EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of January 6, 2006,
by and between Par Pharmaceutical Companies, Inc., a Delaware corporation ("Par"
or "Employer"), and Xxxx XxxXxxx ("Executive").
RECITALS:
A. WHEREAS, Executive is presently employed in the capacity of
Senior Vice President, Branded Sales and Marketing of Par; and
B. WHEREAS, Employer and Executive desire to cancel and replace
Executive's existing Employment Agreement, dated December 20, 2004, and enter
into this Agreement in order for Executive to assume the position of President,
Branded Products Division and to perform the duties associated with this
position with Employer on the terms and conditions set forth herein.
In consideration of the mutual promises herein contained, the parties
hereto hereby agree as follows:
1. EMPLOYMENT.
----------
1.1. GENERAL. Employer hereby employs Executive in the capacity
of President, Branded Products Division at the compensation rate and benefits
set forth in Section 2 hereof for the Employment Term (as defined in Section 3.1
hereof). Executive hereby accepts such employment, subject to the terms and
conditions herein contained. In all such capacity, Executive shall perform and
carry out such duties and responsibilities as may be assigned to him from time
to time by the Board and by the Chief Executive Officer of Par reasonably
consistent with Executive's position and this Agreement, and shall report to the
Board and the Chief Executive Officer of Par.
1.2. TIME DEVOTED TO POSITION. Executive, during the Employment
Term, shall devote substantially all of his business time, attention and skills
to the business and affairs of Employer.
1.3. CERTIFICATIONS. Whenever the Chief Executive Officer of Par
is required by law, rule or regulation or requested by any governmental
authority or by Par's auditors to provide certifications with respect to Par's
financial statements or filings with the Securities and Exchange Commission or
any other governmental authority, Executive shall sign such certifications as
may be reasonably requested by the Chief Executive Officer of Par and/or
Employer, with such exceptions as Executive deems necessary to make such
certifications accurate and not misleading.
2. COMPENSATION AND BENEFITS.
-------------------------
2.1. SALARY. At all times Executive is employed hereunder,
Employer shall pay to Executive, and Executive shall accept, as full
compensation for any and all services rendered and to be rendered by him during
such period to Employer in all capacities, including, but not limited to, all
services that may be rendered by him to any of Employer's existing subsidiaries,
entities and organizations hereafter formed, organized or acquired by Employer,
directly or indirectly (each, a "Subsidiary" and collectively, the
"Subsidiaries"), the following: (i) a base salary at the annual rate of $325,000
(Three Hundred and Twenty-Five Thousand Dollars), or at such increased rate as
the Board (through its Compensation and Equity Awards Committee), in its sole
discretion, may hereafter from time to time grant to Executive, subject to
adjustment in accordance with Section 2.2 hereof (as so adjusted, the "Base
Salary"); and (ii) any additional bonus and the benefits set forth in Sections
2.3, 2.4 and 2.5 hereof. The Base Salary shall be payable in accordance with the
regular payroll practices of Employer applicable to senior executives, less such
deductions as shall be required to be withheld by applicable law and regulations
or otherwise.
2.2. ADJUSTMENTS IN BASE SALARY. On each October 1 during the
Employment Term, the Base Salary shall be increased by that percentage, if any,
by which the Consumer Price Index, Urban Wage Earners and Clerical Workers, for
the New York City metropolitan area, published by the United States Government
as of the month of September of such year exceeds such Index for the immediately
preceding September.
2.3. BONUS. Subject to Section 3.3 hereof, Executive shall be
entitled to an annual bonus during the Employment Term in such amount (if any)
as determined by the Board based on such performance criteria as it deems
appropriate, including, without limitation, Executive's performance and
Employer's earnings, financial condition, rate of return on equity and
compliance with regulatory requirements. The target amount of Executive's Bonus
shall be equal to 50% of his Base Salary.
2.4. EQUITY AWARDS. Executive shall be entitled to participate in
long-term incentive plans commensurate with his titles and positions, including,
without limitation, stock option, restricted stock, and similar equity plans of
Employer as may be offered from time to time.
2.5. EXECUTIVE BENEFITS.
------------------
2.5.1. EXPENSES. Employer shall promptly reimburse
Executive for expenses he reasonably incurs in connection with the performance
of his duties (including business travel and entertainment expenses) hereunder,
all in accordance with Employer's policies with respect thereto as in effect
from time to time.
2.5.2. EMPLOYER PLANS. Executive shall be entitled to
participate in such employee benefit and welfare plans and programs as Employer
may from time to time generally offer or provide to executive officers of
2
Employer or its Subsidiaries, including, but not limited to, participation in
life insurance, health and accident, medical plans and programs and profit
sharing and retirement plans.
2.5.3. VACATION. Executive shall be entitled to four (4)
weeks of paid vacation per calendar year, prorated for any partial year.
2.5.4. AUTOMOBILE. Employer shall provide Executive with
an automobile cash allowance commensurate with his titles and positions.
2.5.5. LIFE INSURANCE. Employer shall obtain (provided,
that Executives qualifies on a non-rated basis) a term life insurance policy,
the premiums of which shall be borne by Employer and the death benefits of which
shall be payable to Executive's estate, or as otherwise directed by Executive,
in the amount of $1 million throughout the Employment Term.
3. EMPLOYMENT TERM; TERMINATION.
----------------------------
3.1. EMPLOYMENT TERM. Executive's employment hereunder shall
commence on the date hereof and, except as otherwise provided in Section 3.2
hereof, shall continue until the fifth (5th) anniversary of the date of this
Agreement (the "Initial Term"). Thereafter, this Agreement shall automatically
be renewed for successive one-year periods commencing on the fifth (5th)
anniversary of the date of this Agreement (the Initial Term, together with any
such subsequent employment period(s), being referred to herein as the
"Employment Term"), unless Executive or Employer shall have provided a Notice of
Termination (as defined in Section 3.4.2 hereof) in respect of its or his
election not to renew the Employment Term to the other party at least 90 days
prior to such termination. Upon nonrenewal of the Employment Term pursuant to
this Section 3.1 or termination pursuant to Sections 3.2.1 through 3.2.6 hereof,
inclusive, Executive shall be released from any duties hereunder (except as set
forth in Section 4 hereof) and the obligations of Employer to Executive shall be
as set forth in Section 3.3 hereof only.
3.2. EVENTS OF TERMINATION. The Employment Term shall terminate
upon the occurrence of any one or more of the following events:
3.2.1. DEATH. In the, event of Executive's death, the
Employment Term shall terminate on the date of his death.
3.2.2. WITHOUT CAUSE BY EXECUTIVE. Executive may
terminate the Employment Term at any time during such Term for any reason
whatsoever by giving a Notice of Termination to Employer. The Date of
Termination pursuant to this Section 3.2.2 shall be thirty (30) days after the
Notice of Termination is given.
3.2.3. DISABILITY. In the event of Executive's
Disability (as hereinafter defined), Employer may, at its option, terminate the
Employment Term by giving a Notice of Termination to Executive. The Notice of
Termination shall specify the Date of Termination, which date shall not be
earlier than thirty (30) days after the Notice of Termination is given. For
purposes of this Agreement, "Disability" means disability as defined in any
3
long-term disability insurance policy provided by Employer and insuring
Executive, or, in the absence of any such policy, the inability of Executive for
180 days in any twelve (12) month period to substantially perform his duties
hereunder as a result of a physical or mental illness, all as determined in good
faith by the Board.
4
3.2.4. FOR CAUSE BY EMPLOYER. Employer may terminate
the Employment Term for "Cause" based on objective factors determined in good
faith by a majority of the Board as set forth in a Notice of Termination to
Executive specifying the reasons for termination and the failure of the
Executive to cure the same within ten (10) days after Employer shall have given
the Notice of Termination; PROVIDED, HOWEVER, that in the event the Board in
good faith determines that the underlying reasons giving rise to such
determination cannot be cured, then the ten (10) day period shall not apply and
the Employment Term shall terminate on the date the Notice of Termination is
given. For purposes of this Agreement, "Cause" shall mean (i) Executive's
conviction of, guilty or no contest plea to, or confession of guilt of, a
felony, or other crime involving moral turpitude; (ii) an act or omission by
Executive in connection with his employment that constitutes fraud, criminal
misconduct, breach of fiduciary duty, dishonesty, gross negligence, malfeasance,
willful misconduct or other conduct that is materially harmful or detrimental to
Employer; (iii) a material breach by Executive of this Agreement; (iv)
continuing failure to perform such duties as are assigned to Executive by
Employer in accordance with this Agreement, other than a failure resulting from
a Disability; (v) Executive's knowingly taking any action on behalf of Employer
or any of its affiliates without appropriate authority to take such action; (vi)
Executive's knowingly taking any action in conflict of interest with Employer or
any of its affiliates given Executive's position with Employer; and/or (vii) the
commission of an act of personal dishonesty by Executive that involves personal
profit in connection with Employer.
3.2.5. WITHOUT CAUSE BY EMPLOYER. Employer may
terminate the Employment Term for any reason or no reason whatsoever (other than
for the reasons set forth elsewhere in this Section 3.2) by giving a Notice of
Termination to Executive. The Notice of Termination shall specify the Date of
Termination, which date shall not be earlier than thirty (30) days after the
Notice of Termination is given or such shorter period if Employer shall pay to
Executive that amount of the Base Salary amount that would have been earned
between the thirty (30) day period and such shorter period.
3.2.6. EMPLOYER'S MATERIAL BREACH. Executive may
terminate the Employment Term upon Employer's material breach of this Agreement
and the continuation of such breach for more than ten (10) days after written
demand for cure of such breach is given to Employer by Executive (which demand
shall identify the manner in which Employer has materially breached this
Agreement). Employer's material breach of this Agreement shall mean (i) the
failure of Employer to make any payment that it is required to make hereunder to
Executive when such payment is due or within two (2) business days thereafter;
(ii) the assignment to Executive, without Executive's express written consent,
of duties inconsistent with his positions, responsibilities and status with
Employer, or a change in Executive's reporting responsibilities, titles or
offices or any plan, act, scheme or design to constructively terminate the
Executive, or any removal of Executive from his positions with Employer, except
in connection with the termination of the Employment Term by Employer for Cause,
without Cause or Disability or as a result of Executive's death or voluntary
resignation or by Executive other than pursuant to this Section 3.2.6; (iii) a
reduction by Employer in Executive's Base Salary; or (iv) a permanent
5
reassignment of Executive's primary work location, without the consent of
Executive, to a location more than 35 miles from Employer's executive offices in
Woodcliff Lake, New Jersey.
3.3. CERTAIN OBLIGATIONS OF EMPLOYER FOLLOWING TERMINATION OF
THE EMPLOYMENT TERM. Following termination of the Employment Term under the
circumstances described below, Employer shall pay to Executive or his estate, as
the case may be, the following compensation and provide the following benefits
in full satisfaction and final settlement of any and all claims and demands that
Executive now has or hereafter may have hereunder against Employer. In
connection with Executive's receipt of any or all monies and benefits to be
received pursuant to this Section 3.3, Executive shall not have a duty to seek
subsequent employment during the period in which he is receiving severance
payments and the Severance Amount (as defined in Section 3.3.2 hereof) shall not
be reduced solely as a result of Executive's subsequent employment by an entity
other than Employer.
3.3.1. FOR CAUSE. In the event that the Employment Term
is terminated by Employer for Cause, Employer shall pay to Executive, in a
single lump-sum within 30 days of the Date of Termination, an amount equal to
any unpaid but earned Base Salary through the Date of Termination.
3.3.2. WITHOUT CAUSE BY EMPLOYER; MATERIAL BREACH BY
EMPLOYER; NON-RENEWAL BY EMPLOYER. In the event that the Employment Term is
terminated by Employer pursuant to Section 3.2.5 hereof or by Executive pursuant
to Section 3.2.6 hereof, or is not renewed by Employer pursuant to Section 3.1
hereof, Employer shall pay to Executive severance in an amount equal to two (2)
times his Base Amount, and Executive shall retain all vested benefits granted
pursuant to Section 2.4 hereof. For purposes hereof, "Base Amount" shall mean
the Base Salary in effect at such applicable time plus, if Executive's
termination is not a result of, in whole or in part, Executive's performance in
respect of his duties hereunder, the amount of Executive's last annual cash
bonus pursuant to Section 2.3 hereof. Any payments made in accordance with this
Section 3.3.2 shall be made in twenty-four (24) equal monthly installments from
the Date of Termination in accordance with Employer's regular payroll practices,
or, if upon agreement of Executive and Employer, in a lump sum within 30 days of
the Date of Termination, subject to Executive's continued compliance with the
terms of Section 4 hereof and the execution by Executive of Employer's standard
form Release Agreement in effect at the time.
3.3.3. WITHOUT CAUSE BY EXECUTIVE; ELECTION NOT TO
RENEW BY EXECUTIVE. In the event that the Employment Term is terminated by
Executive pursuant to Section 3.2.2 hereof or Executive elects not to renew this
Agreement pursuant to Section 3.1 hereof, Employer shall pay to Executive, in a
single lump-sum within 30 days of the Date of Termination, an amount equal to
any unpaid but earned Base Salary through the Date of Termination.
3.3.4. DEATH, DISABILITY. In the event that the
Employment Term is terminated by reason of Executive's death pursuant to Section
3.2.1 hereof or by Employer by reason of Executive's Disability pursuant to
6
Section 3.2.3 hereof, Employer shall pay to Executive, subject to, in the case
of Disability, Executive's continued compliance with Section 4 hereof, the
Severance Amount, less any life insurance and/or disability insurance received
by Executive or his estate pursuant to insurance policies provided by Employer
(including pursuant to Section 2.5.5 hereof), payable in accordance with Section
3.3.2 hereof, and Executive shall retain all vested benefits granted pursuant to
Section 2.4 hereof.
3.3.5. POST-EMPLOYMENT TERM BENEFITS. In the event
Executive is terminated pursuant to Sections 3.2.1 through 3.2.6 hereof,
inclusive, or either Employer or Executive elects not to renew this Agreement
pursuant to Section 3.1 hereof, Employer shall reimburse Executive for any
unpaid expenses pursuant to Section 2.5.1 hereof, and Executive will have the
opportunity and responsibility to elect COBRA continuation coverage pursuant to
the terms of that law and will thus be responsible for the execution of the
continuation of coverage forms upon termination of his insurance coverage.
Except as provided immediately below, Executive will be responsible for all
COBRA payments. Specifically, if Executive is terminated pursuant to Sections
3.2.3, 3.2.5 or 3.2.6 hereof, or Employer elects not to renew this Agreement
pursuant to Section 3.1 hereof, Executive shall be entitled to participate, at
Employer's expense, in all medical and health plans and programs of Employer in
accordance with COBRA for a period of eighteen (18) months (the "Benefits
Period"), subject to the execution by Executive of Employer's standard form
Release Agreement in effect at the time and Executive's continued compliance
with the terms of Section 4 hereof; PROVIDED, that Executive's continued
participation is legally possible under the general terms and provisions of such
plans and programs; and PROVIDED, FURTHER, that in the event Executive is
entitled to equal or comparable benefits from a subsequent employer during the
Benefits Period, Employer's obligation with respect thereto pursuant to this
Section 3.3.5 shall end as of such date.
3.3.6. EQUITY AWARDS.
-------------
(a) If, within twelve (12) months following a Change of
Control (as defined in Section 3.4.1 hereof) of Employer, the Employment Term is
terminated other than for Cause, then Executive (or his estate) shall have
twenty-four (24) months from the date of termination to exercise any vested
equity awards; PROVIDED, that the relevant equity award plan remains in effect
and such equity awards shall not have otherwise expired in accordance with the
terms thereof. In connection therewith, Employer agrees to use commercially
reasonable efforts to amend Executive's Equity Award Agreements if necessary to
effectuate the provisions of this Section 3.3.6(a).
(b) In the event the Employment Term is terminated (i) by
Employer pursuant to Section 3.2.5 hereof and the reason for such termination is
not related to the performance of Executive in his duties with respect to
Employer, or (ii) by Executive pursuant to Section 3.2.6 hereof, then all equity
awards theretofore granted to Executive shall thereupon vest and Executive shall
have twenty-four (24) months from such date to exercise such options; PROVIDED,
that the relevant equity award plan remains in effect and such equity awards
shall not have otherwise expired in accordance with the terms thereof. In
connection therewith, Employer agrees to use commercially reasonable efforts to
7
amend Executive's Equity Award Agreements if necessary to effectuate the
provisions of this Section 3.3.6(b).
3.4. DEFINITIONS.
-----------
3.4.1. "CHANGE OF CONTROL" DEFINED. A "Change of Control"
of Employer means (i) the approval by the stockholders of Par of the sale,
lease, exchange or other transfer (other than pursuant to internal
reorganization) by Par of all or substantially all of its respective assets to a
single purchaser or to a group of associated purchasers; (ii) the first purchase
of shares of equity securities of Par pursuant to a tender offer or exchange
offer (other than an offer by Par) for at least fifteen (15%) percent of the
equity securities of Par; (iii) the approval by the stockholders of Par of an
agreement for a merger or consolidation in which Par shall not survive as an
independent, publicly-owned corporation; (iv) the acquisition (including by
means of a merger) by a single purchaser or a group of associated purchasers of
securities of Par from either Par or any third party representing thirty-five
(35%) percent or more of the combined voting power of Par's then outstanding
equity securities in one or a related series of transactions (other than
pursuant to an internal reorganization) or (v) the change of the membership of a
majority of the Board during any period of two (2) consecutive years, unless the
election, or the nomination for election by Par's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors of the
Board still in office who were directors of Par at the beginning of the period.
3.4.2. "NOTICE OF TERMINATION" DEFINED. "Notice of
Termination" means a written notice that indicates the specific termination
provision relied upon by Employer or Executive and, except in the case of
termination pursuant to Sections 3.2.1, 3.2.2 or 3.2.5 hereof, that sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employment Term under the termination provision so indicated.
3.4.3. "DATE OF TERMINATION" DEFINED. "Date of
Termination" means such date as the Employment Term is expired if not renewed or
terminated in accordance with Sections 3.1 or 3.2 hereof.
4. CONFIDENTIALITY/ NON-SOLICITATION/NON-COMPETE.
---------------------------------------------
4.1. "CONFIDENTIAL INFORMATION" DEFINED. "Confidential
Information" means any and all information (oral or written) relating to
Employer or any Subsidiary or any person or entity controlling, controlled by,
or under common control with Employer or any Subsidiary or any of their
respective activities, including, but not limited to, information relating to:
technology, research, test procedures and results, machinery and equipment;
manufacturing processes; financial information; products; identity and
description of materials and services used; purchasing; costs; pricing;
customers and prospects; advertising, promotion and marketing; and selling,
servicing and information pertaining to any governmental investigation, except
such information which becomes public, other than as a result of a breach of the
provisions of Section 4.2 hereof.
8
4.2. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Executive shall
not at any time (other than as may be required or appropriate in connection with
the performance by him of his duties hereunder), directly or indirectly, use,
communicate, disclose or disseminate any Confidential Information in any manner
whatsoever for the benefit of any person or entity other than Employer (except
as may be required under legal process by subpoena or other court order).
4.3. NON-SOLICITATION. Executive shall not, while employed by
Employer and for a period of one (1) year following the Date of Termination,
directly or indirectly, hire, offer to hire, entice away or in any other manner
persuade or attempt to persuade any officer, employee, agent, lessor, lessee,
licensor, licensee, customer, prospective customer, or supplier of Employer or
any of its Subsidiaries to discontinue or alter his or its relationship with
Employer or any of its Subsidiaries.
4.4. NON-COMPETITION. Executive shall not, while employed by
Employer and for a period of one (1) year following the Date of Termination,
directly or indirectly provide any services (whether in the management, sales,
marketing, public relations, finance, research, development, general office,
administrative, or other areas) as an employee, agent, stockholder, officer,
director, consultant, advisor, investor, or other representative of Employer's
competitors in the branded or generic pharmaceutical industry in any state or
country in which Employer does or seeks to do business. Employer's competitors
include any entity, individual, or affiliate of such company or individual that
develops, sells, markets, or distributes any products that compete with or are
the same or similar to those of Employer. However, the restrictions of this
paragraph 4.4 shall not apply if the Employment Term is terminated by Employer
pursuant to Section 3.2.5 hereof or by Executive properly pursuant to Section
3.2.6 hereof; nor shall this paragraph prohibit Executive from being a passive
owner of not more than one percent (1%) of any publicly-traded class of capital
stock of any entity engaged in a competing business.
4.5. INJUNCTIVE RELIEF. The parties hereby acknowledge and agree
that (a) the type, scope and periods of restrictions imposed in paragraph 4 are
necessary, fair and reasonable to protect Employer's legitimate business
interests and to prevent the inevitable disclosure of Employer's Confidential
Information; (b) Employer will be irreparably injured in the event of a breach
by Executive of any of his obligations under this Section 4; (c) monetary
damages will not be an adequate remedy for any such breach; (d) Employer will be
entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach; and (e) the existence of any claims that
Executive may have against Employer, whether under this Agreement or otherwise,
will not be a defense to the enforcement by Employer of any of its rights under
this Section 4.
4.6. NON-EXCLUSIVITY AND SURVIVAL. The covenants of Executive
contained in this Section 4 are in addition to, and not in lieu of, any
obligations that Executive may have with respect to the subject matter hereof,
whether by contract, as a matter of law or otherwise, and such covenants and
9
their enforceability shall survive any termination of the Employment Term by
either party and any investigation made with respect to the breach thereof by
Employer at any time.
5. MISCELLANEOUS PROVISIONS.
------------------------
5.1. SEVERABILITY. If, in any jurisdiction, any term or provision
hereof is determined to be invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired; (b) any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction; and (c) the invalid or
unenforceable term or provision shall, for purposes of such jurisdiction, be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
5.2. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
5.3. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given upon
receipt when delivered by hand, overnight delivery or telecopy (with confirmed
delivery), or three (3) business days after posting, when delivered by
registered or certified mail or private courier service, postage prepaid, return
receipt requested, as follows:
If to Employer, to:
Par Pharmaceutical Companies, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman
Telecopy No. 000-000-0000
Copy to:
Xxxxxxxxx X. Xxxxxx, Esq.
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Telecopy No.: (000) 000-0000
10
If to Executive, to:
Xxxx XxxXxxx
c/o Par Pharmaceutical, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
And
Xxxx XxxXxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto.
5.4. AMENDMENT. No provision of this Agreement may be modified,
amended, waived or discharged in any manner except by a written instrument
executed by both Par and Executive.
5.5. ENTIRE AGREEMENT. This Agreement and, with respect to
Section 3.3.6 hereof, Executive's Equity Award Agreements and governing equity
award plans constitute the entire agreement of the parties hereto with respect
to the subject matter hereof, and supersede all prior agreements and
understandings of the parties hereto, oral or written, including, but not
limited to, the parties' Employment Agreement dated December 20, 2004. Executive
and Employer hereby agree that the Employment Agreement dated December 20, 2004,
is hereby superseded and of no further force and effect, and that this Agreement
shall be effective as of the date hereof. In the event of any conflict between
Section 3.3.6 hereof and Executive's Equity Award Agreements and the governing
equity award plans, Section 3.3.6 shall govern.
5.6. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey applicable to
contracts made and to be wholly performed therein.
5.7. HEADINGS. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
5.8. BINDING EFFECT; SUCCESSORS AND ASSIGNS. Executive may not
delegate any of his duties or assign his rights hereunder. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
Employer shall require any successor (whether direct or indirect and whether by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Employer, by an agreement in form and substance
reasonably satisfactory to Executive, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that Employer would be
required to perform if no such succession had taken place.
11
5.9. WAIVER, ETC. The failure of either of the parties hereto to
at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto thereafter to enforce each and every provision of this Agreement.
No waiver of any breach of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the party against
whom or which enforcement of such waiver is sought, and no waiver of any such
breach shall be construed or deemed to be a waiver of any other or subsequent
breach.
5.10. CAPACITY, ETC. Executive and Employer hereby represent and
warrant to the other that, as the case may be: (a) he or it has full power,
authority and capacity to execute and deliver this Agreement, and to perform his
or its obligations hereunder; (b) such execution, delivery and performance shall
not (and with the giving of notice or lapse of time or both would not) result in
the breach of any agreements or other obligations to which he or it is a party
or he or it is otherwise bound; and (c) this Agreement is his or its valid and
binding obligation in accordance with its terms.
5.11. ENFORCEMENT; JURISDICTION. If any party institutes legal
action to enforce or interpret the terms and conditions of this Agreement, the
prevailing party shall be awarded reasonable attorneys' fees at all trial and
appellate levels, and the expenses and costs incurred by such prevailing party
in connection therewith. Any legal action, suit or proceeding, in equity or at
law, arising out of or relating to this Agreement shall be instituted
exclusively in the State or Federal courts located in the State of New Jersey,
and each party agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that such party is
not subject personally to the jurisdiction of any such court, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or should be transferred, or that this
Agreement or the subject matter hereof may not be enforced in or by any such
court. Each party further irrevocably submits to the jurisdiction of any such
court in any such action, suit or proceeding. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against any party if given personally or by registered or certified mail, return
receipt requested or by any other means of mail that requires a signed receipt,
postage prepaid, mailed to such party as herein provided. Nothing herein
contained shall be deemed to affect or limit the right of any party to serve
process in any other manner permitted by applicable law.
5.12. ARBITRATION.
-----------
(a) Any dispute under Section 3 hereof, including, but
not limited to, the determination by the Board of a termination for Cause
pursuant to Section 3.2.4 hereof, or in respect of the breach thereof shall be
settled by arbitration in New Jersey. The arbitration shall be accomplished in
the following manner. Either party may serve upon the other party written demand
that the dispute, specifying the nature thereof, shall be submitted to
arbitration. Within ten (10) days after such demand is given in accordance with
Section 5.3 hereof, each of the parties shall designate an arbitrator and
12
provide written notice of such appointment upon the other party. If either party
fails within the specified time to appoint such arbitrator, the other party
shall be entitled to appoint both arbitrators. The two (2) arbitrators so
appointed shall appoint a third arbitrator. If the two arbitrators appointed
fail to agree upon a third arbitrator within ten (10) days after their
appointment, then an application may be made by either party hereto, upon
written notice to the other party, to the American Arbitration Association (the
"AAA"), or any successor thereto, or if the AAA or its successor fails to
appoint a third arbitrator within ten (10) days after such request, then either
party may apply, with written notice to the other, to the Superior Court of New
Jersey, Bergen County, for the appointment of a third arbitrator, and any such
appointment so made shall be binding upon both parties hereto.
(b) The decision of the arbitrators shall be final and
binding upon the parties. The party against whom the award is rendered (the
"non-prevailing party") shall pay all fees and expenses incurred by the
prevailing party in connection with the arbitration (including fees and
disbursements of the prevailing party's counsel), as well as the expenses of the
arbitration proceeding. The arbitrators shall determine in their decision and
award which of the parties is the prevailing party, which is the non-prevailing
party, the amount of the fees and expenses of the prevailing party and the
amount of the arbitration expenses. The arbitration shall be conducted, to the
extent consistent with this Section 5.12, in accordance with the then prevailing
rules of commercial arbitration of the AAA or its successor. The arbitrators
shall have the right to retain and consult experts and competent authorities
skilled in the matters under arbitration, but all consultations shall be made in
the presence of both parties, who shall have the full right to cross-examine the
experts and authorities. The arbitrators shall render their award, upon the
concurrence of at least two of their number, not later than thirty (30) days
after the appointment of the third arbitrator. The decision and award shall be
in writing, and counterpart copies shall be delivered to each of the parties. In
rendering an award, the arbitrators shall have no power to modify any of the
provisions of this Agreement, and the jurisdiction of the arbitrators is
expressly limited accordingly. Judgment may be entered on the award of the
arbitrators and may be enforced in any court having jurisdiction.
[SIGNATURE PAGE FOLLOWS]
13
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
PAR PHARMACEUTICAL COMPANIES, INC.
By:/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name:Xxxxxxx Xxxxxxxx
Title: Vice President, Human Resources
/s/ Xxxx Xxxxxxx
-----------------------------------------
Xxxx XxxXxxx
14
