EXHIBIT 10.9.11
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SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement
(“Agreement”) is made by and between PAR
PHARMACEUTICAL COMPANIES, INC., and PAR PHARMACEUTICAL,
INC . (collectively referred to as “THE COMPANY”),
and SCOTT L. TARRIFF (“EMPLOYEE”), a specified
employee of THE COMPANY. The Effective Date of this Agreement shall
be as set forth in Section 8 herein.
RECITALS
A. For purposes of this
Agreement, “THE COMPANY” means PAR PHARMACEUTICAL
COMPANIES, INC., and PAR PHARMACEUTICAL, INC., and each and any of
their parent and subsidiary corporations, affiliates, departments,
divisions, and/or joint ventures.
B. EMPLOYEE has been employed by
THE COMPANY as President and Chief Executive Officer, Par
Pharmaceutical Companies, Inc., and as President and Chief
Executive Officer, Par Pharmaceutical, Inc.
C. As a result of
EMPLOYEE’s separation from THE COMPANY, and to fully and
finally resolve all issues concerning EMPLOYEE’s employment
relationship with THE COMPANY, and to reiterate certain terms
contained in EMPLOYEE’s Employment Agreement dated
February 9, 2004, THE COMPANY and EMPLOYEE have decided to
enter into this Agreement.
For and in consideration of the
mutual promises and covenants in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
OPERATIVE PROVISIONS
1.
Separation of Employment. THE COMPANY and EMPLOYEE agree
that EMPLOYEE shall separate from THE COMPANY effective at the end
of business on October 31, 2006 (“Separation
Date”), such separation of employment with THE COMPANY
occurring pursuant to Section 3.2.5 of that certain Employment
Agreement dated as of February 9, 2004 by and between the
parties (“Employment Agreement”).
2.
Pay, Benefits and Stock Options Upon Separation.
(a)
Separation Pay. In accordance with the Employment Agreement
EMPLOYEE is, on account of his separation from THE COMPANY,
entitled to severance pay in the amount of one million two hundred
eighty four thousand two hundred twenty eight dollars
($1,284,228.00), payable in six (6) equal installments
beginning in the seventh (7 th ) month
after
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the
Separation Date and continuing for six (6) months thereafter.
The aforementioned payments shall be subject to all appropriate
federal and state withholding and employment taxes. EMPLOYEE hereby
agrees that he is entitled to no other payment from COMPANY as the
result of his separation or during the aforementioned period.
(b)
Benefits/Termination. In accordance with Section 3.3.5
of the Employment Agreement, on account of EMPLOYEE’s
separation from THE COMPANY, THE COMPANY shall, for a two (2) year
period from the Separation Date, maintain in effect for EMPLOYEE
coverage under THE COMPANY’S life insurance, medical, health,
accident, and disability plans and programs in which EMPLOYEE was
entitled to participate immediately prior to the Separation;
provided, that such benefits shall immediately terminate in the
event EMPLOYEE becomes eligible for coverage by a subsequent
employer prior to the expiration of the two (2) year period.
Following the termination of the two (2) year period, if
EMPLOYEE is not eligible for coverage under another
employer’s benefit program, EMPLOYEE will have the
opportunity to elect continuation coverage pursuant to COBRA and
will thus be responsible for the execution of the COBRA
continuation of coverage forms. All other benefits and allowances,
except those in which EMPLOYEE has vested rights under the terms of
an employee benefit plan, terminate as of the Separation Date.
Notwithstanding the foregoing, THE COMPANY shall pay EMPLOYEE a
one-time Executive Heath Care allowance in the amount of five
thousand dollars ($5,000.00) within ten (10) days of execution
of this Agreement.
(c) Stock
Options.
i. The parties
agree that as of September 16, 2003, EMPLOYEE was granted
options for seven hundred ninety five thousand (795,000) shares of
THE COMPANY’s common stock. In accordance with the Employment
Agreement, these options shall be exercisable pursuant to their
normal vesting schedules and at the exercise price related to the
respective option grants. EMPLOYEE’S exercise of such options
is governed by Section 3.3.6(a) of the Employment Agreement as
well as the terms of the applicable plan, referenced in the
Employment Agreement.
ii. The parties
agree that since September 16, 2003 EMPLOYEE has been granted
options for three hundred thirty thousand six hundred thirty three
(330,633) shares of THE COMPANY’s common stock. Any such
unvested options shall vest as of the Effective Date. EMPLOYEE
shall have twenty-four (24) months from such date to exercise all
options, at the exercise price related to the respective option
grants, provided that the relevant stock option plan remains in
effect and such options have not otherwise expired.
iii. The
parties agree that EMPLOYEE has been granted forty seven thousand
four hundred sixty one (47,461) shares of THE COMPANY’s
restricted stock. Any unvested shares of restricted stock shall
vest as of the date of EMPLOYEE’s execution of this
Agreement.
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(d) In
accordance with the Employment Agreement, the payments and benefits
contained in this Section 2 are contingent upon
EMPLOYEE’s continued compliance with Section 4 and 5 of
the Employment Agreement, as referenced in Sections 10 and 11
herein.
3.
Earned Salary.
(a)
Accrued Unused Leave. THE COMPANY shall, on the Separation
Date, pay EMPLOYEE for his unused vacation and personal days, which
THE COMPANY and EMPLOYEE agree total five hundred twenty four
(524) hours.
(b) EMPLOYEE
acknowledges and agrees that he has been paid in full for all work
performed, 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.
4.
Consideration.
(a)
No Disparagement. 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 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 (“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 is good and
sufficient consideration for this Agreement, to the extent it
imposes upon EMPLOYEE obligations in addition to those contained in
the Employment Agreement. The parties further agree that these
amounts are greater than what EMPLOYEE is entitled to receive under
THE COMPANY’s policies, any other verbal or written agreement
between the parties, including but not limited to the Employment
Agreement, and applicable law. EMPLOYEE acknowledges that neither
this Agreement, nor payment of any consideration pursuant to this
Agreement, 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.
5.
Indemnification and Advancement of Expenses. THE COMPANY
acknowledges that it will comply with the indemnification and
advancement of expenses covenants contained in Sections 5.1,
5.2, 5.3 and 5.4 of THE COMPANY’s Bylaws and that EMPLOYEE
does not waive his rights to such indemnification.
6.
General Release and Waiver of Claims. Solely in connection
with EMPLOYEE’s employment relationship with THE COMPANY and
in accordance with Section 3.3 of the Employment Agreement,
and in consideration of the additional promises and covenants made
by THE COMPANY in this Agreement, EMPLOYEE hereby knowingly and
voluntarily compromises, settles and releases THE COMPANY from any
and all past, present, or
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future
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 Agreement. 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, present, and future officers, directors, shareholders,
agents, and employees, and their heirs and assigns. EMPLOYEE
specifically agrees to release and waive all claims for wrongful
termination and any claim for retaliation or discrimination in
employment under federal or state law or regulation including, but
not limited to, discrimination based on age, sex, race, disability,
handicap, national origin or any claims under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act
of 1967, as amended by the Older Workers’ Benefits Protection
Act (ADEA), the Americans with Disabilities Act of 1990 (ADA), the
New Jersey Law Against Discrimination (LAD), the Consolidated
Omnibus Budget Reconciliation Act (COBRA), the Employee Retirement
Income Security Act (ERISA), the Immigration Reform and Control Act
(IRCA), the Fair Labor Standards Act (FLSA), the Conscientious
Employee Protection Act (CEPA), the Family Medical Leave Act
(FMLA), the New Jersey Family Leave Act (NJFLA) and the New
Jersey wage and hour law. The release of claims agreed to herein
specifically excludes (i) any claims relating to a breach of
this Agreement, and (ii) any counterclaims that are not based
on allegations regarding EMPLOYEE’s employment by THE COMPANY
or separation from THE COMPANY that EMPLOYEE might assert if THE
COMPANY were to sue EMPLOYEE.
7.
Covenant Not to Sue.
(a) Each
party represents and agrees that such party has not filed any
lawsuits or arbitrations against the other party, or filed or
caused to be filed any charges or complaints against the other
party with any municipal, state or federal agency charged with the
enforcement of any law or any self-regulatory organization.
(b) THE
COMPANY represents that it is currently not aware of any basis for
any cause of action against EMPLOYEE relative to any matter that
involved THE COMPANY and that occurred up to and including the date
of THE COMPANY’s execution of this Agreement, except for
those which have already been asserted in the pending shareholder
litigation.
(c) EMPLOYEE
agrees, consistent with the EEOC Enforcement Guidance or
Non-Waivable Employee Rights Under EEOC-Enforced Statutes dated
April 11, 1997, and to the fullest extent permitted by laws,
not to sue or file a charge, complaint, grievance or demand for
arbitration against THE COMPANY in any claim, arbitration, suit,
action, investigation or other proceeding of any kind which relates
to any matter that involved THE COMPANY, and that occurred up to
and including the date of EMPLOYEE’s execution of this
Agreement, other than those non-employment-related counterclaims
that EMPLOYEE might assert against THE COMPANY if THE COMPANY were
to sue EMPLOYEE, and unless required to do so by court order,
subpoena or other directive by a court, administrative
agency,
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arbitration panel or legislative body, or unless required to
enforce this Agreement. Nothing in this Agreement shall prevent
EMPLOYEE from (i) commencing an action or proceeding to
enforce this Agreement, or (ii) exercising EMPLOYEE’s
right under the Older Workers Benefit Protection Act of 1990 to
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