benefits on a prospective basis, at any time, effective upon notice
to Executive.
6. Business Expenses . Executive
will be reimbursed for all reasonable, out-of-pocket business
expenses incurred in the performance of Executive’s duties on
behalf of Company. To obtain reimbursement, expenses must be
submitted promptly with appropriate supporting documentation in
accordance with Company’s policies.
7. Termination of Executive’s
Employment .
7.1
Termination for Cause by Company . Although Company
anticipates a mutually rewarding employment relationship with
Executive, Company may terminate Executive’s employment
immediately at any time for Cause. For purposes of this Agreement,
“Cause” is defined as: the occurrence of one or more of
the following: (a) Executive is convicted of or pleads guilty
or nolo contendere to a felony or any crime involving moral
turpitude, embezzlement, fraud or misappropriation;
(b) Executive breaches this Agreement or any agreement entered
into with or policy of Company in a manner that materially and
adversely affects Company; (c) Executive commits willful
misconduct that materially and adversely impacts Company; or
(d) Executive fails, after receipt of written notice and after
receiving a period of at least 10 days following such notice,
to follow a lawful direction of the Board of Directors. In the
event Executive’s employment is terminated in accordance with
this subsection 7.1, Executive shall be entitled to receive
only the Base Salary then in effect, prorated to the date of
termination, and any amounts earned but not yet paid or otherwise
due pursuant to sections 4, 5 and 6 above (collectively
“Standard Entitlements”). All other Company obligations
to Executive pursuant to this Agreement will become automatically
terminated and completely extinguished. Executive will not be
entitled to receive the Severance Package described in
subsections 7.2(a), 7.3 or 7.5(a).
7.2
Termination Without Cause by Company/Severance . Company may
terminate Executive’s employment under this Agreement without
Cause at any time on thirty (30) days’ advance written
notice to Executive. In the event of such termination, and only if
such termination occurs other than within twelve months after a
Change in Control (as that term is defined below), Executive will
receive the Standard Entitlements and a “Severance
Package” described in subsection 7.2(a) below, provided
Executive complies with all the severance conditions set forth in
subsection 7.2(b) below. All other Company obligations to
Executive will be automatically terminated and completely
extinguished.
(a) Severance Package .
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