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Exhibit
10.1
April 4, 2008
Mr. David A.
Eatwell
144 Belle Glades Lane
Belle Mead, New Jersey 08502
Subject: Separation Agreement and
Release
The purpose of this letter is to confirm
the agreement between Catalent Pharma Solutions, Inc. and all of
its parents, subsidiaries and affiliated companies (collectively
referred to as “ Catalent ”) and David A.
Eatwell (referred to as “ You ”) concerning
your termination of employment with Catalent.
Termination Date
You agree that your last day of
employment with Catalent will be April 4, 2008 (the
“ Termination Date ”) and following such date
you will cease to be an officer or employee of Catalent.
Severance Pay
Following the Termination Date, subject
to receipt of this fully-executed Agreement, the receipt and
non-revocation of the release of claims attached hereto as Exhibit
A (the “ Release ”), and your adherence to the
restrictive covenants contained in the Management Equity
Subscription Agreement, dated May 7, 2007, by and between PTS
Holdings Corp. and you (the “ MESA ”), you will
be paid $560,717 in severance (the “ Severance
Benefit ”) in the form of salary continuation for a 52
week period (the “ Initial Severance Period ”).
The first installment payment of the Severance Benefit will be made
on the first regular payroll date that occurs after the Termination
Date. The Severance Benefit consists of your current annual salary
($310,500), a Management Incentive Plan target bonus equal to 75%
of your current annual salary ($232,875), plus your annual car
allowance ($17,342). In addition to the Severance Benefit payable
during the Initial Severance Period, if you satisfactorily perform
the duties reasonably requested of you by Catalent during the six
(6) month period following the Termination Date, as determined
by the Chief Executive Officer of Catalent in his sole discretion,
you will be paid an additional $140,179.25 in severance in
the form of salary continuation for an additional 3 month period
following the end of the Initial Severance Period (such additional
period, to the extent applicable, together with the Initial
Severance Period, the “ Severance Period ”)).
You will also be paid for any accrued and unused P.T.O. (paid time
off).
Management Incentive
Plan
Following the Termination Date, you will
be eligible to receive an amount equal to any bonus that may have
been earned under the FY08 Management Incentive Plan, which amount
will be (i) multiplied by a fraction, the numerator of which
is the number of days you were employed by Catalent in such fiscal
year and the denominator of which is 365 and (ii) payable to
you in September 2008. For purposes of calculating any bonus that
may have been earned under the FY08 Management Incentive Plan, your
individual performance factor shall not be less than
1.0.
Continuation of Health/Group Life
Insurance Benefits
Following the Termination Date, in
addition to the severance pay described above, subject to the
receipt and non-revocation of the Release and your adherence to the
restrictive covenants contained in the MESA, you are entitled to
receive the group health benefits coverage in effect on the
Termination Date (or generally comparable coverage) for yourself
and, where applicable, your spouse and eligible dependents (to the
extent they were receiving such coverage as of the Termination
Date), at the same premium rates as may be charged from time to
time for employees of Catalent generally, which coverage will be
provided until the earlier of (i) the expiration of the
Initial Severance Period or, if later, to the extent applicable,
the Severance Period and (ii) the date you are or become
eligible for coverage under group health plan(s) of any other
employer. Such continued coverage will run concurrently with
COBRA.
Outplacement
Assistance
Catalent will pay for executive
outplacement services on your behalf through consulting firm of Lee
Hecht Harrison.
Employee Assistance Program (“
EAP ”)
The EAP will be available to you and
your immediate family for three (3) months after the
Termination Date.
UK Pension Plan
You may be entitled to receive benefits
under the Cardinal Health Retirement and Death Benefit Plan in
accordance with the terms and conditions of the plan.
401(k) Plan
You may be entitled to receive benefits
under the Catalent Pharma Solutions, Inc. 401(k) Plan in accordance
with the terms and conditions of the plan. If you have any question
regarding your 401(k) plan account, please contact Fidelity
investments at 1-877-866-4401.
Deferred Compensation
Plan
You may be entitled to receive benefits
under the Catalent Pharma Solutions, Inc. Deferred Compensation
Plan in accordance with the terms and conditions of the plan. Your
balance will be paid to you in accordance with the terms of the
plan, based on your distribution election on file with Fidelity
Investments. If you have any questions regarding your account,
please contact Fidelity Investments at 1-877-866-4401.
PTS Equity Compensation
Plan
With respect to the 613.397 shares of
common stock of PTS Holdings Corp. (“PTS Shares”) that
you previously purchased, Catalent agrees to recommend to the Board
of Directors of PTS Holdings Corp. that 338.397 of such PTS Shares
be repurchased by PTS Holdings Corp. on or before April 30,
2008 at a repurchase price per PTS Share of $1000, for an aggregate
repurchase price of $338,397. With respect to the remaining 275 PTS
Shares, you will continue to hold such shares subject to the terms
and conditions of the MESA and the Securityholders Agreement, dated
as of May 7, 2007, among PTS Holdings Corp. and the other
parties thereto (the “ Securityholders Agreement
”).
With respect to the options to purchase
shares of common stock of PTS Holdings Corp. (the “
Options ”) subject to your nonqualified stock option
agreement, dated as of May 7, 2007 (the “ Option
Agreement ”), you will have 90 days from the Termination
Date to exercise 20% of the shares ( i.e ., 183 shares)
subject to your Time Option (as defined in the Option Agreement).
The remaining 80% of the shares subject to your Time Option, as
well as 100% of the shares subject to your Performance Option and
Exit Option (each, as defined in your Option Agreement) will be
forfeited as of the Termination Date and you will not be able to
exercise your option with respect to these shares. If you decide to
exercise the portion of your Time Option that is exercisable, any
shares that you receive upon such exercise will be subject to the
terms and conditions of the MESA and the Securityholders Agreement,
including the call rights set forth in Section 4.2 of the
MESA.
Transition Procedure
You agree to (i) continue to
conduct your activities in a professional manner and to cooperate
with Catalent in all reasonable ways to achieve a smooth transition
and resolution to any open items on which you were working,
(ii) not intentionally injure Catalent in any way relating to
company property or personnel, (iii) turn over any company
property including proprietary information in your possession
including, but not limited to, all credit cards, prescription
cards, office or warehouse keys, supplies or equipment, all company
documents and all copies thereof, (iv) refrain from any
conduct, activity, or conversation which is intended to or does
interfere with or disparage the relationships between Catalent and
its employees, customers, suppliers or others.
Restrictive Covenants
You agree and acknowledge that following
the Termination Date you will continue to be subject to the
covenants not to compete, not to solicit and not to disclose
confidential information contained in the MESA. In connection with
your compliance with the foregoing covenants, Catalent agrees to
respond as
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soon as reasonably practicable to any
requests made by you to clarify the scope of such covenants. In
addition, you agree that for five years after the Termination Date,
you shall not disparage, deprecate or make any comments or take any
other actions, directly or indirectly, that could reflect adversely
on Catalent or any of its officers, directors, employees or agents
or adversely affect its business reputation or goodwill.
No Additional Payments
The severance payments, rights and
benefits described in this Agreement will be the only such
payments, rights and benefits you are to receive as a result of
your termination of employment and you agree you are not entitled
to any additional payments, rights or benefits not otherwise
described in this Agreement. You hereby acknowledge and agree that
you are not eligible to be a participant in any severance or
retention plan of Catalent. Any payments, rights or benefits
received under this Agreement will not be taken into account for
purposes of determining benefits under any employee benefit plan of
Catalent, except to the extent required by law, or as otherwise
expressly provided by the terms of such plan.
Litigation and Regulatory
Cooperation
You agree to cooperate fully with
Catalent in the defense or prosecution of any claims or actions now
in existence or which may be brought in the future against or on
behalf of Catalent that relate to events or occurrences that
transpired during your employment with Catalent. Your full
cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness
on behalf of Catalent at mutually convenient times. In scheduling
your
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