Key Employee Retention Agreements

March 2006


[Employee] Address City, State Zip


Dear [Employee]:


The purpose of this letter agreement between you and Ligand Pharmaceuticals, Inc. (the "Company") is to document the terms of a retention or stay bonus to which you will become entitled under certain circumstances set forth below.


DEFINITIONS. For purposes of this letter agreement the following
definitions will be in effect:


1. "Involuntary Termination" or "Involuntarily Terminated" means the
termination of your employment with the Company:


(i) upon your involuntary discharge or
dismissal, or


(ii) upon your resignation in connection
with any of the following changes to the terms and conditions of your
employment: (A) a change in your position with the Company which
materially reduces your level of responsibility, (B) a material
reduction in your level of compensation (including base salary, fringe
benefits and participation in non-discretionary bonus programs under
which awards are payable pursuant to objective financial or performance
standards, but excluding equity compensation) or (C) a relocation of
your principal place of employment by more than fifty (50) miles.


In no event shall an Involuntary Termination be deemed to
occur should your employment terminate by reason of death or permanent
disability.


2. "Termination for Cause" means an Involuntary Termination or
resignation of your employment with the Company by reason of your
conviction of any felony or other criminal act, your commission of any
act of fraud or embezzlement, your unauthorized use or disclosure of
confidential or proprietary information or trade secrets of the Company
or its subsidiaries, material violation of Company policy, or any
intentional misconduct on your part which adversely affects the
business or affairs of the Company in a material manner.


STAY BONUS. Provided that you are (a) continuously employed by the Company and available for work (except normal holidays and approved paid time off) (b) maintain a performance rating of fully meets expectations (FME) or better and (c) are not subject to any disciplinary action or performance improvement program, in each case from the date of this letter, up to and including December 31, 2006, you will receive on or before January 15, 2007 a


lump-sum payment equal to [amount] less appropriate tax withholding and other deductions (the "Stay Bonus"). In the event of your Involuntary Termination other than a Termination for Cause prior to December 31, 2006, and provided you have complied with each of the conditions set forth in clauses (a) - (c) above from the date of this letter up to the date of such Involuntary Termination, you will be entitled to receive within 15 calendar days of such Involuntary Termination, in addition to any other benefits to which you may be entitled, the full Stay Bonus in effect at the date of such Involuntary Termination. Notwithstanding the foregoing, should your Involuntary Termination constitute a Termination for Cause, then you shall not be entitled to any portion of the Stay Bonus.


MISCELLANEOUS PROVISIONS


1. Entire Agreement; Amendments. This letter agreement se ...