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March 14, 1996
Xx. Xxxxx X. Xxxxxxxx
ALPHARMA AS
Harbitzalleen 3
Xxxxxxxx 000 Xxxxxx
X-0000 Xxxx, Xxxxxx
Dear Einar:
This letter agreement will delineate the material terms of your
employment by ALPHARMA INC. ("AL") and its subsidiaries
(together, the "Worldwide Group") which became effective January
1, 1996 and shall continue in effect through termination of your
employment, subject only to such changes as may heretofore be
approved by the Board of Directors of AL. Following the
recommendation by the Compensation Committee and approval by the
Board of Directors of AL at its March 14,1996 meeting, the terms
of your employment are as follows:
1. You will serve as Chairman and Chief Executive
Officer of ALPHARMA INC., and have general
managerial or oversight responsibility with
respect to each of the companies in the Worldwide
Group. Without limiting the foregoing, you will
also serve as President and Chief Executive
Officer of ALPHARMA AS ("AL Oslo") and Chairman
and Chief Executive Officer of ALPHARMA U.S., INC.
("AL-US") and have the responsibilities of those
positions.
2. You agree, if elected, to serve as a director of
AL and AL Oslo and as a director or in such other
positions to which you are or may be elected by
the boards of directors of the various other
companies of Worldwide Group. For example, you
are currently serving as a director and chairman
of Dumex.
3. Your base salary for 1996 shall be $450,000
effective January 1, 1996. A portion of your base
salary shall be paid by AL Oslo at the rate of
100,000 Nok per month. The balance shall be paid
in $U.S. by AL in approximately equal semi-
monthly installments (or as otherwise paid to
senior executives). The amount of each
installment of base salary paid by AL shall be
determined by subtracting the amount to be paid by
AL Oslo from the base salary using the Nok/$U.S.
exchange rate in effect on March 15, 1996. No
adjustment shall be made as a result of changes in
such exchange rate throughout the year. Your base
salary includes compensation for your services as
a director of any of the companies in the
Worldwide Group, and you will not receive
additional compensation for such services. Your
base salary will be reviewed annually by the
Compensation Committee for adjustment, subject to
Board approval, as of January 1, 1997 and each
subsequent year.
4. You will be considered for an annual cash bonus
each year. You are eligible for a bonus of up to
100% of your base salary based on the overall
performance of the Worldwide Group and your
individual performance and contribution. The
annual bonus recommendation will be made by the
Compensation Committee and will be subject to
approval by the Board of Directors.
5. Although your residence is in Norway, you are
required to maintain offices at each of the
corporate headquarters in Oslo and Fort Xxx. You
will be expected to be personally present at the
corporate offices in Fort Xxx and elsewhere in the
United States for significant amounts of time as
required to perform your responsibilities.
Accordingly, AL agrees to provide appropriate
accommodations and transportation for you when you
are in the New York metropolitan area and to
reimburse you for other reasonable travel expenses
incurred in carrying out your responsibilities in
the United States. Other reasonable travel
expenses will be reimbursed by the appropriate
company in the Worldwide Group in accordance with
normal corporate policies applicable to senior
executive officers. AL agrees to provide you with
assistance with your tax and/or financial planning
and tax return preparation.
6. You will continue to participate in all employee
benefit programs that have been available to
senior executives of AL Oslo on the same basis as
other senior executives of that company including:
a. Life insurance;
b. Disability insurance program;
c. Pension plan;
d. Health and medical insurance; and
e. Paid holidays and vacation.
7. You will not participate in the retirement or
savings plans or other benefits provided by AL or
AL-US primarily for employees of AL or AL-US and
certain subsidiaries of AL-US, other than (i)
those described above in this letter agreement,
(ii) the Stock Purchase Plan and the Deferred
Compensation Plan (at your election), (iii) the
Stock Option Plan (if options are granted to you)
and (iv) as otherwise specifically approved by the
Compensation Committee.
8. The term of your employment hereunder will
continue until the annual meeting of AL's
stockholders to be held in 1999, subject to
earlier termination as provided in paragraph 9.
9. Your employment hereunder may be terminated by you
or AL on thirty days written notice provided that
if your employment is terminated by AL without
good cause, then you shall be entitled to continue
to receive your then current base salary payable
during each of the twelve months following such
termination (or such lesser number of months
remaining until the annual meeting of AL's
stockholders in 1999). If you do not continue to
be elected to the offices set forth in paragraph 1
for any reason other than good cause, such failure
shall be deemed to be a termination of employment
by AL and you shall be entitled to the salary
continuation provided in the prior sentence.
"Good cause" shall mean the willful failure (or
inability as a result of disability) to carry out
your responsibilities continuing for thirty days
after notice from the Board of Directors of AL or
committing any unlawful or improper act which
materially and adversely affects AL. This
provision supersedes the provisions in the August
10, 1972 agreement with AL Oslo relating to
payments to you in the event of the termination of
your employment.
10. For ten years (the "Consulting Period") following
the 1999 annual meeting of AL's stockholders (or
if your employment is earlier terminated by AL
other than for good cause, following the cessation
of base salary payments as provided in paragraph
9), you agree to provide consulting services to
management of AL in consideration of monthly
payments to you of $4,500.00 (subject to
adjustment as provided below), plus payment of
your reasonable expenses incurred in performing
such services. The monthly amount specified in
the prior sentence shall be adjusted as of each
June (beginning with the June 1999 payment) by
multiplying $4,500 by the result derived by
dividing (i) the Consumer Price Index - All
Metropolitan Areas (or most similar index then
published) published under authority of the United
States government ("CPI") for the December
preceding such June by (ii) the CPI for December
1996. Such consulting services shall be provided
at mutually agreeable times as reasonably
requested by management of AL provided that,
unless you otherwise consent, such services shall
be rendered in Oslo, Norway and you shall not be
required to provide such services on more than
three days in any one month and further provided
that you shall not be required to provide
consulting services hereunder during any period of
disability. Payment of the consulting fees to you
under this paragraph 11 shall be in addition to
and shall not limit or affect the receipt by you
during the Consulting Period of fees for services
as a director of AL or any other company in the
Worldwide Group or any payment to which you are
entitled under any retirement, pension, savings or
other benefit plan of AL-Oslo or any other company
in the Worldwide Group.
If the foregoing accurately reflects the terms of your employment
by AL and the Worldwide Group, please sign both copies of this
letter where indicated and return one original signed document to
my attention.
Sincerely,
Xxxxxx X. Xxxxxx
Chairman of the
Compensation Committee
The foregoing accurately reflects
my understanding:
_______________________ Date:__________
Xxxxx X. Xxxxxxxx
