EXHIBIT 10.9.5
June 18, 2003
Xxxxxxx X. Xxxxxx
c/o Pharmaceutical Resources, Inc.
Xxx Xxx Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Re: Terms of Separation From Employment, Consulting,
and Post-Employment Obligations
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Dear Xxx:
This letter sets forth the terms of your anticipated separation from
executive employment with Pharmaceutical Resources Inc. ("PRI," or the
"Company") in the near term, our arrangements for you to continue in a
consulting capacity for the Company thereafter, and the post-employment
obligations of both parties.
The terms set forth below amend the Employment Agreement entered as of
January 4, 2003 (the "Employment Agreement"), and supersede the Employment
Agreement to the extent of any conflict between them. Otherwise, the terms of
the Employment Agreement continue to apply.
We have incorporated by reference the definitions and other terms
contained in the Employment Agreement, unless otherwise specified. Section
numbers likewise refer to those in the Employment Agreement.
1. You have indicated that you intend to resign as Chairman and
Chief Executive Officer of PRI and Chairman of the Board of Directors of
Par Pharmaceutical, Inc. ("Par"), and the Company will accept your
resignation, to be effective on a date in the near future to be agreed upon
(the "Resignation"). Your Resignation will be treated as a Termination
Without Cause by PRI under Section 3.2.5.
2. Upon your Resignation, you will be released from any duties
under the Employment Agreement except those set forth in Section 4.
However, you will continue to serve as a Director on the Board of Directors
of PRI until the date that a new CEO for PRI is appointed, whereupon you
will resign from such Directorship.
Xxxxxxx X. Xxxxxx
June 18, 2003
Page 2
3. Upon your Resignation, PRI will pay you the one time cash
payment of $1,000,000 provided for in Section 2.1.2, and your remaining
base salary through December 31, 2003 in a lump sum pursuant to Section
3.3.2, upon execution of a general release of all claims against PRI
(including Par, and all of the Company's subsidiaries, affiliates and
related entities, and their respective agents, directors, officers and
employees) in a form satisfactory to the Company.
4. After your Resignation, PRI will reimburse you for the cost of
medical, health and accident and disability plans and programs in which you
are currently participating for two years (provided that your continued
participation is possible under the terms and provisions of such plans). If
such participation is not possible, PRI will provide you with substantially
similar benefits pursuant to Section 3.2.5.
5. PRI will reimburse you for unpaid expenses incurred prior to
the date of Resignation pursuant to Section 3.3.5, in accordance with PRI'
reimbursement policies.
6. All existing Stock Options previously granted to you by PRI
will accelerate and vest upon your Resignation; however, those Stock
Options which were granted as of September 21, 2002, must be exercised
within one year from the resignation date, or they will be cancelled and
forfeited.
7. Following your Resignation, you will become a consultant to
PRI, at a rate of compensation equivalent to your current base salary for
the same period. The consultancy will commence on or about July 1, 2003 and
will continue until December 31, 2003, and may be extended at the Company's
option.
8. PRI will provide you with an automobile cash allowance
commensurate with your new role as a consultant, for the duration of your
retention as a consultant, pursuant to Section 2.3.3.
9. You agree that you will not engage in conduct prohibited by
the Non-Competition clause contained in Section 4.4 (but substituting the
United States for the geographic scope set forth in Section 4.4) so long as
you are retained as a consultant to PRI, and for a period of one (1) year
thereafter, except that you will be permitted to act as a part-time
consultant to another business in the generic drug industry, if you have
requested and received advance approval for such engagement from the
Chairman of the Audit Committee.
Xxxxxxx X. Xxxxxx
June 18, 2003
Page 3
10. You agree that you will not engage in conduct prohibited by
Section 4.3 so long as you are retained as a consultant to PRI, and for one
(1) year thereafter.
11. You agree that you will not, at any time during or after your
employment has ended, disparage PRI or Par, or any of their subsidiaries,
affiliates, or related entities, or their respective, prior, current, new
or proposed new executives or Board members, nor make any statement or
publication tending to disparage, impugn or injure the good name and
reputation or business interests of PRI or Par, or any of their
subsidiaries, affiliates or related entities, or their respective products,
services, past or present officers, directors or employees, regardless of
the perceived truth of such statement or publication.
12. PRI's obligations to you hereunder and under the Employment
Agreement will remain contingent upon your continued compliance with your
obligations under Paragraphs 9, 10 and 11 hereof, and Section 4 of the
Employment Agreement, all of which may be enforced pursuant to Section 4.5
of the Employment Agreement, without limiting other remedies which may be
available to the Company in law or equity.
I trust this fully sets forth all the terms of our arrangement. Please
signify your assent hereto by returning a copy of this letter to me with your
signature on the lower left.
On behalf of the Company, we thank you for your dedication and efforts
as a key executive and an architect of much of the Company's success, and we
look forward to building a positive future relationship with you in your
consulting and other future capacities.
Very truly yours,
/s/ Xxxx Xxxxxxxx
--------------------------------
(Name) Xxxx Xxxxxxxx
(Title) Director
ACCEPTED AND AGREED:
Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
June 18, 2003
Page 4
Dated: June 18, 2003
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