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SEPARATION AGREEMENT AND RELEASE

Release Agreement

SEPARATION AGREEMENT AND RELEASE | Document Parties: PAR PHARMACEUTICAL COMPANIES, INC. | Par Pharmaceutical, Inc You are currently viewing:
This Release Agreement involves

PAR PHARMACEUTICAL COMPANIES, INC. | Par Pharmaceutical, Inc

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Title: SEPARATION AGREEMENT AND RELEASE
Governing Law: New Jersey     Date: 2/24/2011
Industry: Biotechnology and Drugs     Sector: Healthcare

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Execution Version

 

EXHIBIT 10.7.15

SEPARATION AGREEMENT AND RELEASE

 

THIS SEPARATION AGREEMENT AND RELEASE (this “ Release ”), is entered into as of December 17, 2010 by and between Par Pharmaceutical, Inc., a Delaware corporation (the “ Company ”), and John A. MacPhee, a resident of the State of New Jersey (“ Employee ”).  The Effective Date of this Release shall be as set forth in Section 6 herein.

 

RECITALS

 

WHEREAS, Employee has been employed by the Company in high level executive positions;

 

WHEREAS, Employee and the Company have agreed to discontinue the employment relationship effective as of January 31, 2011;

 

WHEREAS, Employee signed an Employment Agreement with the Company on March 6, 2008, as amended by an Amendment to Employment Agreement, dated March 4, 2009 (the “ Employment Agreement ”) in which Employee agreed that all payments and benefits upon his separation from the Company were contingent upon his execution of a release for the benefit of the Company within thirty (30) days after the date of separation; and

 

WHEREAS, as a result of Employee’s separation from the Company, the parties wish to fully and finally resolve all issues concerning Employee’s employment relationship with the Company and to reiterate certain terms contained in the Employment Agreement.

 

NOW, IN CONSIDERATION of the mutual promises and covenants in the Employment Agreement and this Release, the sufficiency of which Employee acknowledges, the parties agree as follows:

 

OPERATIVE PROVISIONS

Section 1.       Separation of Employment .  The Company and Employee agree that Employee shall separate from the Company effective at the end of business on January 31, 2011 (the “ Separation Date ”), such separation of employment with the Company occurring pursuant to Section 3.2.5 of the Employment Agreement by and between the parties.  Employee’s employment obligations to the Company shall be deemed satisfied so long as Employee makes himself available to perform services for the Company reasonably related to his position with the Company and the transition of the responsibilities of his position with the Company.

Section 2.      Pay, Benefits and Stock Options Upon Separation .

(a) Separation Pay .  On account of Employee’s separation from the Company and provided Employee remains employed through the Separation Date, the Company shall pay Employee the severance amount of seven hundred fifty thousand dollars ($750,000.00) (the “ Severance Amount ”) in installments and with interest in the manner detailed in Section 3.3.2 of the Employment Agreement.  For purposes of clarification, the “Severance Delayed Payment Date” (as defined in Section 3.3.2 of the Employment Agreement) shall be August 1, 2011, and subsequent installment payments shall be made on a semimonthly basis thereafter through February 2013.  The installments shall be subject to all appropriate federal and state withholding and employment taxes.

 

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(b)      Benefits/Termination .  In accordance with the terms of the Employment Agreement and applicable law, Employee will have the opportunity and responsibility to elect COBRA continuation coverage pursuant to the terms of that law and will thus be responsible for the execution of the continuation of coverage forms upon termination of his insurance coverage.  In the event that Employee elects COBRA coverage, the Company will pay Employee taxable, bi-weekly installment payments equal to one-half of the applicable COBRA premium, in accordance with the Company’s payroll practices, for the period during which Employee maintains health care coverage in accordance with COBRA (and in no event will the Company make more than thirty-six (36) such installment payments), with the initial bi-weekly installment commencing on March 15, 2011.  Except as provided herein, the Company will have no obligation to Employee under Section 3.3.6 of the Employment Agreement.

(c)      Equity Awards .  Notwithstanding the Employment Agreement or any provision of an applicable equity plan or equity award agreement and provided Employee remains employed through the Separation Date, Employee’s unvested equity awards shall vest or be forfeited, as applicable, as set forth below:

(1)     Employee’s 5,400 shares of currently unvested restricted stock awarded on December 20, 2006 and scheduled to vest on December 20, 2010 shall vest on such date.

(2)     Employee’s 5,175 shares of currently unvested restricted stock awarded on March 22, 2007 and scheduled to vest on March 22, 2011 shall vest on the Separation Date.

(3)     Employee’s 6,080 shares of currently unvested restricted stock awarded on January 11, 2008 and scheduled to partially vest on January 11, 2011 shall partially vest in the amount of 3,040 shares on January 11, 2011 and the remaining 3,040 shares shall vest on the Separation Date.

(4)     Employee’s 24,689 shares of currently unvested performance-based restricted stock awarded on January 11, 2008 and any earned premium which may vest according to the terms of Employee’s 2008 Award Agreement on January 11, 2011 shall vest, if earned, on such date.

(5)     Employee’s 15,164 shares of currently unvested retention-based restricted stock awarded on November 18, 2008 and scheduled to vest on November 18, 2011 shall partially vest in the amount of 2,527 shares on the Separation Date and the remaining 12,637 shares shall be forfeited on the Separation Date.

(6)     Employee’s 11,729 shares of currently unvested restricted stock awarded on January 4, 2010 and scheduled to partially vest on January 4, 2011 shall partially vest in the amount of 2,932 shares on January 4, 2011 and the remaining 8,797 shares shall be forfeited on the Separation Date.

(7)     Employee’s currently unvested options for 2,700 shares of common stock awarded on March 22, 2007 and scheduled to vest on March 22, 2011 shall vest on the Separation Date.  Employee shall have twenty-four (24) months from the Separation Date to exercise all vested options granted on March 22, 2007.

 

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(8)     Employee’s currently unvested retention-based options for 34,290 shares of common stock awarded on November 18, 2008 and scheduled to vest on November 18, 2011 shall partially vest in the amount of options to purchase 5,715 shares of common stock on January 8, 2011 and the remaining options to purchase 28,575 shares of common stock shall be forfeited as of the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise all vested options granted on November 18, 2008.

(9)     Employee’s currently unvested options to purchase 74,656 shares of common stock awarded on January 8, 2009 and scheduled to partially vest on January 8, 2011 shall partially vest in the amount of options to purchase 24,885 shares of common stock on January 8, 2011 and the remaining options to purchase 49,771 shares of common stock shall be forfeited on the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise all vested options granted on January 8, 2009.

(10)     Employee’s currently unvested options to purchase 23,457 shares of common stock awarded on January 4, 2010 and scheduled to partially vest on January 4, 2011 shall partially vest in the amount of options to purchase 5,864 shares of common stock on January 4, 2011 and the remaining options to purchase 17,593 shares of common stock shall be forfeited on the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise all vested options granted on January 4, 2010.

(d)    Unused Vacation .  The Company shall pay Employee two (2) weeks of accrued vacation days in accordance with the Company’s vacation policy.

(e)    Reimbursement of Expenses .  The Company will reimburse Employee for all unpaid expenses due and owing Employee as of the Separation Date in accordance with Company policy.

(f)    No Other Payments .  Employee acknowledges and agrees that subject to and including those payments referenced herein, he has been paid in full for all work performed, and has received reimbursement for all business expenses, and is entitled to no further payments or bonuses from the Company whatsoever for services rendered or any other reason, except as set forth herein.

(g)    Payment Terms .  In accordance with and subject to the covenants contained in the Employment Agreement, the payments and benefits contained in this Section 2 are contingent upon Employee’s continued compliance with the continuing terms of the Employment Agreement, as referenced in Sections 7 through 9 herein.

(h)    Recovery of Compensation in Certain Circumstances .  Notwithstanding any other provision of this Agreement, if the Company determines that it is required to restate its financial statements due to material noncompliance with any financial reporting requirement under the law, whether such noncompliance is the result of misconduct or other circumstances, Employee shall be required to reimburse the Company for any bonus, equity awards or other incentive compensation received by Employee to the extent required by and otherwise in accordance with applicable law.

 

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Section 3.      Consideration .

(a)    No Disparagement .  Employee agrees to refrain from any publication or any type of communication, oral or written, of a defamatory or disparaging statement pertaining to the Company, its past, present and future officers, directors, agents, employees or representatives.  The Company agrees to refrain from any publication or any type of communication, oral or written, of a defamatory or disparaging statement pertaining to Employee.  Nothing in this Section 3 shall be construed as prohibiting the Company from making any disclosures as required by law or statute, including the release of such information as is required to be disclosed by the Company in connection with any legal proceeding, filing with the Securities and Exchange Commission (the “ SEC ”) under the Securities Exchange Act of 1934, or as otherwise required by law.

(b)    Sufficiency of Consideration; No Admission of Liability .  The parties agree that the consideration paid to Employee by the terms of this Release is good and sufficient consideration for this Release.  Employee acknowledges that neither this Release, nor any of the payments or benefits tendered in conjunction herewith, shall be taken or construed to be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing by the Company.

Section 4.      General Release and Waiver of Claims .

(a)     Solely in connection with Employee’s employment relationship with the Company, in accordance with the terms of the Employment Agreement, and in consideration of the additional promises and covenants made by the Company in this Release, Employee hereby knowingly and voluntarily compromises, settles and releases the Company and its predecessors, successors in interest, assigns, parent and subsidiary organizations, affiliates, and partners, and its past, present, and future officers, directors, shareholders, agents, and employees, and their heirs and assigns, from any and all past or present claims, demands, obligations, or causes of action, whether based on tort, contract, statutory or other theories of recovery for anything that has occurred up to and including the date of Employee’s execution of this Release.  The released claims include those Employee may have or has against the Company, or which may later accrue to or be acquired by Employee against the Company and its predecessors, successors in interest, assigns, parent and subsidiary organizations, affiliates, and partners, and its past and present officers, directors, shareholders, agents, and employees, and their heirs and assigns, whether directly or indirectly related to the employment relationship between the parties or not.  Such release shall not constitute a waiver of the Employee’s right to indemnification which may


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