Execution
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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.
NY-839076v6
(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
