Exhibit 10.1
SEPARATION AGREEMENT AND
RELEASE
This Separation Agreement and
Release (“Separation Agreement”) is entered into by and
between Nancy J. Wysenski (“Executive” or
“you”) and Endo Pharmaceuticals Holdings Inc. (the
“Company”), and confirms the agreement that has been
reached with you in connection with your resignation from the
Company.
1. Termination of Employment
. You agree that your resignation shall be effective as of
September 1, 2009 (the “Separation Date”) and as
of such date you shall cease to be employed by the Company in any
capacity and you shall resign from all executive positions you then
hold with the Company and its subsidiaries. Your resignation as a
member of the Board of Directors of any of the Company’s
subsidiaries shall be effective as of the Separation Date. The
Company hereby waives the 30 days’ prior notice requirement
in accordance with Section 6.1 of your Amended and Restated
Employment Agreement dated as of December 19, 2007 (the
“Employment Agreement”). You further agree to execute
any additional documents necessary to effectuate the
foregoing.
2. Separation Pay and
Benefits . In consideration of your execution of this
Separation Agreement and your compliance with its terms and
conditions, the Company agrees to pay or provide you (subject to
the terms and conditions set forth in this Separation Agreement)
with the benefits described in paragraphs 2(c)(ii), 2(d) and 2(e)
below and to adhere to the nondisparagement restrictions set forth
in paragraph 5(b) below. The benefits below shall be in full
satisfaction of the Company’s obligations under the terms of
the Employment Agreement and all applicable cash or equity
incentive compensation plans and agreements except as otherwise
preserved by specific reference herein.
a. The Company shall pay you an
aggregate of $1,508,832 (the “Separation Amount”),
which represents two times the sum of (i) your current annual
base salary ($486,720) and (ii) your target incentive
compensation for the fiscal year in which the Separation Date
occurs (55% of salary). The Separation Amount shall be paid within
30 days following the Effective Date (as defined below). There
shall be deducted from the payment of the Separation Amount all
applicable federal, state and local withholding taxes and other
appropriate deductions.
b. The Company shall provide you
with continued coverage under the Company’s group medical
insurance at the cost to the employee that is in effect at the
Separation Date for a period of twenty-four (24) months
following the Separation Date; provided that, to the extent you
become eligible for medical insurance from a subsequent employer,
the Company’s medical insurance shall become secondary to
such subsequent employer’s medical insurance. The health plan
continuation coverage period provided
for under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”) shall commence at
the end of such 24-month period. In addition, the Company shall
provide you with continued life insurance benefits for a period of
twenty-four (24) months following the Separation
Date.
c. The parties acknowledge and agree
that you are party to Stock Option Agreements (the “Option
Agreements”) under which you have been granted stock options
to purchase shares of common stock of the Company (the
“Options”) pursuant to the terms of the Endo
Pharmaceuticals Holdings Inc. 2004 Stock Incentive Plan or the Endo
Pharmaceuticals Holdings Inc. 2007 Stock Incentive Plan, as
applicable (the “Stock Incentive Plans”), as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested Options
as of 9/1/09
|
|
Unvested
Options
|
|
Total
Options
|
|
Exercise
Price
|
|
Remaining vesting
dates (out of 4)
|
|
2/26/09
|
|
0
|
|
101,625
|
|
101,625
|
|
$
|
19.93
|
|
2/26/10, 2/26/11,
2/26/12, 2/26/13
|
|
2/21/08
|
|
8,144
|
|
24,433
|
|
32,577
|
|
$
|
25.19
|
|
2/21/10, 2/21/11 &
2/21/12
|
|
1/25/08
|
|
37,500
|
|
37,500
|
|
75,000
|
|
$
|
24.87
|
|
1/25/10
|
|
9/6/07
|
|
25,000
|
|
75,000
|
|
100,000
|
|
$
|
32.09
|
|
9/6/10 & 9/6/11
|
The parties also acknowledge and
agree that you are party to a Restricted Stock Unit Award
Agreements (the “RSU Agreement”) under which you have
been granted restricted stock units representing shares of common
stock of the Company (the “RSUs”) pursuant to the terms
of the Endo Pharmaceuticals Holdings Inc. 2007 Stock Incentive
Plan, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Vested RSUs
as of 10/1/09
|
|
Unvested
RSUs
|
|
Total
RSUs
|
|
Remaining vesting
dates
|
|
2/26/09
|
|
0
|
|
13,054
|
|
13,054
|
|
100% on 2/26/13
|
|
2/21/08
|
|
0
|
|
4,466
|
|
4,466
|
|
50% on 2/21/10 and
50% on 2/21/12
|
|
|
(i)
|
The Company
acknowledges that the 37,500 unvested Options originally granted to
you on January 25, 2008 become fully vested and exercisable as
of the Separation Date in accordance with the terms of the
applicable grant agreement.
|
2
|
|
(ii)
|
The Company
agrees that 25,000 of the unvested Options originally granted to
you on September 6, 2007 and the 101,625 unvested Options
originally granted to you on February 26, 2009 shall become
fully vested and exercisable as of the Separation Date.
|
|
|
(iii)
|
The Company
agrees that, in accordance with, and subject to, the terms and
conditions of the Option Agreements, you shall be entitled to
exercise all vested Options held by you as of the Separation Date
(including those that become vested in accordance with paragraph
2(c)(i) and (ii) above) until the first anniversary of the
Separation Date.
|
|
|
(iv)
|
All other
unvested Options and RSUs shall lapse on the Separation Date in
accordance with their terms.
|
d. The Company shall provide you
outplacement services through Right Management Associates so
long as you initiate these services within six months of the
Separation Date; provided that these services are not
utilized for more than twelve months from the date of such
initiation. The Company shall pay you, within 30 days following the
Effective Date, an additional $75,000 for expenses associated with
your reverse relocation to North Carolina. The Company shall also
pay you up to $200,000 in connection with a loss of equity within
30 days of the sale of your Pennsylvania home; provided that
you provide documentation of such loss of equity, which shall be
calculated as the purchase price paid by you for your Pennsylvania
home plus the cost of your documented improvements thereon less the
sales price you receive upon its sales. The Company shall promptly
pay in 2009, upon presentation of invoices, your legal
counsel’s reasonable fees in connection with this Agreement,
provided that the cost of such legal fees shall not exceed
$10,000.
e. The Company shall provide you
with continued use of your current Company automobile until the end
of its current lease or the one-year anniversary of the Separation
Date, whichever is later. In accordance with Section 4.2 of
the Employment Agreement, the Company will reimburse you for all
operating expenses relating thereto upon the Executive’s
submission of appropriate documentation as set forth in the
Employment Agreement. The Company will determine the actual value,
if any, of your non-business use of such automobile and will
furnish you with a W-2 Wage and Tax Statement , grossed up for
taxes, to be included in your income tax returns, in accordance
with prevailing Internal Revenue Service regulations. All
reimbursements under this paragraph shall be made as soon as
practicable, and in no event later than the calendar year following
the year in which the expenses are incurred or taxes are
remitted.
f. Notwithstanding the foregoing, in
the event that the Effective Date does not occur by
September 2, 2009, the Company’s obligation to make the
payments and to provide the benefits set forth in paragraphs
2(c)(ii), 2(d) and 2(e) above shall cease. Additionally, the
Company’s obligation to make the payments and to provide the
benefits set forth in paragraphs 2(c)(ii), 2(d) and 2(e) above
shall cease as of the date of any material breach of your
obligations under the covenants set forth in paragraphs 5, 6 and 7
hereof, provided such breach is not cured within 30 days of the
date the Company delivers you written notice notifying of such
breach.
3
3. Consulting Services .
Until March 31, 2010, at the Company’s request, you
shall provide consulting services to the Company from time to
time.
4. Accrued Benefits . Whether
or not you execute this Separation Agreement, you will be paid for
any accrued but unused vacation days, and for unreimbursed,
documented business expenses (in accordance with usual Company
policies and practices, and in no event later than the calendar
year following the year in which the expenses are incurred), to the
extent not theretofore paid. In addition, following the Separation
Date, you will be entitled to receive vested amounts payable to you
under the Company’s 401(k) plan and other retirement and
deferred compensation plans in accordance with the terms of such
plans and applicable law. Except as specifically set forth herein,
your participation in all Company plans shall remain subject to the
terms and conditions of such plans as in effect from time to time
and you agree that such terms and conditions are binding on you and
the Company.
5. Nondisparagement
.
a. You agree that you will not, with
intent to damage, disparage or encourage or induce others to
disparage any of the Company, its subsidiaries and affiliates,
together with all of their respective past and present directors
and officers, as well as their respective past and present
managers, officers, shareholders, partners, employees, agents,
attorneys, servants and customers and each of their predecessors,
successors and assigns (collectively, the “Company Entities
and Persons”); provided that such limitation shall extend to
past and present managers, officers, shareholders, partners,
employees, agents, attorneys, servants and customers only in their
capacities as such or in respect of their relationship with the
Company and its affiliates.
b. The Company agrees that neither
the Company nor any director or officer, with intent to damage you,
will disparage you or encourage or induce others to disparage
you.
c. For the purposes of this
Separation Agreement, the term “disparage” includes,
without limitation, comments or statements adversely affecting in
any manner (i) the conduct of the business of the Company
Entities and Persons or yours or (ii) the business reputation
of the Company Entities and Persons or yours. Nothing in this
Separation Agreement is intended to or shall prevent either party
from providing, or limiting testimony in response to a valid
subpoena, court order, regulatory request or other judicial,
administ
