EXHIBIT 10.3
SEPARATION AND GENERAL RELEASE AGREEMENT
Xxxxxxx X. Xxxx ("Employee") and XXXXXXX COMPANY ("Perrigo") enter into
this Confidential Separation and General Release Agreement ("Agreement") to
resolve all matters related to Employee's employment and separation from
Perrigo.
1. SEPARATION FROM EMPLOYMENT. By executing this Agreement, Employee agrees
to end employment with Perrigo for any and all purposes effective December 15,
2005 (the "Separation Date"), and Employee's employment and all benefits and
privileges associated therewith shall terminate pursuant to the terms of this
Agreement.
2. SEVERANCE. In consideration of Employee's willingness to enter into this
Agreement and end employment as of the Separation Date, Perrigo agrees to
provide Employee with the following discretionary pay and benefits, provided
that Employee (1) signs and returns this Agreement, (2) has otherwise complied
with this Agreement, and (3) allows the seven (7) day revocation period to
expire.
A. SEPARATION PAY. Perrigo will pay Employee the Employee's ending base
salary at regular pay intervals for the period from December 16, 2005
through June 30, 2006, subject to normal payroll taxes and
withholdings. In the event of Employee's death before June 30, 2006,
remaining payments will be made to the surviving spouse of the
Employee or, if none, to the estate of Employee.
B. MIB BONUS. Employee will receive his Fiscal Year 2005 and Fiscal Year
2006 Management Incentive Bonus pursuant to the terms of that plan
when paid to other eligible managers; for Fiscal Year 2006, Employee
will participate in the Consolidated MIB plan, with a target bonus
unchanged from 2005. In the event of Employee's death before the MIB
bonus is paid, the MIB bonus will be paid to Employee's surviving
spouse or, if none, to estate of Employee.
C. BENEFITS. All of Employee's employment benefits shall terminate on
December 15, 2005. However, when Employee and/or Employee's dependents
make a timely COBRA health insurance continuation election, Perrigo
will waive Employee's COBRA health insurance continuation premium from
December 16, 2005, through June 30, 2006. After the COBRA premium
waiver period, Employee shall be responsible for the cost of any
available health insurance continuation coverage.
D. STOCK OPTIONS. Employee's Perrigo stock options will continue to vest
as if Employee remained employed with Perrigo beyond the Separation
Date. All vested options may be exercised at any time prior to the end
of their stated life. This vesting period has been
approved by the Compensation Committee of Xxxxxxx'x Board of
Directors. Employee will continue to be able to participate in the
cashless stock option exercise program. Employee agrees that he will
receive no further stock option grants in Fiscal Years 2005 and 2006.
E. UNEMPLOYMENT. Perrigo and Employee agree that, since Employee will
receive separation pay through June 30, 2006, Employee will not apply
for unemployment benefits before June 30, 2006. Should Employee
receive unemployment benefits during the separation pay period, those
unemployment benefits will be offset against Employee's separation
pay.
F. DIRECTORS & OFFICERS INSURANCE. Perrigo affirms that is Directors &
Officers Insurance covers Employee for claims arising out of
activities that took place before the Separation Date.
Employee acknowledges that the pay and benefits provided in this paragraph 2 of
the Agreement are provided in addition to any amounts/benefits that Employee is
already entitled to receive from Perrigo and satisfy any claims Employee may
have for pay and benefits against Perrigo, except for vested benefits under
qualified retirement plans (including 401(k) and profit sharing) and deferred
compensation plans applicable to Employee.
3. In consideration of all additional discretionary pay and benefits
provided to Employee under the terms of this Agreement, Employee agrees to the
following:
A. RELEASE AND WAIVER OF CLAIMS. Employee releases Perrigo from any and
all legal or equitable claims arising from Employee's association,
employment, or separation from employment with Perrigo. This release
and waiver covers all claims and demands for relief, damages, costs,
expenses, and causes of action of any kind or character, whether known
or unknown, under federal, state, or local statute (including, but not
limited to, claims for notice, retaliation, or race, sex, age,
religion, disability, or national origin discrimination), common law
(including fraud and breach of contract), or equity. This release and
waiver specifically includes any existing claims Employee may have
under the federal Age Discrimination in Employment Act of 1967 (29
USCss."621, et seq.) as of the date of this Agreement. Employee also
waives any right to appeal under Perrigo policies or practices. For
the purposes of this release and waiver, the term "Perrigo" includes
Perrigo, its parent, affiliates, divisions, joint ventures, and
related entities, and all of their respective current and former
Employees, board members, officers, and agents. Employee understands
and agrees that this release and waiver of claims may be pled as a
complete
defense to and provide the basis for summary dismissal of any claim or
entitlement released and waived by it which may be asserted or any
suit or claim against Perrigo (as defined in this paragraph 3.a.).
B. DUTY TO COOPERATE. Employee agrees to cooperate with and assist
Perrigo and its attorneys in defending against any litigation,
arbitration, or other claims which are currently pending, or which may
be brought in the future against Perrigo and/or it's employees,
officers, or directors that involve Employee in any way. Upon
reasonable notice, Employee agrees to make himself available to, and
will in good faith, answer questions, provide information, and prepare
for and/or participate in any discovery procedures, interviews,
testimony, hearings, arbitrations, trials, or other proceedings.
Perrigo will reimburse Employee for any expenses reasonably incurred
in meeting his obligations under this clause and, beyond the
separation pay period, Perrigo will provide Employee with a fair and
reasonable per diem.
C. RETURN OF PERRIGO PROPERTY. All Perrigo property, including but not
limited to the property listed in Employee's August 20, 2003
Noncompetition and Nondisclosure Agreement with Perrigo (attached as
Exhibit A and incorporated in this Agreement by reference) shall be
returned to Perrigo by June 30, 2005. Employee further agrees that
this obligation covers any Perrigo property in any format including
electronic format and Employee agrees he will keep no duplicates or
copies of these materials or records.
D. NON-DISPARAGEMENT. Employee will not, in any manner, publicly or
privately, disparage or impugn the reputation or character of Perrigo
or any of its policies, practices, officers, agents, employees, or
board members. Additionally, Employee will not contact or communicate
with current or former Perrigo officers, agents, employees, board
members, customers, or suppliers, in whole or in part, to discuss or
relate the circumstances of the events which led to the end of
Employee's employment with Perrigo (beyond stating that Employee's
position was eliminated due to a restructuring following the
acquisition of Agis Industries) or to discourage them from working
with Perrigo. Employee shall not improperly disrupt the business
activities of Perrigo and its employees. Upon inquiry to any of
Xxxxxxx'x executive officers or human resources department, Perrigo
will respond that Employee's position was eliminated due to a
restructuring following the acquisition of Agis Industries.
E. RE-EMPLOYMENT. If Employee applies for re-employment with Perrigo or
any entity affiliated with it, Perrigo will be under no obligation to
consider Employee's application.
F. NONCOMPETITION, NONDISCLOSURE, INTELLECTUAL PROPERTY. By entering into
this Agreement, Employee reaffirms the covenants and conditions of
Employee's August 20, 2003 Noncompetition and Nondisclosure Agreement
(attached as Exhibit A) and September 16, 2004 Employee Invention and
Nondisclosure Agreement (attached as Exhibit B). Employee agrees that
both of these agreements are incorporated into this Agreement as if
fully restated in it. Employee agrees that the restrictions,
commitments, and remedies contained in both agreements are reasonable
in scope and duration and further agrees to the following:
i. Expansion of restricted "Company Business" in the August 20, 2003
Noncompetition and Nondisclosure Agreement to include store brand
and value brand OTC drug and nutritional products, and topical
generic prescription pharmaceutical products, which Perrigo is
currently marketing or actively planning to market.
ii. Expansion of the Restriction on the Post-Employment Activities in
the August 20, 2003 Noncompetition and Nondisclosure Agreement as
"Company Business" is redefined in paragraph 3.f.i. above; and
III. For one (1) year following the Separation Date, Employee agrees
not to engage in any business opportunity, including consulting,
that involves the acquisition or divestiture of a product or
business that competes with the "Company Business" as redefined
in paragraph 3.f.i. above, absent Xxxxxxx'x prior written
consent.
iv. For two (2) years following the Separation Date, Employee
specifically agrees not to engage in employment or any business
opportunity (including consulting) with any of the following
Listed Companies or their wholly owned subsidiaries or joint
ventures:
Alpharma LNK
Altana Novartis
G&W OHM/Ranbaxy
Glades PDK Labs
Guardian PFI
Inverness Pharmavite
Ivax PL Development
Xxxxxx Health Products Xxxx
Xxxxxx
v. Should Employee receive an employment offer or entertain any
business opportunity (including consulting) in any way connected
with the Company Business as redefined in paragraph 3.f.i. above,
before acting on any such offer or opportunity, Employee shall
review it with the President of Perrigo who, with reasonable
assurances by Employee and Employee's subsequent employer or
business associate, shall consider allowing Employee to pursue
such offer or opportunity, if, in the sole discretion of the
President, there would not be any material negative impact to
Perrigo.
4. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties and supersedes all previous oral and written agreements, except the
401(k), profit sharing, or stock option agreements, or as otherwise expressly
noted. Further, this Agreement can be modified only by a written agreement
signed by Employee and Xxxxxxx'x Vice President - Human Resources.
5. JUDICIAL MODIFICATION AND SAVINGS CLAUSE. The parties believe this
Agreement to be legally enforceable, and it is the parties' intent that this
Agreement and those incorporated by reference be enforced to the fullest extent
allowed by law. If any portion of this Agreement is found to be invalid or
unenforceable for any reason, any court or other tribunal adjudicating the
rights and duties of the parties under this Agreement shall alter, modify and/or
strike portions of the Agreement so that it will be enforceable to the fullest
extent permitted by law. In the event that any provision of this Agreement (or
any portion thereof) shall be found invalid or unenforceable, the remainder of
that provision and the remainder of this Agreement shall be valid, binding and
enforceable. With specific regard to California, Perrigo agrees that this
Agreement and those incorporated by reference shall not be construed or enforced
to restrain Employee from engaging in a lawful profession, trade, or business.
However, Employee agrees, as with any breach of this Agreement, that Perrigo is
entitled to invoke the remedies in paragraph 8.b. of this Agreement should the
noncompetition restrictions contained in Employee's August 20, 2003
Noncompetition and Nondisclosure Agreement, as modified above in paragraph 3, be
breached by Employee in California.
6. BINDING EFFECT. This Agreement shall be binding upon the parties to this
Agreement and their heirs, administrators, successors, and assigns and also to
Employee's spouse and family. Should Employee be required to forfeit part of the
consideration described above in paragraph 2 due to the Employee's breach of the
Agreement, the agreement itself shall continue to be in full force and effect
and be fully binding on Employee.
7. GOVERNING LAW. This Agreement shall be construed according to the laws
of the State of Michigan with venue and jurisdiction limited to the Circuit
Court for Kent County, Michigan.
8. REMEDIES. Employee acknowledges that the restrictions and covenants
contained in this agreement are reasonable and necessary for the protection of
the legitimate business interests of Perrigo and that any violation of these
restrictions or covenants may cause substantial and irreparable harm to Perrigo.
As a consequence thereof, Employee agrees:
A. That Perrigo is entitled, in addition to other remedies available at
law or equity, to preliminary and permanent injunctive relief to
secure the specific performance of these covenants and to prevent a
breach or contemplated breach of this Agreement
B. As a partial remedy to Perrigo, if Employee in any way violates the
covenants in paragraph 3.f.iv. concerning the Listed Companies or
materially violates the covenants in paragraph 3.d., Perrigo shall be
entitled to immediately stop making and revoke any remaining
separation pay, MIB bonus, benefits, and unvested stock options.
The forfeiture remedy is in addition to and does not displace any remedies
lawfully available to Perrigo should Employee breach any covenant contained in
this Agreement; Perrigo reserves all remedies available at law or equity except
as expressly noted in this Agreement. With regard to the non-disparagement
covenants in paragraph 3.d., Perrigo will not invoke the remedies in paragraph
8.a. and 8.b. against Employee without first giving Employee the opportunity to
cure, unless Employee makes a statement(s) that cause Perrigo direct and
significant harm. Employee acknowledges that the existence of any claim or cause
of action against Perrigo by Employee, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by Perrigo of the
restrictions and provisions contained in this Agreement.
9. VOLUNTARY EXECUTION. Employee acknowledges that Employee has read this
Agreement and those incorporated by reference , understands their terms, and has
entered into this Agreement voluntarily. Employee acknowledges that he has been
advised to consult with all attorney before entering into this Agreement.
Employee acknowledges that Employee has been given a period of at least
forty-five (45) calendar days within which to consider this Agreement and its
waiver and release of claims, that
Employee will have seven (7) calendar days to revoke this Agreement after
Employee signs it, and that this Agreement shall not become effective or
enforceable until the revocation period has expired. Employee also acknowledges
that he has received a disclosure of those eligible to participate in this
separation program and those who are not (by department, job title, and age). If
Employee decides to revoke this agreement, notice of revocation must be sent to:
Vice President of Human Resources, Perrigo, 000 Xxxxxxx Xxxxxx, Xxxxxxx, XX
00000. Notice of revocation must be received by the end of the seventh day (5:00
p.m.) following the signing of this Agreement. Employee understands that he will
not be eligible for any of the consideration identified in paragraph 2 if this
Agreement is revoked.
Dated: July 5, 2005 By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
PERRIGO COMPANY
Dated: June 28, 2005 By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Its: Vice President of Human Resources
