Exhibit 10.11
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement, dated as of April 30, 1998, by and
between Pharmaceutical Resources, Inc., a New Jersey corporation (the
"Company"), Par Pharmaceutical, Inc., a New Jersey corporation and wholly-owned
subsidiary of the Company ("Par"), and Xxxxxxx X. Xxxxxx ("Executive") amends
the Employment Agreement, dated as of October 4, 1992, as amended from time to
time (the "Employment Agreement"), between the Company, Par and Executive. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Employment Agreement.
WHEREAS, the Company and Lipha Americas, Inc., a Delaware corporation (the
"Purchaser"), have entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated March 25, 1998, providing, among other things, for the
Purchaser and its affiliates to acquire over 38% of the common stock of the
Company;
WHEREAS, Executive has the right to terminate the Employment Agreement for
Employer's material breach as a result of the transactions contemplated by the
Stock Purchase Agreement;
WHEREAS, the Stock Purchase Agreement requires that, as a condition to
closing, that Executive must (i) waive such breach of the Employment Agreement
and agree to continue his employment with the Company, (ii) agree to the
appointment of a new President and Chief Operating Officer of the Company and/or
any of its subsidiaries designated by the Purchaser and relinquish his title and
position as President of the Company and/or its subsidiaries in the event that
the Purchaser elects to make such designation, (iii) vote his shares of common
stock of the Company in favor of the transactions contemplated by the Stock
Purchase Agreement, and (iv) agree not to exercise his unexercised stock options
previously granted for a period of three years and ten business days from the
date of closing of the transactions contemplated by the Stock Purchase
Agreement, notwithstanding that otherwise they would have been exercisable
during this period;
WHEREAS, Executive owes the Company the principal amount of $343,057.38,
plus interest, under Executive's promissory note, dated August 14, 1997 (the
"Note"); and
WHEREAS, in consideration of the foregoing agreements and waivers requested
from Executive, the Company has agreed to forgive the Note over a three-year
period.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the Employment Agreement is hereby amended as
follows:
1. Title. Executive agrees that, effective upon the election by the Board
of Directors of the Company of a designee of the Purchaser as the President and
Chief Operating Officer of the Company and/or any of its subsidiaries and any
such designee duly holding such offices, the Company shall employ Executive in
the capacities of Chairman of the Board and Chief Executive Officer of the
Company and each of its subsidiaries and Executive shall no longer be, or be
entitled or required under the Employment Agreement to be, the President of the
Company and/or any of its subsidiaries to the extent that the Purchaser shall
have so designated.
2. Voting. Executive hereby agrees to vote all of the shares of Common
Stock of the Company owned by him or which he otherwise has the power to vote in
favor of each of the Proposals (as defined in the Stock Purchase Agreement),
including approval of all Nominees (as defined in the Stock Purchase Agreement).
3. Stock Options. Executive hereby agrees not to exercise any of the
unexercised stock options owned by him for a period of three years and 10
business days from the date of closing of the Stock Purchase Agreement without
the prior written consent of the Purchaser, subject to the Closing (as such term
is defined in the Stock Purchase Agreement). Such agreement shall be more fully
set forth in a stock option agreement to be executed and delivered by Executive
and the Company.
4. Consent and Waiver. Executive hereby consents to the transactions
contemplated by the Stock Purchase Agreement, including but not limited to
Sections 7.9 and 7.10 thereof, and agrees that such transactions shall not be
deemed to constitute or cause a breach, violation or default by the Company
under the Employment Agreement. Notwithstanding any thing contained in Section
3.2.6 of the Employment Agreement applicable to the transactions contemplated by
the Stock Purchase Agreement, Executive hereby irrevocably waives his rights to
terminate the Agreement under Section 3.2.6 of the Employment Agreement, solely
with respect to the transactions contemplated by the Stock Purchase Agreement.
5. Note Forgiveness. Commencing on April 30, 1998, the Company shall
forgive the payment of the Note at the rate of one-third of the original
principal amount each year (plus accrued interest on the forgiven portion
thereof), prorated for each month of Executive's employment, as more fully set
forth in an amended and restated promissory note to be executed and delivered by
Executive and the Company in the form attached as Exhibit A hereto.
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6. Effect of Termination on Note Forgiveness. The entire remaining
principal balance of the Note, if any, including accrued interest thereon, shall
be forgiven and canceled, without further action by any party, and Executive
shall have no further liability to any party with respect thereto effective
immediately upon (i) a termination of Executive's employment prior to the
expiration of Executive's term of employment, by Executive for Employer's
Material Breach, or by the Company without Cause, (ii) in the event that the
Company or Executive elects not to extend Executive's term of employment, the
last day of Executive's term of employment, or (iii) the termination of the
Employment Agreement by the Company or Par, whether by rejection, pursuant to 11
U.S.C. Section 365, or similar proceedings. In the event of a termination of
Executive's employment for any other reason, the remaining principal balance of
the Note, including incurred interest thereon, which shall not have been
forgiven through the date of termination of Executive's employment shall remain
outstanding and shall be repaid by Executive according to the terms of the Note.
7. Governing Law. This Amendment to Employment Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York.
8. Continued Effect. Except as modified hereby, the Employment Agreement
remains in full force and effect.
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IN WITNESS WHEREOF, this Amendment to Employment Agreement has been
executed and delivered by the parties hereto as of the date first above written.
PHARMACEUTICAL RESOURCES, INC.
By: /s/ Xxxxxx X'Xxxxxx
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Name: Xxxxxx X'Xxxxxx
Title: Vice President & Chief
Financial Officer
PAR PHARMACEUTICAL, INC.
By: /s/ Xxxxxx X'Xxxxxx
----------------------------------
Name: Xxxxxx X'Xxxxxx
Title: Vice President & Chief
Financial Officer
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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