Stock Purchase Rights - Restricted Stock. Under the 2013 Plan, we are authorized to grant rights to purchase shares of restricted Common Stock subject to a right to repurchase such stock at the price paid by the participant if the participant’s employment relationship with us terminates prior to the lapse of such repurchase right. In general, there will be no tax consequences to a participant upon the grant of a right to purchase such restricted stock or upon purchase of such restricted stock. Instead, the participant will be taxed at ordinary income rates at the time our repurchase rights expire or are removed on an amount equal to the excess of the fair market value of the stock at that time over the amount the participant paid to acquire such stock. A participant who acquires restricted stock, however, may make an election under Section 83(b) of the Internal Revenue Code with respect to such stock. If such an election is made within 30 calendar days after the participant’s acquisition of the stock, the participant is taxed at ordinary income rates in the year in which the participant acquires the restricted stock. The ordinary income the participant must recognize is equal to the excess of the fair market value of the stock at the time of the participant’s acquisition of the stock (determined without regard to the restrictions) over the amount that the participant paid to acquire such stock. If a participant makes a timely election under Section 83(b) of the Internal Revenue Code with respect to restricted stock, the participant generally will not be required to report any additional income with respect to such restricted stock until he or she disposes of such stock, at which time he or she will generally recognize capital gain or loss (provided the shares are held as a capital asset) equal to the difference between the sales price and the fair market value of the stock at the time of the participant’s acquisition of the stock (determined without regard to the restrictions). In the event that a participant forfeits (as a result of a repurchase) restricted stock with respect to which an election under Section 83(b) of the Internal Revenue Code has been made, the participant ordinarily will not be entitled to recognize any loss for federal income tax purposes (except to the extent the amount realized by the participant at the time of such forfeiture is less than the participant’s purchase price for such stock). We generally will be entitled to a deduction equal to the amount of ordinary income, if any, recognized by a participant.

Other Awards. In addition to the awards described above, the 2013 Plan authorizes certain other types of awards that may include payments in cash, our Common Stock or a combination of cash and our Common Stock. The tax consequences of such awards will depend upon the specific terms of such awards. Generally, however, a participant who receives an award payable in cash will recognize ordinary income, and we will be entitled to a deduction, with respect to such award at the earliest time at which the participant has an unrestricted right to receive the amount of the cash payment. In general, the sale or grant of stock to a participant under the 2013 Plan will be a taxable event at the time of the sale or grant if such stock at that time is not subject to a substantial risk of forfeiture or is transferable within the meaning of Section 83 of the Internal Revenue Code in the hands of the participant. For such purposes, stock is ordinarily considered to be transferable if it can be transferred to another person who takes the stock free of any substantial risk of forfeiture. In such case, the participant will recognize ordinary income, and we will be entitled to a deduction, equal to the excess of the fair market value of such stock on the date of the sale or grant over the amount, if any, that the participant paid for such stock. Stock that, at the time of receipt by a participant, is subject to restrictions that constitute a substantial risk of forfeiture and that is not transferable within the meaning of Section 83 of the Internal Revenue Code generally will be taxed under the rules applicable to restricted stock as described above.

Withholding. In the event that an optionee or other recipient of an award under the 2013 Plan is our employee, we generally will be required to withhold applicable federal income taxes with respect to any ordinary income recognized by such optionee or other award recipient in connection with stock options or other awards under the 2013 Plan.

Certain Additional Rules Applicable to Awards. The terms of awards granted under the 2013 Plan may provide for accelerated vesting in connection with a change in control. In that event, and depending upon the individual circumstances of the recipient, certain amounts with respect to such awards may constitute “excess parachute payments” under the “golden parachute” provisions of the Internal Revenue Code. Under these provisions, a participant will be subject to a 20% excise tax on any “excess parachute payments” and we will be denied any deduction with respect to such payment.

We generally are entitled to a deduction equal to the ordinary income recognized by a recipient in connection with an award. However, our deduction (including the deduction related to ordinary income recognized by a recipient) for compensation paid to our Chief Executive Officer and each of our other three most highly compensated officers (other than our Chief Financial Officer) may be limited to $1 million per person annually. Depending on the nature of the award, all or a portion of the ordinary income attributable to certain awards granted under the 2013 Plan may be included in the compensation subject to such deduction limitation.

Interest of Certain Persons in Matters to Be Acted Upon

Each of our current directors, executive officers and employees is eligible to receive awards under the 2013 Plan. The Administrator has the discretion to determine which eligible persons will receive awards under the 2013 Plan. As a result, future participation in the 2013 Plan by executive officers, directors and other employees is not ~~determinable, except as set forth below in the following paragraph under the caption “New Plan Benefits.”~~determinable.

New Plan Benefits

~~Other than certain stock options granted contingent on approval of the amendment to the 2013 Plan by our shareholders (the “Contingent Option Grants”), the~~The Compensation Committee will have full discretion to determine the number and amount of awards to be granted to employees under the 2013 Plan, subject to the terms of the plan. Therefore, ~~other than the Contingent Option Grants, which are set forth in the table below,~~ the future benefits or amounts that would be received by the executive officers, directors, and ~~the groups named in the table below~~employees, under the 2013 Plan are not determinable at this time.

Name and Position
Grant Date
Fair Value
Number of Options
George F. Tidmarsh, M.D., Ph.D. $ 5,727,969
300,000
President, Chief Executive Officer and Secretary
Vote Required

The approval of a majority of the votes cast affirmatively or negatively is required to approve this Proposal. Further, approval of this Proposal also requires the affirmative vote of a majority of the shares necessary to constitute a quorum for the Annual Meeting. As a result, broker non-votes and abstentions will be disregarded in determining whether the affirmative votes cast represent a majority of the total number of votes cast on this Proposal. However, a large number of abstentions or broker non-votes could prevent approval of this Proposal under the majority-of-the-quorum requirement.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends a vote “FOR” approval of the foregoing resolution. Proxies will be so voted unless shareholders specify otherwise in their proxies.

PROPOSAL 4: ADVISORY VOTE ON EXECUTIVE COMPENSATION

Background

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires that shareholders have the opportunity to cast an advisory (non-binding) vote on executive compensation (a so-called “say-on-pay” vote).

The advisory vote on executive compensation is a non-binding vote on the compensation of the Company’s “Named Executive Officers,” as described in the tabular disclosure regarding such compensation under the caption “Executive Compensation” and the accompanying narrative disclosure set forth in this proxy statement. The advisory vote on executive compensation is not a vote on the Company’s general compensation policies, compensation of the Company’s Board, or the Company’s compensation policies as they relate to risk management. The Dodd-Frank Act requires the Company to hold the advisory vote on executive compensation at least once every three years.

Our philosophy in setting compensation policies for executive officers has two fundamental objectives: (1) to attract and retain a highly skilled team of executives; and (2) to align our executives’ interests with those of our shareholders by rewarding short-term and long-term performance and tying compensation to increases in shareholder value. The Compensation Committee believes that executive compensation should be directly linked both to continuous improvements in corporate performance (so-called “pay for performance”) and accomplishments that are expected to increase shareholder value.

The vote under this Proposal 4 is advisory and, therefore, not binding on the Company or the Board. However, our Board values the opinions of our shareholders and, to the extent there is any significant vote against the executive officer compensation as disclosed in this proxy statement, the Company will consider our shareholders’ concerns and evaluate what actions may be appropriate to address those concerns.

Shareholders will be asked at the Annual Meeting to approve the following resolution pursuant to this Proposal 4:

RESOLVED, that the shareholders of La Jolla Pharmaceutical Company approve, on an advisory basis, the compensation of the Company’s “Named Executive Officers” (as defined in this proxy statement), as such compensation is described in the tabular disclosure regarding such compensation under the caption “Executive Compensation” and the accompanying narrative disclosure, set forth in the Company’s definitive proxy statement for the Annual Meeting.

Vote Required

The ~~affirmative vote~~approval of a majority of the votes cast ~~at the Annual Meeting, at which a quorum is present,~~affirmatively or negatively is required to approve this ~~proposal. Broker~~Proposal. As a result, broker non-votes and abstentions will ~~have no effect on~~be disregarded in determining whether the affirmative ~~vote constitutes~~votes cast represent a majority of the ~~shares present or represented by proxy and voting at~~total number of votes cast on this Proposal.

Recommendation of the ~~Annual Meeting, but could prevent the~~Board of Directors

The Board of Directors unanimously recommends that you vote “FOR” approval of ~~this proposal because they do not count as affirmative votes.~~the foregoing resolution.

CORPORATE GOVERNANCE

Our business affairs are managed under the direction of our Board, which is currently composed of ~~six~~five directors. ~~Our~~Consistent with NASDAQ listing requirements, our Board has ~~previously~~ determined that ~~Mr. Tang,~~as of the Record Date, Ms. Douglass, Mr. Johnson ~~Mr. Rosen~~ and Mr. ~~Zarrabian~~Rosen are “independent” within the meaning of NASDAQ Marketplace Rules 5605(b) and 5605(a)(2)~~, as adopted by the NASDAQ Stock Market, Inc. Dr. Tidmarsh was not deemed to be “independent” because he is our President and Chief Executive Officer.~~

. During the year ended December 31, ~~2014,~~2015, the Board ~~held 9 meetings~~met or took action by unanimous written consent ten times (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of: (i) the total number of meetings of the Board held during the period for which he or she has been a director; and (ii) the total number of meetings held by all committees of our Board on which he or she served during the periods that he or she served.

Committees of the Board of Directors

Our Board has three standing committees: an audit committee; a compensation committee; and a corporate governance and nominating committee. All committee members have been ~~previously~~ determined ~~by our Board~~ to be independent. The committees operate under written charters that are available for viewing on our website at www.ljpc.com, under “Investor Relations.”

Audit Committee. It is the responsibility of the ~~audit committee~~Audit Committee to oversee our accounting and financial reporting processes and the audits of our financial statements. In addition, the ~~audit committee~~Audit Committee assists the Board in its oversight of our compliance with legal and regulatory requirements. The specific duties of the ~~audit committee~~Audit Committee include: monitoring the integrity of our financial process and systems of internal controls regarding finance, accounting and legal compliance; selecting our independent auditor; monitoring the independence and performance of our independent auditor; and providing an avenue of communication among the independent auditor, our management and our Board. The ~~audit committee~~Audit Committee has the authority to conduct any investigation it feels appropriate to fulfill its responsibilities, and it has direct access to all of our employees and to the independent auditor. The ~~audit committee~~Audit Committee also has the ability to retain, at our expense and without further approval of the Board, special legal, accounting or other consultants or experts that it deems necessary in the performance of its duties. The Audit Committee met 4or took action by unanimous written consent six times in ~~2014.~~2015. Craig Johnson is the chair of the ~~audit committee~~Audit Committee and is deemed to be an audit committee financial expert. Robert Rosen and ~~Saiid Zarrabian~~Laura Douglass also sit on the ~~audit committee. Laura Douglass will be added to~~Audit Committee. As of the ~~audit committee upon Saiid Zarrabian’s retirement from the Board. Each~~Record Date, each member of the ~~audit committee meets~~Audit Committee met the requirements for independence under the listing standards of the NASDAQ Capital Market and the SEC rules and regulations, as well as meeting the requirements for financial literacy and sophistication under the applicable listing standards.

Compensation Committee. It is the responsibility of the ~~compensation committee~~Compensation Committee to assist the Board in discharging the Board’s responsibilities regarding the compensation of our employees and directors. The specific duties of the ~~compensation committee~~Compensation Committee include: making recommendations to the Board regarding the corporate goals and objectives relevant to executive compensation; evaluating our executive officers’ performance in light of such goals and objectives; recommending compensation levels to the Board based upon such evaluations; administering our incentive compensation plans, including our equity-based incentive plans; making recommendations to the Board regarding our overall compensation structure, policies and programs; and reviewing the Company’s compensation disclosures. Additional information regarding the processes and procedures of the ~~compensation committee~~Compensation Committee is provided below under the caption “Executive Compensation.” The Compensation Committee met 4or took action by unanimous written consent five times in ~~2014. Saiid Zarrabian is the chair of the compensation committee~~2015. Craig Johnson and Laura Douglass ~~Craig Johnson and Kevin Tang sit on~~constitute the ~~compensation committee as well. Craig Johnson will chair~~Compensation Committee. As of the ~~compensation committee upon Saiid Zarrabian’s retirement from the Board. Each~~Record Date, each member of the ~~compensation committee meets~~Compensation Committee met the requirements for independence under the listing standards of the NASDAQ Capital ~~Market and the SEC rules and regulations.~~Market.

Corporate Governance and Nominating Committee. It is the responsibility of the ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee to assist the Board: to identify qualified individuals to become ~~Board members;~~directors of the Board; to determine the composition of the Board and its committees; and to monitor and assess the effectiveness of the Board and its committees. The specific duties of the ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee include: identifying, screening and recommending to the Board candidates for election to the Board; reviewing director candidates recommended by our shareholders; assisting in recruiting qualified director candidates to serve on the Board; monitoring the independence of current directors and nominees; and monitoring and assessing the relationship between the Board and our management with respect to the Board’s ability to function independently of management. The Corporate Governance and Nominating Committee met 2or took action by unanimous written consent three times in ~~2014. Kevin Tang is the chair of the corporate governance and nominating committee and~~2015. Laura Douglass and Robert Rosen ~~sit on~~constitute the ~~corporate governance~~Corporate Governance and ~~nominating committee as well. Each~~Nominating Committee. As of the Record Date, each member of the ~~corporate governance~~Corporate Governance and ~~nominating committee meets~~Nominating Committee met the requirements for independence under the listing standards of the NASDAQ Capital ~~Market and the SEC rules and regulations.~~Market.

Corporate Governance Guidelines

We have adopted a set of Corporate Governance Guidelines that describe a number of our corporate governance practices. The Corporate Governance Guidelines are available for viewing on our website at www.ljpc.com, under “Investor Relations.”

Code of Ethics

We have adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial and accounting officer, or persons performing similar functions. Our Code of Ethics is posted on our corporate governance website located at www.ljpc.com, under “Investor Relations”. We intend to disclose future amendments to certain provisions of the Code of Ethics, and waivers of the Code of Ethics granted to executive officers and directors, on the website within four (4) business days following the date of the amendment or waiver.

Communications with the Board of Directors

Our shareholders may communicate with our Board or a particular director by sending a letter addressed to the Board or a particular director to: c/o Corporate Secretary, La Jolla Pharmaceutical Company, 10182 Telesis Court, 6^th6th Floor, San Diego, California, 92121. All communications will be compiled by our Corporate Secretary and forwarded to the Board or the director accordingly.

Compensation Committee Interlocks and Insider Participation

During ~~the last completed year,~~2015, Dr. Tidmarsh was an employee of the Company. None of our executive officers served as a member of the Compensation Committee ~~(or Board of Directors)~~or as a director of another entity where such entity’s executive officers served on our Compensation Committee or Board.

Board Leadership Structure; Risk Management

The role of our Chairman of the Board is separate from the Chief Executive Officer. The Board has determined that its structure is appropriate at this time given the Company’s specific characteristics and circumstances, including the Board’s commitment to independent Board and Committee leadership, and to fulfill the Board’s duties effectively and efficiently so that our business receives the undivided attention of the Chief Executive Officer.

Our Board is responsible for oversight of our risk management policies and procedures. We are exposed to a number of risks, including financial risks, strategic and operational risks and risks relating to regulatory and legal compliance. The Board will regularly discuss with management our major risk exposures and the steps management has taken to monitor and control such exposures, including the guidelines and policies to govern the process by which risk assessment and risk management are undertaken, and highlighting any new risks that may have arisen since they last met.

The Board manages exposure risks within various areas including: (i) risks relating to our employment policies and executive compensation plans and arrangements; (ii) financial risks and taking appropriate actions to help ensure quality financial reporting and appropriately conservative investment practices; and (iii) risks associated with the independence of the Board and potential conflicts of interest. The Audit Committee reviews policies with respect to risk assessment and risk management and consults with outside resources as appropriate on other matters that could have a significant impact on the Company’s financial statements. The Audit Committee also reviews policies with respect to financial risk and makes recommendations to the Board. The Board’s administration of its risk oversight function has not affected the Board’s leadership structure, which separates the roles of our Chairman of the Board and our Chief Executive Officer.

Director Nominations

Our ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the ~~corporate governance~~Corporate Governance and ~~nominating committee utilizes~~Nominating Committee may utilize a variety of methods for identifying and evaluating director candidates. Candidates may come to the attention of the ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee through current directors, professional search firms, shareholders or other persons. Once the ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee has identified a prospective nominee, ~~the corporate governance and nominating committee~~it will evaluate the prospective nominee in the context of the then-current constitution of the Board and will consider a variety of other factors, including the prospective nominee's business,

biotechnology, finance and financial reporting experience, and attributes that would be expected to contribute to an effective Board. The ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee seeks to identify nominees who possess a wide range of experience, skills and areas of expertise, knowledge and business judgment. Our ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee thus considers a broad range of factors relating to the qualifications and background of nominees, which may include diversity, which is not only limited to race, gender or national origin, but also includes diversity of experience and skills. We have no formal policy regarding Board diversity. Our ~~corporate governance~~Corporate Governance and ~~nominating committee’s~~Nominating Committee’s priority in selecting ~~Board members~~directors is identification of persons who will further the interests of our shareholders through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among ~~Board members,~~directors, and professional and personal experiences and expertise relevant to our growth strategy. Successful nominees must have a history of superior performance or accomplishments in their professional undertakings and should have the highest personal and professional ethics and values. The ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee does not evaluate shareholder nominees differently than any other nominee.

Pursuant to procedures set forth in the Company’s Bylaws, as amended and restated (the “Bylaws”), our ~~corporate governance~~Corporate Governance and ~~nominating committee~~Nominating Committee will consider shareholder nominations for directors if we receive timely written notice, in proper form, of the intent to make a nomination at a meeting of shareholders. To be timely, the notice must be received within the time frame discussed in our Bylaws. To be in proper form, the notice must, among other matters, include each nominee’s written consent to serve as a director if elected, a description of all arrangements or understandings between the nominating shareholder and each nominee and information about the nominating shareholder and each nominee. A copy of our Bylaws will be provided upon written request to our Corporate Secretary.

Director Attendance at Annual Meetings

Our Board has adopted a policy that encourages our directors to attend our annual shareholder meeting. We held our 2015 annual shareholder meeting ~~for the year ended December 31, 2014~~ on August ~~27, 2014,~~19, 2015, and ~~all Board members~~five of the Company’s directors were present.

Report of the Audit Committee

The ~~audit committee~~Audit Committee oversees our financial reporting process. Management has the primary responsibility for the financial statements and the reporting process, including our system of internal control over financial reporting. In fulfilling its oversight responsibilities, the ~~audit committee~~Audit Committee reviewed and discussed the audited financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015 with management, including a discussion of the quality, not merely the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.

The ~~audit committee~~Audit Committee reviewed our audited financial statements with ~~the~~our independent auditor, which is responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, ~~its judgments as to the quality, not merely the acceptability,~~including a discussion of ~~our accounting principles and~~ such ~~other~~ matters as are required to be discussed under auditing standards generally accepted in the United States. In addition, the ~~audit committee~~Audit Committee has discussed with the independent auditor ~~the auditor’s~~its independence, including Statement on Auditing Standards No. 16, as amended (Communication with Audit Committees), from us and our management, including the matters in the written disclosures received by us required by the Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). The ~~audit committee~~Audit Committee has also considered the compatibility of the independent auditor’s provision of non-audit services to us with the auditor’s independence.

The ~~audit committee~~Audit Committee discussed with our independent auditor the overall scope and plan for its audit. The ~~audit committee~~Audit Committee met with the independent auditor, with and without management present, to discuss the results of its examinations, its evaluations of our internal controls and the overall quality of our financial reporting.

Based upon the reviews and discussions referred to above, the ~~audit committee~~Audit Committee recommended that our audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015 for filing with the SEC. This report is provided by the following directors, who perform the functions of the ~~audit committee:~~Audit Committee:

Craig A. Johnson, Chair of Audit Committee

Robert H. Rosen

~~Saiid Zarrabian~~Laura L. Douglass

Section 16(a) Beneficial Ownership Reporting Compliance

Under the securities laws of the United States, our directors and officers and persons who own more than 10% of our equity securities are required to report their initial beneficial ownership of our equity securities and any subsequent changes in that beneficial ownership to the ~~Securities and Exchange Commission.~~SEC. Specific due dates for these reports have been established, and we are required to disclose any known late filings during the year ended December 31, ~~2014.~~2015. To our knowledge, based solely upon our review of the copies of such reports required to be furnished to us during the year ended December 31, ~~2014,~~2015, all of these reports were timely filed.

EXECUTIVE OFFICERS ~~OF THE REGISTRANT~~

Our executive officers and ~~key employees and~~ their respective ages as of July 1, ~~2015~~2016 are set forth ~~below.~~

below, as well as biographies for officers other than Dr. Tidmarsh, whose biography is set forth under Proposal 1.



Name	Age	Position
George F. Tidmarsh, M.D., Ph.D.	5556	President, Chief Executive Officer, Secretary and Director
Lakhmir S. Chawla, M.D.	4445	Chief Medical Officer
Dennis M. Mulroy	6061	Chief Financial Officer
Jennifer A. Carver	62	Senior Vice President, Operations

~~The biography for Dr. Tidmarsh is set forth above under Proposal 1. Biographies of our other key employees appear below.~~

Dr. Lakhmir “Mink” S. Chawla ~~joined~~has been the ~~Company as~~ Chief Medical Officer inof the Company since July 2015. Dr. Chawla has more than 20 years of medical experience with particular expertise in critical care and nephrology. Dr. Chawla has been an active investigator in the field of critical care nephrology since 2002. Previously, Dr. Chawla was an Associate Professor of Medicine at the George Washington University from 2008 to 2015, where he had dual appointments in the Department of Anesthesiology and Critical Care Medicine and in the Department of Medicine, Division of Renal Diseases and Hypertension. Dr. Chawla was also the Chief of the Division of Intensive Care Medicine at the Washington D.C. Veterans Affairs Medical ~~Center.~~Center from 2014 to 2015. During his tenure at George Washington, Dr. Chawla was the designer and lead investigator of a pilot study called the ATHOS (Angiotensin II for the Treatment of High Output Shock) ~~trial. Data~~trial, which served as the basis for the Company’s ongoing ATHOS 3 clinical study. Dr. Chawla received his medical degree from the ATHOS trial was published in the medical journal Critical Care during 2014 and demonstrated the utility of angiotensin II in patients with severe shock. These data were also used in support of the initiation of the Company’s ATHOS 3 trial, a Phase 3 clinical trial of LJPC-501, the Company’s proprietary formulation of angiotensin II, for the treatment of catecholamine-resistant hypotension, which was initiated in March 2015. Dr. Chawla has been an active investigator in the field of critical care nephrology since 2002. Dr. Chawla is an internationally renowned expert in the field of acute kidney injury (AKI) and was an active investigator in the fields of inflammation and AKI, AKI biomarkers, AKI risk prediction, chronic kidney disease caused by AKI and AKI therapeutics. In addition, Dr. Chawla was an active investigator in shock, inflammation and extracorporeal therapies, including: continuous renal replacement therapy, dialysis and albumin dialysis. Dr. Chawla is also the author of more than 100 peer-reviewed publications and an Associate Editor for the Clinical Journal of the American Society of Nephrology.New Jersey Medical School.

Dennis M. Mulroy has been the Chief Financial Officer of the Company since April 2015. Mr. Mulroy has more than 25 years of financial management experience, including leadership positions in publicly traded biotechnology, life sciences, medical service and medical device companies. Prior to joining La Jolla, Mr. Mulroy served as Chief Financial Officer of Taxus Cardium Pharmaceuticals Group Inc. since 2005. Prior to joining Taxus Cardium, Mr. Mulroy served as Chief Financial Officer of Molecular Imaging, Inc. and SeraCare Life Sciences, Inc., and held financial management positions of increasing responsibility at several other companies. Mr. Mulroy began his career as a Certified Public Accountant with Ernst & Young LLP in San ~~Diego and holds~~Diego. Mr. Mulroy received a B.B.A. degree ~~in Business Administration,~~ with an emphasis in ~~Accounting,~~accounting, from the University of San Diego.

Jennifer A. Carver has been the Senior Vice President, Operations of the Company since January 2016. Ms. Carver has more than 20 years of cross-functional leadership experience in pharmaceutical drug development. Ms. Carver joined La Jolla in February 2014 as Senior Director of Project Management, was promoted to Vice President of Project Management in December 2014, and then promoted to Vice President of Operations in June 2015. Prior to joining La Jolla, Ms. Carver was Senior Director of Project Management at Spectrum Pharmaceuticals, Inc., leading the NDA and launch activities for Beleodaq, an FDA-approved, anti-cancer agent, from 2012 to 2014. Previously, she held various roles at Allos Therapeutics, Inc. from 2001 to 2012, including project manager for Folotyn®, an FDA-approved, anti-cancer agent, and leading integration activities following the acquisition of Allos by Spectrum Pharmaceuticals in 2012. Ms. Carver received a B.S.N. and M.B.A. from the University of Colorado.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

The following Compensation Discussion and Analysis describes the material elements of compensation earned by ~~Dr. Tidmarsh,~~our three executive officers serving during 2015, which included the Chief Executive Officer, Chief Medical Officer and Chief Financial Officer, who ~~was the sole executive officer serving in 2014. For purposes of this discussion, Dr. Tidmarsh is sometimes~~are collectively referred to herein as ~~the Company’s “Named Executive Officer~~.” As more fully described below, the Company has appointed two new executive officers in 2015, both of whom are expected to be deemed “Named Executive Officers,” along with Dr. Tidmarsh, with respect to the Company’s 2015 Summary Compensation Table and other compensation tables and disclosures and the corresponding Compensation Discussion and Analysis. References below to our “executives” or “executive officers” generally (and not specifically to Dr. Tidmarsh or the Named Executive Officer) reflect compensation practices and philosophies applied to all of the Company’s Named Executive ~~Officers in~~Officers. In January 2016, Jennifer Carver was promoted to the position of Senior Vice President, Operations. In that capacity, Ms. Carver is deemed an executive officer. However, because Ms. Carver was not serving as an executive officer at any time during 2015, Ms. Carver is not included as a Named Executive Officer for the year ended December 31, 2015.

Compensation Philosophy and Objectives

Our goal is to provide a competitive total compensation package with significant emphasis on pay for performance. Accordingly, we favor equity and discretionary awards over guaranteed cash compensation in order to drive accomplishments

that enhance shareholder value and align the interests of our ~~executives~~executive officers and our shareholders. This means that our ~~executives~~executive officers will not realize the total potential value of their compensation package unless performance goals, which are directly tied to our corporate performance, are achieved. The Compensation Committee believes that our executive compensation program is appropriately designed and reasonable in light of the executive compensation programs of our peer group companies and responsible in that it is designed to incentivize our management team to achieve our short-term and long-term corporate objectives, while effectively managing business risks and challenges.

Based on the foregoing objectives, executive compensation is based on three primary components: base salary, annual incentive bonuses and equity awards. The Compensation Committee believes that cash compensation in the form of base salary and an annual incentive target bonus provides our ~~executives~~executive officers with short-term rewards for success in operations, and that long-term compensation through equity awards (which consists mainly of stock options) aligns the objectives of management with those of our shareholders with respect to long-term performance and success. In addition, our ~~executives~~executive officers receive benefits that are generally available to all of our employees. Our compensation-setting process includes reviewing the targeted overall compensation for each executive, and then allocating that compensation between base salary and incentive compensation (annual performance-based cash bonuses and equity incentive awards), based ~~appropriately~~ on industry and salary survey data for public companies of a similar market capitalization, size and stage of clinical development.

With respect to equity awards, these awards typically vest and become exercisable over a period of four years, consisting of an initial one-year cliff-vest, ~~for new employees,~~ followed by monthly or quarterly vesting. However, we have also used performance-based vesting conditions and the combination of performance and time-based vesting conditions for certain awards, such as the restricted stock grant that was issued to Dr. Tidmarsh in 2013. We believe that long-term value creation, contrasted with short-term gain, presents the best opportunity for employees to profit from these awards. In circumstances where performance-based equity awards have been granted, the events that trigger vesting are generally estimated to be achieved at least one year from the grant date, although shorter performance goals may be used in some cases. The Company has not historically used claw-back provisions or imposed holding periods for vested awards, although the Compensation Committee may consider whether such mechanisms might be appropriate in the future to mitigate risk.

Risk Management and Mitigation

In reviewing the compensation structure in fiscal 2015, we also considered how the Company’s compensation policies may affect the Company’s risk profile and whether compensation policies and practices may encourage risk-taking by employees. More specifically, we considered the general design philosophy of the Company’s policies for employees whose conduct would be most affected by incentives established by compensation policies. In considering these issues, we concluded that the use of performance-based bonuses and long-term equity awards did not appear to create undue risks for the Company or encourage excessive risk-taking behavior on the part of our executive officers.

Roles in Determining Compensation

Compensation Committee

The Compensation Committee has the responsibility of reviewing the appropriateness of the total compensation paid to our executive officers. The Compensation Committee oversaw and approved all compensation arrangements and actions for our key employees in ~~2014,~~2015, including the Named Executive ~~Officer.~~Officers. The Compensation Committee has delegated to the Chief Executive Officer certain administrative responsibilities under the Company’s equity compensation plan, allowing the Chief Executive Officer to make equity award grants, and set base salary and annual incentive targets within predetermined guidelines established by the Compensation Committee, to non-officer employees of the Company.

Compensation Consultant

In ~~2014,~~2015, the Compensation Committee engaged the services of Barney & Barney, LLC (“B&B”), an independent insurance firm that provides compensation consulting services. The directive for B&B was to assist the Compensation Committee in its review of executive and director compensation practices, including the competitiveness of pay levels, executive compensation design and review, and analysis of competitive data with respect to the Company’s peers in the industry. The Compensation Committee has the final authority to engage and terminate services for consultants it may engage. The decision to engage B&B was not made, or recommended, by the Company’s management; B&B provides insurance brokerage services to the Company outside of its services to the Compensation Committee. The Compensation Committee, after a review of the factors set forth in Section 10C-1of the Securities Exchange Act of 1934, has determined that B&B is

independent, and the insurance brokerage work and compensation consulting work performed by B&B did not present any conflicts of interest.

Say-on-Pay

On June 5, 2013, the Company provided shareholders a ~~"say-on-pay"~~“say-on-pay” advisory vote on its executive compensation under Section 14A of the Securities Exchange Act of 1934, as amended. At the Company's 2013 annual meeting of shareholders, shareholders expressed substantial support for the compensation of our Named Executive Officer, with approximately 90% of the votes cast for approval of the ~~"say-on-pay"~~“say-on-pay” advisory vote. The Compensation Committee carefully evaluated the results of the 2013 advisory vote. The Compensation Committee also considers many other factors in evaluating the Company's executive compensation programs as discussed in this Compensation Discussion and Analysis, including the Compensation Committee's assessment of the interaction of our compensation programs with our corporate business objectives, evaluations of our programs by external consultants, and review of peer group and survey data, each of which is evaluated in the context of the Compensation Committee's fiduciary duty to act as the directors determine to be in shareholders' best interests. While each of these factors bore on the Compensation Committee's decisions regarding our Named Executive Officer’s compensation, the Compensation Committee did not make any changes to our executive compensation program and policies as a result of the 2013 ~~"say-on-pay"~~“say-on-pay” advisory vote. The Company also provided shareholders a “say-on-frequency” advisory vote on June 5, 2013. As previously disclosed, in light of the results of such shareholder vote, the Board adopted a resolution to hold a “say-on-pay” vote every three years. The next “say-on-pay” vote will be held at ~~the Company’s 2016 annual meeting of shareholders.~~this upcoming Annual Meeting.

Base Salary

Executive base salaries are based on job responsibilities, accountability and the experience of the individual. For ~~2014,~~2015, the Compensation Committee sought to implement a policy of targeting base salaries for executives, including the Chief Executive Officer, at or near the 50th percentile of salaries of executives with similar roles at similar organizations, based on broad comparative data. In its assessment of executive compensation levels, B&B provided information that indicated that, using the Company’s identified peer group, executive cash compensation was slightly below the 50th percentile.

During its review of base salaries for executives and other key employees, the Compensation Committee primarily considered:

market data provided by publicly available industry surveys and B&B to ensure competitive compensation;

compensation data for public companies of a similar market capitalization, size and stage of clinical development;

individual performance of the executive for the prior year, including achievements and overall contribution to the Company’s growth and business success; and

internal review of the executive’s overall compensation relative to other executives at a similar level.

The Compensation Committee considers these factors in the aggregate, without assigning weight to any specific factor, and not every factor was considered for each executive officer.

Salary levels are typically considered annually as part of our performance review process as well as upon promotion or other changes in job responsibilities. Merit increases are awarded based on the Compensation Committee’s subjective overall review of an executive’s performance of his or her job responsibilities. In addition, base salaries are reviewed annually to assure comparability with market practices. Market adjustments generally are reserved for those whose base salaries are substantially below market. In the evaluation of performance during 2014, the Compensation Committee approved an increase of 11.7% for Dr. ~~Tidmarsh,~~Tidmarsh’s base salary, which was effective commencing with the first pay period in 2015. In January 2016, the Compensation Committee reassessed the base salary paid to the Named Executive Officers and approved increases of 6.0% for Dr. Tidmarsh, 6.0% for Dr. Chawla and 3.1% for Mr. Mulroy. In June 2016, the Compensation Committee again reassessed the base salary paid to the Named Executive Officers and approved increases of 4.2% for Dr. Chawla and 6.1% for Mr. Mulroy. Dr. Tidmarsh’s base salary remained the same.

Annual Incentive Bonus

The annual performance-based cash bonus for the Named Executive ~~Officer~~Officers is determined based upon corporate performance and also individual achievements and performance, as warranted. The Compensation Committee, consistent with the overall corporate philosophy of keeping cash compensation for executives at or near the 50th percentile when compared to executives with similar roles at similar organizations, reviewed the target bonus potential payout for the Named Executive ~~Officer~~

Officers together with other generally available market comparative data. The target bonus is set at an incentive level based on the executive’s accountability and potential impact on the Company’s performance. Accordingly, the more control and accountability that an executive has over the Company’s performance, the greater the percentage of that executive’s total compensation is dependent on annual performance-based cash bonus awards. The targeted bonus payout for ~~2014~~2015 set at the beginning of the year was 50% of base salary for Dr. ~~Tidmarsh.~~Tidmarsh and 35% of base salary for each of Dr. Chawla and Mr. Mulroy. In determining the annual performance-based cash bonus opportunity for executives, the executive’s annual base salary is multiplied by his target bonus percentage. The resulting amount is then multiplied by the corporate performance percentage approved by the Compensation Committee, which is dependent on the achievement of corporate performance goals, and also potentially adjusted upwards or downwards for individual executives based on their individual contribution toward the corporate results during the relevant ~~year.~~year and prorated for their time employed in 2015. For ~~Dr. Tidmarsh in 2014, 100% of his annual incentive cash bonus was based on~~2015, the Compensation ~~Committee’s review~~Committee determined that our Named Executive Officers had achieved 85% of their corporate ~~achievement.~~performance goals and individual contribution toward the corporate results. Performance-based cash bonus payouts made to the Named Executive ~~Officer~~Officers in ~~March 2015~~January 2016 for their performance in ~~2014~~2015 are shown in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.

For annual performance-based cash bonuses for our executive officers, in any given year, a minimum overall goal achievement of greater than or equal to 50% is required for an executive officer to earn any performance-based cash bonus. The target bonus can be earned if a goal achievement of 100% is obtained; for extraordinary performance in corporate goal achievement, up to 150% of the target bonus for that goal could be awarded. Accordingly, for the Named Executive ~~Officer in 2014,~~Officers, there ~~was~~is the potential to receive up to 150% of ~~his~~their overall bonus target. The Compensation Committee retains broad discretion to modify our target goals at any time, including the methodology for calculating the specific bonus amounts. The Compensation Committee may also, in its sole discretion, determine to either increase annual incentive bonus payouts for extraordinary achievement or to reduce payout if economic and business conditions warrant.

Based on a review of overall Company performance in 2014, Dr. Tidmarsh was awarded a cash bonus of $235,000, which was equal to 100% of the target amount. Key factors that the Compensation Committee considered in awarding this bonus included the Company’s progress in identifying and advancing clinical programs and in-licensing new programs.

Equity Compensation

The executive equity incentive compensation program is designed to promote high performance and achievement of corporate goals by employees on a long-term basis, encourage the growth of shareholder value and allow employees to participate in the long-term success of the Company. As of ~~July 10,~~December 31, 2015, the Company had approximately 4259 employees and ~~five~~four non-employee directors who are eligible to receive equity awards. Under the 2013 Equity Incentive Plan, the Board (or a committee thereof, including the Compensation Committee) may grant stock options, shares of stock, restricted stock units, stock appreciation rights and performance awards. In granting these awards, the Board (or a committee thereof, including the Compensation Committee) may establish any conditions or restrictions it deems appropriate.

To date, our Company has generally granted equity to our executive officers and other employees in the form of stock ~~options and restricted stock awards.~~options. These awards will provide compensation only to the extent that the Company’s stock price appreciates over that time. The Compensation Committee has provided the management team with an equity stake in the business, which we believe aligns the long-term interests of the management team with our shareholders. Because a financial gain from stock options is only possible if the price of the Company’s Common Stock has increased, the Company believes that option grants motivate our executives and other employees to deliver superior performance and focus on behaviors and initiatives that lead to ~~long term~~long-term value creation, which benefits all of the Company’s shareholders. The Company typically grants time-based vesting options, but has also granted performance-based stock awards to ~~each of~~ our Chief Executive Officer and also certain other executives upon occasion.

Stock option award levels are based on option grant guidelines approved by the Board or the Compensation Committee and vary among employees based on their level within the Company and their individual performance. Annual awards of stock options to executives are made as part of the annual review of executive performance, which typically occurs around ~~year-end.~~year end. Newly hired or promoted executives receive their award of stock options on their date of hire/promotion or at the next regularly scheduled Compensation Committee or Board meeting following their hire or promotion date. ~~For 2014, the~~The Compensation Committee ~~targeted~~targets stock option award levels for executives, including the Chief Executive Officer, at or near the 75th percentile of long-term incentive awards of executives with similar roles at similar organizations, based on broad comparative data. The Compensation Committee, in line with the Company’s philosophy to encourage long-term value creation, elected to emphasize the equity portion of each executive’s overall total compensation. The grant of options by the Company is unrelated to any anticipated major announcements made by the Company and is thus not influenced by any material, non-public information that may exist at the time of grant.

In light of these factors, Dr. Tidmarsh was granted an option in April 2014 to purchase up to 181,000 shares of common stock at an exercise price of $10.84. This option vests and becomes exercisable with respect to 25% of the underlying shares on the first anniversary of the date of grant, and then with respect to the remaining shares on a quarterly basis over the next three years.

Following an annual review of compensation that was completed in the first quarter of 2015, Dr. Tidmarsh was ~~awarded~~granted an option to purchase up to 300,000 shares of ~~common stock~~the Company's Common Stock at a price ~~of $19.69, with~~equal to the ~~option grant made contingent upon the approval by~~fair market value of the Company’s ~~shareholders of an amendment to~~Common Stock on the ~~2013 Plan, which is the subject of Proposal 3 herein. If Proposal 3 is approved, the~~grant date, for his performance in 2014. This option ~~grant will vest~~vests and ~~become~~becomes exercisable with

respect to ~~25%~~one-quarter of the underlying shares on the first anniversary of the grant date, ~~of grant,~~ and ~~then with respect to~~ the remaining shares ~~on a quarterly basis~~are to vest ratably each quarter over the next three years, such that the option is fully vested and exercisable on the fourth anniversary of the grant date, subject to ~~Dr. Tidmarsh’s~~his continued service ~~during that time.~~with the Company through each such vesting date. The option was granted and is governed in all respects under the Company’s 2013 Equity Incentive Plan.

~~On September 24, 2013,~~In February 2015, Dr. ~~Tidmarsh~~Chawla was granted ~~1,327,048~~an option to purchase up to 60,000 shares of restricted stock as a replacement of the option that was granted in April 2012, which was equal to 7.5% of our fully diluted, as-converted shares of common stock outstanding at such time. These shares of restricted stock vest as follows: (i) 1/14 vested January 20, 2015; (ii) 1/14 vesting January 20, 2016; (iii) 2/7 vesting on the earlier of the Company’s first drug approval or the trading day following the Company’s Common Stock ~~trading for 20 consecutive trading days~~ at ~~or above $10.50 per share; (iv) 1/7 vesting on~~a price equal to the ~~trading day following~~fair market value of the Company’s Common Stock ~~trading for 20 consecutive days at or above $7.00 per share; (v) 1/7 vesting~~ on the ~~trading day following~~grant date, pursuant to a consultancy arrangement, which such consultancy arrangement was subsequently terminated upon the commencement of his employment in July 2015. The option was fully vested with respect to one-quarter of the underlying shares on the grant date, and the remaining shares are to vest ratably each quarter over the next three years, such that the option is fully vested and exercisable on the third anniversary of the grant date, subject to his continued service with the Company through each such vesting date. The option was granted and is governed in all respects under the Company’s 2013 Equity Incentive Plan.

In connection with his appointment as Chief Financial Officer in April 2015, Mr. Mulroy was granted an option to purchase up to 60,000 shares of the Company’s Common Stock ~~trading for 20 consecutive days~~ at ~~or above $12.50 per share; (vi) 1/7 vesting on~~a price equal to the ~~trading day following~~fair market value of the Company’s Common Stock ~~trading for 20 consecutive days at or above $15.00 per share; and (vii) 1/7 vesting~~ on the ~~trading day following~~grant date. This option vests and becomes exercisable with respect to one-quarter of the underlying shares on the first anniversary of the grant date, and the remaining shares are to vest ratably each month over the next three years, such that the option is fully vested and exercisable on the fourth anniversary of the grant date, subject to his continued service with the Company through each such vesting date. This option was granted outside of the Company’s shareholder-approved equity incentive plan, but is governed in all respects as if granted under the Company’s 2013 Equity Incentive Plan.

In August 2015, Dr. Tidmarsh and Dr. Chawla were each granted an option to purchase up to 40,000 shares of the Company's Common Stock at a price equal to the fair market value of the Company’s Common Stock ~~trading for 20 consecutive days at or above $17.50 per share. In~~on the ~~event~~grant date. The vesting of ~~an involuntary termination or change~~these options is contingent upon the achievement of ~~control,~~a certain performance milestone by the ~~shares shall fully vest and become exercisable. Any unvested shares will be forfeited if vesting conditions are not satisfied within 7 years from the date~~end of grant. On July 22, 2014, the vesting conditions were amended with respect to the tranches numbering (iii), (v), (vi) and (vii) to add a time-based service element so that the awards will vest no sooner than January 1, 2016. On July 15, 2015 the vesting conditions for all unvested restricted stock awards were amended to provide that vesting and delivery shall be deferred until March 15, 2017,2016, each subject to ~~Dr. Tidmarsh’s~~their continued service with the Company through such vesting date, at which time any unvested shares underlying the options will be canceled. These options were granted and are governed in all respects under the Company’s 2013 Equity Incentive Plan.

In August 2015, Dr. Chawla was granted an option to purchase up to 60,000 shares of the Company’s Common Stock at a price equal to the fair market value of the Company’s Common Stock on the grant date. This option vests and become exercisable ratably each month over the next four years, such that the option is fully vested and exercisable on the fourth anniversary of the grant date, subject to his continued service with the Company through each such vesting date. This option was granted and governed in all aspects under the Company’s 2013 Equity Incentive Plan.

Following an annual review of compensation that was completed in December 2015, Dr. Tidmarsh, Dr. Chawla and Mr. Mulroy were granted an option to purchase up to 289,000, 58,700 and 41,500 shares, respectively, of Common Stock at a price equal to the fair market value of the Company’s Common Stock on the grant date for their performance in 2015. These options shall vest and become exercisable with respect to one-quarter of the underlying shares on the first anniversary of the grant date, and the remaining shares are to vest ratably each month over the next three years, such that these options are fully vested and exercisable on the fourth anniversary of the grant date, subject to their continued service with the Company through each such vesting date. These options were granted and are governed in all respects under the Company’s 2013 Equity Incentive Plan.

Employee Benefit Program

We have not historically provided special benefits or perquisites to our Named Executive Officers and did not do so in ~~2014.~~2015. The Named Executive Officers are eligible to participate in all of the Company’s health, welfare, paid time-off and

401(k) retirement savings benefit programs on the same terms as are available to other employees. These benefit programs are designed to enable the Company to attract and retain its workforce in a competitive marketplace. Health, welfare and paid time-off benefits ensure that the Company has a productive and focused workforce through reliable and competitive health and other benefits. The retirement savings plan helps employees save and prepare financially for retirement.

The Company’s retirement savings plan (“401(k) Plan”) is a tax-qualified retirement savings plan, pursuant to which all employees, including the Named Executive Officers, are able to contribute the lesser of 50% of their annual compensation (as defined) or the limit prescribed by the Internal Revenue Service to the 401(k) Plan on a before-tax basis. The Company matches employee contributions to the 401(k) Plan based on each participant’s contribution during the plan year, up to ~~a maximum amount equal to the lesser of: (a)~~ 3.5% of each participant’s annual ~~compensation; and (b) $7,800, $7,650, and $7,500 in 2014, 2013 and 2012, respectively.~~compensation.

Employment and Separation Arrangements

From time to time, we have provided executive officers with certain termination and change in control benefits. Where implemented, the Compensation Committee or Board has approved these termination and change in control benefits in order to maintain market-competitive compensation practices and to mitigate some of the risk that exists for executives working in a biopharmaceutical company at our current stage of development, ~~and~~ where the possibility exists that we may be acquired if our business efforts succeed. These arrangements are intended to retain ~~highly-skilled~~highly skilled executives who have, or who may seek, alternatives that may appear to them to be less risky in terms of the potential loss of their position following a merger or sale, particularly where the services of these executive officers may not be required by the acquirer.

A summary of the terms of the arrangements we have with ~~the~~our Named Executive ~~Officer~~Officers and the potential value of payments upon termination or change in control is provided in this proxy statement under the ~~headings “Employment Agreements” and “Payments Upon~~heading “Potential Payments upon Termination or Change in Control.”

Competitive Market Review

In ~~2014,~~2015, the Compensation Committee retained B&B to assist the committee in identifying a selected peer group of companies within the biotechnology/biopharmaceutical industry and with similar identified characteristics to our Company to be used to assess compensation levels for the top senior management positions. B&B was involved with the process of selecting an appropriate peer group for our Company and in collecting and analyzing compensation data of the companies within our peer group. In addition, for some positions, we reviewed other broader market surveys within our industry. While we do not establish compensation levels based solely on comparative data, pay practices at other companies are an important factor that is considered in assessing the reasonableness of compensation and ensuring that our compensation practices are competitive in the marketplace. In compiling the peer group for ~~2014,~~2015, the factors that were identified as providing well-defined comparatives to the Company were market capitalization ($~~150~~400 million to ~~$300~~$850 million), current stage of clinical development or business activity (product(s) in Phase 2 and Phase 3 studies, and/or close to potential commercialization) and number of employees ( < 100). While the Compensation Committee reviewed compensation data pertaining to these companies, it determined that elements such as the Company’s diversity of clinical development activities and the level of executive experience should be significant factors in assessing compensation levels, and certain factors such as number of employees or market capitalization might allow for easy categorization, but were not necessarily the most significant factors in determining the relative need by the Company to recruit highly skilled executives. The 20 companies in the peer group identified by B&B for ~~2014~~2015 are listed below.



Array BioPharma, Inc.	BioCryst Pharmaceuticals, Inc.
Blueprint Medicines Corporation	~~AcelRX~~Dermira, Inc.
Enata Pharmaceuticals, Inc.	~~Actinium Pharmaceuticals,~~Epizyme, Inc.
	~~Ambit Biosciences Corp~~	~~Ampio Pharmaceuticals, Inc.~~
	~~Argos~~Esperion Therapeutics, Inc.	~~Celladon~~Geron Corporation
	~~ChemoCentryx,~~MacroGenics, Inc.	~~Cytokinetics, Incorporated~~
	~~Endocyte, Inc.~~	~~Flexion Therapeutics, Inc.~~
	~~GlycoMimetics, Inc.~~	~~Idera Pharmaceuticals, Inc.~~
	Mirati Therapeutics, Inc.
~~Oncothyreon, Inc.~~Omeros Corporation	OncoMed Pharmaceuticals, Inc.
Otonomy, Inc.	~~Repros~~Raptor Pharmaceuticals Corporation
Repligen Corporation	Revance Therapeutics, Inc.	~~Rigel Pharmaceuticals, Inc.~~
	~~Stemline Therapeutics,~~Sucamtp Pharmaceuticals, Inc.	Synergy Pharmaceuticals Inc.
	~~Threshold Pharmaceuticals,~~TG Therapeutics, Inc.	~~Verastem,~~Xencor, Inc.

Tax Considerations

Deductibility of Executive Compensation. In making compensation decisions affecting our executive officers, the Board has considered our ability to deduct, under applicable federal corporate income tax ~~law~~laws, compensation payments made to executives. Specifically, the Compensation Committee or the Board considered the requirements and impact of Section 162(m) of the Internal Revenue Code, which limits the tax deductibility to us of compensation in excess of $1.0 million in any year for certain executive officers, except for qualified “performance-based compensation” under the Section 162(m) rules. Although the Compensation Committee or the Board may consider the Section 162(m) rules as a factor in determining compensation, these considerations will not necessarily limit compensation to amounts deductible under Section 162(m). In addition, the rules promulgated under Section 162(m) are complicated, and may change from time to time, sometimes with retroactive effect. As such, it cannot be guaranteed that any amounts intended to qualify as ~~“performance based~~“performance-based compensation” under Section 162(m) will so qualify.

Minimum Stock Ownership Requirements

There are no minimum stock ownership guidelines for our executives or employees, although senior members of our management team are encouraged and expected to have a significant direct interest in the value of our Common Stock through the receipt of equity awards and/or open market purchases, as the case may be. We strive to design our compensation program to stress long-term ownership in Company equity as the means of best aligning the interests of our executives with those of our shareholders.

~~Report of the~~ Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on this review and discussion, the Compensation Committee recommended that the foregoing Compensation Discussion and Analysis be included in this ~~Proxy Statement.~~proxy statement.

Submitted by the Compensation Committee

~~Saiid Zarrabian, Chairman~~

Craig A. Johnson, Chairman

Laura L. ~~Douglas~~

~~Kevin C. Tang~~Douglass

Summary Compensation Table

The following tables and descriptive materials set forth information concerning compensation earned for services rendered to us by our Named Executive ~~Officer~~Officers during 2015, 2014 ~~2013~~ and ~~2012.~~

2013.

Name and Principal Position Year Salary
Option
Awards (1)

Non-Equity
Incentive Plan Compensation (2)

All Other
Compensation
Total
George F. Tidmarsh, M.D., Ph.D. 2014 $ 470,000
$ 1,936,979
$ 235,000
$ 63,930
$ 2,705,909
President and Chief Executive Officer 2013 $ 420,000
$ —
$ 105,000
$ 70,827
$ 595,827
2012 $ 226,462
$ 30,347,572
$ —
$ —
$ 30,574,034



Name and Principal Position	Year	Salary		Options Awards⁽¹⁾		Non-Equity Incentive Plan Compensation⁽²⁾		All Other Compensation⁽³⁾		Total
George F. Tidmarsh, M.D., Ph.D., President, Chief Executive Officer and Secretary	2015	$	525,000	$	14,871,700	$	223,000	$	18,228	$	15,637,928
	2014	$	470,000	$	1,936,979	$	235,000	$	63,930	$	2,705,909
	2013	$	420,000	—		$	105,000	$	70,827	$	595,827
Lakhmir S. Chawla, M.D., Chief Medical Officer⁽⁴⁾	2015	$	190,000	$	5,190,689	$	119,000	$	52,588	$	5,552,277
Dennis M. Mulroy, Chief Financial Officer⁽⁵⁾	2015	$	236,513	$	2,172,844	$	72,000	$	9,376	$	2,490,733



~~(1)~~1.	This column represents the net aggregate ~~grant-date~~grant date fair value, computed in accordance with Financial Accounting Standards Board (“~~FASB~~ ”)(FASB) Accounting Standard Codification (“ ~~ASC~~ ”)(ASC) Topic 718, for all stock options and awards ~~granted to the Named Executive Officer~~granted. In 2015, this includes options awarded in February 2015 for 2014 ~~2013~~performance, options awarded in December 2015 for 2015 performance, new hire options awarded in 2015 and ~~2012.~~other options awarded in 2015, all of which are described under “Equity Compensation,” above. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The assumptions used in calculating the fair value of the stock options and awards can be found under Note 76 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2014.~~2015. For additional information on stock options awarded, ~~to the Named Executive Officer in 2014 and in prior years,~~ see below under “Outstanding Equity Awards at Year-End.” These amounts reflect the net grant date fair value for these stock options and awards and do not necessarily correspond to the actual value that will be realized by the Named Executive Officer.


~~(2)~~2.	The amounts listed represent cash awards earned for the year under the Company’s bonus program.

The amounts in 2015 include the Company contributions to the 401(k) plans for Dr. Tidmarsh, Dr. Chawla and Mr. Mulroy in the amount of $15,806, $4,750 and $7,000, respectively, and life insurance premiums paid by the Company for Dr. Tidmarsh, Dr. Chawla and Mr. Mulroy in the amount of $2,422, $338 and $2,376, respectively. In addition, Dr. Chawla received relocation expenses covered by the Company in the amount of $47,500.


4.	Dr. Chawla joined the Company in July 2015 with an initial annual salary of $380,000.


5.	Mr. Mulroy joined the Company in April 2015 with an initial annual salary of $320,000.

Grants of Plan-Based Awards Table

The following table sets forth certain information regarding grants of plan-based awards ~~to the Named Executive Officer~~ during ~~year 2014.~~

2015.


Name	Grant Date	All Other Option Awards: Number of Securities Underlying Options	Exercise Price of Option Awards ($/Sh)	Grant Date Fair Value of Option Awards(1)	Grant Date	Estimated Possible Payout Under Equity Incentive Plan Awards⁽¹⁾			All Other Option Awards: Number of Securities Underlying Options	Exercise Price of Option Awards ($/Sh)		Grant Date Fair Value of Option Awards⁽²⁾
Name					Grant Date	Threshold	Target	Maximum		Exercise Price of Option Awards ($/Sh)		Grant Date Fair Value of Option Awards⁽²⁾
Name	4/3/2014	181,000	td0.84	td,936,979	2/23/2015	—			300,000⁽⁴⁾	$	19.69	$	6,860,870
					8/31/2015	—	40,000		—	$	35.58	$	240,609
					12/21/2015	—			289,000⁽⁵⁾	$	28.24	$	7,770,221
Lakhmir S. Chawla, M.D.					2/6/2015	—			60,000⁽⁶⁾	$	17.34	$	1,329,529
					8/31/2015	—	40,000		—	$	35.58	$	240,609
					8/31/2015	—			60,000⁽⁷⁾	$	35.58	$	2,042,309
					12/21/2015	—			58,700⁽⁵⁾	$	28.24	$	1,578,242
Dennis M. Mulroy⁽³⁾					12/21/2015	—			41,500⁽⁵⁾	$	28.24	$	1,115,793



~~(1)~~1.	These equity incentive plan awards consist of performance-based stock options. The number of shares issuable will range from 0% to 100% based on the achievement of patient enrollment related to the Phase 3 clinical trial for the LJPC-501 program, a 17-month performance period.

This column reflects the aggregate grant date fair value of equity awards granted in ~~2014~~2015 and calculated in accordance with FASB ASC 718, excluding the effect of estimated forfeitures. The assumptions used in calculating the fair value of the stock options and awards can be found under Note 56 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2015.


3.	In April 2015, the Company made a stock option grant of 60,000 shares of Common Stock with an exercise price of $18.23 and grant date fair market value of $1,057,051. This grant was awarded as an Inducement Grant outside of the 2013 Equity Plan and, therefore, is not included in the above Plan-Based Awards table.


4.	These options were awarded in February 2015 for performance in calendar year 2014.


5.	These options were awarded in December 2015 for performance in calendar year 2015.


6.	These options were awarded in February 2015 pursuant to Dr. Chawla’s prior consultancy arrangement with the Company.


7.	These options were awarded in August 2015 for performance in calendar year 2015.

Outstanding Equity Awards at ~~2014~~2015 Year End

~~We effected a 1-for-50 reverse stock split on January 14, 2014. The information set forth in the table below is listed on a post-split basis.~~


											Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date (1)	Number of Unearned Shares, Units or Other Rights that have not Vested (#)		Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested ($)		Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options⁽²⁾		Option Exercise Price ($)		Option Expiration Date⁽¹⁾		Number of Unearned Shares, Units or Other Rights that have not Vested (#)	Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested($)
George F. Tidmarsh, M.D., Ph.D.	—	181,000	(2)	$	10.84	4/3/2024	1,137,469	(3)	$	20,986,303	67,877	113,123	(3)	—		$	10.84	4/3/2024		—	—
											—	300,000	(3)	—		$	19.69	2/23/2025		—	—
											—	—		40,000	(2)	$	35.58	8/31/2025		—	—
											—	289,000	(4)	—		$	28.24	12/21/2025		—	—
											—	—		—		—		—		1,042,679	$	28,152,333
Lakhmir S. Chawla, M.D.											26,250	33,750	(5)	—		$	17.34	2/6/2025		—	—
											5,000	55,000	(6)	—		$	35.58	8/31/2025		—	—
											—	—		40,000	(2)	$	35.58	8/31/2025		—	—
											—	58,700	(4)	—		$	28.24	12/21/2025	��	—	—
Dennis M. Mulroy											—	60,000	(4)	—		$	18.23	4/6/2025		—	—
											—	41,500	(4)	—		$	28.24	12/21/2025		—	—



~~(1)~~1.	All stock options expire ten years from the date of grant.

~~(2)~~
2.	Equity incentive plan awards consist of performance-based stock options. The number of shares issuable will range from 0% to 100% based on the achievement of patient enrollment related to the Phase 3 clinical trial for the LJPC-501 program, a 17-month performance period.


3.	The stock option vests and becomes exercisable with respect to 25% of the underlying shares on the one-year anniversary of the grant date and then vests and becomes exercisable ratably on a quarterly basis over the next three ~~years thereafter.~~years.


~~(3)~~4.	~~See the description~~The stock option vests and becomes exercisable with respect to 25% of the ~~vesting conditions~~underlying shares on the one-year anniversary of the ~~restricted~~grant date and then vests and becomes exercisable ratably on a monthly basis over the next three years.


5.	The stock option vests and becomes exercisable with respect to 25% of the underlying shares on the date of grant ~~described under “Equity Compensation”, above.~~and then vests and becomes exercisable ratably on a quarterly basis over the next three years.


6.	The stock option vests and becomes exercisable with respect to the underlying shares ratably on a monthly basis over four years after the grant date.

Option Exercises and Stock Vested



	Options Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)⁽¹⁾	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)
George F. Tidmarsh, M.D., Ph.D.	—	—	94,790	$	1,894,852
Lakhmir S. Chawla, M.D.	—	—	—	—
Dennis M. Mulroy	—	—	—	—


1.	Value realized on exercise of option awards is computed by determining the difference between the closing market price of our Common Stock on The NASDAQ Global Select Market on the dates of exercise and the exercise price per share exercised.

~~Our Named Executive Officer did~~

Pension Benefits

We do not ~~exercise~~maintain any ~~stock options or have any shares of stock that vested in 2014.~~pension benefits.

Non-qualified Defined Contribution and Other Non-qualified Deferred Compensation Plans

We do not maintain a defined benefit pension plan or a ~~nonqualified~~non-qualified deferred compensation plan.

Potential Payments upon Termination or Change in Control

Employment Agreements

The Company entered into an employment agreement with Dr. Tidmarsh on January 19, 2012. The annual base salary was $240,000 for the first year of employment with the Company and was increased to $420,000 on the ~~one-year~~first anniversary of the employment start date. Presently, Dr. Tidmarsh’s base salary is $557,000 annually. The employment agreement does not provide for any severance or other benefits upon a change of control or any termination of his employment. Under the agreement, an option to purchase the number of shares of Common Stock equal to 7.5% of the Company’s fully diluted, as-converted shares of Common Stock was awarded (the “First Option”), subject to the terms and conditions of any applicable award agreements and other restrictions and limitations generally applicable to Common Stock or equity awards held by Company executives or otherwise imposed by law. Subject to applicable terms and conditions, the First Option was to vest with respect to 25% of the underlying shares on the one-year anniversary of the employment start date, with the remainder vesting monthly, in equal monthly installments, over the three years thereafter. The First Option was exercisable at a price equal to $3.00 per share of Common Stock. The First Option was canceled on September 24, ~~2013. As~~2013, and as a replacement for the First Option, Dr. Tidmarsh received shares of restricted ~~stock as described under “Equity Compensation”, above.~~stock. This award accelerates upon any termination of Dr. Tidmarsh’s employment without cause or if he elects to terminate his employment with good reason, as shown in the table below.

The Company entered into an employment agreement with Dr. Chawla on July 1, 2015. ~~Dr. Chawla receives~~The agreement provided for an ~~annual~~initial salary of $380,000, which has been subsequently increased to $420,000, and isprovides that Dr. Chawla will be eligible for a target bonus in an amount equal to 35% of his then-current annual base salary. Dr. Chawla received an option to purchase a total of 60,000 shares of the Company’s Common Stock in February 2015 pursuant to a consultancy arrangement. The option was fully vested with respect to one quarter of the underlying shares on the date of grant, and the remaining shares are to vest quarterly thereafter over the next three years. The option was granted and governed in all respects under the Company’s 2013 Equity Incentive Plan.

The Company entered into an employment agreement with Mr. Mulroy on April 6, 2015. ~~Mr. Mulroy receives~~The agreement provided for an ~~annual~~initial salary of $320,000, which has been subsequently increased to $350,000, and isprovides that Mr. Mulroy will be eligible for a target bonus in an amount equal to 35% of ~~his~~the then-current annual base salary. In connection with his appointment as Chief Financial Officer, Mr. Mulroy was granted an option to purchase up to 60,000 shares of the Company’s Common Stock (the “Inducement Option”). The Inducement Option has an exercise price equal to the fair market value of the Company’s Common Stock on the date of the grant (the “Inducement Grant Date”). The Inducement Option vests and becomes exercisable: (i) with respect to 15,000 shares, on the first anniversary of the Inducement Grant Date; and (ii) with respect to the remaining shares, ratably each month over the subsequent three years, such that the Inducement Option will be fully vested and exercisable on the fourth anniversary of the Inducement Grant Date. The Inducement Option was granted outside of the Company’s shareholder-approved equity incentive plans, but is governed in all respects as if granted under the Company’s 2013 Equity Incentive Plan.

The following table sets forth information regarding potential payments that would have been made to our Named Executive ~~Officer~~Officers upon various termination or change in control events assuming such events occurred as of December 31, ~~2014.~~

2015.


	Without Cause or With Good Reason		Without Cause or With Good Reason Within Three Months Before or 12 Months After a Change in Control
Name					Without Cause or With Good Reason		Without Cause or With Good Reason Within Three Months Before or 12 Months After a Change in Control
George F. Tidmarsh, M.D., Ph.D.
Severance (1)	$	—	$	—	$	—	$	—
Benefit continuation	—		—		—		—
Accelerated vesting of stock awards (2)	20,986,303		20,986,303		—		32,173,401
Total	$	20,986,303	$	20,986,303	$	—	$	32,173,401
Lakhmir S. Chawla, M.D.
Severance⁽¹⁾					$	—	$	—
Benefit continuation					—		—
Accelerated vesting of stock awards⁽²⁾					—		326,025
Total					$	—	$	326,025
Dennis M. Mulroy
Severance⁽¹⁾					$	—	$	—
Benefit continuation					—		—
Accelerated vesting of stock awards⁽²⁾					—		523,200
Total					$	—	$	523,200



~~(1)~~1.	~~Dr. Tidmarsh’s~~The executive officers' employment offer ~~letter does~~letters do not provide for severance benefits upon ~~his~~ termination, with or without a change of control. However, pursuant to the terms of ~~a restricted~~the stock ~~award, Dr. Tidmarsh is~~options and equity awards, the executive officers, are entitled to accelerated vesting of ~~his~~their equity ~~award~~awards in certain circumstances, as set forth in this table.

~~(2)~~
2.	Represents the value of in-the-money, unvested equity awards that would have accelerated if the Named Executive ~~Officer was~~Officers were terminated on December 31, ~~2014~~2015, based on the closing price of our Common Stock of ~~$18.45~~$27.00 on December 31, ~~2014.~~2015.

Director Compensation

Our employee directors do not receive any compensation for their ~~service as members of our Board.~~

Board service.

Director Compensation Table - ~~2014~~2015

The table below sets forth the total compensation paid to our non-employee directors for ~~2014. In 2014,~~2015. Mr. Tang elected to waive all cash compensation for his service as a director.


Name	Fees Earned or Paid in Cash		Stock Awards		Options Awarded (1)		Total		Fees Earned or Paid in Cash		Stock Awards	Options Awarded⁽¹⁾⁽²⁾		Total
Kevin C. Tang ~~(2)~~(3)	$	—	$	—	$	166,845	$	166,845	—		—	$	475,136	$	475,136
Laura L. Douglass ~~(3)~~(4)	$	51,500	$	—	$	205,674	$	257,174	$	60,000	—	$	475,136	$	535,136
Craig A. Johnson ~~(4)~~(5)	$	53,750	$	—	$	205,674	$	259,424	$	60,000	—	$	475,136	$	535,136
Robert H. Rosen ~~(5)~~(6)	$	17,500	$	—	$	153,006	$	170,506	$	60,000	—	$	475,136	$	535,136
Saiid Zarrabian ~~(6)~~(7)	$	70,000	$	—	$	205,674	$	275,674	$	38,167	—	$	195,823	$	233,990



~~(1)~~1.	This column reflects the aggregate grant date fair value of equity awards granted in ~~2014~~2015 and calculated in accordance with FASB ASC 718, excluding the effect of estimated forfeitures. ~~Assumptions~~The assumptions used in calculating the ~~calculations~~fair value of the stock options and awards can be found under Note 6 to the Financial Statements in our Annual Report on Form 10-K for ~~these amounts are set forth in~~ the ~~notes to our financial statements included in this report.~~year ended December 31, 2015.


~~(2)~~2.	Each non-employee director was granted 10,000 options on February 23, 2015 with an exercise price of $19.69 for a grant date fair value of $195,823 for their service in 2014 and 10,000 options were granted on December 21, 2015 with an exercise price of $28.24 for a grant date fair value of $279,313 for their service in 2015.


3.	As of December 31, ~~2014,~~2015, Mr. Tang held option awards representing the right to acquire a total of ~~18,000~~38,000 shares of ~~common stock.~~Common Stock. In addition, Mr. Tang has elected to waive all cash compensation for his service as a director.

~~(3)~~
4.	As of December 31, ~~2014,~~2015, Ms. Douglass held option awards representing the right to acquire a total of ~~37,000~~57,000 shares of ~~common stock.~~Common Stock.


~~(4)~~5.	As of December 31, ~~2014,~~2015, Mr. Johnson held option awards representing the right to acquire a total of ~~37,000~~57,000 shares of ~~common stock.~~Common Stock.


~~(5)~~6.	As of December 31, ~~2014,~~2015, Mr. Rosen held option awards representing the right to acquire a total of ~~18,000~~38,000 shares of ~~common stock.~~Common Stock.


~~(6)~~7.	Mr. Zarrabian resigned as a director of the Company effective August 19, 2015. As of December 31, ~~2014,~~2015, Mr. Zarrabian ~~held~~holds no option ~~awards representing the right to acquire a total of 37,000 shares of common stock.~~awards.

Director Compensation

Retainers and Fees for ~~2014~~2015. Directors who are also our employees receive no extra compensation for their service on the Board. In ~~2014,~~2015, our non-employee directors received an annual fee of ~~$35,000,~~$60,000, which is paid quarterly. The Chairman of the Board, Mr. Tang, has elected to waive all cash compensation for his service as a director. In 2014, the chairman of the audit committee received an annual fee of $12,000, the chairman of the compensation committee received an annual fee of $10,000 and the chairman of the corporate governance and nominating committee received an annual fee of $6,000. In 2014, Laura L. Douglass also received an additional $11,000 in fees for sitting on committees, Craig A. Johnson received an additional $8,000 in fees for sitting on committees and Saiid Zarrabian received an additional $15,000 in fees for his time spent as Chairman of the Board from January through April of 2014 and $9,000 in fees for sitting on committees.

Option Grants for ~~2014~~2015. Each of our non-employee directors is eligible to automatically receive, upon becoming a non-employee director, a one-time grant of a non-qualified stock option under the 2013 Plan in an amount to be determined by the Board at an exercise price equal to the fair market value of a share of the Common Stock on the date of grant. These non-employee director options have a term of 10 years and vest with respect to 1/3^rd of the underlying shares on the one-year anniversary of the grant and with respect to ~~1/12~~^ththe remainder of the underlying shares on a quarterly basis for two years thereafter. There were ~~two~~no such awards granted in ~~2014.~~2015. Each non-employee director receives an additional grant annually of a non-qualified stock option in an amount to be determined by the Board. These non-employee director options have a term of 10 years and vest fully on the one-year anniversary of the grant. The exercise price for these additional non-employee director options is the fair market value of our Common Stock on the date of their grant. All outstanding non-employee director options vest in full immediately prior to any change in control. Each non-employee director is also eligible to receive additional options under the 2013 Plan at the discretion of the Board. These options vest and become exercisable pursuant to the 2013 Plan and the terms of the option grant. ~~No such discretionary options were granted in year 2014.~~

~~2015.~~For ~~2015,~~their service in 2014, each non-employee ~~directors other than Mr. Tang will receive an annual cash retainer of $60,000. Mr. Tang has elected to waive all cash compensation for his service as a director. Additionally,~~director was awarded in February 2015 an option to purchase up to 10,000 shares of Common Stock at $19.69 per share, a price per share equal to the fair value of the Common Stock on the date of grant. In December 2015 each non-employee director was awarded an option to purchase up to 10,000 shares of Common Stock at $28.24 per share, a price per share equal to the fair value of the Common Stock on the date of ~~grant.~~grant for their service in 2015.

Certain Relationships and Related-Party Transactions

Pursuant to our Code of Ethics, our executive officers, directors and employees must disclose transactions involving actual or apparent conflicts of interest, such as related-party transactions, to the ~~Chairperson~~Chairman of the Audit Committee. Additionally, the Audit Committee is responsible for review and approval of all related-party transactions in which any officer, director or shareholder has a direct or indirect interest and would be required to be disclosed under Item 404(a) of SEC Regulation S-K, and has written policies and procedures for reviewing, approving or ratifying any transaction required to be reported under Item 404(a) of SEC Regulation S-K. In reviewing related-party transactions, the Audit Committee evaluates any transaction in which a “related person” (as defined in Item 404(a) of SEC Regulation S-K) was or is to be a participant and the amount involved exceeds $120,000, and in which the related person had or will have a direct or indirect material interest. The Audit Committee also will consider whether the proposed terms are at least as favorable to the Company as could be obtained from unaffiliated third parties and will confirm that there is a bona fide business purpose for the transaction.

~~No director or executive officer, nor any beneficial holder of more than five percent of our outstanding capital stock, nor any immediate family member~~During the year ended December 31, 2015, the Company entered into a services agreement with a third party that is controlled by investment funds affiliated with the Chairman of the ~~foregoing, had~~Company’s Board. Pursuant to the services agreement, the Company provides certain services to this related party, including, but not limited to, research and development and clinical trial design and management for the project undertaken. In exchange for providing such services, the Company receives payments at a negotiated, arms-length rate that has been reviewed and approved by the Company’s Audit Committee. As a result, the consideration received by the Company for its services is considered to be no less favorable to the Company than comparable terms that the Company could obtain from an unaffiliated third party in an arms-length transaction. The services

agreement may be canceled by either party upon 60 days’ written notice to the other party.

During the year ended December 31, 2015, the Company recognized approximately $1.1 million of contract revenue for services and costs provided under the services agreement.

In addition, the Company and the Company’s Chief Executive Officer hold a non-voting profit interest in the related party, which provides the potential to receive a portion of the future distributions of profits, if any, ~~material interest, direct or indirect, in any reportable transaction with us during~~that may be distributed by the ~~2014 year, or any reportable business relationship with us during such time.~~third party entity.

Equity Compensation Plan Information

The following table provides information as of December 31, ~~2014~~2015 with respect to shares of our Common Stock that may be issued under our equity compensation plans. ~~We effected a 1-for-50 reverse stock split on January 14, 2014. The information set forth in the table below is listed on a post-split basis.~~


Plan Category	Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)	Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity compensation plans approved by security holders	618,900	(1)	$	9.54	478,304	2,258,685	(1)	$	22.11	786,525
Equity compensation plans not approved by security holders	—		$	—	—	60,000	(2)	$	18.23	—
Total	618,900		$	9.54	478,304	2,318,685		$	22.01	786,525

6. RULES APPLICABLE TO AWARDS

(a) All Awards

(1) Award Provisions. The Administrator will determine the terms of all Awards, subject to the limitations provided herein. By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant agrees to the terms of the Award and the Plan. Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.

(2) Term of Plan. No Awards may be made after September 24, 2023, although previously granted Awards may continue beyond that date in accordance with their terms.

(3) Transferability. Neither ISOs nor, except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3), other Awards may be transferred other than by will or by the laws of descent and distribution, and during a Participant’s lifetime ISOs (and, except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3), other Awards requiring exercise) may be exercised only by the Participant. The Administrator may permit Awards, other than ISOs, to be transferred by gift, subject to such limitations as the Administrator may impose.

(4) Vesting, Etc. The Administrator may determine the time or times at which an Award will vest or become exercisable and the terms on which an Award requiring exercise will remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply:

(A) Immediately upon the cessation of the Participant’s Employment and except as provided in (B) and (C) below, each Award requiring exercise that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate, and all other Awards that are then held by the Participant or by the Participant’s permitted transferees, if any, to the extent not already vested will be forfeited.

(B) Subject to (C) and (D) below, all Stock Options and SARs held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of three months or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon terminate.

(C) All Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the Participant’s death, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period ending with the first anniversary of the Participant’s death or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon terminate.

(D) All Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation of Employment if the Administrator, in its sole discretion, determines that such cessation of Employment has resulted for reasons which cast such discredit on the Participant as to justify immediate termination of the Award.

(5) Taxes. The delivery, vesting or retention of Stock under an Award is conditioned upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award. The Administrator will prescribe such rules for the withholding of taxes as it deems necessary. The Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax withholding requirements (but not in excess of the minimum withholding required by law).

(6) Dividend Equivalents, Etc. The Administrator may provide for the payment of amounts in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award. Any entitlement to dividend equivalents or similar entitlements shall be established and administered consistent either with exemption from, or compliance with, the requirements of Section 409A.

~~A-2~~

(7) Rights Limited. Nothing in the Plan will be construed as giving any person the right to continued employment or service with the Company or its Affiliates, or any rights as a shareholder except as to shares of Stock actually issued under the Plan. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant.

(8) Section 162(m). This Section 6(a)(8) applies to any Performance Award intended to qualify as performance-based for the purposes of Section 162(m) other than a Stock Option or SAR. In the case of any Performance Award to which this Section 6(a)(8) applies, the Plan and such Award will be construed to the maximum extent permitted by law in a manner consistent with qualifying the Award for such exception. With respect to such Performance Awards, the Administrator will pre-establish, in writing, one or more specific Performance Criteria no later than 90 days after the commencement of the period of service to which the performance relates (or at such earlier time as is required to qualify the Award as performance-based under Section 162(m)). Prior to grant, vesting or payment of the Performance Award, as the case may be, the Administrator will certify whether the applicable Performance Criteria have been attained and such determination will be final and conclusive. No Performance Award to which this Section 6(a)(8) applies may be granted after the first meeting of the shareholders of the Company held in the fifth year following the year in which the shareholders last approved the list of possible performance measures specified in the definition of “Performance Criteria” until the listed performance measures set forth in the definition of “Performance Criteria” (as originally approved or as subsequently amended) have been resubmitted to and reapproved by the shareholders of the Company in accordance with the requirements of Section 162(m) of the Code, unless such grant is made contingent upon such approval.

(9) Coordination with Other Plans. Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Affiliates. For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or its Affiliates may be settled in Stock (including, without limitation, Unrestricted Stock) if the Administrator so determines, in which case the shares delivered shall be treated as awarded under the Plan (and shall reduce the number of shares thereafter available under the Plan in accordance with the rules set forth in Section 4). In any case where an award is made under another plan or program of the Company or its Affiliates and such award is intended to qualify for the performance-based compensation exception under Section 162(m), and such award is settled by the delivery of Stock or another Award under the Plan, the applicable Section 162(m) limitations under both the other plan or program and under the Plan shall be applied to the Plan as necessary (as determined by the Administrator) to preserve the availability of the Section 162(m) performance-based compensation exception with respect thereto.

(10) Section 409A. Each Award shall contain such terms as the Administrator determines, and shall be construed and administered, such that the Award either (i) qualifies for an exemption from the requirements of Section 409A, or (ii) satisfies such requirements.

(11) Certain Requirements of Corporate Law. Awards shall be granted and administered consistent with the requirements of applicable California law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case, as determined by the Administrator.

(b) Awards Requiring Exercise

(1) Time And Manner Of Exercise. Unless the Administrator expressly provides otherwise, an Award requiring exercise by the holder will not be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the Administrator), which may be an electronic notice, signed (including electronic signature in form acceptable to the Administrator) by the appropriate person and accompanied by any payment required under the Award. If the Award is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that the person exercising the Award has the right to do so.

(2) Exercise Price. The exercise price (or the base value from which appreciation is to be measured) of each Award requiring exercise shall be 100% (in the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422, 110%) of the fair market value of the Stock subject to the Award, determined as of the date of grant, or such higher amount as the Administrator may determine in connection with the grant. To the extent the Company has a class of securities listed for trading on the NASDAQ Stock Market, no Award, once granted, may be re-priced other than in accordance with the applicable shareholder approval requirements of NASDAQ. Fair market value shall be determined by the Administrator consistent with the applicable requirements of Section 422 and Section 409A.

~~A-3~~

(3) Payment Of Exercise Price. Where the exercise of an Award is to be accompanied by payment, payment of the exercise price shall be by cash or check acceptable to the Administrator, or, if so permitted by the Administrator and if legally permissible, (i) through the delivery of unrestricted shares of Stock that have a fair market value equal to the exercise price, subject to such minimum holding period requirements, if any, as the Administrator may prescribe, (ii) through a broker-assisted exercise program acceptable to the Administrator, (iii) by other means acceptable to the Administrator, or (iv) by any combination of the foregoing permissible forms of payment. The delivery of shares in payment of the exercise price under clause (i) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe.

(4) Maximum Term. Awards requiring exercise will have a maximum term not to exceed ten (10) years from the date of grant (five (5) years from the date of grant in the case of an ISO granted to a ten-percent shareholder described in Section 6(b)(2)).

7. EFFECT OF CERTAIN TRANSACTIONS

(a) Mergers, etc. Except as otherwise provided in an Award, the following provisions shall apply in the event of a Covered Transaction:

(1) Assumption or Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may provide for the assumption of some or all outstanding Awards or for the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.

(2) Cash-Out of Awards. If the Covered Transaction is one in which holders of Stock will receive a payment (whether cash, non-cash or a combination of the foregoing) upon consummation, then subject to Section 7(a)(5) the Administrator may provide for payment (a ~~“cash-out”~~“cash-out”), with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (A) the fair market value of one share of Stock (as determined by the Administrator in its reasonable discretion) times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award or such portion (in the case of an SAR, the aggregate base value above which appreciation is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and subject to such conditions, as the Administrator determines; provided, that the Administrator shall not exercise its discretion under this Section 7(a)(2) with respect to an Award or portion thereof providing for “nonqualified deferred compensation” subject to Section 409A in a manner that would constitute an extension or acceleration of, or other change in, payment terms if such change would be inconsistent with the applicable requirements of Section 409A.

(3) Other Actions. If the Covered Transaction (whether or not there is an acquiring or surviving entity) is one in which there is no assumption, substitution or cash-out, all outstanding Awards requiring exercise will cease to be exercisable and all Awards providing for the future delivery of Stock (including Stock Units and Performance Awards to the extent consisting of Stock Units) shall expire, in each case after such payment or other consideration, if any, as the Administrator deems equitable in the circumstances, as of the effective time of the Covered Transaction.

(4) Termination of Awards Upon Consummation of Covered Transaction. Each Award will terminate upon consummation of the Covered Transaction, other than the following: (i) Awards assumed pursuant to Section 7(a)(1) above; (ii) Awards converted pursuant to the proviso in Section 7(a)(3) into an ongoing right to receive payment other than Stock; and (iii) outstanding shares of Restricted Stock (which shall be treated in the same manner as other shares of Stock, subject to Section 7(a)(5)).

(5) Additional Limitations. Any share of Stock, cash or other property delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction. For purposes of the immediately preceding sentence, a cash-out under Section 7(a)(2) above or the acceleration of exercisability of an Award under Section 7(a)(3) above shall not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock that does not vest in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

~~A-4~~

(b) Changes in and Distributions With Respect to Stock

(1) Basic Adjustment Provisions. In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure, the Administrator shall make appropriate adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan and to the maximum share limits described in Section 4(c), and shall also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

(2) Certain Other Adjustments. The Administrator may also make adjustments of the type described in Section 7(b)(1) to take into account distributions to shareholders other than those provided for in Section 7(a) and Section 7(b)(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under Section 422, the requirements of Section 409A, and for the performance-based compensation rules of Section 162(m), where applicable.

(3) Continuing Application of Plan Terms. References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.

8. LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is, at the time of delivery, listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act. The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.

9. AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan, the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so at the time of the Award. Any amendments to the Plan shall be conditioned upon shareholder approval only to the extent, if any, such approval is required by law (including the Code and applicable stock exchange requirements), as determined by the Administrator.

10. OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to award a person bonuses or other compensation in addition to Awards under the Plan.

11. MISCELLANEOUS

(a) Waiver of Jury Trial. By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim shall be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.

~~A-5~~

(b) Limitation of Liability. Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of the Company, any Affiliate, or the Administrator, shall be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any interest and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to the Award; provided, that nothing in this Section 11(b) shall limit the ability of the Administrator or the Company, in its discretion, to provide by separate express written agreement with a Participant for a gross-up payment or other payment in connection with any such acceleration of income or additional tax.

12. ESTABLISHMENT OF SUB-PLANS

The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board will establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Administrator’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board deems necessary or desirable. All supplements adopted by the Board will be deemed to be part of the Plan, but each supplement will apply only to Participants within the affected jurisdiction and the Company will not be required to provide copies of any supplement to Participants in any jurisdiction that is not affected.

13. GOVERNING LAW

Except as otherwise provided by the express terms of an Award agreement or under a sub-plan described in Section 12, the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of our based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof will be governed by and construed in accordance with the domestic substantive laws of the State of California without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

~~A-6~~

EXHIBIT A

Definition of Terms

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

“Administrator”: The Board, except that the Board may delegate (i) to one or more of its members (or one or more other members of the Board) such of its duties, powers and responsibilities as it may determine; and (ii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate. In the event of any delegation described in the preceding sentence, the term “Administrator” shall include the person or persons so delegated to the extent of such delegation.

“Affiliate”:: Any corporation or other entity that stands in a relationship to the Company that would result in the Company and such corporation or other entity being treated as one employer under Section 414(b) and Section 414(c) of the Code.

“Award”: Any or a combination of the following:

(i) Stock Options.

(ii) SARs.

(iii) Restricted Stock.

(iv) Unrestricted Stock.

(v) Stock Units, including Restricted Stock Units.

(vi) Performance Awards.

(vii) Cash Awards.

(viii) Awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock.

“Board”: The Board of Directors of the Company.

“Cash Award”: An Award denominated in cash.

“Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect.

“Company”: La Jolla Pharmaceutical Company, a California corporation.

“Covered Transaction”: Any of (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding ~~common stock~~Common Stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction shall be deemed to have occurred upon consummation of the tender offer.

“Employee”: Any person who is employed by the Company or an Affiliate.

~~A-7~~

“Employment”: A Participant’s employment or other service relationship with the Company and its Affiliates. Employment will be deemed to continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to the Company or its Affiliates. If a Participant’s employment or other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates. Notwithstanding the foregoing and the definition of “Affiliate” above, in construing the provisions of any Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms shall be construed to require a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of the Treasury Regulations. The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed a part of the Plan.

“ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422. Each option granted pursuant to the Plan will be treated as providing by its terms that it is to be a non-incentive stock option unless, as of the date of grant, it is expressly designated as an ISO.

“Participant”: A person who is granted an Award under the Plan.

“Performance Award”:: An Award subject to Performance Criteria. The Committee in its discretion may grant Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and Performance Awards that are not intended so to qualify.

“Performance Criteria”:: Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. For purposes of Awards that are intended to qualify for the performance-based compensation exception under Section 162(m), a Performance Criterion will mean an objectively determinable measure of performance relating to any or any combination of the following (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; shareholder return; operating or gross margin; operating income; net income (before or after taxes); net operating income; net operating income after tax; pre-and after-tax income; pre-tax profit; cash flow ~~determined~~(determined in the aggregate or on a per share basis); operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of expense or working capital levels; economic value added (or an equivalent metric); debt reduction; implementation or completion of projects or processes; sales of particular products or services; customer acquisition, retention or satisfaction; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings. A Performance Criterion and any targets with respect thereto determined by the Administrator need not be based upon an increase, a positive or improved result or avoidance of loss. To the extent consistent with the requirements for satisfying the performance-based compensation exception under Section 162(m), the Administrator may provide in the case of any Award intended to qualify for such exception that one or more of the Performance Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.

“Plan”: La Jolla Pharmaceutical Company 2013 Equity Incentive Plan as from time to time amended and in effect.

“Restricted Stock”: Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.

~~A-8~~

“SAR”: A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the fair market value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.

“Section 409A”: Section 409A of the Code.

“Section 422”: Section 422 of the Code.

“Section 162(m)”: Section 162(m) of the Code.

“Stock”: Common Stock of the Company, par value $0.001 per share.

“Stock Option”: An option entitling the holder to acquire shares of Stock upon payment of the exercise price.

“Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.

“Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award.

* * *

~~A-9~~



o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12



x	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:
o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:


	2014		2013		2015		2014
Audit Fees	$	116,603	$	66,500	$	177,656	$	116,603
Audit-Related Fees	62,550		22,560		31,402		62,550
Tax Fees	5,500		5,800		7,910		5,500
Total	$	184,653	$	94,860	$	216,968	$	184,653


	Number of shares	As a percentage of stock outstanding(1)		Number of shares	As a percentage of stock outstanding⁽¹⁾
Outstanding stock options	924,735	3.88	%	2,408,985	8.51	%
Outstanding stock options contingent upon shareholder approval	300,000	1.26	%
Outstanding restricted stock awards and exercised options	10,476	0.04	%	64,790	0.23	%
Total shares issued or subject to outstanding awards as of the Record Date (including options contingent upon shareholder approve)	1,235,211	5.19	%
Total shares available for future awards as of the Record Date	164,789	0.69	%
Total shares issued or subject to outstanding awards as of July 1, 2016				2,473,775	8.74	%
Total shares available for future awards as of July 1, 2016				626,225	2.21	%
Proposed increase in shares available for future awards	2,000,000	8.40	%	1,500,000	5.30	%
Proposed shares available for future awards	1,864,789	7.83	%	2,126,225	7.51	%



	Options Granted	Full-Value Shares Granted	Total Granted	Weighted Average Number of Fully Diluted Shares	Annualized Burn Rate
2012 - 2014	622,000	1,852,000	2,474,000	17,090,000	4.83%



Filed by the Registrant	x	Filed by a Party other than the Registrant	o


1.	To elect up to five directors to serve until the Company’s ~~2016~~2017 Annual Meeting of Shareholders;


2.	To ratify the selection of Squar Milner ~~Peterson, Miranda & Williamson,~~ LLP as the Company’s independent registered public accounting firm for the year ending December 31, ~~2015;~~2016;


3.	To approve an amendment to the Company’s 2013 Equity Incentive Plan to increase the number of shares authorized for issuance thereunder;


4.	To conduct an advisory (non-binding) vote on executive compensation; and


4.5.	To transact any other business that may properly come before the meeting or any adjournment or postponement of the meeting.


A.	You are receiving these proxy materials from us because you were a shareholder at the close of business on the Record Date. As a shareholder on the Record Date, you are invited to attend the Annual Meeting and are entitled to, and requested to, vote on the items of business described in this proxy statement.


A.	A majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting must be represented at the Annual Meeting, either in person or by proxy, to constitute a quorum. A quorum is required to conduct business at the Annual Meeting.


A.	The items of business scheduled to be voted on at the Annual Meeting are as follows:


A.	You may vote all shares of Common Stock owned by you as of the Record Date, including: (1) shares held directly in your name as the shareholder of record; and (2) shares held for you as the beneficial owner through a broker, fiduciary or custodian.


Q.	Is my vote confidential?


Q.	How are votes counted?


Q.	What is a “broker non-vote”?


Q.	What is the difference between holding shares as a shareholder of record and as a beneficial owner?


A.	Most of our shareholders hold their shares of Common Stock through a broker, fiduciary or custodian rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.


Q.	How can I vote my shares without attending the Annual Meeting?


A.	If you return a proxy card that indicates an abstention from voting on all matters, the shares represented will be counted as present for the purpose of determining the presence of a quorum, but they will not be voted on any matter at the Annual Meeting.


A.	Your vote is being solicited on behalf of the Board, and the Company will pay the costs associated with the solicitation of proxies, including preparation, assembly, printing and mailing of this proxy statement.


A.	We intend to announce preliminary voting results at the meeting and publish final results in a Current Report on Form 8-K within four business days following the Annual Meeting.


A.	If you have any additional questions about the Annual Meeting or the ~~proposals~~Proposals presented in this proxy statement, you should contact:



~~(1)~~1.	Percentage outstanding is ~~presented~~calculated on an as-converted, fully diluted basis, which includes the ~~common stock~~Common Stock underlying our issued and outstanding convertible preferred stock and options to purchase Common Stock.



	Options Granted	Full-Value Shares Granted	Total Granted	Average Number of Fully Diluted Shares	Annualized Burn Rate
2013 - 2015	2,389,000	1,790,000	4,179,000	20,055,000	6.95%



Name and Position	Grant Date Fair Value		Number of Options
George F. Tidmarsh, M.D., Ph.D.	$	5,727,969	300,000
President, Chief Executive Officer and Secretary



~~(1)~~1.	Outstanding options to purchase shares of our Common Stock under the La Jolla Pharmaceutical Company 2013 Equity Incentive Plan.



Name and Address	Shares of Common Stock Owned (1)	Shares with Right to Acquire Within 60 Days	Total Beneficial Ownership	Percentage of Common Stock
Greater than 5% Shareholders
Tang Capital Partners, LP (2)	2,622,130	—	2,622,130	17.19	%
FMR LLC (3)	1,106,641	—	1,106,641	7.26	%
RTW Investments, LLC (4)	1,064,247	263,014	1,327,261	8.56	%
Baker Bros. Advisors LP (5)	421,070	799,392	1,220,462	7.60	%
Broadfin Capital, LLC (6)	1,121,370	—	1,121,370	7.35	%
Franklin Resources, Inc. (7)	984,600	—	984,600	6.46	%

Directors and Executive Officers
Kevin C. Tang (2)	2,664,970	6,000	2,670,970	17.51	%
George F. Tidmarsh, M.D., Ph.D.	1,445,086	56,564	1,501,650	9.81	%
Saiid Zarrabian	109,919	23,750	133,669	0	%
Laura L. Douglass	—	23,750	23,750	0	%
Craig A. Johnson	—	23,750	23,750	0	%
Robert H. Rosen	—	6,500	6,500	0	%
Lakhmir S. Chawla, M.D.	—	22,500	22,500	0	%
Dennis M. Mulroy	—	—	—	0	%
All current Directors and Executive Officers as a group	4,219,975	162,814	4,382,789	28.43	%



Name and Address	Shares of Common Stock Owned⁽¹⁾	Shares with Right to Acquire Within 60 Days	Total Beneficial Ownership	Percentage of Common Stock
Greater than 5% Shareholders
Tang Capital Partners, LP⁽²⁾	3,052,130	—	3,052,130	16.72	%
FMR LLC⁽³⁾	2,736,226	—	2,736,226	14.99	%
RTW Investments, LLC⁽⁴⁾	1,084,416	263,029	1,347,445	7.28	%
Visium Balanced Master Fund, Ltd.⁽⁵⁾	1,182,013	—	1,182,013	6.48	%
Broadfin Capital, LLC⁽⁶⁾	1,165,373	—	1,165,373	6.38	%
Franklin Resources, Inc.⁽⁷⁾	965,600	—	965,600	5.29	%

Directors and Executive Officers
Kevin C. Tang⁽²⁾	3,052,130	22,000	3,074,130	16.82	%
George F. Tidmarsh, M.D., Ph.D.	1,447,086	214,316	1,661,402	9.00	%
Lakhmir S. Chawla, M.D.	485	51,250	51,735	*
Laura L. Douglass	—	40,250	40,250	*
Craig A. Johnson	—	40,250	40,250	*
Robert H. Rosen	—	22,500	22,500	*
Dennis M. Mulroy	—	20,000	20,000	*
Jennifer A. Carver	—	30,941	30,941	*
All Directors and Executive Officers as a group	4,499,701	441,507	4,941,208	26.43	%



~~(1)~~1.	Shares of Common Stock ~~Owned~~owned are based upon the Company’s review of Statement of Beneficial Ownership Filings on Schedules 13D, 13D/A, 13G and 13G/A, unless otherwise indicated. Shares of Common Stock ~~Owned~~owned can vary since the date of such filings.


3.	Based upon a Schedule 13G/A filed with the SEC on February 12, 2016. The Schedule 13G/A was filed jointly by FMR LLC, Abigail P. Johnson and Select Biotechnology Portfolio. The address of the ~~foregoing~~ entities and ~~person~~persons is ~~4747 Executive Drive, Suite 510, San Diego, CA 92121. Mr. Tang is the Chairman of the Board of Directors.~~245 Summer Street, Boston, MA 02210.


~~(3)~~4.	Based upon a Schedule 13G filed with the SEC on February ~~13, 2015.~~11, 2016. The Schedule 13G was filed jointly by FMR LLC, Edward C. Johnson, 3rd, Abigail P. Johnson and Select Biotechnology Portfolio. FMR LLC has sole power to vote and dispose of all 1,106,641 shares. The address of FMR LLC, Edward C. Johnson, 3^rd~~, Abigail P. Johnson and Select Biotechnology Portfolio is 245 Summer Street, Boston, MA 02210.~~
~~(4)~~	~~Based upon a Schedule 13G/A filed with the SEC on February 17, 2015 and information recently provided to the Company. The Schedule 13G/A~~ was jointly filed by RTW Investments, LLC, RTW Master Fund, Ltd. and Roderick Wong. RTW Investments, LLC, RTW Master Fund, Ltd. and Roderick Wong share voting and dispositive power over such shares.The beneficial ownership for RTW Investments, LLC includes approximately 263,029 shares of Common Stock that are potentially issuable upon conversion of shares of the Company’s Series C-1² Convertible Preferred Stock. The address of the foregoing entities and person is 250 West 55^th55th Street, 16^th16th Floor, Suite A, New York, NY 10019.