Exhibit 10.14

 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **EMPLOYMENTAGREEMENT** |   |
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| AGREEMENT by and betweenFOREST LABORATORIES, INC. Company, a Delaware corporation (the"Company") and Lawrence S. Olanoff, M.D., Ph.D. (the "Executive"),dated as of the 5th day of September, 2006.

The Board of Directors of theCompany (the "Board") has determined that it is in the bestinterests of the Company and its shareholders to assure that theCompany will have the continued dedication of the Executive,notwithstanding the possibility, threat or occurrence of a Changeof Control (as defined below) of the Company. The Board believes itis imperative to diminish the inevitable distraction of theExecutive by virtue of the personal uncertainties and risks createdby a pending or threatened Change of Control and to encourage theExecutive's full attention and dedication to the Company currentlyand in the event of any threatened or pending Change of Control,and to provide the Executive with compensation and benefitsarrangements upon a Change of Control which ensure that thecompensation and benefits expectations of the Executive will besatisfied and which are competitive with those of othercorporations. Therefore, in order to accomplish these objectives,the Board has caused the Company to enter into this Agreement. |

NOW, THEREFORE, IT IS HEREBYAGREED AS FOLLOWS:

| 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Certain Definitions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The "Effective Date" shallmean the first date during the Change of Control Period (as definedin Section 1(b)) on which a Change of Control (as defined inSection 2) occurs. Anything in this Agreement to the contrarynotwithstanding, if a Change of Control occurs and if theExecutive's employment with the Company is terminated prior to thedate on which the Change of Control occurs, and if it is reasonablydemonstrated by the Executive that such termination of employment(i) was at the request of a third party who has taken stepsreasonably calculated to effect a Change of Control or (ii)otherwise arose in connection with or anticipation of a Change ofControl, then for all purposes of this Agreement the "EffectiveDate" shall mean the date immediately prior to the date of suchtermination of employment. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The "Change of ControlPeriod" shall mean the period commencing on the date hereof andending on the third anniversary of the date hereof; provided,however, that commencing on the date one year after the datehereof, and on each annual anniversary of such date (such date andeach annual anniversary thereof shall be hereinafter referred to asthe "Renewal Date"), unless previously terminated, the Change ofControl Period shall be automatically extended so as to terminatethree years from such Renewal Date, unless at least 60 days priorto the Renewal Date the Company shall give notice to the Executivethat the Change of Control Period shall not be so extended. |
| 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Change of Control.For the purpose of this Agreement, a "Change of Control" shallmean:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The acquisition by anyindividual, 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 themeaning of Rule 13d-3 promulgated under the Exchange Act) of 20% ormore of either (i) the then outstanding shares of common stock ofthe Company (the "Outstanding Company Common Stock") or (ii) thecombined voting power of the then outstanding voting securities ofthe 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 followingacquisitions shall not constitute a Change of Control: (i) anyacquisition directly from the Company, (ii) any acquisition by theCompany, (iii) any acquisition by any employee benefit plan (orrelated trust) sponsored or maintained by the Company or anycorporation controlled by the Company or (iv) any acquisition byany corporation pursuant to a transaction which complies withclauses (i), (ii) and (iii) of subsection (c) of this Section 2;or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Individuals who, as of thedate hereof, constitute the Board (the "Incumbent Board") cease forany reason to constitute at least a majority of the Board;provided, however, that any individual becoming a directorsubsequent to the date hereof whose election, or nomination forelection by the Company's shareholders, was approved by a vote ofat least a majority of the directors then comprising the IncumbentBoard shall be considered as though such individual were a memberof the Incumbent Board, but excluding for this purpose, any suchindividual whose initial assumption of office occurs as a result ofan actual or threatened election contest with respect to theelection or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Personother than the Board; or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Consummation of areorganization, merger or consolidation or sale or otherdisposition of all or substantially all of the assets of theCompany (a "Business Consolidation"), in each case, unless,following such Business Combination, (i) all or substantially allof the individuals and entities who were the beneficial owners,respectively, of the Outstanding Company Common Stock andOutstanding Voting Securities immediately prior to such BusinessCombination beneficially own, directly or indirectly, more than 50%of, respectively, the then outstanding shares of common stock andthe combined voting power of the then outstanding voting securitiesentitled to vote generally in the election of directors, as thecase may be, of the corporation resulting from such BusinessCombination (including, without limitation, a corporation which asa result of such transaction owns the Company or all orsubstantially all of the Company's assets either directly orthrough one or more subsidiaries) in substantially the sameproportions as their ownership, immediately prior to such BusinessCombination of the Outstanding Company Common Stock and OutstandingCompany Voting Securities, as the case may be, (ii) no Person(excluding any corporation resulting from such Business Combinationor any employee benefit plan (or related trust) of the Company orsuch corporation resulting from such Business Combination)beneficially owns, directly or indirectly, 20% or more of,respectively, the then outstanding shares of common stock of thecorporation resulting from such Business Combination or thecombined voting power of the then outstanding voting securities ofsuch corporation except to the extent that such ownership existedprior to the Business Combination and (iii) at least a majority ofthe members of the board of directors of the corporation resultingfrom such Business Combination were members of the Incumbent Boardat the time of the execution of the initial agreement, or of theaction of the Board, providing such Business Combination; or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Approval by the shareholdersof the Company of a complete liquidation or dissolution of theCompany. |
| 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 theCompany subject to the terms and conditions of this Agreement, forthe period commencing on the Effective Date and ending on the thirdanniversary of such date (the "Employment Period").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Terms of Employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Position and Duties. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (i) | During the Active EmploymentPeriod, (A) the Executive's position (including status, offices,titles and reporting requirements), authority, duties, andresponsibilities shall be at least commensurate in all materialrespects with the most significant of those held, exercised andassigned at any time during the 120-day period immediatelypreceding the Effective Date and (B) the Executive's services shallbe performed at the location where the Executive was employedimmediately preceding the Effective Date or any office or locationless than 35 miles from such location. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (ii) | During the Active EmploymentPeriod, and excluding any periods of vacation and sick leave towhich the Executive is entitled, the Executive agrees to devotereasonable attention and time during normal business hours to thebusiness and affairs of the Company and, to the extent necessary todischarge the responsibilities assigned to the Executivethereunder, to use the Executive's reasonable best efforts toperform faithfully and efficiently such responsibilities. Duringthe Employment Period it shall not be a violation of this Agreementfor the Executive to (A) serve on corporate, civic or charitableboards or committees, (B) deliver lectures, fulfill speakingengagements or teach at educational institutions and (C) managepersonal investments, so long as such activities do notsignificantly interfere with the performance of the Executive'sresponsibilities as an employee of the Company in accordance withthis Agreement. It is expressly understood and agreed that to theextent that any such activities have been conducted by theExecutive prior to the Effective Date, the continued conduct ofsuch activities (or the conduct of activities similar in nature andscope thereto) subsequent to the Effective Date shall notthereafter be deemed to interfere with the performance of theExecutives responsibilities to the Company. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iii) | This Agreement shall becanceled and will not be effective in any manner in the event thatthe employee enters into a Termination Agreement between theemployee and the Company. This Agreement shall be deemed to be nulland void as of the first day of any Termination Agreement and maynot be reinstated except by the signature of thePresident.

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Compensation. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (i) | Base Salary. Duringthe Employment Period, the Executive shall receive an annual basesalary ("Annual Base Salary"), which shall be paid at a Monthlyrate, at least equal to twelve times the highest monthly basesalary paid or payable, including any base salary which has beenearned but deferred, to the Executive by the Company and itsaffiliated companies in respect of the twelve-month periodimmediately preceding the month in which the Effective Date occurs.During the Employment Period, the Annual Base Salary shall bereviewed no more than 12 months after the last salary increaseawarded to the Executive prior to the Effective Date and thereafterat least annually. Any increase in Annual Base Salary shall notserve to limit or reduce any other obligation to the Executiveunder this Agreement. Annual Base Salary shall not be reduced afterany such increase and the term Annual Base Salary as utilized inthis Agreement shall refer to Annual Base Salary as so increased.As used in this Agreement, the term, "affiliated companies" shallinclude any company controlled by, controlling or under commoncontrol with the Company. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (ii) | Annual Bonus. Inaddition to Annual Base Salary, the Executive shall be awarded, foreach fiscal year ending during the Employment Period, an annualbonus (the "Annual Bonus") in cash at least equal to the highestaggregate amount awarded to the Executive under all annual bonus,incentive and other similar plans of the Company with respect toany of the last three full fiscal years prior to the Effective Date(annualized in the event that the Executive was not employed by theCompany for the whole of such fiscal year) (the "Recent AnnualBonus"). Each such Annual Bonus shall be paid no later than the endof the third month of the fiscal year next following the fiscalyear for which the Annual Bonus is awarded, unless the Executiveshall elect to defer the receipt of such Annual Bonus. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iii) | Incentive, Savings andRetirement Plans. During the Employment Period, theExecutive shall be entitled to participate in all incentive,savings and retirement plans, practices, policies and programsapplicable generally to other peer executives of the Company andits affiliated companies, but in no event shall such plans,practices, policies and programs provide the Executive withincentive opportunities (measured with respect to both regular andspecial incentive opportunities, to the extent, if any, that suchdistinction is applicable), savings opportunities and retirementbenefit opportunities, in each case, less favorable, in theaggregate, than the most favorable of those provided by the Companyand its affiliated companies for the Executive under such plans,practices and policies and programs as in effect at any time duringthe 120-day period immediately preceding the Effective Date or ifmore favorable to the Executive, those provided generally at anytime after the Effective Date to other peer executives of theCompany and its affiliated companies. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iv) | Welfare BenefitPlans. During the Employment Period, the Executive and/orthe Executive's family, as the case may be, shall be eligible forparticipation in and shall receive all benefits under welfarebenefit plans, practices, policies and programs provided by theCompany and its affiliated companies (including, withoutlimitation, medical, prescription, dental, disability, employeelife, group life, accidental death and travel accident insuranceplans and programs) to the extent applicable generally to otherpeer executives of the Company and its affiliated companies, but inno event shall such plans, practices, policies and programs providethe Executive with benefits which are less favorable in theaggregate, than the most favorable of such plans, practices,policies and programs in effect for the Executive at any timeduring the 120-day period immediately preceding the Effective Dateor, if more favorable to the Executive, those provided generally atany time after the Effective Date to other peer executives of theCompany and its affiliated companies. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (v) | Expenses. Duringthe Employment Period, the Executive shall be entitled to receiveprompt reimbursement for all reasonable expenses incurred by theExecutive in accordance with the most favorable policies, practicesand procedures of the Company and its affiliated companies ineffect for the Executive at any time during the 120-day periodimmediately preceding the Effective Date or, if more favorable tothe Executive, as is effect generally at any time thereafter withrespect to other peer executives of the Company and its affiliatedcompanies. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (vi) | Fringe Benefits.During the Employment Period, the Executive shall be entitled tofringe benefits, including, without limitation, tax and financialplanning services, payment of club dues, and, if applicable, use ofan automobile and payment of related expenses, in accordance withthe most favorable plans, practices, programs and policies of theCompany and its affiliated companies in effect for the Executive atany time during the 120-day period immediately preceding theEffective Date or, if more favorable to the Executive, as in effectgenerally at any time thereafter with respect to other peerexecutives of the Company and its affiliated companies. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (vii) | Office and SupportStaff. During the Employment Period, the Executive shall beentitled to an office or offices of a size and with furnishings andother appointments, and to exclusive personal secretarial and otherassistance, at least equal to the most favorable of the foregoingprovided to the Executive by the Company and its affiliatedcompanies at any time during the 120-day period immediatelypreceding the Effective Date or, if more favorable to theExecutive, as provided generally at any time thereafter withrespect to other peer executives of the Company and its affiliatedcompanies. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (viii) | Vacation. Duringthe Employment Period, the Executive shall be entitled to paidvacation in accordance with the most favorable plans, policies,programs and practices of the Company and its affiliated companiesas in effect for the Executive at any time during the 120-dayperiod immediately preceding the Effective Date or, if morefavorable to the Executive, as in effect generally at any timethereafter with respect to other peer executives of the Company andits affiliated companies. |
| 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Termination ofEmployment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Death orDisability. The Executive's employment shall terminateautomatically upon the Executive's death during the EmploymentPeriod. If the Company determines in good faith that the Disabilityof the Executive has occurred during the Employment Period(pursuant to the definition of Disability set forth below), it maygive to the Executive written notice in accordance with Section12(b) of this Agreement of its intention to terminate theExecutive's employment. In such event, the Executive's employmentwith the Company shall terminate effective on the 30th day afterreceipt of such notice by the Executive (the "Disability EffectiveDate"), provided that, within 30 days after such receipt, theExecutive shall not have returned to full-time performance of theExecutive's duties. For purposes of this Agreement, "Disability"shall mean the absence of the Executive from the Executive's dutieswith the Company on a full-time basis for 180 consecutive businessdays as a result of incapacity due to mental or physical illnesswhich is determined to be total and permanent by a physicianselected by the Company or its insurers and acceptable to theExecutive or the Executive's legal representative. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Cause. The Companymay terminate the Executive's employment during the EmploymentPeriod for Cause. For purposes of this Agreement, "Cause" shallmean: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (i) | the willful and continuesfailure of the Executive to perform substantially the Executive'sduties with the Company or one of its affiliates (other than anysuch failure resulting from incapacity due to physical or mentalillness), after a written demand for substantial performance isdelivered to the Executive by the Board or the Chief ExecutiveOfficer of the Company which specifically identifies the manner inwhich the Board or Chief Executive Officer believes that theExecutive has not substantially performed the Executive's duties,or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (ii) | the willful engaging by theExecutive in illegal conduct or gross misconduct which is naturallyand demonstrably injurious to the Company. |
| For purposes of thisprovision, no act or failure to act, on the part of the Executive,shall be considered "willful, unless it is done, or omitted to bedone, by the Executive in bad faith or without reasonable beliefthat the Executive's action or omission was in the best interestsof the Company. Any act, or failure to act, based upon authoritygiven pursuant to a resolution duly adopted by the Board or uponthe instructions of the Chief Executive Officer or a senior officerof the Company or based upon the advice of counsel for the Companyshall be conclusively presumed to be done, or omitted to be done,by the Executive in good faith and in the best interests of theCompany. The cessation of employment of the Executive shall not bedeemed to be for Cause unless and until there shall have beendelivered to the Executive a copy of a resolution duly adopted bythe affirmative vote of not less than three-quarters of the entiremembership of the Board at a meeting of the Board called and heldfor the purpose (after reasonable notice is provided to theExecutive and the Executive is given an opportunity, together withcounsel, to be heard before the Board), finding that, in the goodfaith opinion of the Board, the Executive is guilty of the conductdescribed in subparagraph (i) or (ii) above, and specifying theparticulars thereof in detail. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Good Reason. TheExecutive's employment may be terminated by the Executive for GoodReason. For purposes of this Agreement, "Good Reason" shallmean: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (i) | the assignment to theExecutive of any duties inconsistent in any respect with theExecutive's position (including status, offices, titles andreporting requirements), authority, duties or responsibilities ascontemplated by Section 4(a) of this Agreement, or any other actionby the Company which results in a diminution in such position,authority, duties or responsibilities, excluding for this purposean isolated, insubstantial and inadvertent action not taken in badfaith and which is remedied by the Company promptly after receiptof notice thereof given by the Executive; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (ii) | any failure by the Company tocomply with any of the provisions of Section 4(b) of thisAgreement, other than an isolated, insubstantial and inadvertentfailure not occurring in bad faith and which is remedied by theCompany promptly after receipt of notice thereof given by theExecutive; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iii) | the Company's requiring theExecutive to be based at any office or location other than asprovided in Section 4(a)(i)(B) hereof or the Company's requiringthe Executive to travel on Company business to a substantiallygreater extent than required immediately prior to the EffectiveDate; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iv) | any purported termination bythe Company of the Executive's employment otherwise than asexpressly permitted by this Agreement; or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (v) | any failure by the Company tocomply with and satisfy Section 11(c) of this Agreement. |
| For purposes of this Section5(c), any good faith determination of "Good Reason" made by theExecutive shall be conclusive. Anything in this Agreement to thecontrary notwithstanding, a termination by the Executive for anyreason during the 30-day period immediately following the firstanniversary of the Effective Date shall be deemed to be atermination for Good Reason for all purposes of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Notice ofTermination. Any termination by the Company for Cause, or bythe Executive for Good Reason, shall be communicated by Notice ofTermination to the other party hereto given in accordance withSection 12(b) of this Agreement. For purposes of this Agreement, a"Notice of Termination" means a written notice which (i) indicatesthe specific termination provision in this Agreement relied upon,(ii) to the extent applicable, sets forth in reasonable detail thefacts and circumstances claimed to provide a basis for terminationof the Executive's employment under the provision so indicated and(iii) if the Date of Termination (as defined below) is other thanthe date of receipt of such notice, specifies the termination date(which date shall be not more than thirty days after the giving ofsuch notice). The failure by the Executive or the Company to setforth in the Notice of Termination any fact or circumstance whichcontributes to a showing of Good Reason or Cause shall not waiveany right of the Executive or the Company, respectively, hereunderor preclude the Executive or the Company, respectively, fromasserting such fact or circumstance in enforcing the Executive's orthe Company's rights hereunder. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Date ofTermination. "Date of Termination" means (i) if theExecutive's employment is terminated by the Company for Cause, orby the Executive for Good Reason, the date of receipt of the Noticeof Termination or any later date specified therein, as the case maybe, (ii) if the Executive's employment is terminated by the Companyother than for Cause or Disability, the Date of Termination shallbe the date on which the Company notifies the Executive of suchtermination and (iii) if the Executive's employment is terminatedby reason of death or Disability, the Date of Termination shall bethe date of death of the Executive or the Disability EffectiveDate, as the case may be. |
| 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Obligations of the Companyupon Termination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Good Reason: Other Thanfor Cause, Death or Disability. If, during the EmploymentPeriod, the Company shall terminate the Executive's employmentother than for Cause or Disability or the Executive shall terminateemployment for Good Reason: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (i) | the Company shall pay to theExecutive in a lump sum in cash within 30 days after the Date ofTermination the aggregate of the following amounts: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | A. | the sum of (1) theExecutive's Annual Base Salary through the Date of Termination tothe extent not heretofore paid, (2) the product of (x) the higherof(i) the Recent Annual Bonus and (II) the Annual Bonus paid orpayable, including any bonus or portion thereof which has beenearned but deferred (and annualized for any fiscal year consistingof less than twelve full months or during which the Executive wasemployed for less than twelve full months), for the most recentlycompleted fiscal year during the Employment Period, if any (suchhigher amount being referred to as the "Highest Annual Bonus") and(y) a fraction, the numerator of which is the number of days in thecurrent fiscal year through the Date of Termination, and thedenominator of which is 365 and (3) any compensation previouslydeferred by the Executive (together with any accrued interest ofearnings thereon) and any accrued vacation pay, in each case to theextent not theretofore paid (the sum of the amounts described inclauses (1), (2) and (3) shall be hereinafter referred to as the"Accrued Obligations); and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | B. | the amount equal to theproduct of (1) three and (2) the sum of (x) the Executive's AnnualBase Salary and (y) the Highest Annual Bonus; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | C. | an amount equal to the excessof (a) the actuarial equivalent of the benefit under the Company'squalified defined benefit retirement plan (the "Retirement Plan")(utilizing actuarial assumptions no less favorable to the Executivethan those in effect under the Company's Retirement Planimmediately prior to the Effective Date), and any excess orsupplemental retirement plan in which the Executive participates(together, the "SERP") which the Executive would receive if theExecutive's employment continued for three years after the Date ofTermination assuming for this purpose that all accrued benefits arefully vested, and, assuming that the Executive's compensation ineach of the three years is that required by Section 4(b)(i) andSection 4(b)(ii), over (b) the actuarial equivalent of theExecutive's actual benefit (paid or payable), if any, under theRetirement Plan and the SERP as of the Date of Termination. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (ii) | for three years after theExecutive's Date of Termination, or such longer period as may beprovided by the terms of the appropriate plan, program, practice orpolicy, the Company shall continue benefits to the Executive and/orthe Executive's family at least equal to those which would havebeen provided to them in accordance with the plans, programs,practices and policies described in Section 4(b)(iv) of thisAgreement if the Executive's employment had not been terminated or,if more favorable to the Executive, as in effect generally at anytime thereafter with respect to other peer executives of theCompany and its affiliated companies and their families, provided,however, that if the Executive becomes reemployed with anotheremployer provided plan, the medical and other welfare benefitsdescribed herein shall be secondary to those provided under suchother plan during such applicable period of eligibility. Forpurposes of determining eligibility (but not the time ofcommencement of benefits) of the Executive for retiree benefitspursuant to such plans, practices, programs and policies, theExecutive shall be considered to have remained employed until threeyears after the Date of Termination and to have retired on the lastday of such period; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iii) | the Company shall, at itssole expense as incurred, provide the Executive with outplacementservices the scope and provider of which shall be selected by theExecutive in his sole discretion; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (iv) | to the extent not theretoforepaid or provided, the Company shall timely pay or provide to theExecutive any other amounts or benefits required to be paid orprovided or which the Executive is eligible to receive under anyplan, program, policy or practice or contract or agreement of theCompany and its affiliated companies (such other amounts andbenefits shall be hereinafter referred to as the "OtherBenefits"). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Death. If theExecutive's employment is terminated by reason of the Executive'sdeath during the Employment Period, this Agreement shall terminatewithout further obligations to the Executive's legalrepresentatives under this Agreement other than for payment ofAccrued Obligations and the timely payment or provision of OtherBenefits. Accrued Obligations shall be paid to the Executive'sestate or beneficiary, as applicable, in a lump sum in cash within30 days of the Date of Termination. With respect to the provisionof Other Benefits, the term Other Benefits as utilized in thisSection 6(b) shall include, without limitation, and the Executive'sestate and/or beneficiaries shall be entitled to receive, benefitsat least equal to the most favorable benefits provided by theCompany and affiliated companies to the estates and beneficiariesof peer executives of the Company and such affiliated companiesunder such plans, programs, practices and policies relating todeath benefits, if any, as in effect with respect to other peerexecutives and their beneficiaries at any time during the 120-dayperiod immediately preceding the Effective Date or, if morefavorable to the Executive's estate and/or the Executive'sbeneficiaries as in effect on the date of the Executive's deathwith respect to other peer executives of the Company and itsaffiliated companies and their beneficiaries. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Disability. If theExecutive's employment is terminated by reason of the Executive'sDisability during the Employment Period, this Agreement shallterminate without further obligations to the Executive, other thanfor payment of Accrued Obligations and the timely payment orprovision of Other Benefits. Accrued Obligations shall be paid tothe Executive in a lump sum in cash within 30 days of the Date ofTermination. With respect to the provision of other Benefits, theterm Other Benefits as utilized in this Section 6(c) shall include,and the Executive shall be entitled after the Disability EffectiveDate to receive, disability and other benefits at least equal tothe most favorable of those generally provided by the Company andits affiliated companies to disabled executives and/or theirfamilies in accordance with such plans, programs, practices andpolicies relating to disability, if any, as in effect generallywith respect to other peer executives and their families at anytime during the 120-day period immediately preceding Effective Dateor, if more favorable to the Executive and/or the Executive'sfamily, as in effect at any time thereafter generally with respectto other peer executives of the Company and its affiliatedcompanies and their families. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Cause: Other than for GoodReason. If the Executive's employment shall be terminatedfor Cause during the Employment Period, this Agreement shallterminate without further obligations to the Executive other thanthe obligation to pay to the Executive (x) his Annual Base Salarythrough the Date of Termination, (y) the amount of any compensationpreviously deferred by the Executive, and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (z)Other Benefits, in each caseto the extent theretofore unpaid. If the Executive voluntarilyterminates employment during the Employment Period, excluding atermination for Good Reason, this Agreement shall terminate withoutfurther obligations to the Executive, other than for AccruedObligations and the timely payment of provision of Other Benefits.In such case, all Accrued Obligations shall be paid to theExecutive in a lump sum in cash within 30 days of the Date ofTermination. |
| 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Non-exclusivity ofRights. Nothing in this Agreement shall prevent or limit theExecutive's continuing or future participation in any plan,program, policy or practice provided by the Company or any of itsaffiliated companies and for which the Executive may qualify, nor,subject to Section 12(f), shall anything herein limit or otherwiseaffect such rights as the Executive may have under any contract oragreement with the Company or any of its affiliated companies.Amounts which are vested benefits or which the Executive isotherwise entitled to receive under any plan, policy, practice orprogram of or any contract or agreement with the Company or any ofits affiliated companies at or subsequent to the Date ofTermination shall be payable in accordance with such plan, policy,practice or program or contract or agreement except as explicitlymodified by this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                          |
| 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Full Settlement.The Company's obligation to make the payments provided for in thisAgreement and otherwise to perform its obligations hereunder shallnot be affected by any set-off, counterclaim, recoupment, defenseor other claim, right or action which the Company may have againstthe Executive or others. In no event shall the Executive beobligated to seek other employment or take any other action by wayof mitigation of the amounts payable to the Executive under any ofthe provisions of this Agreement and such amounts shall not bereduced whether or not the Executive obtains other employment. TheCompany agrees to pay as incurred, to the full extent permitted bylaw, all legal fees and expenses which the Executive may reasonablyincur as a result of any contest (regardless of the outcomethereof) by the Company, the Executive or others of the validity orenforceability of, or liability under, any provision of thisAgreement or any guarantee of performance thereof (including as aresult of any contest by the Executive about the amount of anypayment pursuant to this Agreement), plus in each case interest onany delayed payment at the applicable Federal rate provided for inSection 7872(f)(2)(A) of the Internal Revenue Code of 1986, asamended (the "Code"). |
| 9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Certain Reductions ofPayments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Anything in this Agreement tothe contrary not-withstanding, in the event it shall be determinedthat any payment or distribution by the Company to or for thebenefit of the Executive (whether paid or payable or distributed ordistributable pursuant to the terms of this Agreement or otherwise)(a "Payment") would be nondeductible by the Company for Federalincome tax purposes because of Section 280G of the Code, then theaggregate present value of amounts payable or distributable to orfor the benefit of the Executive pursuant to this Agreement (suchpayments or distributions pursuant to this Agreement arehereinafter 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 theaggregate present value of Agreement Payments without causing anyPayment to be nondeductible by the Company because of Section 280Gof the Code. For purposes of this Section 9 present value shall bedetermined in accordance with Section 280G(d)(4) of the Code. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | All determinations requiredto be made under this Section 9 shall be made by BDO Seidman (the"Accounting Firm") which shall provide detailed supportingcalculations both to the Company and the Company shall elect whichand how much of the Agreement Payments shall be eliminated orreduced consistent with the requirements of this Section 9 andshall notify the Executive promptly of such election. Within fivebusiness days thereafter, the Company shall pay to or distribute toor for the benefit of the Executive such amounts as are then due tothe Executive under this Agreement. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | As a result of theuncertainty in the application of Section 280G of the Code at thetime of the initial determination by the Accounting Firm hereunder,it is possible that Agreement Payments will have been made by theCompany which should not have been made ("Overpayment") or thatadditional Agreement Payments which will have not been made by theCompany could have been made ("Underpayment"), in each case,consistent with the calculations required to be made hereunder. Inthe event that the Accounting Firm determines that an Overpaymenthas been made, any such Overpayment shall be treated for allpurposes as a loan to the Executive which the Executive shall repayto the Company together with interest at the applicable Federalrate provided for in Section 7872(f)(2) of the Code; provided,however, that no amount shall be payable by the Executive to theCompany (or if paid by the Executive to the Company shall bereturned to the Executive) if and to the extent such payment wouldnot reduce the amount which is subject to taxation under Section4999 of the Code. In the event that the Accounting Firm determinesthat an Underpayment has occurred, any such Underpayment shall bepromptly paid by the Company to or for the benefit of the Executivetogether with interest at the applicable Federal rate provided forin Section 7872(f)(2) of the Code. |
| 10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | ConfidentialInformation. The Executive shall hold in a fiduciarycapacity for the benefit of the Company all secret or confidentialinformation, knowledge or data relating to the Company or any ofits affiliated companies, and their respective businesses, whichshall have been obtained by the Executive during the Executive'semployment by the Company or any of its affiliated companies andwhich shall not be or become public knowledge (other than by actsby the Executive or representatives of the Executive in violationof this Agreement), After termination of the Executive's employmentwith the Company, the Executive shall not, without prior writtenconsent of the Company or as may otherwise be required by law orlegal process, communicate or divulge any such information,knowledge or data to anyone other than the Company and thosedesignated by it. In no event shall an asserted violation of theprovisions of this Section 10 constitute a basis for deferring orwithholding any amounts otherwise payable to the Executive underthis Agreement.                                                                                                                                                                                                                              |
| 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Successors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | This Agreement is personal tothe Executive and without the prior written consent of the Companyshall not be assigned by the Executive otherwise than by will orthe laws of descent and distribution. This Agreement shall inure tothe benefit of and be enforceable by the Executive's legalrepresentative. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | This Agreement shall inure tothe benefit of and be binding upon the Company and its successorsand assigns. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The Company will require anysuccessor (whether direct or indirect, by purchase, merger,consolidation or otherwise) to all or substantially all of thebusiness and/or assets of the Company to assume expressly and agreeto perform this Agreement in the same manner and to the same extentthat the Company would be required to perform it if no suchsuccession had taken place. As used in this Agreement, "Company"shall mean the Company as hereinbefore defined and any successor toits business and/or assets as aforesaid which assumes and agrees toperform this Agreement by operation of law, or otherwise. |
| 12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Miscellaneous.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | This Agreement shall begoverned by and construed in accordance with the laws of the Stateof New York, without reference to principles of conflict of laws.The captions of this Agreement are not part of the provisionshereof and shall have no force or effect. This Agreement may not beamended or modified otherwise than by a written agreement executedby the parties hereto or their respective successors and legalrepresentatives. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | All notices and othercommunications hereunder shall be in writing and shall be given byhand delivery to the other party or by registered or certifiedmail, return receipt requested, postage prepaid, addressed asfollows: |

|   |   | If to theExecutive:                              |   |
|--------|--------|--------------------------------------------------|--------|
|   |   |                                             |   |
|   |   |                                             |   |
|   |   | Lawrence S. Olanoff, M.D.,Ph.D.                  |   |
|   |   |                                             |
|   |   |                                             |   |
|   |   | If to theCompany:                                |   |
|   |   |                                             |   |
|   |   | Forest Laboratories,Inc.                         |   |
|   |   | Attention: Herschel Weinsteinor Bernard McGovern |
|   |   | 909 Third Avenue                                 |   |
|   |   | New York, New York10022                          |

 

|   |   | or to such other address aseither party shall have furnished to the other in writing inaccordance herewith. Notice and communications shall be effectivewhen actually received by addressee. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (c)    | The invalidity orunenforceability of any provision of this Agreement shall notaffect the validity or enforceability of any other provision ofthis Agreement.                                 |
|   |   | i.                                                                                                                                                                                           | The Company may withhold fromany amounts payable under this Agreement such Federal, state, localor foreign taxes as shall be required to be withheld pursuant toany applicable law or regulation. |
|   |   | ii.                                                                                                                                                                                          | The Executive's or theCompany's failure to insist upon strict compliance with anyprovision of this Agreement or the failure to assert any right theExecutive or the Company may have hereunder, including, withoutlimitation, the right of the Executive to terminate employment forGood Reason pursuant to Section 5(c)(i)(v) of this Agreement, shallnot be deemed to be a waiver of such provision or right or anyother provision or right of this Agreement. |
|   |   | iii.                                                                                                                                                                                         | The Executive and the Companyacknowledge that, except as may otherwise be provided under anywritten agreement between the Executive and the Company, theemployment of the Executive by the Company is "at will" and,subject to Section i(a) hereof, prior to the Effective Date, theExecutive's employment and/or this Agreement may be terminated byeither the Executive or the Company at any time prior to theEffective Date, in which case the Executive shall have no furtherrights under this Agreement. From and after the Effective Date thisAgreement shall supersede any other agreement between the partieswith respect to the subject matter hereof. |

 

| IN WITNESS WHEREOF, theExecutive has hereunto set the Executive's hand and, pursuant tothe authorization from its Board of Directors, the Company hascaused these presents to be executed in its name on its behalf, allas of the day and year first above written. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                |   |   |
|                                                                                                                                                                                                                                                                |   |   |
|                                                                                                                                                                                                                                                                |   | /s/ Lawrence S. Olanoff,M.D., Ph.D.     |
|                                                                                                                                                                                                                                                                |   | Lawrence S. Olanoff, M.D.,Ph.D. |
|                                                                                                                                                                                                                                                                |   |   |
|                                                                                                                                                                                                                                                                |   | Date: September 5,2006 |
|                                                                                                                                                                                                                                                                |   |   |
|                                                                                                                                                                                                                                                                |   | FOREST LABORATORIES,INC. |
|                                                                                                                                                                                                                                                                |   | By: |
|                                                                                                                                                                                                                                                                |   |   |
|                                                                                                                                                                                                                                                                |   | /s/ HowardSolomon         |
|                                                                                                                                                                                                                                                                |   | Howard Solomon |
|                                                                                                                                                                                                                                                                |   | Chairman and Chief ExecutiveOfficer |