July 1, 1999
Xx. Xxxxx X. Xxxxxxxx
Alpharma A.S.
Xxxxxxxxxxxxx 0
Xxxxxxxx 000 Xxxxxx
X-0000 Xxxx 0 Xxxxxx
Dear Einar:
This letter agreement will delineate the material terms of your
compensation arrangements with Alpharma Inc. ("AL") and its
subsidiaries (together, the "Worldwide Group") which will become
effective July 1, 1999 and shall continue in effect as provided
herein. In accordance with the recommendation by the
Compensation Committee and approval by the Board of Directors of
AL at its June 10, 1999 meeting, your compensation arrangements
are as follows:
1. While you serve as Chairman of AL you will receive an
annual fee of $150,000. This fee will also cover your
services as Chairman of Alpharma U.S., Inc. ("AL-US"),
as Chairman of the Office of the Chief Executive of AL,
as a director of Alpharma A.S. ("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. In
addition, you will be eligible for a bonus in such
amount as the Compensation Committee may recommend so
long as you provide services as chairman of the Office
of the Chief Executive.
2. Such annual fee shall be paid in $U.S. by AL in
approximately equal monthly installments. Your annual
fee will be reviewed annually by the Compensation
Committee for adjustment, subject to Board approval, as
of July 1, 2000 and each subsequent year.
3. Although your residence is in Norway, you will be
expected to be personally present at the corporate
offices in Fort Xxx and elsewhere in the United States
from time to time as required to perform your
responsibilities (including consulting services
provided under Section 6 below). 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. It is
understood that the Company will continue to provide
your current apartment in New York City and Company
provided car through at least 1999 and that you will
have the opportunity to purchase at appraised value the
Company-provided car currently made available to you.
All travel expenses will be reimbursed by the
appropriate company in the Worldwide Group in
accordance with normal corporate policies applicable to
senior executive officers. In Norway, you will receive
the use of an automobile in accordance with existing
policy. AL agrees to provide you with assistance with
your tax and/or financial planning and tax return
preparation.
4. You will be entitled to all benefits available under
applicable plans and policies in Norway arising from
your retirement from employment by AL-Oslo and, in
addition, will be entitled to receive from AL-Oslo an
amount (estimated at 344,000 NOK) which, when added to
amounts you are entitled to receive under Norwegian
Social Security, the AL-Oslo pension plan and your
individual retirement benefits equals 900,000 NOK.
5. 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), and (iii) as otherwise specifically approved
by the Compensation Committee.
6. For ten years (the "Consulting Period") commencing July
1, 1999 you agree to provide consulting services to
management of AL in consideration of monthly payments
to you of $12,000 (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 July (beginning with the July 2000
payment) by multiplying $12,000.00 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 1999. Such
consulting services (which shall not include services
referred to in paragraph 1 above) shall be provided at
mutually agreeable times and places as reasonably
requested by management of AL provided that you shall
not be required to provide such services on more than
five 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 6 shall be in addition to and shall not limit
or affect the receipt by you during the Consulting
Period of fees for services as Chairman of the Board or
as a director of AL or any other company in the
Worldwide Group or any payment (including those
referred to herein) 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.
7. This letter agreement supersedes and replaces the
letter agreement dated March 14, 1996.
If the foregoing accurately reflects your compensation
arrangements 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,
Xxxxx X. Xxxxxxx
Chairman of the Compensation
Committee
The foregoing accurately reflects
my understanding:
____________________________ Date:______________
Xxxxx X. Xxxxxxxx
