EXHIBIT 10.9.9
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
(this “Agreement”), dated as
of December 3, 2008, by and between Par Pharmaceutical, Inc., a
Delaware corporation (“Par” or “Employer”),
and Lawrence Kenyon (“Executive”).
R E C I T A L S :
A.
WHEREAS, Executive desires to provide
services to Par in the capacity of Chief Financial
Officer.
B.
WHEREAS, Executive and Employer agree and
acknowledge that the Agreement set forth herein contains the terms
and conditions that govern Executive’s employment.
In consideration of the mutual promises
herein contained, the parties hereto hereby agree as
follows:
1.
Employment .
1.1
General . Par hereby employs Executive effective
December 15, 2008 (the “Effective Date”) in the
capacity of Executive Vice President. Upon resignation of
Employer’s present Chief Financial Officer, Executive’s
term as Executive Vice President shall terminate and Par will
employ Executive in the capacity of Executive Vice President and
Chief Financial Officer (“CFO”).
Executive shall perform and carry out such duties and
responsibilities that are reasonably consistent with
Executive’s position and responsibilities and this Agreement,
and as may be assigned to him by Employer. Executive shall
report to Employer’s Chief Executive Officer. Executive
hereby accepts such employment, subject to the terms and conditions
herein contained.
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 . Once Executive becomes the CFO,
whenever the CFO 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 Board, 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 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 subsidiaries, entities and organizations
presently existing or hereafter formed, organized or acquired,
directly or indirectly, by Employer (each, a
“Subsidiary” and collectively, the
“Subsidiaries”), the following: (i) a Base Salary at
the annual rate of $340,000 (Three
Hundred and Forty Thousand Dollars); and (ii) any bonus and the
benefits set forth in Sections 2.2, 2.3, and 2.4 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.
2.2
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, in its sole
discretion, 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. Although this section does not guarantee any
specific bonus figures, it is understood that Executive’s
annual bonus target shall be equal to fifty percent (50%) of
his Base Salary. At the time the Board determines the
Executive’s eligibility for a bonus, the Board shall set
forth all material terms of the bonus arrangement in a written
document. The Employer shall pay the bonus by March 1
following the end of the calendar year in which the bonus is
earned.
2.3
Equity Awards . Executive shall be entitled to participate in
long-term incentive plans, including, without limitation, stock
option, restricted stock, and similar equity plans of Employer as
may be offered from time to time. In connection herewith,
Employer will issue Executive’s equity award in January 2009.
It is anticipated that such equity award will have economic
value ranging from $700,000 (Seven Hundred Thousand Dollars) to
$800,000 (Eight Hundred Thousand) (the “issued
amount”). The issued amount shall be determined by
Employer in its own discretion and subject to the terms and
conditions set forth in the 2004 Performance Equity Plan ,
Executive’s January 2009 Stock Option Agreement, and the
January 2009 Award Agreement relating to such shares.
2.4
Executive Benefits
.
2.4.1
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.
2.4.2
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 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
in accordance with the terms and conditions of such plans and
programs.
2.4.3
Vacation . Executive shall be entitled to four (4) weeks
of paid vacation per calendar year, prorated for any partial
year.
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2.4.4
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.
2.5
Relocation Benefit
. Executive will have access to the
services set forth in Par’s relocation policy. Such
benefits will be made available to Executive for up to eighteen
(18) months after Executive’s first date of
employment.
2.6
Signing Bonus . On the date hereof,
Employer shall pay to Executive a one-time signing bonus (the
“Signing Bonus”) in the amount of $25,000 (Twenty-Five
Thousand Dollars), less such deductions as shall be required to be
withheld by applicable law and regulations. In the event
Executive’s employment is terminated during the first year of
the Initial Term by Executive pursuant to Section 3.2.2 hereof or
by Employer pursuant to Section 3.2.4 hereof, Executive shall repay
to Employer the Signing Bonus, less one-twelfth (1/12) of such
amount for each full thirty (30) day period during which Executive
has been employed hereunder.
3.
Employment Term;
Termination .
3.1
Employment Term
. Executive’s employment
hereunder shall commence on the Effective Date (as defined in
Section 1.1 hereof) and, except as otherwise provided in Section
3.2 hereof, shall continue until the third (3 rd )
anniversary of the Effective Date (the “Initial Term”).
Thereafter, this Agreement shall automatically be renewed for
successive one-year periods commencing on the third (3
rd ) anniversary of the Effective Date (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 written notice
of termination in respect of its or his election not to renew the
Employment Term to the other party at least thirty (30) days prior
to the end of the current Employment Term. Upon non-renewal
of the Employment Term pursuant to this Section 3.1 or termination
pursuant to Sections 3.2.1 through 3.2.6 inclusive, Executive shall
be released from any duties hereunder (except as set forth in
Sections 2.5 and 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 or no
reason whatsoever by giving a written notice of termination to
Employer. The Executive’s decision not to renew the
Employment Term before the end of the Term, or before the end of
any renewal period in which the Executive has not attained age
sixty-five (65), is a termination of the Employment Term without
Cause by the Executive. The date of termination for this
Section 3.2.2 shall be thirty (30) days after the notice of
termination is given.
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3.2.3
Disability . In the event of Executive’s Disability
(as hereinafter defined), Employer may terminate the Employment
Term by giving a written 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 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.
3.2.4
For Cause By Employer
. Employer may terminate the
Employment Term for “Cause,” based on factors
determined in good faith by Employer as set forth in a notice of
termination to Executive. For purposes of this Agreement,
“Cause” shall mean () Executive’s conviction of,
guilty or no contest plea to, or confession of guilt of, a felony
or crime involving moral turpitude; () 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; () a material
breach by Executive of this Agreement; () a continuing or other
failure by Executive to perform such duties as are assigned to
Executive by Employer in accordance with this Agreement, other than
a failure resulting from a Disability; () Executive’s
knowingly taking any action on behalf of Employer or any of its
affiliates without appropriate authority to take such action; ()
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 () the commission of an act of personal dishonesty by
Executive in connection with Employer that involves personal
profit.
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 in accordance with Employer’s regular payroll
practices.
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; (ii) the
assignment to Executive, without Executive’s express written
consent, of duties materially inconsistent with his position and
responsibilities with Employer, or a significant change in
Executive’s reporting responsibilities, titles or offices;
(iii) a reduction of more than 20% by Employer in Executive’s
Base Salary; or (iv) a permanent reassignment of Executive's
primary work location, without the consent of Executive, to a
location more than seventy-five (75) miles from Employer's
executive offices in Woodcliff Lake, New Jersey.
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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
addition, the Company shall pay the following compensation and
provide the following benefits only if the Executive incurs a
separation from service under Treas. Reg. § 1.409A-1(b) (a
“Separation of Service”). All lump-sum payments
owed by Employer shall be made to Executive within forty-five (45)
days of the date of termination in accordance with Employer’s
regular payroll practices. The Executive must execute within
thirty (30) days after the date of termination Employer’s
standard form of Release Agreement substantially in the form
attached as Exhibit A hereto.
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 thirty (30) days of the date of
termination an amount equal to any unpaid but earned Base Salary
through the date of termination in accordance with Employer’s
regular payroll practices. The Employer shall also pay any
annual bonus earned but unpaid as of the date of termination for
any previously completed fiscal year in accordance with the terms
of the bonus, and such employee benefits as to which Executive may
be entitled under the employee benefit plans of
Employer.
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 Executive severance in the amount of
Executive’s Base Salary in effect on the date of termination
(the “Severance Amount I”). If a termination as
described in the prior sentence occurs within two (2) years after a
Change of Control (as defined in Section 3.3.6(d) hereof), the
Employer shall pay to Executive severance in an amount equal to the
product of two (2) multiplied by the sum of Executive’s Base
Salary in effect on the date of termination, and 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 2.2 hereof (the “Severance Amount
II”). The Employer shall pay the Severance Amount I in
installments, and shall first determine the amount of each
installment if the Severance Amount I were paid in equal
semimonthly installments for twelve (12) months (the
“Installment Payment I”) commencing on the forty-fifth
(45th) day after the date of termination. The Employer shall
pay the Severance Amount II in installments, and shall first
determine the amount of each installment if the Severance Amount II
were paid in equal semimonthly installments for two (2) years (the
“Installment Payment II”) commencing on the forty-fifth
(45th) day after the date of termination. From the
forty-fifth (
