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Exhibit
10.12
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SEPARATION
AGREEMENT AND GENERAL RELEASE
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This Separation Agreement and
General Release ("Agreement") is made and entered into by and
between DR. IVAN GERGEL ("Dr. Ivan Gergel") and FOREST
LABORATORIES, INC. ("Forest").
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In consideration of the mutual
promises and covenants set forth herein, Dr. Ivan Gergel and Forest
agree as follows:
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Termination of Employment. Dr. Ivan Gergel hereby resigns
from his position as Senior Vice President, Scientific Affairs,
President FRI in the Corporate Research & Development
organization within the Executive area with Forest (as well as from
any and all other positions with Forest in whatever capacity)
effective March 31, 2008. Dr. Ivan Gergel’s last day of
regular work in his current capacity at Forest shall be on or about
March 31 2008 as determined in consultation with Dr. Lawrence S.
Olanoff, M.D., President & COO of Forest Laboratories, Inc.
From April 1, 2008, to and including December 31, 2008, Dr. Gergel
will serve the Company in the capacity of Special Advisor to the
President & COO. Dr. Ivan Gergel’s last day of employment
with Forest shall be December 31 , 2008 (the "Separation
Date"). Dr. Ivan Gergel shall have permission to use his current
position title throughout the period of this agreement, up to and
including the Separation Date.
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1.
Continued Employment. Forest
agrees to continue Dr. Ivan Gergel’s employment up to and
including the Separation Date (December 31, 2008). Forest's sole
obligations to Dr. Ivan Gergel in connection with such continued
employment shall be the continued payment of salary and provision
of benefits as set forth in this Agreement. The period from January
1, 2008 through March 31, 2008 shall serve as the Notice Period and
be inclusive in this Agreement. From April 1, 2008 up to and
including the Separation Date, Dr. Ivan Gergel’s employment
shall consist of making himself available for consultations with
members of Forest's management and providing requested reports
and/or works as determined by Forest. Such employment may or may
not require Dr. Ivan Gergel’s presence at meetings. It is
understood that Dr. Ivan Gergel will cooperate and will not refuse
any appropriate and reasonable request by Forest for information
and/or assistance during the time period from April 1, 2008 through
the Separation Date, inclusive, subject to Dr. Ivan Gergel’s
reasonable availability. Failure to accept, and/or respond to such
reasonable requests may be considered as a breach of this Agreement
and may result in, among other things, a suspension or termination
of monetary benefits. It is understood that Dr. Ivan Gergel may
engage in interviews and other activities up to and including the
Separation Date for purposes of securing new employment.
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Dr. Ivan Gergel acknowledges and agrees that if Dr. Ivan
Gergel does not enter into this Agreement, his employment with
Forest will not be extended to the Separation Date and he will not
receive the salary and other benefits set forth in this Agreement
(with the exception of any benefits that would otherwise be
required by law). Further, Dr. Ivan Gergel acknowledges that the
agreement known as Change in Control between Forest and Dr. Gergel
shall be canceled as of March 31, 2008.
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2.
Salary Payments by Forest to Dr.
Ivan Gergel. Forest agrees to continue to pay Dr. Ivan
Gergel his current annual salary of $565,000 on Forest's customary
payroll dates, and in accordance with Forest's customary payroll
practices, less all applicable taxes, withholdings and deductions
for the period April 1, 2008 up to and including the Separation
Date. Dr. Ivan Gergel may continue to possess and use the company
provided vehicle through the separation date and its use shall be
taxable as per IRS regulations. This company vehicle is to be
returned to the Forest in good condition as per policy and plan no
later than December 31, 2008. Dr. Ivan Gergel shall be eligible to
receive a performance bonus only for the period January 1, 2008
through March 31, 2008. Such performance bonus shall be paid no
later than the Separation Date. No eligibility for bonus will be
made for the period of April 1, 2008 through December 31, 2008
(Separation Date). Upon the satisfactory execution of this
agreement, Forest shall release Dr. Ivan Gergel from any obligation
to Forest as a result of his relocation. Vacation time will vest up
to the end of March 31, 2008; there will be no further accrual
between that date and the Separation Date. Dr. Ivan Gergel shall be
paid for all unused vacation as earned in a check no later than one
month following Separation Date. Unemployment eligibility is
determined by state law; however, Forest shall not contest any
truthful application for benefits made by Dr. Ivan Gergel.
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3.
Medical and Dental Benefits.
Forest agrees to continue Dr. Ivan Gergel’s participation in
its existing medical and dental plans at his existing co-pay,
annual deductible and monthly premium contribution rates. These
benefits shall continue up to and including the Separation Date,
unless Dr. Ivan Gergel becomes covered by a medical and/or dental
plan prior to the Separation Date and coverage is redundant or not
needed. Dr. Ivan Gergel shall immediately notify Forest of any new
medical and/or dental plan enrollment occurring prior to the
Separation Date. In any event, regular enrollment in the Forest
medical and dental benefit plans shall cease as of the Separation
Date where no notification was provided to Forest. After the
Separation Date, Dr. Ivan Gergel has the right to obtain benefits
continuation through the provisions of COBRA at his own expense and
at the then prevailing COBRA rate for such coverage through the
carrier. Details regarding his COBRA rights have been provided to
Dr. Ivan Gergel. Forest reserves the right to amend, alter, modify
or otherwise terminate the company medical and dental plans at any
time, with or without notice so long as such amendment, alteration,
modification or termination is generally applicable to employees
similarly situated to Dr. Ivan Gergel. In the event that Forest
makes any changes to the plans (as opposed to terminating the
plans) while Dr. Ivan Gergel is eligible for coverage, he will
automatically be eligible to be enrolled in the same level of
coverage, subject to any such applicable changes. Forest's human
resources department will be available for benefit plan discussion
and enrollment support.
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4.
Life Insurance. Forest agrees
to continue Dr. Ivan Gergel’s participation in Forest’s
life insurance plan in an amount equal to Dr. Ivan Gergel’s
current annual salary (as set forth in Section 2 of this Agreement)
up to and including the Separation Date. Any supplemental life
insurance amount presently in effect through any Forest plan will
also be continued up to and including the Separation Date, unless
canceled in writing prior to the Separation Date.
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5.
Stock Options Dr. Gergel has
access to the complete list of all stock option agreements (the
"Option Agreements") (the "Optionee Statement") currently in effect
between Forest and Dr. Ivan Gergel, including the number of shares
of Forest's Common Stock covered, the exercise price, the
expiration date and the extent to which such options are currently
vested. For reference, Dr. Gergel may be directed to our stock
option vendor, Smith Barney at their website
(www.benefit.access.com) for further information. Forest and Dr.
Ivan Gergel agree that the Option Agreements shall remain in full
force and effect up to and including the Separation Date, in
accordance with their respective terms and conditions and the
provisions of this agreement. For a period of 90 days immediately
following the Separation Date or his early resignation date which
ever shall occur first, Dr. Ivan Gergel shall have the right to
exercise any vested stock options in accordance with the terms and
conditions contained in the plan documents. If, prior to the
Separation Date, Dr. Ivan Gergel becomes employed with another
employer, who requires him to not be employed by another firm, and
in order to accept that employment, Dr. Ivan Gergel resigns from
Forest, this Separation Agreement and General Release shall remain
in full force and effect, except that Dr. Ivan Gergel will forego
any stock option consideration beyond the date of his
resignation.
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Nothing
contained herein shall be deemed a representation or warranty by
Forest as to the market price or value of shares of Forest's Common
Stock.
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6.
401(k) Plan. Dr. Ivan Gergel
will be eligible to participate in Forest's 401(k) salary reduction
plan, subject to plan terms and limitations, on the same basis
available to Forest's employees generally up to and including the
Separation Date, or until new employment is obtained, whichever
occurs first. Dr. Ivan Gergel will be eligible to receive Forest's
matching 401k contributions according to the regular schedule
during the period continuing salary payments are made to Dr. Ivan
Gergel under this Agreement. In the event that Forest makes any
changes to the plan (as opposed to terminating the plans) while Dr.
Ivan Gergel is eligible for coverage, he will automatically be
eligible to be enrolled in the same or similar level of coverage,
subject to any such applicable changes. Any matching payments
received will be based on the actual amounts contributed by Dr.
Ivan Gergel into the 401(k) plan. Dr. Ivan Gergel has achieved 100%
vesting in the 401k plan during the period up to and including the
Separation Date.
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7.
Profit Sharing. Dr. Ivan
Gergel will be eligible to receive profit sharing distributions for
the 2007 calendar year pursuant to Forest's profit sharing plan, as
determined by the Board of Directors, and in accordance with plan
terms and requirements. Dr. Ivan Gergel will be eligible to receive
profit sharing distributions for the 2008 calendar year pursuant to
Forest's profit sharing plan, as determined by the Board of
Directors, and in accordance with plan terms and requirements. He
will not be eligible for profit sharing distributions for the 2009
calendar year pursuant to Forest's profit sharing plan, as
determined by the Board of Directors, and in accordance with plan
terms and requirements.
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Nothing set forth in Sections 4 through
7 of this agreement shall be deemed to require Forest to maintain
any of the plans referred to in such Sections or prevent Forest
from changing the terms, conditions or benefits of such plans on a
basis applicable to Forest's employees generally.
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Dr.
Ivan Gergel acknowledges and agrees that the salary and other
benefits provided for in Sections 3 through 7 of this Agreement
exceed any and all salary, bonus, commission, vacation pay,
personal time pay, holiday pay, floating holiday pay, sick pay, and
other compensation and benefits of any kind to which Dr. Ivan
Gergel may have been entitled from Forest absent this Agreement.
Dr. Ivan Gergel further acknowledges and agrees that other than the
salary and other benefits provided for in Sections 3 through 7 of
this Agreement, Forest is under no further obligation to make any
payments of any kind to, or on behalf of Dr. Ivan Gergel for any
reason whatsoever.
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8.
General Release by Dr. Ivan
Gergel. Dr. Ivan Gergel acknowledges and agrees that for and
in consideration of the continuation of his employment up to and
including the Separation Date, along with his continued salary
payments and other benefits provided for in this Agreement and the
other promises and valuable consideration set forth in this
Agreement, Dr. Ivan Gergel, for himself and for his heirs,
executors, administrators, trustees, legal representatives,
successors and assigns (collectively referred to for purposes of
this General Release as the "Employee Releasors"), hereby forever
releases and discha
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