This Consulting Services Agreement involves
Title: RETIREMENT AND CONSULTING AGREEMENT
Governing Law: Pennsylvania Date: 8/9/2016
Industry: Biotechnology and Drugs Sector: Healthcare
RETIREMENT AND CONSULTING AGREEMENT
This Retirement and Consulting Agreement (“Agreement”) is made by and between John D. Sheehan (“Sheehan”) and Mylan Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).
WHEREAS, Sheehan and the Company executed an Executive Employment Agreement on July 31, 2013 (the “Employment Agreement”) which, among other matters, provides for certain terms and conditions regarding Sheehan’s employment with, and separation from, the Company, including without limitation obligations that survive termination of the Employment Agreement and termination of Sheehan’s employment with the Company, as specified in Section 21 of this Agreement;
WHEREAS, Sheehan announced his intention to voluntarily retire from employment with the Company effective as of April 1, 2016 (the “Retirement Date”);
WHEREAS, the Company wishes to continue to utilize Sheehan’s services in a consulting capacity for twelve months after the Retirement Date; and
WHEREAS, the Company and Sheehan wish to reach an agreement regarding the terms of Sheehan’s retirement and consultancy to the Company.
NOW, THEREFORE, in consideration of the mutual promises made herein and intending to be legally bound hereby, the Company and Sheehan hereby agree as follows:
1. Consideration and Other Terms of Retirement . Provided that Sheehan executes this Agreement within twenty-one days following the Retirement Date, does not revoke his acceptance of this Agreement during the seven-day revocation period identified in Section 24 below, performs consulting services as provided herein, and does not commit a material breach of this Agreement, as described in Section 12 below:
a. The Company agrees to pay Sheehan an amount equal to six hundred and fifty thousand dollars ($650,000) in four equal quarterly installments. Each installment shall be paid no later than thirty (30) days after the close of each fiscal quarter (i.e., July 30th, October 30th, January 30th and April 30th), in each case less applicable deductions and withholdings.
b. Except as specified in this paragraph, all equity and cash bonus awards will be treated in accordance with the terms of the 2003 Long-Term Incentive Plan, as amended and the applicable award agreements. The Company will treat Sheehan’s termination of service with the Company as a “Retirement” for purposes of stock options granted under the 2003 Long-Term Incentive Plan, as amended, (i.e., all unvested stock options will vest as of the Effective Date and all stock options will remain exercisable through the applicable expiration dates).
c. Sheehan’s group benefits, other than medical, dental, vision and prescription, shall cease at the end of the month of the Retirement Date (meaning April 30, 2016). The Company will pay the cost of Sheehan’s medical, dental, vision and prescription benefits under the health benefit provisions of Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, through the end of the month of the first anniversary of the Retirement Date (meaning April 30, 2017), unless Sheehan becomes eligible for such coverage under another plan.
d. Except as specified herein, Sheehan’s participation in all benefits and incidents of employment, including, but not limited to, the accrual of bonuses, vacation, and paid time off, and any additional 401(k) plan contributions, shall cease as of the Retirement Date. Vested amounts payable to Sheehan under the Company’s 401(k) and other retirement plans or agreements (including the vested benefit under Sheehan’s Retirement Benefit Agreement) will be paid in accordance with the terms of such plans and agreements and applicable law.
2. Payment of Salary and Receipt of All Benefits . Sheehan acknowledges and represents that, other than the consideration to be paid pursuant to this Agreement, the Retirement Benefit Agreement, Sheehan’s final regular pay on the Company’s next regularly scheduled payroll date after the Retirement date and payment for all unused and accrued vacation time as of March 31, 2016 (which will be included in Sheehan’s final regular pay on the Company’s next regularly scheduled payroll date after the Retirement Date, subject to applicable deductions and withholding), the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, reimbursable expenses, stock, stock options, vesting, shares pursuant to vested restricted stock units, and any and all other benefits and compensation due to Sheehan by the Company and its affiliates. Sheehan acknowledges that all equity-based awards (other than stock options) that are unvested as of the Retirement Date will be forfeited as of the Retirement Date. To receive reimbursement for any final Company-related travel expenses, Sheehan must submit a final report of all such outstanding expenses within thirty (30) calendar days after the Retirement Date, accompanied by receipts and otherwise subject to the Company’s expense reimbursement policy.
3. Release of Claims . In consideration of the payments to be made under Sections 1(a) through (c) of this Agreement, which Sheehan acknowledges he would not otherwise be entitled to receive, Sheehan agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Sheehan by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, direct and indirect parents and subsidiaries, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, predecessor and successor corporations and assigns, and all persons acting with or on behalf of them (collectively, the “Releasees”). The parties acknowledge and agree that the amounts paid for Sheehan’s consulting services under this Agreement are in lieu of any payments for consulting or similar services under any other plan or agreement during the consulting period covered by this Agreement. Sheehan, on his own behalf and on behalf of his heirs, family members, executors, agents, and assigns, hereby and forever releases and discharges the Releasees from any and all claims, complaints, charges, duties, obligations, demands, or causes of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Sheehan may possess against any of the Releasees arising from any omissions, acts, failures to act, facts, or damages that have occurred up until and including the date Sheehan executes this Agreement, including, without limitation:
a. any and all claims relating to or arising from Sheehan’s employment relationship with the Company and/or any of the Releasees and the termination of that relationship;
b. any and all claims relating to, or arising from, Sheehan’s right to purchase, or actual purchase of shares of stock of the Company and/or any of the Releasees,
including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;
c. any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;
d. any and all claims under any policy, agreement, understanding or promise, written or oral, formal or informal, between any Releasee and Sheehan existing as of the date hereof (whether arising before, on or after the date Sheehan executes this Agreement);
e. any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the laws and Constitution of the Commonwealth of Pennsylvania, each as amended, or any other federal, state or local law, regulation ordinance or common law;
f. any and all claims for violation of the federal or any state constitution;
g. any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;
h. any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Sheehan as a result of this Agreement;
i. any and all claims for attorneys’ fees and costs; and
j. any other claims whatsoever.
Sheehan agrees that the Release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This Release does not extend to any obligations incurred under this Agreement, Sheehan’s Retirement Benefit Agreement, surviving rights of Sheehan under his Employment Agreement, including but not limited to indemnification rights, any claims accruing after execution of this Agreement, or any rights Sheehan may have under any D&O insurance policy maintained by the Company and/or any of the Releasees. This Release does not release claims that cannot be released as a matter of law, including, but not limited to, Sheehan’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that any such filing or participation
does not give Sheehan the right to recover any monetary damages against the Company and/or any of the Releasees; and Sheehan’s release of claims herein bars Sheehan from recovering such monetary relief from the Company and/or any of the Releasees). Sheehan represents that he has made no assignment or transfer of any right, claim, complaint, charge, duty, obligation, demand, cause of action, or other matter waived or released by this Section.
4. Acknowledgment that Waiver of Claims is Knowing and Voluntary . Sheehan acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Sheehan agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the date Sheehan executes this Agreement. Sheehan acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Sheehan was already entitled. Sheehan further acknowledges that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within which to consider this Agreement; (c) he has seven (7) days following his execution of this Agreement to revoke this Agreement and may do so by writing to the Company’s Chief Legal Officer; (d) this Agreement shall not be effective until after the revocation period has expired without revocation; and (e) nothing in this Agreement prevents or precludes Sheehan from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Sheehan signs this Agreement and returns it to the Company in less than the 21-day period identified above, Sheehan hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.
5. Unknown Claims . Sheehan acknowledges that he has been advised to consult with legal counsel and that he is familiar with the principle that a general release does not extend to claims that the releaser does not know or suspect to exist in his favor at the time of executing the release, which, if known by him, must have materially affected his settlement with the Releasee. Sheehan, being aware of said principle, agrees to expressly waive any rights he may have to that effect, as well as under any other statute or common law principles of similar effect.
6. No Pending or Future Lawsuits . Sheehan represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the other Releasees. Sheehan also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.
7. Consulting Services . The Company and Sheehan agree that, commencing as of the Effective Date, Sheehan will be available at reasonable times and upon reasonable notice to perform the consulting services described herein on behalf of the Company and/or any of its subsidiaries and affiliates until close of business on April 1, 2017. In the event Sheehan accepts employment with, or agrees to provide services for consideration to, any person or entity during the period from the Retirement Date through April 1, 2017, Sheehan shall notify the Company within five (5) business days and the Company shall have the option at its sole discretion to terminate the consulting services set forth in this Section 7. In the event that the Company terminates Sheehan’s consulting services pursuant to the immediately preceding sentence, Sheehan shall receive all accrued payments set forth in Section 1(a) in respect of completed fiscal quarters and payment for the remainder of the fiscal quarter in which the Company terminates Sheehan’s consulting services, but shall no longer be eligible to receive payments in respect of future fiscal quarters. Except as provided in Section 12 or as required by applicable law, Sheehan
shall not be required to repay to the Company any amounts actually paid by the Company to Sheehan pursuant to Section 1(a).
a. Sheehan shall provide such business and commercial consulting and other services as may reasonably be required of Sheehan by the Company’s Executive Chairman or Chief Executive Officer or his or her designee, which services shall include without limitation the provision of historic and background information applicable to the Company and /or any subsidiary or affiliate’s business affairs, business decisions, or operations known to Sheehan by virtue of his employment with the Company or otherwise.
b. Sheehan shall use his best efforts in his performance of services hereunder, including such care, resources, effort, knowledge and expertise as a reasonably prudent person experienced in and knowledgeable of such matters and duties of the kind and character contemplated herein would exercise under the circumstances.
c. The Parties acknowledge and agree that the consideration provided in this Agreement constitutes adequate and complete compensation for Sheehan’s consulting and other services as set forth herein.
d. The Company shall reimburse Sheehan for reasonable expenses directly related to the provision of services, which expenses or costs are approved by the Company’s Executive Chairman or Chief Executive Officer or his or her designee. Sheehan shall provide to the Company’s Executive Chairman or Chief Executive Officer or his or her designee, on a monthly basis, documentation (in reasonable detail) of all expenses for which reimbursement is requested, and such