EMPLOYMENT AGREEMENT
AGREEMENT by and between ST Shared Services LLC, a Delaware limited liability
company, or any successor thereto (“STSS”) and, solely for purposes of Sections
3, 4 and 6, Mallinckrodt plc, a public company with limited liability
incorporated in Ireland, or any successor thereto (“Mallinckrodt” and together
with STSS solely for Sections 3, 4 and 6, the “Company”) and [EXECUTIVE]
(“Executive”), dated as of the [●] of [●], 2020 (the “Effective Date”).
WHEREAS, the Company wishes to continue Executive in its employ on the terms and
conditions, and for the consideration, hereinafter set forth, and Executive is
desirous of continuing employment with the Company on such terms and conditions
and for such consideration.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.Employment Period. The Company hereby agrees to continue Executive in its
employ, and Executive hereby agrees to remain in the employ of the Company,
subject to the terms and conditions of this Agreement, for the Employment
Period. For purposes of this Agreement, “Employment Period” means the period
commencing on the Effective Date 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, the “Renewal Date”), unless previously terminated, the
Employment 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 Executive that the Employment Period shall not be
so extended (“Non-Renewal”).
2.Terms of Employment.
(a)Position and Duties.
(i) During the Employment Period, Executive will (A) serve as [POSITION], with
such duties and responsibilities as are commensurate with such position, (B)
report to [●], and (C) perform his or her services at the Company’s [●]
location. Executive acknowledges that he or she may be required to travel in
connection with the performance of his or her duties.
(ii) During the Employment Period, Executive agrees to devote his or her full
business time, energy and skill to the performance of his or her duties,
authorities and responsibilities to the Company; provided that the foregoing
will not prevent Executive from engaging in other activities (“Outside
Activities”) consistent with Mallinckrodt’s conflict of interest policy
(“Conflict Policy”) as in effect from time to time; provided, however, if the
Conflict Policy changes during the Employment Period from the Conflict Policy as
in effect on the Effective Date and as a result of any such change, the Outside
Activities that Executive was engaging in are no longer permissible under the
updated Conflict Policy, then Executive shall have three months to cease any
such impermissible Outside Activities under the updated Conflict Policy without
being in breach of this Agreement or the updated Conflict Policy.
(b)Compensation.
(i) Base Salary. During the Employment Period, Executive will receive an annual
base salary (“Annual Base Salary”) of no less than $[●].
(ii) Annual Bonus. Executive will be eligible, for each fiscal year of the
Company or portion of a fiscal year ending during the Employment Period, an
annual bonus with a target Annual Bonus opportunity not less than [●]% of Annual
Base Salary (the “Annual Bonus”). Payment of the Annual Bonus, if any, will be
based on the attainment of one or more pre-established performance goals over
such performance periods as may be established by Human Resources and
Compensation Committee (the “Compensation Committee”) of the Board of Directors
of Mallinckrodt (the “Board”), and will be pro-rated to the extent that the
Annual Bonus relates to a performance period that is less than one year.
Achievement of such pre-established performance goals and the Annual Bonus
amount, if any, will be determined at the end of each applicable performance
period in the discretion of the Compensation Committee. Any Annual

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Bonus earned with respect to a particular performance period will be paid no
later than 75 days following the end of the performance period.
(iii) Other Benefits. During the Employment Period, Executive will be eligible
for participation in the welfare and other benefit plans, practices, policies
and programs, as may be in effect from time to time, for senior executives of
the Company generally.
(iv) Expenses. During the Employment Period, Executive will be entitled to
receive reimbursement for all reasonable, documented business expenses incurred
by Executive in accordance with the performance of Executive’s duties under this
Agreement.
3.Termination of Employment.
(a)Death or Permanent Disability. Executive’s employment will terminate
automatically upon Executive’s death during the Employment Period. If the
Company determines in good faith that the Permanent Disability (as defined
below) of Executive has occurred during the Employment Period, it may provide
Executive with written notice in accordance with Section 7(e) of this Agreement
of its intention to terminate Executive’s employment. In such event, Executive’s
employment with the Company will terminate effective on the 30th day after
receipt of such notice by Executive (the “Permanent Disability Effective Date”);
provided that, within the 30 days after such receipt, Executive will not have
returned to full-time performance of Executive’s duties. For purposes of this
Agreement, “Permanent Disability” means Executive’s permanent and total
incapacity from engaging in any employment for the Company for physical or
mental reasons. A Permanent Disability will be deemed to exist if Executive
meets the requirements for disability benefits under (i) the Company’s long-term
disability plan or (ii) the social security law then in effect.
(b)Cause. The Company may terminate Executive’s employment during the Employment
Period either with or without Cause. For purposes of this Agreement, “Cause”
means Executive’s:
(i) substantial failure or refusal to perform duties and responsibilities of his
or her job at a satisfactory level as required by the Company or a Company
subsidiary, other than due to Permanent Disability;
(ii) a material violation of any fiduciary duty or duty of loyalty owed to the
Company or a subsidiary;
(iii) conviction of a misdemeanor (other than a traffic offense) or felony;
(iv) fraud, embezzlement or theft;
(v) violation of a material rule or policy of the Company or a Company
subsidiary;
(vi) unauthorized disclosure of any trade secret or confidential information of
the Company or a Company subsidiary; or
(vii) other egregious conduct that has or could have a serious and detrimental
impact on the Company or a Company subsidiary and its employees.
Any act, or failure to act, based upon (A) authority given pursuant to a
resolution duly adopted by the Board, or if Mallinckrodt is not the ultimate
parent corporation and is not publicly-traded, the board of directors of the
ultimate parent of Mallinckrodt (the “Applicable Board”), or (B) the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by Executive in good faith and in the best interests of the Company.
The cessation of employment of Executive shall not be deemed to be for Cause
unless and until there shall has been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Applicable Board (excluding Executive, if
Executive is a member of the Applicable Board) at a meeting of the Applicable
Board called and held for such purpose (after reasonable notice is provided to
Executive and Executive is given an opportunity, together with counsel for
Executive, to be heard before the Applicable Board), finding that, in the good
faith opinion of the Applicable Board, Executive is guilty of the conduct
described in Section 3(b), and specifying the particulars thereof in detail.
Termination of Executive’s employment in connection with or following a
Corporate Transaction (as defined in Section 3(g) below) after which Executive
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was offered an Alternate Position (as defined in Section 3(g) below) will not be
considered a termination without Cause for any purposes of this Agreement.
(c)Good Reason. Executive’s employment may be terminated by Executive with or
without Good Reason. For purposes of this Agreement, “Good Reason” means any
resignation or termination of employment by Executive that is not initiated by
the Company and that is caused by any one or more of the following events that
occurs, without Executive’s written consent, during the period (the “Change in
Control Period”) beginning on the date of a Change in Control (as defined below)
and ending two years after the date of such Change in Control (each, a “Good
Reason Resignation”):
(i) the assignment to Executive of any duties inconsistent in any material
respect with Executive’s authority, duties or responsibilities as in effect
immediately prior to the Change in Control;
(ii) a material diminution in the authority, duties or responsibilities of the
supervisor to whom Executive is required to report as in effect immediately
prior to the Change in Control;
(iii) a material change in the geographic location at which Executive must
perform services to a location which is more than 50 miles from Executive’s
principal place of business immediately prior to the Change in Control;
(iv) a material reduction in Executive’s compensation and benefits, taken as a
whole, as in effect immediately prior to the Change in Control;
(v) the Company’s failure to obtain a satisfactory agreement from any successor
to assume and agree to perform the Company’s obligations to Executive under this
Agreement; or
(vi) a material diminution in the budget over which Executive retains authority.
Notwithstanding the foregoing, Executive will be considered to have a Good
Reason Resignation only if (x) Executive provides written notice to the Company
specifying in reasonable detail the event upon which Executive is basing such
Good Reason within ninety (90) days after the occurrence of such event, (y) the
Company fails to cure such event within thirty (30) days after its receipt of
such notice, and (z) Executive terminates employment within sixty (60) days
after the expiration of such cure period.
(d)Notice of Termination. Any termination of employment by the Company for
Cause, or by Executive for Good Reason, will be communicated by Notice of
Termination to the other party hereto given in accordance with Section 7(e).
“Notice of Termination” means a written notice that (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 Executive’s employment under the provision
so indicated, and (iii) if the Date of Termination (as defined herein) is other
than the date of receipt of such notice, specifies the Date of Termination
(which Date of Termination will be not more than 30 days after the giving of
such notice). The failure by Executive or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause will not waive any right of Executive or the Company,
respectively, hereunder or preclude Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing Executive’s or the Company’s
respective rights hereunder.
(e)Date of Termination. “Date of Termination” means (i) if Executive’s
employment is terminated by the Company for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination or such later date
specified in the Notice of Termination, as the case may be, (ii) if Executive’s
employment is terminated by the Company other than for Cause or Permanent
Disability, the date on which the Company notifies Executive of such
termination, (iii) if Executive resigns without Good Reason, the date on which
Executive notifies the Company of such termination, (iv) if Executive’s
employment is terminated by reason of death or Permanent Disability, the date of
Executive’s death or the Permanent Disability Effective Date, as the case may
be, and (v) if Executive’s employment is terminated by the Company as a result
of a Non-Renewal, the end of the Employment Period. Notwithstanding the
foregoing, in no event will the Date of Termination occur until Executive
experiences a “separation from service” within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), and the date on
which such separation from service takes place will be the “Date of
Termination.”
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(f)Change in Control. “Change in Control” means the first to occur of any of the
following events:
(i) any “person” (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), excluding for this
purpose, (A) Mallinckrodt or any majority owned subsidiary or (ii) any employee
benefit plan of Mallinckrodt or any subsidiary (or any person or entity
organized, appointed or established by Mallinckrodt for or pursuant to the terms
of any such plan that acquires beneficial ownership of voting securities of
Mallinckrodt), is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly of securities of Mallinckrodt
representing more than 30% of the combined voting power of Mallinckrodt's then
outstanding securities; provided, however, that no Change in Control will be
deemed to have occurred as a result of a change in ownership percentage
resulting solely from an acquisition of securities by Mallinckrodt; or
(ii) persons who, as of the Effective Date constitute the Board (the “Incumbent
Directors”) cease for any reason (including without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction) to constitute at
least a majority thereof, provided that any person becoming a director of the
Company subsequent to the Effective Date shall be considered an Incumbent
Director if such person's election or nomination for election was approved by a
vote of at least 50% of the Incumbent Directors; but provided further, that any
such person whose initial assumption of office is in connection with an actual
or threatened proxy contest relating to the election of members of the Board or
other actual or threatened solicitation of proxies or consents by or on behalf
of a “person” (as defined in Section 13(d) and 14(d) of the Exchange Act) other
than the Board, including by reason of agreement intended to avoid or settle any
such actual or threatened contest or solicitation, shall not be considered an
Incumbent Director; or
(iii) consummation of a reorganization, merger or consolidation or sale or other
disposition of at least 80% by value of the assets of Mallinckrodt (a “Business
Combination”), in each case, unless, following such Business Combination, all or
substantially all of the individuals and entities who were the beneficial owners
of outstanding voting securities of Mallinckrodt immediately prior to such
Business Combination beneficially own directly or indirectly more than 50% of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, of the company resulting from such
Business Combination (including, without limitation, a company which, as a
result of such transaction, owns Mallinckrodt or all or substantially all of
Mallinckrodt'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 voting securities of the Company; or
(iv) a complete liquidation or dissolution of Mallinckrodt.
Any payment of deferred compensation subject to Section 409A of the Code that is
to be made under this Agreement other than an Annual Performance Bonus upon the
occurrence of a Change in Control or any change in the timing and/or form of
such payment as a direct result of a Change in Control (including payments made
upon a specified date or event occurring after a Change in Control) shall not be
made, or such change in timing and/or form shall not occur, unless such Change
in Control is also a “change in ownership or effective control” of Mallinckrodt
within the meaning of Code Section 409A(a)(2)(A)(v) and applicable regulations
and rulings thereunder and such pay extent required to prevent Executive from
incurring tax penalties under Section 409A of the Code in respect of payments
(g)Alternative Position. “Alternative Position” means the opportunity to
continue employment with the Company, any Subsidiary or any successor to the
Company or a Subsidiary following a Change in Control or a sale of stock or
assets of the Company or Subsidiary, a joint venture or a sale, divestiture or
outsourcing of a business unit or function, or other transaction involving
Executive’s employer or substantial job functions (a “Corporate Transaction”):
(i) is not more than 50 miles each way from the location in which Executive
worked, and in the position Executive held, immediately before the Corporate
Transaction; and
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(ii) provides the Executive with compensation and benefits, taken as a whole, as
in effect immediately prior to the Corporate Transaction.
The Board has the exclusive discretionary authority to determine whether a
position or is an Alternative Position.
4.Obligations of the Company upon Termination.
(a)Obligations of the Company upon an Involuntary Termination at any Time Other
than During a Change in Control Period. If, during the Employment Period, but
outside of the Change in Control Period, the Company terminates Executive’s
employment without Cause (excluding a termination due to death or Permanent
Disability) (an “Involuntary Termination”), the Company will provide Executive
the following severance benefits, subject to, except with respect to Section
4(a)(i), Executive’s compliance with Section 4(f):
(i) Notice Pay. Executive will receive at least thirty (30) calendar days’
notice as a notice period (the “Notice Period”). In the event that the Company
determines Executive’s last day of work will be prior to the end of his or her
Notice Period, Executive will be entitled to pay in lieu of notice for the
balance of such Notice Period (“Notice Pay”). Notice Pay paid to Executive will
be in addition to, and will not be offset against, any severance benefits
Executive may be entitled to receive under this Section 3(f). However, the
Notice Period will run concurrently with, and not in addition to, any notice
period required under local, state or federal law. If Executive does not sign,
or revokes, prior to the expiration of the applicable revocation period, his or
her signature on, a Release (as defined below), Executive will only be eligible
for Notice Pay. Unless otherwise permitted by the applicable plan documents or
laws, Executive will not be eligible to apply for short-term disability,
long-term disability and/or workers’ compensation during the Notice Period, or
anytime thereafter. Notice Pay will be paid in a lump sum within thirty (30)
days following the Date of Termination.
(ii) Severance Payment. Executive shall receive a single lump sum payment equal
to the product of (A) the sum of his or her Annual Base Salary and Average
Annual Bonus (as defined below) multiplied by [two (2)] [one and a half (1.5)],
net of deductions and tax withholdings, as applicable (the “Severance Payment”).
The Severance Payment shall be made on the Company’s first regular payroll date
following the Release Effective Date (as defined below). If Executive was not
employed with the Company for at least one full year prior to the Date of
Termination, Executive’s Severance Payment shall be reduced by 50%. For purposes
of this Agreement, Executive’s “Average Annual Bonus” means the average of the
actual bonuses paid (excluding any amounts paid pursuant to the 2020 Key
Employee Incentive Program attributable to the component of the award intended
to replace Executive’s previously approved target long-term equity incentive
opportunity) to Executive pursuant to The Mallinckrodt Annual Incentive Plan,
the Global Bonus Plan, and/or the 2020 Key Employee Incentive Program (except as
expressly excluded above) during the three Company fiscal years that immediately
precede Executive’s Date of Termination. If Executive has not been employed by
the Company for a period during which such Executive was paid three full annual
bonuses prior to the Date of Termination, the Average Annual Bonus shall be
calculated by dividing the total of the actual bonuses paid (subject to the
exclusions noted above) to the Executive by the number of full months worked by
Executive during the years for which such actual bonuses were paid, and
multiplied by twelve.
(iii) Pro-rata Bonus. Executive may be eligible for a cash payment under the
Global Bonus Plan equal to such Executive’s pro-rated Annual Bonus for the plan
year in which the Date of Termination occurs.
(iv) Medical, Dental and Health Care Reimbursement Account Benefits. Executive
(and his/her spouse, domestic partner or child(ren), as applicable) shall be
eligible for continued coverage under the Company’s medical and dental plans as
required by and pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended, and the regulations promulgated thereunder (“COBRA”).. The
Company shall provide COBRA coverage only if such
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coverage is timely elected by Executive or other qualified beneficiary (as
defined by COBRA). In addition, if Executive is enrolled in medical, dental
and/or coverage as of the Date of Termination, Executive shall receive a single
lump sum payment equal to the Employer COBRA Premium (as defined below)
multiplied by eighteen (18), net of deductions and tax withholdings, as
applicable, regardless of whether Executive timely elects COBRA coverage. The
“Employer COBRA Premium” shall be an amount equal to the difference between (A)
the monthly applicable COBRA premium in effect on the Date of Termination for
the medical, dental, vision and EAP plan options in which Executive (and his/her
spouse, domestic partner or child(ren), as applicable) is enrolled on such date,
and (B) the monthly premium paid for such coverage(s) by Executive as of the
Date of Termination. Such cash payment shall be made on the Company’s first
regular payroll date following the Release Effective Date. COBRA coverage will
cease upon the earlier of (i) the expiration of the maximum period required
under COBRA; (ii) the Participant’s failure to pay the required premium within
the applicable time period; (iii) the Participant’s termination of COBRA
coverage; or (iv) the occurrence of an event that, pursuant to COBRA, permits
the earlier termination of COBRA coverage.
(v) Equity Awards. Except as otherwise provided in Section 4(a)(v)(A) through
(C) below, all equity awards relating to ordinary shares of the Company that are
held by Executive as of his or her Date of Termination will be treated in
accordance with the terms and conditions of the applicable plan and award
agreement under which such awards were granted.
(A) Stock Options. All stock options held by Executive as of the Date of
Termination which would have vested and become exercisable during the twelve
(12)-month period occurring immediately after the Date of Termination will
accelerate and become immediately vested and exercisable on as of the Release
Effective Date , unless the applicable option agreement provides for more
favorable vesting treatment. All outstanding stock options held by Executive
that are vested and exercisable as of the Date of Termination (including options
that vest and become exercisable pursuant to the provisions of this Section
4(a)(v)(A) or Section 4(a)(v)(C) below in the case of Normal Retirement) will be
exercisable for the greater of (x) the period set forth in applicable option
agreement for exercise post-termination of employment, or (y) twelve (12) months
after the Date of Termination. In no event, however, will an option be
exercisable beyond its original expiration date. If Executive dies, the terms
and conditions of the applicable option agreement will govern.
(B) Restricted Stock, Restricted Units and Performance Units. All unvested
restricted stock and restricted units held by Executive as of such Date of
Termination which would have vested during the twelve (12)-month period
occurring immediately after the Date of Termination will accelerate and become
immediately vested as of the Release Effective Date, unless the applicable
equity agreement provides for more favorable vesting treatment. All other
unvested restricted stock and restricted units held by Executive as of the Date
of Termination will be forfeited as of the Date of Termination. All unvested
performance units held by Executive as of the Date of Termination that would
have vested during the twelve (12)-month period occurring immediately after the
Date of Termination will vest at the completion of the performance period and
will be awarded based on certified performance results. All other performance
units held by Executive as of the Date of Termination will be forfeited as of
the Date of Termination.
(C) Early Retirement and Normal Retirement Eligibility. Notwithstanding the
provisions of Section 4(a)(v)(A) and (B), if Executive satisfies the Release
Condition (as defined below) and begins receiving severance benefits hereunder
and would satisfy the requirements for Early Retirement or Normal Retirement (as
such terms are defined in the applicable award agreement) set forth in a
non-qualified stock option, restricted unit or performance unit award agreement
covering ordinary shares of the Company at any time during the period beginning
on the Date of Termination and
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ending twenty-four (24) months later (such period, the “Post-Termination
Period”) solely by reason of attaining the requisite age set forth in the
applicable award agreement during such Post-Termination Period, then all such
non-qualified stock option, restricted unit and performance unit awards will
vest in accordance with the terms and conditions of the applicable award
agreement by treating Executive as if Executive had satisfied the age and
service requirement for Early Retirement or Normal Retirement, as applicable,
under the applicable award agreement on the Date of Termination; provided,
however that, solely with respect to non-qualified stock options, if Section
4(a)(v)(A) provides more favorable treatment than this Section 4(a)(v)(C) (as
would be the case if Early Retirement treatment applied), the more favorable
provision will apply. If Executive dies, the terms and conditions of the
applicable award agreement will govern.
(vi) Outplacement Services. The Company will pay the cost of outplacement
services for Executive at the level and outplacement agency that the Company
regularly uses for such purpose for similar level executives; provided, however,
that the period of outplacement will not exceed twelve (12) months after the
Date of Termination or, if earlier, the date of Executive’s death.
(b)Involuntary Termination or Termination by Executive for Good Reason During
the Change in Control Period. If, during a Change in Control Period that occurs
during the Employment Period, Executive incurs an Involuntary Termination or
Executive resigns for Good Reason, the Company will provide Executive the
severance payments and benefits set forth in Section 4(a); provided, however,
that for purposes of Section 4(a)(v) Executive shall be vested in full as of the
Release Effective Date in all unvested stock options, restricted stock and
restricted stock units held by Executive as of his or her Date of Termination
which are subject solely to time-vesting requirements and all unvested
restricted stock and restricted stock units held by Executive as of his or her
Date of Termination which are subject in whole or part to performance-based
vesting provisions will accelerate and become vested if and to the extent that
the Committee determines in its sole discretion that the applicable
performance-vesting requirements have been or will be attained, or would have
been attained during the applicable performance period in the ordinary course
but for the Change in Control and Executive’s termination under Section 4(b).
(c) Voluntary Termination by Executive or Termination for Death or Permanent
Disability. If Executive’s employment terminates on account of Executive’s (i)
resignation from the Company for any reason (other than for Good Reason during
the Change in Control Period), (ii) death or (iii) Permanent Disability, then
Executive will not be entitled to receive any severance benefits or payments
provided under this Agreement; provided, however, that Executive will be
entitled to those benefits (if any) as may be available under the Company’s
benefit plans and policies in effect at the time of such termination of
employment, including any rights to accelerated vesting in any stock options,
restricted stock units or performance share units following a Change in Control.
(d)Termination by the Company for Cause. If Executive’s employment terminates on
account of termination by the Company for Cause (in accordance with the
procedure set forth in Section 3(b)), Executive will not be entitled to receive
severance benefits under this Agreement and will be entitled only to those
benefits that are required to be provided to Executive by applicable law.
Notwithstanding any other provision of this Agreement to the contrary, if the
Company determines (in accordance with the procedure set forth in Section 3(b)),
at any point during the Post-Termination Period, that Executive engaged in
conduct that constitutes Cause, any severance benefits payable to Executive will
cease immediately, and Executive will be required to return to the Company any
severance benefits that were provided to Executive before such determination.
The Company may withhold providing severance benefits pending resolution of an
inquiry that could lead to a finding that Executive engaged in conduct that
constitutes Cause. Any such severance benefit that is withheld and subsequently
is determined to be due will be provided to Executive within ninety (90) days
after the date of the final and binding resolution.
(e)Reduction of Severance Benefits. With respect to amounts paid in satisfaction
of any severance benefits provided by this Agreement that are not subject to
Code Section 409A and the regulations promulgated thereunder, the Company
reserves the right to make deductions in accordance with applicable law for
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any monies owed to the Company by Executive or the value of Company property
that Executive has retained in his or her possession; provided, however, that
such deductions cannot exceed $5,000 in the aggregate in any Company fiscal
year. Other than as set forth in this Section 3(f), in the event of an
Involuntary Termination or a Termination for Good Reason, the Company will have
no further obligation to Executive under this Agreement.
(f)Separation Agreement and General Release; Compliance with Restrictive
Covenants. The Company’s obligations to make payments under Section 3(f) of this
Agreement is conditioned on Executive executing and delivering (and not revoking
during the applicable revocation period) a separation agreement and general
release in substantially the form annexed hereto as Exhibit A not later than
sixty (60) days following the Date of Termination (the “Release Condition” and
the effective date of such release being , the “Release Effective Date”) and
Executive’s continued compliance with the Restrictive Covenants described in
Section 5 below. In the event that Executive does not satisfy the Release
Condition or violates the Restrictive Covenants, the Company may require
Executive to repay any amounts previously provided to him or her pursuant to
this Section 3(f).
5.Restrictive Covenants. Executive is a party to a Non-Competition,
Non-Solicitation, and Confidentiality Agreement with the Company (the
“Restrictive Covenant Agreement”) and hereby reaffirms all covenants that are
contained therein. The terms of the Restrictive Covenant Agreement are
incorporated herein by reference.
6.Limitation on Benefits.
(a)Notwithstanding anything in this Agreement to the contrary, if it is
determined that the payments or distributions by the Company or its subsidiaries
to or for the benefit of Executive (whether paid or provided pursuant to the
terms of this Agreement or otherwise) which are contingent on a change in
control of the Company (within the meaning of Section 280G(b)(2)(A)(i) of the
Code) would be nondeductible by the Company or any Company subsidiary for
Federal income tax purposes because of Section 280G of the Code, then the
aggregate present value of the benefits provided to Executive under this
Agreement (benefits provided to Executive under this Agreement are hereinafter
referred to as “Payments”) shall be reduced to the Reduced Amount (as defined
below) if the net after tax benefit (after taking into account federal, state,
local or other income, employment, self-employment and excise taxes) provided to
Executive after application of the reduction is greater than the net after-tax
benefit (after taking into account federal, state, local or other income,
employment, self-employment and excise taxes) to which Executive would otherwise
be entitled from the receipt of Payments in their entirety and without
application of any reduction. For this purpose, the “Reduced Amount” shall be an
amount expressed in present value which maximizes the aggregate present value of
Payments without causing any payments to Executive which are contingent upon a
change in control of the Company to be nondeductible by the Company or Employer
because of Section 280G of the Code. Present value shall be determined in
accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 6 shall be made by
an accounting firm selected by the Company before the Change in Control (the
“Accounting Firm”), which shall provide detailed supporting calculations both to
the Company and Executive within fifteen (15) business days of the Date of
Termination or such earlier time as requested by the Company. Any such
determination by the Accounting Firm shall be binding upon the Company and
Executive. Within five (5) business days of the determination by the Accounting
Firm as to any determination required to be made under this Section 6, the
Company shall provide to Executive such severance benefits as are then due to
Executive in accordance with the rights afforded under this Agreement.
(c)If Payments are to be reduced, then such Payments shall be reduced in a
manner which maximizes the aggregate value of the Payments. If (i) any Payments
would be treated as paid pursuant to a nonqualified deferred compensation plan
(within the meaning of Code Section 409A(d)(1)); (ii) Payments are required to
be reduced pursuant to this Section 6; and (iii) Payments are to be paid on
separate payment dates, then any reduction shall be applied to Payments that are
first payable to Executive.
(d)The Reduced Payment shall be effected by reducing or eliminating Executive’s
Payment or Payments (or portion(s) thereof), until no portion of such Payments
is rendered nondeductible by application of Section 280G of the Code, in the
following order: (i) the portion denominated and payable in cash (other than
24(c) Payments, as defined below), such as severance; (ii) the portion payable
in-kind, such as insurance coverage, or in cash as a reimbursement, such as for
outplacement, legal fees, or moving expenses (other than 24(c) Payments); (iii)
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the portion of equity-based compensation, including stock options and stock
appreciation rights or similar rights, that are not 24(c) Payments, including
such compensation subject to the achievement of performance-based objectives;
and (iv) the portion of 24(c) Payments, such as equity-based compensation or any
other Payment.
(e)The Company has full discretionary authority to determine which Payments to
reduce within each of the four categories described above in the preceding
sentence. The Company cannot, however, reduce Payments in one category unless
all Payments in the preceding category have been eliminated. A “24(c) Payment”
is any Payment permitted to be valued under Treas. Reg. Section 1.280G-1, Q&A
24(c), or any successor provision, promulgated under Code Section 280G.
7.Miscellaneous.
(a)Indemnification. The Company will indemnify Executive to the maximum extent
permitted under applicable law and that certain Deed of Indemnification by and
between Mallinckrodt and Executive, dated as of [●] (the terms of which are
incorporated herein by reference), for acts taken within the scope of his or her
employment and his or her service as an officer or director of the Company. To
the extent that the Company obtains coverage under a director and officer
indemnification policy, Executive will be entitled to such coverage on a basis
that is no less favorable than the coverage provided to any other officer or
director of the Company.
(b)Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of [New Jersey][Missouri], without reference to
principles of conflict of laws.
(c)Interpretation. The captions of this Agreement are not part of the provisions
hereof and will have no force or effect.
(d)Amendment. 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.
(e)Notices. All notices and other communications hereunder will be in writing
and will be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:  At the most recent address
 on file at the Company.

If to the Company:  ST Shared Services LLC
675 McDonnell Blvd.
Hazelwood, Missouri 63042
Attention: Chief Human Resources Officer
Facsimile: [●]
or to such other address as either party will have furnished to the other in
writing in accordance herewith. Notice and communications will be effective when
actually received by the addressee.
(f)Section 409A.
(i) Notwithstanding any other provision of this Agreement to the contrary, if
required by Code Section 409A, no cash-based severance benefits provided
pursuant to Section 4 will be paid to Executive if Executive is designated as a
“specified employee” under Code Section 409A by the Compensation Committee
during the six (6)-month period after the Date of Termination (or such other
period as may be required by Code Section 409A) (the “Postponement Period”). If
the previous sentence applies, then the payment of severance benefits will
commence after expiration of the applicable Postponement Period and any amounts
that would have been paid during the Postponement Period but for the previous
sentence will be paid in a single lump sum within thirty (30) days after the end
of such Postponement Period. If Executive dies during the Postponement Period,
however, amounts withheld pursuant to this Section 7(f)(i) will be paid to
Executive’s estate no later than the earlier of sixty (60) days after
Executive’s death or thirty (30) days after the end of the Postponement Period.
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(ii) The cash severance payable pursuant to this Agreement is intended to
provide certain benefits that meet the requirements of the “short-term deferral”
exception, the “separation pay” exception and other exceptions under Code
Section 409A and the regulations promulgated thereunder. Notwithstanding any
other provision of this Agreement to the contrary, if required by Code Section
409A, payments may only be made under this Agreement upon an event and in a
manner permitted by Code Section 409A. For purposes of Code Section 409A, each
individual payment that constitutes part of the salary continuation benefits
will be treated as a separate payment from any other such payment. All
reimbursements and in-kind benefits provided under this Agreement will be made
or provided in accordance with the requirements of Code Section 409A, including,
where applicable, the requirement that (A) any reimbursement is for expenses
incurred during the period of time specified in this Agreement, (B) the amount
of expenses eligible for reimbursement, or in-kind benefits provided, during a
calendar year may not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other calendar year, (C) the reimbursement of an
eligible expense will be made no later than the last day of the calendar year
following the year in which the expense is incurred, and (D) the right to
reimbursement, or in-kind benefits is not subject to liquidation or exchange for
another benefit. In no event may Executive designate the year of payment for any
amounts payable under this Agreement. Notwithstanding anything herein to the
contrary, in no event shall any liability for failure to comply with the
requirements of Code Section 409A be transferred from Executive or any other
individual to the Company or any of its affiliates, employees or agents pursuant
to the terms of this Agreement or otherwise.
(g)Successors.
(i) This Agreement is personal to Executive and, without the prior written
consent of the Company, will not be assignable by Executive otherwise than by
will or the laws of descent and distribution. This Agreement will inure to the
benefit of and be enforceable by Executive’s legal representatives.
(ii) This Agreement will inure to the benefit of and be binding upon the Company
and its successors and assigns.
(iii) 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” will 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.
(h)Validity/Enforceability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement.
(i)Tax Withholdings. The Company may withhold from any amounts payable under
this Agreement such federal, state, local or foreign taxes as will be required
to be withheld pursuant to any applicable law or regulation.
(j)Waiver. 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
Executive or the Company may have hereunder will not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.
(k)Dispute Resolution. Any controversy or claim between Executive and the
Company arising out of or relating to or concerning this Agreement or any aspect
of Executive’s employment with the Company or the termination of that employment
will be finally settled by binding arbitration in [St. Louis, Missouri][New
York, New York] administered by the American Arbitration Association under its
Rules for the Resolution of Employment Disputes; provided, however, that with
respect to any controversy or claim arising out of or relating to or concerning
injunctive relief for Executive’s breach or purported breach of Section 5 of
this Agreement, the Company will have the right, in addition to any other
remedies it may have, to seek specific
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performance and injunctive relief with a court of competent jurisdiction,
without the need to post a bond or other security. Each of Executive and the
Company will bear its own legal expenses and will share the arbitration costs
equally.
(l)Exclusive Severance Obligations. Executive waives all rights to severance and
participation in the Mallinckrodt Pharmaceuticals Severance Plan for U.S.
Officers and Executives, or any other severance plan of the Company, and any
rights Executive has to severance upon termination of employment shall be
exclusively governed by this Agreement.

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IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and, 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.

[EXECUTIVE]

________________________________

ST SHARED SERVICES LLC

By
Name:
Title:

And solely for purposes of Sections 3, 4 and 6:
MALLINCKRODT PLC

By
Name:
Title:

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Exhibit A
Form of Release