EMPLOYMENT AGREEMENT
Exhibit 10.12
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AGREEMENT by and between FOREST LABORATORIES, INC. Company, a Delaware corporation (the "Company") and Xxxxxxxx Xxxxxxxxx (the "Executive"), dated as of the 22nd day of the twelfth month of 2005. The Board of Directors of the
Company (the "Board") has determined that it is in the best
interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company. The Board believes it
is imperative to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently
and in the event of any threatened or pending Change of Control,
and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the
compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this Agreement. |
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NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
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1. |
Certain Definitions: |
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(a) |
The "Effective Date" shall
mean the first date during the Change of Control Period (as defined
in Section 1(b)) on which a Change of Control (as defined in
Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the
Executive's employment with the Company is terminated prior to the
date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such
termination of employment. |
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(b) |
The "Change of Control
Period" shall mean the period commencing on the date hereof and
ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date
hereof, and on each annual anniversary of such date (such date and
each annual anniversary thereof shall be hereinafter referred to as
the "Renewal Date"), unless previously terminated, the Change of
Control Period shall be automatically extended so as to terminate
three years from such Renewal Date, unless at least 60 days prior
to the Renewal Date the Company shall give notice to the Executive
that the Change of Control Period shall not be so extended. |
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2. |
Change of Control. For
the purpose of this Agreement, a "Change of Control" shall
mean: |
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(a) |
The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by
any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 2;
or |
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(b) |
Individuals who, as of the
date hereof, constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or |
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(c) |
Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Business Consolidation"), in each case, unless,
following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person
(excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the
action of the Board, providing such Business Combination; or |
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(d) |
Approval by the shareholders
of the Company of a complete liquidation or dissolution of the
Company. |
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3. |
Employment Period. The
Company hereby agrees to continue the Executive in its employ, and
the Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third
anniversary of such date (the "Employment Period"). |
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4. |
Terms of Employment. |
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(a) |
Position and Duties. |
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(i) |
During the Active Employment
Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties, and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive's services shall
be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location
less than 35 miles from such location. |
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(ii) |
During the Active Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive
thereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During
the Employment Period it shall not be a violation of this Agreement
for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not
significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executives responsibilities to the Company. |
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(iii) |
This Agreement shall be canceled and will not be effective in any manner in the event that the employee enters into a Termination Agreement between the employee and the Company. This Agreement shall be deemed to be null and void as of the first day of any Termination Agreement and may not be reinstated except by the signature of the President.
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(b) |
Compensation. |
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(i) |
Base Salary. During
the Employment Period, the Executive shall receive an annual base
salary ("Annual Base Salary"), which shall be paid at a Monthly
rate, at least equal to twelve times the highest monthly base
salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its
affiliated companies in respect of the twelve-month period
immediately preceding the month in which the Effective Date occurs.
During the Employment Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter
at least annually. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized in
this Agreement shall refer to Annual Base Salary as so increased.
As used in this Agreement, the term, "affiliated companies" shall
include any company controlled by, controlling or under common
control with the Company. |
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(ii) |
Annual Bonus. In
addition to Annual Base Salary, the Executive shall be awarded, for
each fiscal year ending during the Employment Period, an annual
bonus (the "Annual Bonus") in cash at least equal to the highest
aggregate amount awarded to the Executive under all annual bonus,
incentive and other similar plans of the Company with respect to
any of the last three full fiscal years prior to the Effective Date
(annualized in the event that the Executive was not employed by the
Company for the whole of such fiscal year) (the "Recent Annual
Bonus"). Each such Annual Bonus shall be paid no later than the end
of the third month of the fiscal year next following the fiscal
year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus. |
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(iii) |
Incentive, Savings and
Retirement Plans. During the Employment Period, the Executive
shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and its affiliated companies for the Executive under such plans,
practices and policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and its affiliated companies. |
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(iv) |
Welfare Benefit Plans.
During the Employment Period, the Executive and/or the Executive's
family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
benefits which are less favorable in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated
companies. |
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(v) |
Expenses. During the
Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as is effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies. |
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(vi) |
Fringe Benefits.
During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of
an automobile and payment of related expenses, in accordance with
the most favorable plans, practices, programs and policies of the
Company and its affiliated companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies. |
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(vii) |
Office and Support
Staff. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated
companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies. |
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(viii) |
Vacation. During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies. |
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5. |
Termination of
Employment. |
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(a) |
Death or Disability.
The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. If the Company
determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement
of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within
30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a
full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to
be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the Executive's
legal representative. |
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(b) |
Cause. The Company may
terminate the Executive's employment during the Employment Period
for Cause. For purposes of this Agreement, "Cause" shall mean: |
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(i) |
the willful and continues
failure of the Executive to perform substantially the Executive's
duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive
Officer of the Company which specifically identifies the manner in
which the Board or Chief Executive Officer believes that the
Executive has not substantially performed the Executive's duties,
or |
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(ii) |
the willful engaging by the
Executive in illegal conduct or gross misconduct which is naturally
and demonstrably injurious to the Company. |
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For purposes of this
provision, no act or failure to act, on the part of the Executive,
shall be considered "willful, unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief
that the Executive's action or omission was in the best interests
of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or upon
the instructions of the Chief Executive Officer or a senior officer
of the Company or based upon the advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held
for the purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail. |
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(c) |
Good Reason. The
Executive's employment may be terminated by the Executive for Good
Reason. For purposes of this Agreement, "Good Reason" shall
mean: |
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(i) |
the assignment to the
Executive of any duties inconsistent in any respect with the
Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action
by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive; |
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(ii) |
any failure by the Company to
comply with any of the provisions of Section 4(b) of this
Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the
Executive; |
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(iii) |
the Company's requiring the
Executive to be based at any office or location other than as
provided in Section 4(a)(i)(B) hereof or the Company's requiring
the Executive to travel on Company business to a substantially
greater extent than required immediately prior to the Effective
Date; |
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(iv) |
any purported termination by
the Company of the Executive's employment otherwise than as
expressly permitted by this Agreement; or |
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(v) |
any failure by the Company to
comply with and satisfy Section 11(c) of this Agreement. |
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For purposes of this Section
5(c), any good faith determination of "Good Reason" made by the
Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any
reason during the 30-day period immediately following the first
anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement. |
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(d) |
Notice of Termination.
Any termination by the Company for Cause, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of
such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive's or
the Company's rights hereunder. |
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(e) |
Date of Termination.
"Date of Termination" means (i) if the Executive's employment is
terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on
which the Company notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the
case may be. |
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6. |
Obligations of the Company
upon Termination. |
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(a) |
Good Reason: Other Than
for Cause, Death or Disability. If, during the Employment
Period, the Company shall terminate the Executive's employment
other than for Cause or Disability or the Executive shall terminate
employment for Good Reason: |
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(i) |
the Company shall pay to the
Executive in a lump sum in cash within 30 days after the Date of
Termination the aggregate of the following amounts: |
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A. |
the sum of (1) the
Executive's Annual Base Salary through the Date of Termination to
the extent not heretofore paid, (2) the product of (x) the higher
of(i) the Recent Annual Bonus and (II) the Annual Bonus paid or
payable, including any bonus or portion thereof which has been
earned but deferred (and annualized for any fiscal year consisting
of less than twelve full months or during which the Executive was
employed for less than twelve full months), for the most recently
completed fiscal year during the Employment Period, if any (such
higher amount being referred to as the "Highest Annual Bonus") and
(y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the
denominator of which is 365 and (3) any compensation previously
deferred by the Executive (together with any accrued interest of
earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in
clauses (1), (2) and (3) shall be hereinafter referred to as the
"Accrued Obligations); and |
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B. |
the amount equal to the
product of (1) three and (2) the sum of (x) the Executive's Annual
Base Salary and (y) the Highest Annual Bonus; and |
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C. |
an amount equal to the excess
of (a) the actuarial equivalent of the benefit under the Company's
qualified defined benefit retirement plan (the "Retirement Plan")
(utilizing actuarial assumptions no less favorable to the Executive
than those in effect under the Company's Retirement Plan
immediately prior to the Effective Date), and any excess or
supplemental retirement plan in which the Executive participates
(together, the "SERP") which the Executive would receive if the
Executive's employment continued for three years after the Date of
Termination assuming for this purpose that all accrued benefits are
fully vested, and, assuming that the Executive's compensation in
each of the three years is that required by Section 4(b)(i) and
Section 4(b)(ii), over (b) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if any, under the
Retirement Plan and the SERP as of the Date of Termination. |
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(ii) |
for three years after the
Executive's Date of Termination, or such longer period as may be
provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been terminated or,
if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families, provided,
however, that if the Executive becomes reemployed with another
employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such
other plan during such applicable period of eligibility. For
purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until three
years after the Date of Termination and to have retired on the last
day of such period; |
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(iii) |
the Company shall, at its
sole expense as incurred, provide the Executive with outplacement
services the scope and provider of which shall be selected by the
Executive in his sole discretion; and |
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(iv) |
to the extent not theretofore
paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and
benefits shall be hereinafter referred to as the "Other
Benefits"). |
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(b) |
Death. If the
Executive's employment is terminated by reason of the Executive's
death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal
representatives under this Agreement other than for payment of
Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this
Section 6(b) shall include, without limitation, and the Executive's
estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and beneficiaries
of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to
death benefits, if any, as in effect with respect to other peer
executives and their beneficiaries at any time during the 120-day
period immediately preceding the Effective Date or, if more
favorable to the Executive's estate and/or the Executive's
beneficiaries as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its
affiliated companies and their beneficiaries. |
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(c) |
Disability. If the
Executive's employment is terminated by reason of the Executive's
Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than
for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to
the Executive in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of other Benefits, the
term Other Benefits as utilized in this Section 6(c) shall include,
and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to
the most favorable of those generally provided by the Company and
its affiliated companies to disabled executives and/or their
families in accordance with such plans, programs, practices and
policies relating to disability, if any, as in effect generally
with respect to other peer executives and their families at any
time during the 120-day period immediately preceding Effective Date
or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect
to other peer executives of the Company and its affiliated
companies and their families. |
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(d) |
Cause: Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) |
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Other Benefits, in each case
to the extent theretofore unpaid. If the Executive voluntarily
terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued
Obligations and the timely payment of provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of
Termination. |
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7. |
Non-exclusivity of
Rights. Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor,
subject to Section 12(f), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of
its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement. |
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8. |
Full Settlement. The
Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense
or other claim, right or action which the Company may have against
the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement and such amounts shall not be
reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably
incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"). |
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9. |
Certain Reductions of
Payments. |
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(a) |
Anything in this Agreement to
the contrary not-withstanding, in the event it shall be determined
that any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise)
(a "Payment") would be nondeductible by the Company for Federal
income tax purposes because of Section 280G of the Code, then the
aggregate present value of amounts payable or distributable to or
for the benefit of the Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount"
shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any
Payment to be nondeductible by the Company because of Section 280G
of the Code. For purposes of this Section 9 present value shall be
determined in accordance with Section 280G(d)(4) of the Code. |
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(b) |
All determinations required
to be made under this Section 9 shall be made by BDO Xxxxxxx (the
"Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Company shall elect which
and how much of the Agreement Payments shall be eliminated or
reduced consistent with the requirements of this Section 9 and
shall notify the Executive promptly of such election. Within five
business days thereafter, the Company shall pay to or distribute to
or for the benefit of the Executive such amounts as are then due to
the Executive under this Agreement. |
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(c) |
As a result of the
uncertainty in the application of Section 280G of the Code at the
time of the initial determination by the Accounting Firm hereunder,
it is possible that Agreement Payments will have been made by the
Company which should not have been made ("Overpayment") or that
additional Agreement Payments which will have not been made by the
Company could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made hereunder. In
the event that the Accounting Firm determines that an Overpayment
has been made, any such Overpayment shall be treated for all
purposes as a loan to the Executive which the Executive shall repay
to the Company together with interest at the applicable Federal
rate provided for in Section 7872(f)(2) of the Code; provided,
however, that no amount shall be payable by the Executive to the
Company (or if paid by the Executive to the Company shall be
returned to the Executive) if and to the extent such payment would
not reduce the amount which is subject to taxation under Section
4999 of the Code. In the event that the Accounting Firm determines
that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive
together with interest at the applicable Federal rate provided for
in Section 7872(f)(2) of the Code. |
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10. |
Confidential
Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which
shall have been obtained by the Executive during the Executive's
employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation
of this Agreement), After termination of the Executive's employment
with the Company, the Executive shall not, without prior written
consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under
this Agreement. |
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11. |
Successors. |
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(a) |
This Agreement is personal to
the Executive and without the prior written consent of the Company
shall not be assigned by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal
representative. |
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(b) |
This Agreement shall inure to
the benefit of and be binding upon the Company and its successors
and assigns. |
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(c) |
The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise. |
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12. |
Miscellaneous. |
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(a) |
This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed
by the parties hereto or their respective successors and legal
representatives. |
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(b) |
All notices and other
communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows: |
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If to the Executive: |
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Xxxxxxxx Xxxxxxxxx |
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If to the Company: |
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Forest Laboratories, Inc. |
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Attention: Xxxxxxx Xxxxxxx or Xxxxxxx XxXxxxxx |
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000 Xxxxx Xxxxxx |
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Xxx Xxxx, Xxx Xxxx 00000 |
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or to such other address as
either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective
when actually received by addressee. |
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(c) |
The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement. |
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i. |
The Company may withhold from
any amounts payable under this Agreement such Federal, state, local
or foreign taxes as shall be required to be withheld pursuant to
any applicable law or regulation. |
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ii. |
The Executive's or the
Company's failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for
Good Reason pursuant to Section 5(c)(i)(v) of this Agreement, shall
not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement. |
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iii. |
The Executive and the Company
acknowledge that, except as may otherwise be provided under any
written agreement between the Executive and the Company, the
employment of the Executive by the Company is "at will" and,
subject to Section i(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by
either the Executive or the Company at any time prior to the
Effective Date, in which case the Executive shall have no further
rights under this Agreement. From and after the Effective Date this
Agreement shall supersede any other agreement between the parties
with respect to the subject matter hereof. |
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IN WITNESS WHEREOF, the
Executive has hereunto set the Executive's hand and, pursuant to
the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all
as of the day and year first above written. |
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/s/ Xxxxxxxx Xxxxxxxxx |
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|
Xxxxxxxx Xxxxxxxxx |
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Date: January 4, 2006 |
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FOREST LABORATORIES, INC. |
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By: |
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/s/ Xxxxxxx X. Xxxxxxx |
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Xxxxxxx X. Xxxxxxx |
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President & COO |
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