Exhibit10.13

 

 

 

                                                                                     September5, 2006

 

Lawrence S. Olanoff, M.D., Ph.D.

 

Dear Lawrence:

            Weare delighted to extend our offer of employment to you for theposition of President and Chief Operating Officer at an annualsalary of $750,000 (Base Salary), and paid semi-monthly. In thisposition, located at our New York Corporate Headquarters, you willreport to Howard Solomon, Chief Executive Officer. You will beeligible to receive an annual bonus (with a target of 40%-50% ofbase; standard executive bonus range is zero to 50%) based uponCompany and your individual performance (the "Bonus"). You will begranted a prorated Bonus for the 2006 calendar year, which shall beno less than $100,000. Typically, the Bonus will be paid with thefinal calendar year payroll, on or about December 31st.In addition, you will be eligible for consideration for meritincreases in Base Salary for each year of your employmentcommencing with calendar year 2008, following your performancereview in December of the previous year. You will be granted astock option of 250,000 shares of Forest Laboratories, Inc. stocksubject only to approval by our Board of Directors effective uponyour employment start date as President and Chief OperatingOfficer. These stock options have a 10-year expiry. The vestingschedule is as follows:

                        15%after the first grant year (15% total)                        another15% at the end of the second grant year (30% total)                        another15% at the end of the third grant year (45% total)                        another15% at the end of the fourth grant year (60% total), and                        afterthe fifth grant year the remaining 40% (100% total)

            Inthe past, stock option grants for senior executives have beenawarded annually in December as part of the compensation cycle.Therefore, it would not be unreasonable to forecast additionalstock option awards for your service beginning in December 2007,and thereafter, commensurate with your position and option grantsto senior executive officers generally. All stock option awardswill be exercisable, for active employees, based upon the terms andconditions of the stock option agreement as provided to you by theCompany.

            Duringthe term of your employment, you shall be entitled to such benefitsand perquisites as are generally made available to senior executiveofficers of Forest. By way of illustration and not limited by thepreceding sentence, Forest shall provide you with the followingbenefits: You and your dependents will be eligible forparticipation in Forest Laboratories Medical and Dental plans. Youwill also be eligible to participate in our Flexible SpendingAccounts (Medical/ Dependent), Life, Profit Sharing, 401K Savings,Deferred Compensation, and Long Term Disability plans in accordancewith the standard eligibility requirements as defined in therespective plans. You will also receive four (4) weeks paidvacation in accordance with Company policy. This vacation periodwill be prorated for calendar year 2006.

            Accompanyingthis position will be a company car. Forest will either lease orpurchase a vehicle of your choosing for your use. The car allowanceprovided will be commensurate with the car allowances provided toother senior executive officers. This company vehicle will requireonly minimal tax liability resulting from your personal use. ****Following your employment, we will make the appropriatearrangements with you. Forest will reimburse you for allreasonable, ordinary and necessary expenses incurred by you in theperformance of your duties, provided you account to Forest for suchexpenses in the manner prescribed by Forest.

            Pursuantto this agreement, Forest will provide you with a three (3) yearemployment guarantee as of your start date, limited to severanceand certain benefits in the event of a termination of youremployment by Forest without Cause or your termination ofemployment for Good Reason (as the terms are defined in the Changein Control Employment Agreement referred to below). In such event,this severance agreement will provide you with semi-monthly BaseSalary payments for a period of either the balance of the threeyear contract, or for one year, which ever is greater, plus oneBonus payment (the higher of the last actual bonus payout, or 50%of salary target). In the event that the employment guarantee isactivated, you agree, subject to your availability, to bereasonably available to management for consultations from time totime during the period of salary continuation, it being understoodthat you shall not be required to perform such consultation for anyspecified minimum number of hours. Further, Forest shall continuehealth care coverage (medical and dental) for yourself and anyeligible family members for the period concurrent with salarycontinuation, or until coverage is obtained by you, which ever isearlier. Such coverage shall be on the same terms and conditionsand at the same cost as for active senior executive officers ofForest. During any period of the employment agreement there shallnot be any accelerated vesting of stock options. However, any stockoptions previously awarded to you shall continue to vest until theexpiration of the three year employment agreement.

            Finally,as President and Chief Operating Officer, you will be eligible toparticipate in Forest Laboratories, Inc.’s Change in ControlEmployment Agreement in the form attached hereto and incorporatedherein. This agreement provides for a three-year salary protectionin the event of a hostile takeover of the company.

            Pleasesign your acceptance of this Offer of Employment and return it tome no later than Tuesday, September 5, 2006. I would appreciate averbal concurrence as soon as you are able.

            Weare projecting a start date for your employment as being on October30, 2006 and your appointment as President and Chief OperatingOfficer to be effective as of such date. As required by the U.S.Department of Labor and pursuant to the Immigration and NationalityAct, our company is required to verify the identity and employmentauthorization of all new hires. In order to comply with this legalobligation, we must complete an Employment Eligibility VerificationForm (I-9) within three (3) days of your hire. We have enclosed alist of forms needed to comply with the requirement (Form I-9) foryour review. Please note that you will need to provide on the firstday of your employment either (i) one document from "list A" or(ii) one document from "list B" and one document from "list C" ofthe form (see the enclosed I-9 list). If you anticipate havingdifficulty completing the Form I-9 or producing the requireddocuments, please contact me as soon as possible.

            Ifyou have any questions, please contact me as soon as possible.

                                                                                    Sincerely,

                                                                                    /s/ HowardSolomon       

                                                                                    HowardSolomon

                                                                                    Chairmanand Chief Executive Officer

ACCEPTED & AGREED:

 

 

/s/ Lawrence S. Olanoff, M.D., Ph.D.	

Lawrence S. Olanoff, M.D., Ph.D.

Attachment I-9; Change in Control

cc: H. Solomon