[Schein Letterhead]
August 1, 1999
Xx. Xxxxxx Xxxxxx
00 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Dear Xxx:
In connection with your transition from full-time employee to part-time
employee, we are confirming all of our agreements as follows:
1. Notwithstanding anything to the contrary contained in the employment
agreement (the "Employment Agreement") dated November 22, 1993 between you
and Schein Pharmaceutical, Inc. (the "Company"), the status of your
employment with the Company will change from full-time employee to
part-time employee effective August 1, 1999 (such date hereinafter
referred to as the "Transition Date").
2. Effective upon the Transition Date, the Employment Agreement will be
superceded by this Agreement, and the Employment Agreement will no longer
be of any force or effect.
3. The term of this Agreement shall be the two-year period commencing on the
Transition Date and ending on July 31, 2001, subject to earlier
termination or extension as provided herein (the "Term"). The Term may be
extended at the election of the Company for successive one-year periods
unless at least 90 days prior to end of then Term you notify the Company
in writing that the Term shall terminate at the end of the then Term. You
may terminate the Term upon 90 days' written notice to the Company. In
addition, the Term shall terminate upon your death and may be terminated
by the Company at any time for Cause. For purposes of this Agreement,
"Cause" means (i) your wilful and continued failure substantially to
perform your duties with the Company, (ii) fraud, misappropriation or
intentional material damage to the property or business of the Company or
(iii) commission of a felony.
4. During the Term, the Company will employ you, and you agree to be so
employed, as Senior Vice President on a part-time basis on the following
terms:
(a) You will be paid base compensation ("Base Compensation")
of $150,000 per year during the period beginning on the
Transition Date through the end of the Term, payable in
equal quarterly installments of $37,500 on the first day
of each quarter (the "Quarterly Installment"), and
otherwise in accordance with the normal payroll
practices of the Company.
(b) You will be paid fees ("Assignment Fees") for
assignments that may be offered to you from time to time
by the Company in its sole discretion at a rate of
$3,000 per day, plus reasonable expenses. Each Quarterly
Installment will be credited
against any Assignment Fees earned for such quarter. You
will not be required to repay any Quarterly Installment,
or any part thereof, if the Assignment Fees earned for
such quarter are less than the Quarterly Installment.
(c) You will be available to the Company during the Term, as
reasonably requested by the Company, to, among other
things, assist the Company in connection with its
manufacturing and technical operations, and generally
assist in such other matters as the Company may
reasonably request. You will be available to meet in
person with Company executives and others and to travel
as reasonably requested by the Company. The Company will
endeavor to give you reasonable prior notice of any
occasion for which your presence is required and of any
travel which may be so requested. You will be reimbursed
by the Company for all expenses reasonably incurred by
you in connection with any such travel in accordance
with the Company's usual practices.
(d) You will continue to be an employee of the Company and
not an independent contractor.
5. From and after the Transition Date, the Company and you each will pay its
respective portion of the premiums to continue health, dental, vision and
life insurance coverage for you, your spouse and dependents, in each
instance with such coverage as is in effect from time to time under the
applicable Company program, through the Term.
6. From and after the Transition Date through the Term, you will continue to
be eligible to contribute, but will not be eligible for any additional
contribution or matching contribution by the Company, to your account
under the Retirement Plan of Schein Pharmaceutical, Inc. and Affiliates
(the "Plan") for any calendar year unless you work more than 1,000 hours
in such year. The balance in your account will continue to be invested at
your direction in accordance with the terms and conditions of the Plan,
and will reflect your investment results.
7. Each of your option agreements (the "Option Agreements") with the Company
shall remain in effect in accordance with their terms and all Options (as
defined in the Option Agreements) shall continue to vest in accordance
with the terms of the Option Agreements. If this Agreement terminates
other than for Cause prior to July 31, 2001, all unvested Options shall be
fully vested as of the date of such termination, and each Option not
previously exercised shall be exercisable immediately in full and shall
remain exercisable thereunder until the earlier of the first anniversary
of the date of such termination and the tenth anniversary of the date of
grant of such Option.
8. Your Deferred Compensation Agreement with the Company dated November 22,
1993 (the "Deferred Compensation Agreement") is hereby amended, effective
as of the Transition Date, to provide that if this Agreement terminates
other than for Cause prior to September 30, 2000, you will be paid
promptly after such termination any remaining unpaid Deferred Compensation
Amount (as defined in the Deferred Compensation Agreement), whether or not
then due under the Deferred Compensation
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Agreement. Except as amended hereby, the Deferred Compensation Agreement
shall remain in full force and effect, without modification.
9. Your employee confidentiality and non-disclosure undertaking with the
Company dated December 27, 1993 (the "Confidentiality and Non-Disclosure
Undertaking") shall remain in full force and effect, without modification.
10. In addition to the programs specifically referenced in this Agreement, you
may participate in other benefit plans maintained by the Company from time
to time in which part-time employees are eligible to participate, in
accordance with the terms and conditions of such plans.
11. You will not, at any time during your employment by the Company and for
one year thereafter (the "Restrictive Period"), directly or indirectly,
any place within the United States, engage in or become interested in (as
owner, stockholder, partner, director, officer, employee, consultant,
agent or otherwise) any business competitive with the business conducted
by the Company. You acknowledge that this provision is necessary for the
Company's protection and is reasonable, since you are able to obtain
employment with companies whose businesses are not competitive with those
of the Company and with companies in other areas. If, however, any
provision of this paragraph is held to be unenforceable because of the
duration, geographical area or scope of the restriction, the court making
that determination shall modify that provision to the extent necessary to
make it valid. Ownership of less than 5% of any class of securities
registered under Section 12(b) or 12(g) of the Securities Exchange Act of
1934 shall not be considered a violation of the provisions of this
paragraph.
You will not, during the Restrictive Period, directly or indirectly employ
or retain, solicit the employment or retention of, or be associated with
any entity that employs or retains or solicits the employment or retention
of, any person who was an employee of the Company at any time during the
twelve months preceding the termination of your employment or during the
Restrictive Period.
Any discovery, design or improvement that you develop during your
employment or during the Restrictive Period (whether or not during your
regular working hours or on the Company's premises) and that is related to
the Company's business or research activities as then conducted or
contemplated, shall belong to the Company and shall be promptly disclosed
to the Company. During your employment and thereafter you shall, without
additional compensation, execute and deliver to the Company any
instruments of transfer and take any other action that the Company may
request to carry out the provisions of this paragraph.
Since a breach by you of the provisions of this paragraph 11 or the
Confidentiality and Non-Disclosure Undertaking would injure the Company in
a way that could not be adequately compensated for by damages, in addition
to any other remedies available to
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the Company it may obtain an injunction restraining any such breach,
without the necessity of showing actual damage and without any bond or
other security being required.
12. You acknowledge and agree that the payments referred to in paragraph 4
above exceed any payments to which you are or might otherwise be entitled
to under any policy, plan, practice, procedure or prior agreement or
contract. In consideration of the Company entering into this Agreement,
you hereby release the Company, its subsidiaries, directors, officers,
agents and employees and any of its successors, assigns or affiliates and
their heirs, successors and assigns, from any and all liabilities, claims
and causes of action, known or unknown, now existing or which may
hereafter accrue, which relate to or arise out of your employment through
the Transition Date, including, but not limited to, claims under the
Employment Agreement, Title VII of the Civil Rights Act of 1964, as
amended in 1991, the Equal Pay Act, the Rehabilitation Act of 1973, the
Americans with Disabilities Act, the Fair Labor Standards Act, the Family
and Medical Leave Act, the Age Discrimination In Employment Act, ERISA and
any other federal, state and local law or any common law. You are not,
however, releasing any claims relating to the Company's failure to perform
it obligations under this Agreement.
You understand that by releasing the Company, it is not intended to imply
that the Company has done anything unlawful or wrong and the acceptance of
this release and the payments made and benefits allowed to you pursuant to
this Agreement do not constitute an admission of any liability by either
party. In consideration of the Company entering into this Agreement, you
also promise never to file a lawsuit asserting any claims that are
released in the preceding paragraph. You agree that under no circumstances
will you induce, encourage, solicit or assist any person or entity to file
or pursue any claim or proceeding of any kind against any person or entity
released by you in this Agreement.
13. Both you and the Company acknowledge that this Agreement, the Deferred
Compensation Agreement, the Option Agreements and the Confidentiality and
Nondisclosure Undertaking constitute the entire agreement of the parties
hereto with respect to the subject matter hereof and that there are no
other agreements or understandings, oral or written, between the parties
with respect to the subject matter hereof. You agree that you will keep
the terms and existence of this Agreement strictly confidential; provided,
however, that you may discuss this Agreement and its terms with your
professional advisors and members of your immediate family who will not
disclose the terms or existence of this Agreement. But for this Agreement,
you would not be entitled to the benefits provided herein under the
Company's policies or procedures.
You understand and acknowledge that your representations and commitments
contained in this Agreement are essential, material and indispensable
conditions of this Agreement and that the Company would not be entering
into the agreements hereunder, except for these representations and
commitments. It is agreed that in the event you take any action or engage
in any conduct in violation of this Agreement or you seek to challenge the
enforceability of any provision of this Agreement, or such action or
conduct is taken on
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your behalf, the Company may, at its option, void this entire Agreement
and cease to pay or provide any benefits provided to you pursuant to this
Agreement and recover from you as liquidated damages the amounts paid to
you under the terms of the agreements hereunder.
You will be given a period of 21 days to review and consider this
Agreement. You may use as much of this 21 day period as you wish prior to
signing this Agreement. You may revoke this Agreement within 7 days of
signing it. Revocation can be made by delivering a written notice of
revocation to Xxxxxx X. Xxxxx, Senior Vice President, Corporate Human
Resources and Information Systems. For this revocation to be effective,
written notice must be received no later than the close of business on the
eighth day after you sign this Agreement. If you revoke this Agreement, it
shall not be effective or enforceable.
You are strongly encouraged to consult with your attorney before signing
this Agreement. It is your decision whether or not to do so. By signing
this Agreement, you acknowledge that (a) you have carefully reviewed and
understand the contents of this Agreement, (b) you have been given
sufficient time to review it with any person of your choosing in order to
determine whether or not to enter into this Agreement and (c) you
acknowledge that you are voluntarily entering into this Agreement.
14. This Agreement shall be binding upon and inure to the benefit of you and
your legal representatives and the Company and any assignee or successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the
Company.
15. This Agreement is enforceable under the laws of the State of New Jersey.
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If you wish to accept this offer under the terms outlined above, please sign
below, date your signature and return the signed document to me.
Sincerely,
SCHEIN PHARMACEUTICAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, Senior Vice
President,
Corporate Human Resources
and Information Systems
ACCEPTED AND AGREED AS OF THE
DATE FIRST SET FORTH ABOVE:
/s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
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