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EXHIBIT 10.3.2
PAR PHARMACEUTICAL COMPANIES, INC.
TERMS OF STOCK OPTION
This
document sets forth the terms of an Option (as defined below)
granted by PAR PHARMACEUTICAL COMPANIES, INC. (the
“Company”) pursuant to a Certificate of Stock
Option (the “Certificate”) displayed at the
website of Smith Barney Benefits Access®. The Certificate,
which specifies the director of the Company (who is not an
employee of the Company or any Subsidiary, the “Eligible
Director”) to whom the Stock Option has been granted,
other specific details of the grant, and the electronic
acceptance of the Certificate at the website of Smith Barney,
are incorporated herein by reference.
WHEREAS ,
the Board of Directors of the Company (the “Board”) has
authorized and approved the Par Pharmaceutical Companies, Inc. 1997
Directors’ Stock and Deferred Fee Plan (the
“Plan”), which has been approved by the stockholders of
the Company; and
WHEREAS ,
the Plan, in part, provides for the annual grant of an option (the
“Option”) under the Plan to the Eligible Director to
purchase Five Thousand (5,000) shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock");
WHEREAS,
pursuant to the Plan, the award to the Eligible Director of
the Option is subject to the terms and conditions specified on
the Certificate and as set forth in the Plan and in these
Terms; and
WHEREAS,
capitalized terms not otherwise defined herein shall have the
meanings assigned to them under the Plan.
NOW, THEREFORE ,
in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1
.
Incorporation of the Plan .
The Option is granted pursuant to the provisions of the Plan and
the terms and definitions of the Plan are incorporated by reference
in these Terms.
2
.
Grant of Option .
( a
)
Subject to the terms and conditions of the Plan, the Company hereby
grants on the date of grant (the “Date of Grant”) to
the Eligible Director the right and option (the "Option") to
purchase all or any part of an aggregate number of shares of the
Common Stock of the Company (the "Option Shares"), as specified on
the Certificate and on the terms and conditions set forth herein
and therein.
(
b
)
This Option shall not be deemed an “Incentive Stock
Option” under the Internal Revenue Code
(“Code”). Accordingly, the Eligible Director
acknowledges that, under existing laws and regulations,
exercise of this Option would be a taxable event under the
Code. The Eligible Director will be subject to a withholding
tax on the difference between the purchase price of the Option
Shares and their market value on the date of the taxable
event. Any such tax shall be paid to the Company by the
Eligible Director within two days of receipt of a notice from
the Company specifying the amount thereof.
3
.
Purchase Price .
The price per share to be paid by the Eligible Director for the
Option Shares shall be the grant price specified on the
Certificate.
4
.
Exercise Terms .
(
a
)
The Option shall be exercisable in full commencing on the
first anniversary of the Date of Grant (the “Exercise
Date”), provided that the Eligible Director has not been
removed “for cause”, as a member of the Board on
or prior to the first anniversary of the Date of Grant, and
shall expire and not be exercisable after 5:00 P.M. on the
tenth anniversary of the Date of Grant (the “Exercise
Period”). An Option shall remain exercisable after the
Exercise Date at all times during the Exercise Period,
regardless of whether the Eligible Director thereafter
continues to serve as a member of the Board.
(
b
)
The Option may be exercised at any time or from time to time
during the term of the Option as to any or all full shares
which have become exercisable in accordance with this Section,
but not as to less than 100 shares of Common Stock unless the
remaining shares of Common Stock that are so exercisable are
less than 100 shares of Common Stock. The Option price is to
be paid in full upon the exercise of the Option. The holder of
an Option shall not have any of the rights of a stockholder
with respect to the shares of Common Stock subject to the
Option until such shares of Common Stock have been issued or
transferred to him upon the exercise of his
Option.
(
c
)
The Option may be exercised with respect to a specified number
of shares of Common Stock by written notice of exercise to the
Company stating that (i) the option price for the shares and
any withholding tax due thereon will be paid to the Company
directly by a broker-dealer designated by the Eligible
Director and irrevocable instructions to such effect have been
furnished by the Eligible Director to such broker-dealer, and
(ii) an advice from the broker-dealer confirming payment to
the Company will be promptly delivered to the Company. The
exercise of such Option shall be irrevocable at the time of
notice to the Company; provided, however, that the Company
shall not be required to deliver certificates for shares of
Common Stock with respect to the exercise of the Option until
the Company has confirmed the receipt of good and sufficient
funds in payment of the purchase price hereof.
(
d
)
Upon a Sale (as defined below), the Board may elect either
( i
)
to continue the Option without any payment or (ii) to cause to
be paid to the Eligible Director upon consummation of the
Sale, a payment equal to the excess, if any, of the sale
consideration receivable by the holders of shares of Common
Stock in such a Sale (the “Sale Consideration”)
over the purchase price for this Option for each share of
Common Stock the Eligible Director shall then be entitled to
acquire under these Terms. If the Board elects to continue the
Option, then the Company shall cause effective provisions to
be made so that the Eligible Director shall have the right, by
exercising the Option prior to the end of the Exercise Period,
to purchase the kind and amount of shares of stock and other
securities and property receivable upon such a Sale by a
holder of the number of shares of Common Stock which might
have been purchased upon exercise of the Option immediately
prior to the Sale. The value of the Sale Consideration
receivable by the holder of a share of Common Stock, if it
shall be other than cash, shall be determined, in good faith,
by the Board. Upon payment to the Optionee of the Sale
Consideration, the Eligible Director shall have no further
rights in connection with the
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