AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) dated as of the 15th day of July 2008, between Barr Pharmaceuticals, Inc., a Delaware corporation having its principal executive offices at 225 Summit Avenue, Montvale, New Jersey 07645-1523 (the “ Company ”), and Bruce L. Downey (the “ Employee ”).

WITNESSETH:

     WHEREAS, the Company, Barr Laboratories, Inc. (“ BLI ”) and the Employee entered into an employment agreement dated as of January 4, 1993, which was amended and restated as of August 16, 2002, October 24, 2002 and March 13, 2006 (as so amended and restated, the “ Prior Agreement ”);

     WHEREAS, the Company and the Employee wish to amend and restate the Prior Agreement;

     WHEREAS, the Company wishes to assure itself of the services of the Employee and provide an inducement for the Employee to remain in its employ; and

     WHEREAS, the Employee is willing to remain in the employ of the Company on the terms and conditions hereafter set forth;

     NOW, THEREFORE, the Company and the Employee hereby agree that, effective as of the date first stated above, the Prior Agreement is amended and restated in its entirety to read as follows:

     1. Employment . The Company agrees to employ the Employee, and the Employee agrees to serve in the employ of the Company, during the term of this Agreement on the terms and conditions hereafter set forth.

     2. Term . The term of this Agreement shall commence on July 15, 2008 (the “ Commencement Date ”) and shall terminate at 5 P.M. on December 31, 2009 unless sooner terminated in accordance with the terms of this Agreement or extended as hereinafter provided. The term of this Agreement shall be extended, without further action by the Company or the Employee, on the date (the “ Extension Effective Date ”) that is six (6) months before December 31, 2009 and on the date (also an “ Extension Effective Date ”) that is six (6) months before each subsequent December 31, for successive periods of twelve (12) months each, unless the Company shall have given written notice to the Employee, or the Employee shall have given written notice to the Company, in the manner set forth in paragraph 13(e) or (f) below, prior to the Extension Effective Date in question, that the term of this Agreement that is in effect at the time such written notice is given is not to be extended or further extended, as the case may be.

     3.  Position and Responsibilities; Place of Performance .

          (a) Throughout the term of this Agreement, the Employee agrees to serve in the employ of the Company, and the Company agrees to employ the Employee, as its Chief Executive Officer, reporting only to the Company’s Board of Directors (the “ Board ”). As the Company’s Chief Executive Officer, the Employee shall be the most senior officer of the

Company and its Subsidiaries (as defined in paragraph 11(b)), shall have effective supervision, control and policy-making authority over, and responsibility for, the strategic direction and general leadership and management of the business and affairs of the Company and its Subsidiaries, subject only to the authority of the Board, and shall have all of the powers, authority, duties and responsibilities usually incident to the position and role of Chief Executive Officer in public companies that are comparable in size, character and performance to the Company. All employees of the Company and its Subsidiaries shall report, directly or indirectly, to the Employee. The Company agrees to use its best efforts to secure the Employee’s election as a member and Chairman of the Board and as a member and Chairman of the Board of Directors of Barr Laboratories, Inc. (the “ BLI Board ”) during the term of this Agreement, and the Employee agrees to serve as such and as an officer and member of the board of directors of any other Affiliate (as defined in paragraph 11(b)) to which he may be elected or appointed during the term of this Agreement, without additional compensation beyond that provided in this Agreement.

          (b) In connection with the Employee’s employment by the Company, the Employee shall be based at a location of his choosing in the greater Washington, D.C. metropolitan area or at any other Company or Subsidiary location, as he may determine to be appropriate for the performance of his duties, and the Employee agrees to travel, to the extent reasonably necessary to perform the Employee’s duties and obligations under this Agreement, to Company facilities and other destinations elsewhere at the Company’s expense.

          (c) During the term of this Agreement, the Employee shall serve the Company on an exclusive basis (it being understood that the Employee’s engaging in activities on behalf of an Affiliate shall be deemed serving the Company for this purpose) and shall devote all the Employee’s business time, attention, skill and efforts to the faithful performance of the Employee’s duties hereunder; provided that the Employee may engage in community service and charitable activities or such other activities as approved by the Board that do not materially interfere with the performance of the Employee’s duties and responsibilities hereunder.

     4.  Compensation . For all services rendered by the Employee in any capacity during the term of this Agreement, and for the Employee’s undertakings with respect to confidential information, non-solicitation and disparaging remarks set forth in Sections 6 and 7 below, the Employee shall be entitled to the following:

          (a) a salary, payable in installments not less frequent than monthly, at the annual rate of one million five hundred thousand dollars ($1,500,000), with such increases in such rate, if any, as the Board or a committee of the Board may approve from time to time during the term of this Agreement in accordance with the Company’s regular administrative practices applicable to officers from time to time during the term of this Agreement (the Employee’s annual salary rate as increased from time to time during the term of this Agreement being hereafter referred to as the “ Base Salary ”);

          (b) participation in the Company’s annual executive incentive or bonus plan as in effect from time to time, with the opportunity to receive, for each fiscal year of the Company that begins or ends during the term of this Agreement, a target award of seventy-five percent (75%) of the Base Salary earned during such year (or such higher amount as the Board or a committee of the Board may determine, in its discretion, up to a maximum of the lesser of (i) one

hundred percent (100%) of Base Salary earned during such year or (ii) three percent (3%) of the Company’s pre-tax and pre-bonus net operating income for such year), in accordance with the terms and conditions of such incentive or bonus plan, it being understood that any award for the fiscal year of the Company in which the term of this Agreement terminates pursuant to the terms hereof shall be prorated based on the portion of such fiscal year that coincides with the term of this Agreement and shall be made at the same time as awards (if any) are made to other participants with respect to such fiscal year. The Company will pay the Employee’s annual incentive bonus for each year at the same time as annual incentive bonus payments for such year (if any) are made to other participants with respect to such fiscal year, and in all events within the two and one half (2 ¹ / 2 ) months following the end of the calendar year in which the bonus is earned. Annual incentive bonuses are intended to qualify for the short-term deferral exception to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”). The Employee recognizes and agrees that the Board will delay the payment of any portion of his annual bonus to the extent that, and for such period of time and on such terms and subject to such conditions as, may be reasonably necessary to avoid a loss by the Company or an Affiliate of a tax deduction with respect to such portion of his annual bonus under Code Section 162(m). Any such delayed amount shall be paid as soon as reasonably practicable following the first date on which the Company or an Affiliate anticipates or reasonably should anticipate that, if the payment were made on such date, the Company’s or Affiliate’s deduction with respect to such payment would no longer be restricted due to the application of Code Section 162(m). Any such delayed amount shall be non-forfeitable, shall constitute an unfunded, unsecured obligation of the Company, and until paid shall be deemed invested in such hypothetical investments as the Employee may select from among the hypothetical investment options that are available from time to time during the delay period under the Company’s excess 401(k) plan or, if no such investment options are available at the time in question under that plan, then from among the same hypothetical investment options that were available under the Company’s excess 401(k) plan on January 1, 2008 or a reasonable facsimile thereof;

          (c) participation in the stock incentive plan applicable to Company officers as from time to time in effect, subject to the terms and conditions of such plan;

          (d) the business and personal use of an automobile at Company expense including, without limitation, payment or reimbursement of automobile insurance and maintenance expenses, or a cash allowance in lieu thereof, in accordance with the Company’s automobile policy applicable to similarly situated officers; and

          (e) participation in all health, welfare, savings and other employee benefit and fringe benefit plans (including vacation pay plans or policies and life and disability insurance plans) in which other officers of the Company participate during the term of this Agreement, subject in all events to the terms and conditions of such plans as in effect from time to time. Nothing in this paragraph (e) shall preclude the Company or an Affiliate from amending or terminating any such plan at any time prior to a Change in Control or Potential Change in Control. The plans covered by this paragraph (e) shall not include the annual incentive or stock incentive plans, which are covered by paragraphs (b) and (c) above.

     5.  Termination of Employment .

          (a) Termination by the Company or an Affiliate without Good Cause or by the Employee for Good Reason; Non-Renewal Termination .

     (i) If the Employee’s employment with the Company is terminated by the Company or an Affiliate without Good Cause (except as an incident of assigning the rights to Employee’s services to a Permitted Assignee in accordance with paragraph 13(d) below) when the Employee is willing and able to continue performing services, or is terminated by the Employee for Good Reason, in either case during the term of this Agreement and other than at the expiration of the term of this Agreement as the same may have been extended in accordance with the provisions of Section 2 above (any such employment termination being hereafter referred to as a “ Compensable Termination ”), the Company shall pay the Employee, in accordance with normal payroll practices, the portion of the Employee’s Base Salary accrued through the date of the Compensable Termination and any other amounts to which the Employee is entitled by law or pursuant to the terms of any compensation or benefit plan or arrangement in which the Employee participated prior to the Compensable Termination and, in addition, subject to all of the provisions of this Section 5, Section 14 below, and further subject to compliance by the Employee with the provisions of Sections 6 and 7 below, relating to confidential information, non-solicitation and disparaging remarks, the Company shall, as liquidated damages or severance pay or both (whichever characterization(s) will serve to validate the payments), and as additional consideration for the Employee’s undertakings under Sections 6 and 7 below, pay the Employee the following:

     (A) the Employee’s annual bonus for the fiscal year of the Company preceding the fiscal year of the Company in which the Compensable Termination occurs, if unpaid at the time of the Compensable Termination. Such annual bonus shall be paid at the same time as bonuses (if any) for such preceding fiscal year are paid to other officers, and in all events within the first two and one half (2 ¹ / 2 ) months of the fiscal year in which the Compensable Termination occurs. The amount of such bonus shall be determined by the Board or a committee of the Board on a basis consistent with the prior bonus determinations with respect to the Employee or, in the event a Change in Control or Potential Change in Control (as defined in Section 11 below) occurred before the Compensable Termination, consistent with the bonus determinations with respect to the Employee prior to the Change in Control or Potential Change in Control; and

     (B) a prorated annual bonus for the fiscal year of the Company in which the Compensable Termination occurs, payable at the same time as bonuses (if any) for such fiscal year are paid to other officers, and in all events within the first two and one half (2 ¹ / 2 ) months of the fiscal year following the fiscal year in which the Compensable Termination occurs. Such prorated annual bonus shall be determined by multiplying the “Applicable Average Bonus” as defined below in this subparagraph 5(a)(i)(B) by a fraction, the numerator of which shall be the number of days elapsed in such fiscal year through (and including) the date on which the Compensable Termination occurs and the denominator of which shall be the number three hundred sixty-five (365). For purposes of this Agreement,

the “ Applicable Average Bonus ” means the highest of (I) the average annual bonus (including any portion of the bonus that is deferred) awarded to the Employee during the three (3)-year period immediately preceding the Compensable Termination, (II) the average annual bonus (including any portion of the bonus that is deferred) awarded to the Employee during the three (3) fiscal years of the Company that precede the fiscal year in which the Compensable Termination occurs; provided that, if the Compensable Termination occurs after a Change in Control or Potential Change in Control, the Applicable Average Bonus shall not be less than the average annual bonus (including any portion of the bonus that is deferred) awarded to the Employee during the three (3) years preceding the date on which the Change in Control or Potential Change in Control occurred; or (III) the Employee’s target bonus (based on the greatest of (i) the Employee’s target bonus percentage and Base Salary rate as specified in Section 4 above, (ii) the Employee’s approved target bonus percentage and Base Salary rate in effect on the date of the Compensable Termination, or (iii) the Employee’s approved target bonus percentage and Base Salary rate in effect on the date of notice of such Compensable Termination); and

     (C) an amount of money (the “ Severance Payment ”) equal to three (3) times the Employee’s “Annual Cash Compensation” as hereafter defined, unless the Employee has attained age sixty-five (65) but not age seventy (70) (or such later age or ages as the Board may in its discretion determine) prior to the Compensable Termination, in which case the Severance Payment shall be equal to two (2) times such Annual Cash Compensation, or unless the Employee has attained age seventy (70) (or such later age as the Board may in its discretion determine) prior to the Compensable Termination, in which case the Severance Payment shall be equal to one (1) times such Annual Cash Compensation. Notwithstanding the foregoing, if the Severance Payment is payable solely on account of the Employee’s resignation for Good Reason pursuant to subparagraph 5(d)(v) below (relating to the Company or an Affiliate giving the Employee notice of non-extension), no amount will be payable under this subparagraph 5(a)(i)(C), and the Employee shall instead receive the payment set forth in subparagraph 5(a)(ii). Except as otherwise provided hereafter in this subparagraph 5(a)(i)(C) and Section 14, the Severance Payment shall be paid as follows: seventy-five percent (75%) of the Severance Payment (or, if the Employee has attained age sixty-five (65) prior to the Compensable Termination, one hundred percent (100%) of the Severance Payment) shall be paid in a lump sum within ten (10) days after the date of the Compensable Termination. Any balance of the Severance Payment shall be paid in six (6) equal monthly installments, one (1) of which shall be paid at the end of each of the first six (6) months after the date of the Compensable Termination, provided, that the Employee has not accepted full-time or regular part-time employment with or regularly served as a consultant to a for-profit pharmaceutical company prior to the date for payment of such installment, it being understood and agreed that the foregoing condition shall not be violated by the Employee’s serving as a member of a board of directors of a for-profit pharmaceutical company or by his performing consulting services on an ad hoc basis for such a company. If a Change in Control occurs that is a “change

in control event” within the meaning of Code Section 409A and Treasury Regulation §1.409A-3(i)(5)(i) (or any similar or successor provisions) (either before or after the Compensable Termination and in accordance with Treasury Regulation §1.409A-3(c)), the Severance Payment (or, in the case of such a “change in control event” that occurs after the Compensable Termination, any portion thereof that remains unpaid at the time such “change in control event” occurs) shall be paid in a lump sum within ten (10) days after the Compensable Termination (or, in the case of such a “change in control event” that occurs after the Compensable Termination, within ten (10) days after the “change in control event” occurs), and the two (2) preceding sentences of this subparagraph shall not apply. For thirty-six (36) months following a Compensable Termination, the Company shall also provide the Employee (and, as applicable, the Employee’s covered dependents), at Company expense, with continuation coverage under the Company’s group health plan(s) covering similarly situated executives. For purposes of this Section 5, the Employee’s “ Annual Cash Compensation ” shall mean the sum of (I) the Employee’s highest Base Salary ( i.e., one (1) year’s salary at its highest rate), plus (II) the “Applicable Average Bonus” as defined in subparagraph 5(a)(i)(B) above.

     (ii) If the term of this Agreement as the same may have been extended in accordance with the provisions of Section 2 above is not extended or further extended because the Company or an Affiliate gives written notice of non-extension to the Employee as provided in Section 2 above, and there is not Good Cause for termination of the Employee’s employment at the time of giving such notice, and the Employee does not thereafter resign for Good Reason during the term of this Agreement as permitted by paragraph 5(d)(v) below, and the Employee is willing and able to renew or execute a new agreement providing terms and conditions substantially similar to those in this Agreement and to continue providing such services, then the Company shall pay the Employee, subject to fulfillment by the Employee of the Employee’s obligations under this Agreement during the balance of the term and the Employee’s compliance with the provisions of Sections 6 and 7 below, relating to confidential information, non-solicitation and disparaging remarks, as non-renewal compensation, and as additional consideration for the Employee’s undertakings under this Agreement, including Sections 6 and 7 below, an amount of money (the “ Non-Renewal Payment ”) equal to two (2) times the Employee’s Annual Cash Compensation as defined in subparagraph 5(a)(i)(C) above (unless the Employee has attained age seventy (70) or such later age as the Board may in its discretion determine) prior to the Compensable Termination, in which case the Non-Renewal Payment shall be equal to one (1) times the Employee’s Annual Cash Compensation), in addition to any other amounts to which the Employee may be entitled hereunder (including without limitation the Employee’s annual bonus pursuant to paragraph 4(b) above for the fiscal year of the Company in which the Employee’s Compensable Termination occurs and any amounts to which the Employee may be entitled under paragraph 5(f) or Section 8, 9 or 10 below) or by law or pursuant to the terms of any compensation or benefit plan or arrangement in which the Employee participated before the Employee’s Compensable Termination occurred. Except as otherwise provided hereafter in this subparagraph 5(a)(ii), the Non-Renewal Payment shall be paid as follows: seventy-five percent (75%) of the Non-Renewal Payment, or if

the Employee has attained age sixty-five (65) prior to the Compensable Termination, one hundred (100%) of the Non-Renewal Payment, shall be paid in a lump sum within ten (10) days after the date on which the Employee’s Compensable Termination occurs, subject to paragraph 5(i) and Section 14. Any balance of the Non-Renewal Payment shall be paid in six (6) equal monthly installments one (1) of which shall be paid at the end of each of the first six (6) months after the date on which the Employee’s Compensable Termination occurred. If a Change in Control occurs that is a “change in control event” within the meaning of Code Section 409A and Treasury Regulation §1.409A-3(i)(5)(i) (or any similar or successor provisions) (either before or after the Employee’s termination and in accordance with Treasury Regulation §1.409A-3(c)), the Non-Renewal Payment (or, in the case of such a “change in control event” that occurs after the Employee’s Compensable Termination, any portion thereof that remains unpaid at the time such “change in control event” occurs) shall be paid in a lump sum within ten (10) days after the date on which the Employee’s Compensable Termination occurs (or, in the case of such a “change in control event” that occurs after the Employee’s Compensable Termination, within ten (10) days after the “change in control event” occurs), and the two (2) preceding sentences of this subparagraph shall not apply. For thirty-six (36) months following the Employee’s termination, the Company shall also provide the Employee (and, as applicable, the Employee’s covered dependents), at Company expense, with continuation coverage under the Company’s group health plan(s) covering similarly situated executives.

     (iii) The foregoing provisions of (including any payments under) this paragraph 5(a) shall be in lieu of any severance pay that may be payable under any plan or practice of the Company, any other Subsidiary or Affiliate (as such terms are defined in Section 11 below), or by law (including the WARN Act or any similar state or foreign law), but shall be in addition to (and not in lieu of) any payments to which the Employee may be entitled under paragraph 5(f) and Sections 8, 9 and 10 below. Subparagraphs 5(a)(i)(C) and 5(a)(ii) above are intended to be mutually exclusive, and in no event shall such subparagraphs, either individually or collectively, be construed to require the Company to pay an amount of money in excess of three (3) times the Employee’s Annual Cash Compensation under such subparagraphs, either individually or collectively, in addition to continuation coverage under the Company’s group health plan(s) covering similarly situated executives provided by the Company to the Employee (and, as applicable, the Employee’s covered dependents), at Company expense, for thirty-six (36) months.

     (iv) The Employee shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement (including but not limited to any payment provided for above in this paragraph 5(a)) by seeking other employment or otherwise, nor shall any compensation earned by the Employee in other employment or otherwise reduce the amount of any payment or benefit provided for in this Agreement, except as provided in subparagraphs 5(a)(i)(C) and 5(a)(ii) above.

     (v) A Compensable Termination shall not include a termination of employment by reason of the Employee’s death.

          (b) Termination by the Company or an Affiliate for Good Cause or by the Employee without Good Reason . If, during the term of this Agreement, the Employee’s employment by the Company is terminated by the Company or an Affiliate for Good Cause or by the Employee without Good Reason, the Employee shall not be entitled to receive any compensation under Section 4 above accruing after the date of such termination or any payment under paragraph 5(a) above. However, any obligations of the Company under paragraph 5(f) and Sections 8, 9 and 10 shall not be affected by such termination of employment. The provisions of this paragraph 5(b) shall be in addition to, and not in lieu of, any other rights and remedies the Company may have at law or in equity or under any other provision of this Agreement in respect of such termination of employment. However, if during the term of this Agreement the Employee’s employment is terminated by the Employee without Good Reason and the Employee gives the Company at least one hundred twenty (120) days’ advance notice of such termination, then the Employee shall not have any obligation or liability under this Agreement on account of such termination of employment, but the Employee’s obligations under Section 6 and 7 hereof shall not be affected by such termination of employment.

          (c) Good Cause Defined . For purposes of this Agreement, the Company and the Affiliates shall have “ Good Cause ” to terminate the Employee’s employment by the Company during the term of this Agreement only if:

     (i) (A) the Employee fails to substantially perform the Employee’s duties hereunder for any reason or to devote substantially all the Employee’s business time exclusively to the affairs of the Company (including Company activities on behalf of the other Affiliates), other than by reason of a medical condition that prevents the Employee from substantially performing the Employee’s duties hereunder even with a reasonable accommodation by the Company, and (B) such failure is not discontinued within a reasonable period of time, in no event to exceed thirty (30) days, after the Employee receives written notice from the Company or an Affiliate of such failure; or

     (ii) the Employee commits an act of dishonesty resulting or intended to result directly or indirectly in gain or personal enrichment at the expense of the Company or an Affiliate, or engages in conduct that constitutes a felony in the jurisdiction in which the Employee engages in such conduct; or

     (iii) the Employee is grossly negligent or engages in willful misconduct or insubordination in the performance of the Employee’s duties hereunder; or

     (iv) the Employee materially breaches the Employee’s obligations under Section 6 or paragraph 7(a) below, relating to confidential information and non-solicitation.

     In addition, the Employee’s employment shall be deemed to have terminated for Good Cause if, after the Employee’s employment has terminated, facts and circumstances arising during the course of the Employee’s employment are discovered that would have justified a termination for Good Cause under subparagraphs 5(c)(ii) or (iv) above.

     Any foregoing provision of this paragraph 5(c) to the contrary notwithstanding, the Company and the Affiliates shall not have “Good Cause” to terminate the Employee’s

employment within three (3) years after a Change in Control or Potential Change in Control (as such terms are defined in Section 11 below) unless (A) the Employee’s act or omission is willful and has a material adverse effect upon the Company or an Affiliate, (B) the Board gives the Employee (I) written notice warning of its intention to terminate the Employee for Good Cause if the specified act or omission alleged to constitute Good Cause is not discontinued and, if curable, cured, and (II) a reasonable opportunity after receipt of such written notice, but in no event less than two (2) weeks, to discontinue and, if curable, cure the conduct alleged to constitute Good Cause, and (C) the Employee fails to discontinue and, if curable, cure the act or omission in question; provided that clauses (B) and (C) of this sentence shall not apply with respect to conduct on the part of the Employee that constitutes a felony in the jurisdiction in which the Employee engages in such conduct, and, provided further, that this sentence shall not apply to conduct involving moral turpitude. For all purposes of this Agreement, no act, or failure to act, on the Employee’s part shall be deemed “willful” unless done, or omitted to be done, by the Employee intentionally and in bad faith ( i.e. , without reasonable belief that the Employee’s action or omission was in furtherance of the interests of the Company, another Subsidiary or Affiliate).

          (d) Good Reason Defined . For purposes of this Agreement, the Employee shall have “ Good Reason ” to terminate employment during the term of this Agreement only if:

     (i) the Company fails to pay or provide any amount or benefit that the Company is obligated to pay or provide under Section 4 above or Section 8, 9, or 10 below and the failure is not remedied within thirty (30) days after the Company receives written notice from the Employee of such failure; or

     (ii) the Employee is assigned duties or responsibilities not contemplated by Section 3 above without the Employee’s consent, or the Employee’s duties or responsibilities or power or authority contemplated by Section 3 above are limited in any respect materially detrimental to the Employee, and in either case the situation is not remedied within thirty (30) days after the Company receives written notice from the Employee of the situation; or

     (iii) the Employee is removed from, or not elected or reelected to, the Board, the board of directors of any successor to the Company, or the office, title and position of Chairman of the Board and Chief Executive Officer of the Company, and the Company and the Affiliates do not have Good Cause for doing so; or

     (iv) the Company or an Affiliate relocates the Employee’s office outside of either (A) the greater Washington, D.C. metropolitan area, or (B) such other Company or Subsidiary location as he may determine to be appropriate for the performance of his duties, in either case (A) or (B) without the Employee’s written consent (given in a personal rather than representative capacity) and the situation is not remedied within thirty (30) days after the Company receives written notice from the Employee of the situation; or

     (v) the Company or an Affiliate gives the Employee written notice, in the manner set forth in paragraph 13(f) below, prior to any Extension Effective Date, that the term of this Agreement that is in effect at the time such written notice is given is not to be

extended or further extended, as the case may be; provided that the giving of such written notice to the Employee shall constitute Good Reason only if and when the Employee shall have performed such of the Employee’s duties and responsibilities for such period of time, in no event to exceed six (6) months after the giving of such notice, as the Board may reasonably request in writing to transition the Employee’s duties and responsibilities; or

     (vi) a Change in Control occurs and as a result thereof either (A) equity securities of the Company cease to be publicly-traded, or (B) the Employee is not elected or designated to serve as the sole Chief Executive Officer of the Company or its survivor in the Change in Control; or

     (vii) a Change in Control or Potential Change in Control occurs and (A) the dollar value of the stock optioned to the Employee annually thereafter is less than the average annual dollar value of the stock that was optioned to the Employee during the four (4) years prior to the Change in Control or Potential Change in Control, or (B) the material terms of such options (including without limitation vesting schedules) are less favorable to the Employee than the material terms of the options that were granted to the Employee during the four (4) years prior to the Change in Control or Potential Change in Control, and in either case (A) or (B) the situation is not remedied within thirty (30) days after the Company receives written notice from the Employee of the situation. For purposes of (A) and (B) of this subparagraph 5(d)(vii), if free-standing stock appreciation rights are granted to the Employee, the stock subject to such rights shall be considered stock that is optioned to the Employee, and if alternative stock appreciation rights (a/k/a tandem stock appreciation rights) are granted to the Employee, the stock appreciation rights shall be considered terms of the options to which they are alternative/tandem; or

     (viii) the Company or a Permitted Assignee attempts to assign any of its rights or obligations under this Agreement other than in accordance with paragraph 13(d) below and does not remedy the situation within thirty (30) days after the Company receives written notice from the Employee of the situation; or

     (ix) the Company or any Subsidiary or Affiliate materially breaches the terms of this Agreement.

     In no event shall the Employee’s continued employment after any of the foregoing constitute the Employee’s consent to the act or omission in question, or a waiver of the Employee’s right to terminate employment for Good Reason hereunder on account of such act or omission, except as provided in the following sentence. With respect to any act, omission, or occurrence that is alleged to occur after the Commencement Date and prior to a Change in Control or Potential Change in Control, the Employee must provide the Company with written notice of any one (1) or more of the conditions set forth in this definition of Good Reason within six (6) months of the initial existence of the condition for such condition to constitute Good Reason. Such notice shall not excuse the Employee from continuing to perform the duties and responsibilities assigned to the Employee until such time as the Employee terminates employment. Notwithstanding the foregoing, this notice requirement shall not apply to acts or omissions alleged to constitute Good Reason that arise after a Change in Control or Potential Change in Control.

          (e) Disability

     (i) Notwithstanding any provision of this Agreement to the contrary, (A) if during the term of this Agreement as the same may be extended from time to time pursuant to Section 2 above, a medical condition prevents the Employee, even with a reasonable accommodation by the Company, from substantially performing the Employee’s duties hereunder (it being understood that a transitory illness, such as a cold or flu, that prevents the Employee from substantially performing the Employee’s duties hereunder during a brief period is not such a medical condition), then until the date, if any, on which the Employee recovers from such medical condition (the “ Evaluation Period ”), the Company may terminate the Employee’s employment only pursuant to subparagraph 5(e)(ii) below (a “ Disability Termination ”) or for willful misconduct constituting Good Cause under paragraph 5(c) above, and (B) if any notice of non-extension of the term of this Agreement was given before the Evaluation Period, or is given during the Evaluation Period, whether by the Company or an Affiliate or the Employee, pursuant to Section 2 above, and, but for this clause (B), the term of this Agreement would expire during the Evaluation Period as a result of such notice of non-extension having been given, then the term of this Agreement will automatically be extended without action by any party until the Employee recovers from such medical condition. For purposes of this paragraph 5(e), the Employee will be deemed to recover from a medical condition only if and when the Employee both (I) has been able to substantially perform the Employee’s duties hereunder (either with or without a reasonable accommodation by the Company) for more than six (6) months, consecutive or non-consecutive, within any period of twelve (12) or fewer consecutive months commencing on or after the commencement of the Evaluation Period, and (II) is not entitled to receive long-term disability (“ LTD ”) benefits under a LTD plan of the Company or a Subsidiary.

     (ii) Except as otherwise provided in subparagraph 5(e)(i) above, during the Evaluation Period, the Company may terminate the Employee’s employment only in the event of a “ Disability ,” which for this purpose means that a medical condition either (A) has prevented the Employee, even with a reasonable accommodation by the Company, from substantially performing the Employee’s duties hereunder for six (6) months, consecutive or non-consecutive, in any period of twelve (12) or fewer consecutive months, or (B) entitles the Employee to receive LTD benefits under a LTD plan of the Company or any Subsidiary. The Company will give the Employee at least ten (10) days advance written notice of a Disability Termination. Notwithstanding any provision of this Agreement to the contrary, a Disability Termination will not be treated as a termination to which the provisions of paragraph 5(a) or 5(b) apply.

     (iii) In the event of a Disability Termination, the Company will pay or provide the Employee with the following:

     (A) With respect to the period ending on the date of the Disability Termination, the Employee will receive all of the compensation and benefits provided by Section 4 above. The amount of any compensation payable to the Employee with respect to the period ending on the date of the Disability Termination may be reduced by (I) any payments which the Employee receives

with respect to the same period because of short- or long-term disability under any disability plan of the Company or any Subsidiary, and (II) any income (whether from Social Security, workers compensation or any other source) that is deducted in computing the amount of such payments under any disability plan of the Company or any Subsidiary;

     (B) An amount of money equal to the Severance Payment. Except as otherwise provided hereafter in this subparagraph 5(e)(iii)(B) and Section 14, seventy-five percent (75%) of the Severance Payment (or, if the Employee has attained age sixty-five (65) prior to the Disability Termination, one hundred percent (10