Document:

EX-10.5

Exhibit 10.5

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
“Agreement”) dated as of the 15th day of
July 2008, between Barr Laboratories, Inc., a Delaware corporation having its principal
executive offices at 225 Summit Avenue, Montvale, New Jersey 07645-1523 (the “Company”), and
Michael J. Bogda (the “Employee”).

WITNESSETH:

     WHEREAS, the Company and the Employee entered into an employment agreement dated as of May 15,
2003, which was amended and restated as of August 19, 2005 (as so amended and restated, the
“Prior Agreement”);

     WHEREAS, the Company and the Employee wish to amend and restate the Prior Agreement;

     WHEREAS, the Company wishes to assure itself of the services of the Employee and provide an
inducement for the Employee to remain in its employ; and

     WHEREAS, the Employee is willing to remain in the employ of the Company on the terms and
conditions hereafter set forth.

     NOW, THEREFORE, the Company and the Employee hereby agree that, effective as of the date first
stated above, the Prior Agreement is amended and restated in its entirety to read as follows:

     1. Employment. The Company agrees to employ the Employee, and the Employee agrees to
serve in the employ of the Company, during the term of this Agreement on the terms and conditions
hereafter set forth.

     2.
Term. The term of this Agreement shall commence on
July 15th, 2008 (the
“Commencement Date”) and shall terminate at 5 P.M. on December 31, 2009 unless sooner terminated in
accordance with the terms of this Agreement or extended as hereinafter provided. The term of this
Agreement shall be extended, without further action by the Company or the Employee, on the date
(the “Extension Effective Date”) that is six (6) months before December 31, 2009 and on the
date (also an “Extension Effective Date”) that is six (6) months before each subsequent
December 31, for successive periods of twelve (12) months each, unless the Company, BPI or an
Affiliate shall have given written notice to the Employee, or the Employee shall have given written
notice to the Company, in the manner set forth in paragraph 13(e) or (f) below, prior to the
Extension Effective Date in question, that the term of this Agreement that is in effect at the time
such written notice is given is not to be extended or further extended, as the case may be.

     3. Position and Responsibilities; Place of Performance.

          (a) Throughout the term of this Agreement, the Employee agrees to serve in the employ of the
Company, and the Company agrees to employ the Employee, as its President and Chief Operating
Officer, reporting to the Chief Executive Officer of the Company (the “CEO”) or such other
officer as the Chief Executive Officer of BPI (the “BPI CEO”) may direct.

 

 

As the Company’s President and Chief Operating Officer, the Employee shall be responsible for
managing and supervising, and shall have responsibility for the day-to-day operation of, the
Company’s manufacturing and engineering functions and facilities, including manufacturing and
engineering activities conducted by the Company on behalf of BPI or any Affiliate (as defined
below), and shall have responsibility for Quality and Pharma Chemicals, as well as significant
responsibilities with respect to the Company’s budgeting, financial forecasting and capital
management activities, subject to the authority of the Board of Directors of BPI (the “Board”) and
the CEO. The Employee shall have all of the powers, authority, duties and responsibilities usually
incident to the position and role of President and Chief Operating Officer of companies that are
comparable in size, character, and performance to the Company and shall perform such other
reasonable duties, consistent with the position of President and Chief Operating Officer as may
lawfully be assigned to the Employee by the Board, the CEO, or the BPI CEO.

          (b) In connection with the Employee’s employment by the Company, the Employee shall be based
at the principal executive offices of the Company in the greater New York City metropolitan area,
including Montvale, New Jersey, and the Employee agrees to travel, to the extent reasonably
necessary to perform the Employee’s duties and obligations under this Agreement, to Company
facilities and other destinations elsewhere at the Company’s expense.

          (c) During the term of this Agreement, the Employee shall serve the Company on an exclusive
basis (it being understood that the Employee’s engaging in activities on behalf of BPI or an
Affiliate shall be deemed serving the Company for this purpose) and shall devote all the Employee’s
business time, attention, skill and efforts to the faithful performance of the Employee’s duties
hereunder; provided that the Employee may engage in community service and charitable activities or
such other activities as approved by the BPI CEO, the CEO, and the Board, that do not materially
interfere with the performance of the Employee’s duties and responsibilities hereunder.

     4. Compensation. For all services rendered by the Employee in any capacity during the
term of this Agreement, and for the Employee’s undertakings with respect to confidential
information, non-solicitation and disparaging remarks set forth in Sections 6 and 7 below, the
Employee shall be entitled to the following:

          (a) a salary, payable in installments not less frequent than monthly, at the annual rate of
six hundred thousand dollars ($600,000), with such increases in such rate, if any, as the Board or
a committee of the Board may approve from time to time during the term of this Agreement in
accordance with the Company’s regular administrative practices applicable to senior officers from
time to time during the term of this Agreement (the Employee’s annual salary rate as increased from
time to time during the term of this Agreement being hereafter referred to as the “Base
Salary”);

          (b) participation in the Company’s annual executive incentive or bonus plan as in effect from
time to time, with the opportunity to receive, for each fiscal year of the Company that begins or
ends during the term of this Agreement, a target award of sixty-five percent (65%) of the Base
Salary earned during such year (or such higher amount as the Board or a committee of the Board may
determine, in its discretion, up to a maximum of the lesser of (i) one hundred percent (100%) of
Base Salary earned during such year or (ii) three percent (3%) of the

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Company’s pre-tax and pre-bonus net operating income for such year), in accordance with the terms
and conditions of such incentive or bonus plan, it being understood that any award for the fiscal
year of the Company in which the term of this Agreement terminates pursuant to the terms hereof
shall be prorated based on the portion of such fiscal year that coincides with the term of this
Agreement and shall be made at the same time as awards (if any) are made to other participants with
respect to such fiscal year. The Company will pay the Employee’s annual incentive bonus for each
year at the same time as annual incentive bonus payments for such year (if any) are made to other
participants with respect to such fiscal year, and in all events within the two and one half (21/2)
months following the end of the calendar year in which the bonus is earned. Annual incentive
bonuses are intended to qualify for the short-term deferral exception to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”);

          (c) participation in the stock incentive plan applicable to Company officers as from time to
time in effect, subject to the terms and conditions of such plan;

          (d) the business and personal use of an automobile at Company expense including, without
limitation, payment or reimbursement of automobile insurance and maintenance expenses, or a cash
allowance in lieu thereof, in accordance with the Company’s automobile policy applicable to
similarly situated senior officers; and

          (e) participation in all health, welfare, savings and other employee benefit and fringe
benefit plans (including vacation pay plans or policies and life and disability insurance plans) in
which other senior officers of the Company participate during the term of this Agreement, subject
in all events to the terms and conditions of such plans as in effect from time to time. Nothing in
this paragraph (e) shall preclude the Company, BPI or an Affiliate from amending or terminating any
such plan at any time prior to a Change in Control or Potential Change in Control. The plans
covered by this paragraph (e) shall not include the annual incentive or stock incentive plans,
which are covered by paragraphs (b) and (c) above.

     5. Termination of Employment.

          (a) Termination by the Company, BPI or an Affiliate without Good Cause or by the Employee
for Good Reason; Non-Renewal Termination.

     (i) If the Employee’s employment with the Company is terminated by the Company, BPI or
an Affiliate without Good Cause (except as an incident of assigning the rights to Employee’s
services to a Permitted Assignee in accordance with paragraph 13(d) below) when the Employee
is willing and able to continue performing service, or is terminated by the Employee for Good
Reason, in either case during the term of this Agreement and other than at the expiration of
the term of this Agreement as the same may have been extended in accordance with the
provisions of Section 2 above (any such employment termination being hereafter referred to as
a “Compensable Termination”), the Company shall pay the Employee, in accordance with
normal payroll practices, the portion of the Employee’s Base Salary accrued through the date
of the Compensable Termination and any other amounts to which the Employee is entitled by law
or pursuant to the terms of any compensation or benefit plan or arrangement in which the
Employee participated prior to the Compensable Termination and, in addition, subject to all
of the provisions of this Section 5, Section 14 below, and further subject to compliance by
the

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Employee with the provisions of Sections 6 and 7 below, relating to confidential information,
non-solicitation and disparaging remarks, the Company shall, as liquidated damages or severance pay
or both (whichever characterization(s) will serve to validate the payments), and as additional
consideration for the Employee’s undertakings under Sections 6 and 7 below, pay the Employee the
following:

     (A) the Employee’s annual bonus for the fiscal year of the Company preceding the
fiscal year of the Company in which the Compensable Termination occurs, if unpaid at
the time of the Compensable Termination. Such annual bonus shall be paid at the same
time as bonuses (if any) for such preceding fiscal year are paid to other officers,
and in all events within the first two and one half (21/2) months of the fiscal year in
which the Compensable Termination occurs. The amount of such bonus shall be
determined by the Board or a committee of the Board on a basis consistent with the
prior bonus determinations with respect to the Employee or, in the event a Change in
Control or Potential Change in Control (as defined in Section 11 below) occurred
before the Compensable Termination, consistent with the bonus determinations with
respect to the Employee prior to the Change in Control or Potential Change in Control.
If the Board or a committee of the Board made no bonus determinations with respect to
the Employee before the Compensable Termination or, if applicable, before the Change
in Control or Potential Change in Control, the amount of such bonus shall be
determined on a basis consistent with the Board’s or Board committee’s bonus
determinations with respect to other Senior Vice Presidents before the Compensable
Termination or, if applicable, before the Change in Control or Potential Change in
Control; and

     (B) a prorated annual bonus for the fiscal year of the Company in which the
Compensable Termination occurs, payable at the same time as bonuses (if any) for such
fiscal year are paid to other officers, and in all events within the first two and one
half (21/2) months of the fiscal year following the fiscal year in which the Compensable
Termination occurs. Such prorated annual bonus shall be determined by multiplying the
“Applicable Average Bonus” as defined below in this subparagraph 5(a)(i)(B) by a
fraction, the numerator of which shall be the number of days elapsed in such fiscal
year through (and including) the date on which the Compensable Termination occurs and
the denominator of which shall be the number three hundred sixty-five (365). For
purposes of this Agreement, the “Applicable Average Bonus” means the highest
of (I) the average annual bonus (including any portion of the bonus that is deferred)
awarded to the Employee during the three (3)-year period immediately preceding the
Compensable Termination or, if the Employee was employed by the Company for less than
three (3) years before the Compensable Termination, during the period of the
Employee’s employment by the Company prior to the Compensable Termination (annualizing
any bonus awarded for less than a full year of employment), (II) the average annual
bonus (including any portion of the bonus that is deferred) awarded to the Employee
during the three (3) fiscal years of the Company that precede the fiscal year in which
the Compensable Termination occurs or during the portion of such three (3) fiscal
years in which the Employee was employed by the Company (annualizing any bonus awarded
for less than a

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full year of employment); provided that, if the Compensable Termination occurs
after a Change in Control or Potential Change in Control, the Applicable Average Bonus
shall not be less than the average annual bonus (including any portion of the bonus
that is deferred) awarded to the Employee during the three (3) years preceding the
date on which the Change in Control or Potential Change in Control occurred or during
the portion of such three (3) years in which the Employee was employed by the Company
(annualizing any bonus awarded for less than a full year of employment); or (III) the
Employee’s target bonus (based on the greatest of (i) the Employee’s target bonus
percentage and Base Salary rate as specified in Section 4 above, (ii) the Employee’s
approved target bonus percentage and Base Salary rate in effect on the date of the
Compensable Termination, or (iii) the Employee’s approved target bonus percentage and
Base Salary rate in effect on the date of notice of such Compensable Termination,
whichever is greater); and

     (C) an amount of money (the “Severance Payment”) equal to two and
one-half (21/2) times the Employee’s “Annual Cash Compensation” as hereafter defined,
unless the Severance Payment is payable solely on account of the Employee’s
resignation for Good Reason pursuant to subparagraph 5(d)(v) below (relating to the
Company, BPI or an Affiliate giving the Employee notice of nonextension), in which
case the Severance Payment shall be equal to one and one-quarter (11/4) times the
Employee’s “Annual Cash Compensation” as hereafter defined. Except as otherwise
provided hereafter in this subparagraph 5(a)(i)(C) and Section 14, seventy-five
percent (75%) of the Severance Payment shall be paid in a lump sum within ten (10)
days after the date of the Compensable Termination. The twenty-five percent (25%)
balance of the Severance Payment shall be paid in six (6) equal monthly installments,
one (1) of which shall be paid at the end of each of the first six (6) months after
the date of the Compensable Termination, provided, in the case of each of such six (6)
installments, that the Employee has not accepted full-time or regular part-time
employment with or regularly served as a consultant to a for-profit pharmaceutical
company prior to the date for payment of such installment, it being understood and
agreed that the foregoing condition shall not be violated by the Employee’s serving as
a member of a board of directors of a for-profit pharmaceutical company or by his/her
performing consulting services on an ad hoc basis for such a company. If a Change in
Control occurs that is a “change in control event” within the meaning of Code Section
409A and Treasury Regulation §1.409A-3(i)(5)(i) (or any similar or successor
provisions) (either before or after the Compensable Termination and in accordance with
Treasury Regulation §1.409A-3(c)), the Severance Payment (or, in the case of such a
“change in control event” that occurs after the Compensable Termination, any portion
thereof that remains unpaid at the time such “change in control event” occurs) shall
be paid in a lump sum within ten (10) days after the Compensable Termination (or, in
the case of such a “change in control event” that occurs after the Compensable
Termination, within ten (10) days after the “change in control event” occurs), and the
two (2) preceding sentences of this subparagraph shall not apply. For thirty (30)
months following a Compensable Termination, the Company shall also provide the
Employee (and, as applicable, the Employee’s covered dependents), at Company expense,
with

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continuation coverage under the Company’s group health plan(s) covering similarly situated
executives. For purposes of this Section 5, the Employee’s “Annual Cash
Compensation” shall mean the sum of (I) the Employee’s highest Base Salary (i.e., one (1)
year’s salary at its highest rate), plus (II) the “Applicable Average Bonus” as defined in
subparagraph 5(a)(i)(B) above.

     (ii) If the term of this Agreement as the same may have been extended in accordance with the
provisions of Section 2 above is not extended or further extended because the Company, BPI or an
Affiliate gives written notice of non-extension to the Employee as provided in Section 2 above, and
there is not Good Cause for termination of the Employee’s employment at the time of giving such
notice, and the Employee does not thereafter resign for Good Reason during the term of this
Agreement as permitted by paragraph 5(d)(v) below, and the Employee is willing and able to renew or
execute a new agreement providing terms and conditions substantially similar to those in this
Agreement and to continue providing such services, then the Company shall pay the Employee, subject
to fulfillment by the Employee of the Employee’s obligations under this Agreement during the
balance of the term and the Employee’s compliance with the provisions of Sections 6 and 7 below,
relating to confidential information, non-solicitation and disparaging remarks, as non-renewal
compensation, and as additional consideration for the Employee’s undertakings under this Agreement,
including Sections 6 and 7 below, an amount of money (the “Non-Renewal Payment”) equal to
one and one-quarter (11/4) times the Employee’s Annual Cash Compensation as defined in subparagraph
5(a)(i)(C) above, in addition to any other amounts to which the Employee may be entitled hereunder
(including without limitation the Employee’s annual bonus pursuant to paragraph 4(b) above for the
fiscal year of the Company in which the Employee’s employment terminates and any amounts to which
the Employee may be entitled under Section 8, 9 or 10 below) or by law or pursuant to the terms of
any compensation or benefit plan or arrangement in which the Employee participated before the
Employee’s employment terminated. Except as otherwise provided hereafter in this subparagraph
5(a)(ii), seventy-five percent (75%) of the Non-Renewal Payment shall be paid in a lump sum within
ten (10) days after the date on which the Employee’s employment terminates, subject to paragraph
5(f) and Section 14. The twenty-five percent (25%) balance of the Non-Renewal Payment shall be
paid in six (6) equal monthly installments one (1) of which shall be paid at the end of each of the
first six (6) months after the date on which the Employee’s employment terminates. If a Change in
Control occurs that is a “change in control event” within the meaning of Code Section 409A and
Treasury Regulation §1.409A-3(i)(5)(i) (or any similar or successor provisions) (either before or
after the Employee’s termination and in accordance with Treasury Regulation §1.409A-3(c)), the
Non-Renewal Payment (or, in the case of such a “change in control event” that occurs after the
Employee’s termination, any portion thereof that remains unpaid at the time such “change in control
event” occurs) shall be paid in a lump sum within ten (10) days after the date on which the
Employee’s employment terminates (or, in the case of such a “change in control event” that occurs
after the Employee’s termination, within ten (10) days after the “change in control event” occurs),
and the two (2) preceding sentences of this subparagraph shall not apply. For thirty (30) months
following the Employee’s termination, the Company shall also provide the Employee (and, as
applicable, the Employee’s covered dependents), at Company

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expense, with continuation coverage under the Company’s group health plan(s) covering
similarly situated executives.

     (iii) The foregoing provisions of (including any payments under) this paragraph 5(a)
shall be in lieu of any severance pay that may be payable under any plan or practice of the
Company, any other Subsidiary or Affiliate, or BPI (as such terms are defined in Section 11
below), or by law (including the WARN Act or any similar state or foreign law), but shall be
in addition to (and not in lieu of) any payments to which the Employee may be entitled under
Sections 8, 9 and 10 below. Subparagraphs 5(a)(i)(C) and 5(a)(ii) above are intended to be
mutually exclusive, and in no event shall such subparagraphs, either individually or
collectively, be construed to require the Company to pay an amount of money in excess of two
and one-half (21/2) times the Employee’s Annual Cash Compensation under such subparagraphs,
either individually or collectively, in addition to continuation coverage under the Company’s
group health plan(s) covering similarly situated executives provided by the Company to the
Employee (and, as applicable, the Employee’s covered dependents), at Company expense, for
thirty (30) months.

     (iv) The Employee shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement (including but not limited to any payment provided for above
in this paragraph 5(a)) by seeking other employment or otherwise, nor shall any compensation
earned by the Employee in other employment or otherwise reduce the amount of any payment or
benefit provided for in this Agreement, except as provided in subparagraphs 5(a)(i)(C) and
5(a)(ii) above.

     (v) A Compensable Termination shall not include a termination of employment by reason of
the Employee’s death.

          (b) Termination by the Company, BPI or an Affiliate for Good Cause or by the Employee
without Good Reason. If, during the term of this Agreement, the Employee’s employment by the
Company is terminated by the Company, BPI or an Affiliate for Good Cause or by the Employee without
Good Reason, the Employee shall not be entitled to receive any compensation under Section 4 above
accruing after the date of such termination or any payment under paragraph 5(a) above. However, any
obligations of the Company under Sections 8, 9 and 10 shall not be affected by such termination of
employment. The provisions of this paragraph 5(b) shall be in addition to, and not in lieu of, any
other rights and remedies the Company may have at law or in equity or under any other provision of
this Agreement in respect of such termination of employment. However, if during the term of this
Agreement the Employee’s employment is terminated by the Employee without Good Reason and the
Employee gives the Company at least one hundred twenty (120) days’ advance notice of such
termination, then the Employee shall not have any obligation or liability under this Agreement on
account of such termination of employment, but the Employee’s obligations under Section 6 and 7
hereof shall not be affected by such termination of employment.

          (c) Good Cause Defined. For purposes of this Agreement, the Company, BPI and the
Affiliates shall have “Good Cause” to terminate the Employee’s employment by the Company
during the term of this Agreement only if:

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     (i) (A) the Employee fails to substantially perform the Employee’s duties hereunder for
any reason or to devote substantially all the Employee’s business time exclusively to the
affairs of the Company (including Company activities on behalf of the other Affiliates or
BPI), other than by reason of a medical condition that prevents the Employee from
substantially performing the Employee’s duties hereunder even with a reasonable accommodation
by the Company, and (B) such failure is not discontinued within a reasonable period of time,
in no event to exceed thirty (30) days, after the Employee receives written notice from the
Company, BPI or an Affiliate of such failure; or

     (ii) the Employee commits an act of dishonesty resulting or intended to result directly
or indirectly in gain or personal enrichment at the expense of the Company, BPI or an
Affiliate, or engages in conduct that constitutes a felony in the jurisdiction in which the
Employee engages in such conduct; or

     (iii) the Employee is grossly negligent or engages in willful misconduct or
insubordination in the performance of the Employee’s duties
hereunder; or 

     (iv) the Employee
materially breaches the Employee’s obligations under Section 6 or paragraph 7(a) below,
relating to confidential information and non-solicitation.

     In addition, the Employee’s employment shall be deemed to have terminated for Good Cause if,
after the Employee’s employment has terminated, facts and circumstances arising during the course
of the Employee’s employment are discovered that would have justified a termination for Good Cause
under subparagraphs 5(c)(ii) or (iv) above.

     Any foregoing provision of this paragraph 5(c) to the contrary notwithstanding, the Company,
BPI and the Affiliates shall not have “Good Cause” to terminate the Employee’s employment within
three (3) years after a Change in Control or Potential Change in Control (as such terms are defined
in Section 11 below) unless (A) the Employee’s act or omission is willful and has a material
adverse effect upon the Company, BPI or an Affiliate, (B) the Board gives the Employee (I) written
notice warning of its intention to terminate the Employee for Good Cause if the specified act or
omission alleged to constitute Good Cause is not discontinued and, if curable, cured, and (II) a
reasonable opportunity after receipt of such written notice, but in no event less than two (2)
weeks, to discontinue and, if curable, cure the conduct alleged to constitute Good Cause, and (C)
the Employee fails to discontinue and, if curable, cure the act or omission in question; provided
that clauses (B) and (C) of this sentence shall not apply with respect to conduct on the part of
the Employee that constitutes a felony in the jurisdiction in which the Employee engages in such
conduct, and, provided further, that this sentence shall not apply to conduct involving moral
turpitude. For all purposes of this Agreement, no act, or failure to act, on the Employee’s part
shall be deemed “willful” unless done, or omitted to be done, by the Employee intentionally and in
bad faith (i.e., without reasonable belief that the Employee’s action or omission was in
furtherance of the interests of the Company, BPI or a Subsidiary or Affiliate).

          (d) Good Reason Defined. For purposes of this Agreement, the Employee shall have
“Good Reason” to terminate employment during the term of this Agreement only if:

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     (i) the Company fails to pay or provide any amount or benefit that the Company is obligated
to pay or provide under Section 4 above or Section 8, 9, or 10 below and the failure is not
remedied within thirty (30) days after the Company receives written notice from the Employee of
such failure; or

     (ii) the Employee is assigned duties or responsibilities not contemplated by Section 3
above without the Employee’s consent, or the Employee’s duties or responsibilities or power or
authority contemplated by Section 3 above are limited in any respect materially detrimental to
the Employee, and in either case the situation is not remedied within thirty (30) days after the
Company receives written notice from the Employee of the situation; or

     (iii) the Employee is removed from, or not elected or reelected to, the office, title or
position of President and Chief Operating Officer of the Company, and the Company, BPI and the
Affiliates do not have Good Cause for doing so; or 

     (iv) the Company, BPI or an Affiliate
relocates the Employee’s office outside of either the Company’s principal executive offices or
the greater New York City metropolitan area without the Employee’s written consent (given in a
personal rather than representative capacity) and the situation is not remedied within thirty
(30) days after the Company receives written notice from the Employee of the situation; or

     (v) the Company, BPI or an Affiliate gives the Employee written notice, in the manner set
forth in paragraph 13(f) below, prior to any Extension Effective Date, that the term of this
Agreement that is in effect at the time such written notice is given is not to be extended or
further extended, as the case may be; provided that the giving of such written notice to the
Employee shall constitute Good Reason only if and when the Employee shall have performed such of
the Employee’s duties and responsibilities for such period of time, in no event to exceed ninety
(90) days after the giving of such notice, as the CEO, another officer to whom the Employee
reports in accordance with paragraph 3(a) above, or the Board, may reasonably request in writing
to transition the Employee’s duties and responsibilities; or

     (vi) a Change in Control occurs and as a result thereof either (A) equity securities of BPI
cease to be publicly-traded, or (B) the Employee is not elected or designated to serve as the
sole President and Chief Operating Officer of the Company or its survivor in the Change in
Control; or

     (vii) a Change in Control or Potential Change in Control occurs and (A) the dollar value of
the stock optioned to the Employee annually thereafter is less than the average annual dollar
value of the stock that was optioned to the Employee during the four (4) years prior to the
Change in Control or Potential Change in Control, or (B) the material terms of such options
(including without limitation vesting schedules) are less favorable to the Employee than the
material terms of the options that were granted to the Employee during the four (4) years prior
to the Change in Control or Potential Change in Control, and in either case (A) or (B) the
situation is not remedied within thirty (30) days after the Company receives written notice from
the Employee of the situation. For purposes of (A) and (B) of this subparagraph 5(d)(vii), if
free-standing stock appreciation

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rights are granted to the Employee, the stock subject to such rights shall be considered
stock that is optioned to the Employee, and if alternative stock appreciation rights (a/k/a
tandem stock appreciation rights) are granted to the Employee, the stock appreciation rights
shall be considered terms of the options to which they are alternative/tandem; or

     (viii) the Company or a Permitted Assignee attempts to assign any of its rights or
obligations under this Agreement other than in accordance with paragraph 13(d) below and does
not remedy the situation within thirty (30) days after the Company receives written notice from
the Employee of the situation; or

     (ix) the Company, BPI or any Subsidiary or Affiliate materially breaches the terms of this
Agreement.

     In no event shall the Employee’s continued employment after any of the foregoing constitute
the Employee’s consent to the act or omission in question, or a waiver of the Employee’s right to
terminate employment for Good Reason hereunder on account of such act or omission, except as
provided in the following sentence. With respect to any act, omission, or occurrence that is
alleged to occur after the Commencement Date and prior to a Change in Control or Potential Change
in Control, the Employee must provide the Company with written notice of any one (1) or more of the
conditions set forth in this definition of Good Reason within six (6) months of the initial
existence of the condition for such condition to constitute Good Reason. Such notice shall not
excuse the Employee from continuing to perform the duties and responsibilities assigned to the
Employee until such time as the Employee terminates employment. Notwithstanding the foregoing, this
notice requirement shall not apply to acts or omissions alleged to constitute Good Reason that
arise after a Change in Control or Potential Change in Control.

          (e) Disability

     (i) Notwithstanding any provision of this Agreement to the contrary, (A) if during the
term of this Agreement as the same may be extended from time to time pursuant to Section 2
above, a medical condition prevents the Employee, even with a reasonable accommodation by the
Company, from substantially performing the Employee’s duties hereunder (it being understood
that a transitory illness, such as a cold or flu, that prevents the Employee from
substantially performing the Employee’s duties hereunder during a brief period is not such a
medical condition), then until the date, if any, on which the Employee recovers from such
medical condition (the “Evaluation Period”), the Company may terminate the Employee’s
employment only pursuant to subparagraph 5(e)(ii) below (a “Disability Termination”)
or for willful misconduct constituting Good Cause under paragraph 5(c) above, and (B) if any
notice of nonextension of the term of this Agreement was given before the Evaluation Period,
or is given during the Evaluation Period, whether by the Company, BPI or an Affiliate or the
Employee, pursuant to Section 2 above, and, but for this clause (B), the term of this
Agreement would expire during the Evaluation Period as a result of such notice of
nonextension having been given, then the term of this Agreement will automatically be
extended without action by any party until the Employee recovers from such medical condition.
For purposes of this paragraph 5(e), the Employee will be deemed to recover from a medical
condition only if and when the Employee both (I) has been able to

- 10 -

 

substantially perform the Employee’s duties hereunder (either with or without a reasonable
accommodation by the Company) for more than six (6) months, consecutive or non-consecutive, within
any period of twelve (12) or fewer consecutive months commencing on or after the commencement of
the Evaluation Period, and (II) is not entitled to receive long-term disability (“LTD”)
benefits under a LTD plan of BPI or a Subsidiary.

     (ii) Except as otherwise provided in subparagraph 5(e)(i) above, during the Evaluation Period,
the Company may terminate the Employee’s employment only in the event of a “Disability,”
which for this purpose means that a medical condition either (A) has prevented the Employee, even
with a reasonable accommodation by the Company, from substantially performing the Employee’s duties
hereunder for six (6) months, consecutive or non-consecutive, in any period of twelve (12) or fewer
consecutive months, or (B) entitles the Employee to receive LTD benefits under a LTD plan of BPI or
any Subsidiary. The Company will give the Employee at least ten (10) days advance written notice
of a Disability Termination. Notwithstanding any provision of this Agreement to the contrary, a
Disability Termination will not be treated as a termination to which the provisions of paragraph
5(a) or 5(b) apply.

     (iii) In the event of a Disability Termination, the Company will pay or provide the Employee
with the following:

     (A) With respect to the period ending on the date of the Disability Termination, the
Employee will receive all of the compensation and benefits provided by Section 4 above. The
amount of any compensation payable to the Employee with respect to the period ending on the
date of the Disability Termination may be reduced by (I) any payments which the Employee
receives with respect to the same period because of short- or long-term disability under any
disability plan of BPI or any Subsidiary, and (II) any income (whether from Social Security,
workers compensation or any other source) that is deducted in computing the amount of such
payments under any disability plan of BPI or any Subsidiary;

     (B) An amount of money equal to the Severance Payment. Except as otherwise provided
hereafter in this subparagraph 5(e)(iii)(B) and Section 14, seventy-five percent (75%) of the
Severance Payment shall be paid in a lump sum within ten (10) days after the date of the
Disability Termination. The twenty-five percent (25%) balance of the Severance Payment shall
be paid in six (6) equal monthly installments, one (1) of which shall be paid at the end of
each of the first six (6) months after the date of the Disability Termination. If a Change in
Control occurs that is a “change in control event” within the meaning of Code Section 409A
and Treasury Regulation §1.409A-3(i)(5)(i) (or any similar or successor provisions) (either
before or after the Disability Termination and in accordance with Treasury Regulation
§1.409A-3(c)), the Severance Payment (or, in the case of such a “change in control event”
that occurs after the Disability Termination, any portion thereof that remains unpaid at the
time such “change in control event” occurs) shall be paid in a lump sum within ten (10) days
after the Disability Termination (or, in the case of such a “change in control event” that

- 11 -

 

occurs after the Disability Termination, within ten (10) days after the “change in control
event” occurs), and the two (2) preceding sentences of this subparagraph shall not apply; and

     (C) During the period from the date of the Disability Termination until the first to
occur of (I) the date, if any, on which the Employee recovers from the disabling medical
condition, (II) the Employee’s attainment of age 65, and (III) the death of the Employee, the
Company will pay the Employee a monthly amount of money (the “Supplemental LTD Payments”)
equal to the excess, if any, of (aa) over (bb) where (aa) is 60% of one-twelfth
(1/12th) of the Employee’s Base Salary (as defined in paragraph 4(a) above)
immediately before the Disability Termination (i.e., 60% of the Employee’s monthly salary at
its highest rate), and (bb) is the sum of (1) the monthly LTD benefit (if any) which the
Employee receives with respect to the same month under a LTD plan of BPI or any Subsidiary,
plus (2) any income (whether from Social Security, workers compensation or any other source)
that is deducted in computing the amount of such monthly LTD benefit; provided,
however, that the Employee will be entitled to a Supplemental LTD Payment for a given
month only to the extent that the Employee’s cumulative Supplemental LTD Payments (determined
without regard to this proviso) through the end of that month exceed the Severance Payment.

     The payments and benefits provided by the foregoing provisions of this subparagraph
5(e)(iii) are in addition to and not in lieu of any other amounts to which the Employee is
entitled by law or pursuant to the terms of any compensation or benefit plan or arrangement in
which the Employee participated prior to the Disability Termination, and any amounts payable
pursuant to Section 8, 9 or 10 below.

          (f) Release. Any and all amounts payable and benefits or additional rights provided
pursuant to this Agreement after Separation from Service beyond any accrued, vested amounts shall
only be payable if the Employee (i) signs after a Separation from Service a general release
prepared by the Company of all claims of the Employee occurring up to and including the date of
Separation from Service excluding claims under this Agreement, claims for compensation and benefits
that are vested as of such date, and claims for indemnification or advancement of expenses related
to the Employee’s service or status as an officer or employee (the “Release”), (ii) delivers the
signed Release to the Company within forty-five (45) calendar days of presentation thereof by the
Company to the Employee, which presentation shall be made no later than ten (10) calendar days
following the Employee’s Separation from Service, and (iii) does not revoke the Release during the
seven (7) calendar days following the date on which the Employee signs the Release. Subject to the
preceding sentence, any amounts that otherwise would be paid or provided pursuant to this Agreement
during the sixty-two (62) calendar days following the Employee’s Separation from Service shall be
paid or provided between the sixty-third (63rd) and seventy-fourth (74th) calendar days following
the Separation from Service.

          (g) Code Section 409A. All payments to be made pursuant to this Section 5 are subject
to Section 14 of this Agreement, including the Six Month Delay Rule, if applicable. To the extent
of any conflict between Section 14 and this Section 5, Section 14 will control. For purposes of
this Agreement, the Employee’s employment with the Company shall be deemed to be terminated when
the Employee has a “Separation from Service” within the meaning of Code

- 12 -

 

Section 409A, and references to termination of employment shall be deemed to refer to a Separation
from Service. For purposes of this Section 5, and in accordance with Treasury Regulation
§1.409A-1(h)(1)(ii) (or any similar or successor provisions), a termination of employment shall be
deemed to occur, without limitation, if the Company and the Employee reasonably anticipate that the
level of bona fide services the Employee will perform after a certain date (whether as an employee
or as an independent contractor) will permanently decrease to less than fifty percent (50%) of the
average level of bona fide services provided in the immediately preceding thirty-six (36) months.

     6. Confidential Information.

          (a) The Employee agrees not to disclose, either while in the employ of the Company, BPI, an
Affiliate or Subsidiary or at any time thereafter, to any person not employed by the Company, BPI
or an Affiliate, or not engaged to render services to the Company, BPI or an Affiliate, except with
the prior written consent of an authorized officer of the Company, BPI or an Affiliate or as
necessary or appropriate for the performance of the Employee’s duties hereunder, any confidential
information obtained by the Employee while in the employ of the Company, including, without
limitation, information relating to any of the inventions, processes, formulae, plans, devices,
compilations of information, research, methods of distribution, suppliers, customers, client
relationships, marketing strategies or trade secrets of the Company, another Subsidiary or
Affiliate, or BPI; provided, however, that this provision shall not preclude the Employee from use
or disclosure of information known generally to the public or of information not considered
confidential by persons engaged in the businesses conducted by the Company, another Subsidiary or
Affiliate, or BPI, or from disclosure required by law or court order. The Employee also agrees that
upon leaving the Company’s employ the Employee will not take with the Employee, without the prior
written consent of an authorized officer of the Company, BPI or an Affiliate, and the Employee will
surrender to the Company, any record, list, drawing, blueprint, specification or other document or
property of the Company, another Subsidiary or Affiliate, or BPI, together with any copy or
reproduction thereof, mechanical or otherwise, which is of a confidential nature relating to the
Company, another Subsidiary or Affiliate, or BPI, or without limitation, relating to its or their
methods of distribution, suppliers, customers, client relationships, marketing strategies or any
description of any formulae or secret processes, or which was obtained by the Employee or entrusted
to the Employee during the course of the Employee’s employment with the Company.

          (b) The Employee agrees that the Company retains all rights to any and all intellectual or
proprietary properties created by the Employee during the Employee’s employment with the Company,
an Affiliate or Subsidiary, or BPI, including but not limited to all concepts, discoveries and
inventions (whether or not patentable and whether or not reduced to practice); all copyrights
(including all copyrights covering notebooks, presentations, publications, advertising, promotional
and/or educational materials, labels, inserts and packaging materials); all trademarks, trade names
and other similar designations of origin; and all trade secrets, confidential information and
ideas, including but not limited to promotion and marketing plans, customer, supplier and other
lists (collectively “Intellectual Property”). To the extent that any right, title or interest in or
to any Intellectual Property vests in the Employee in a manner contrary to this paragraph 6(b), the
Employee agrees to, and hereby does, irrevocably assign to the Company any and all such rights,
titles, and interests in and to such Intellectual Property

- 13 -

 

without the need for any further action by the Company. The Employee agrees to assist the Company,
its Affiliates and Subsidiaries, or BPI, including following the Employee’s employment with the
Company, an Affiliate or Subsidiary, or BPI, in the transfer or assignment of such Intellectual
Property.

     7. Restrictive Covenants

          (a) Non-Solicitation. Employee covenants and agrees that, during the Employee’s
employment by the Company and during the one (1)-year period immediately following the termination
of the Employee’s employment with the Company for any reason (including, without limitation, a
termination of employment by the Company, BPI or an Affiliate without Cause and a voluntary
termination of employment by the Employee, in either case whether during the term of this
Agreement, at the expiration of the term of this Agreement or at any time thereafter), the Employee
will not solicit or attempt to persuade any employee of the Company, any other Subsidiary or
Affiliate, or BPI (except the Employee’s personal secretary or administrative assistant), or any
other person who performs services for the Company, any other Subsidiary or Affiliate, or BPI at
the time the Employee’s employment terminates or at any time within one (1) year thereafter, to
terminate or reduce or refrain from engaging in his or her employment or other service relationship
with the Company, any other Subsidiary or Affiliate, or BPI; provided, however, that responding to
inquiries from any such employees or other persons that are not initiated by the Employee, and
subsequently hiring such employees or other persons following the termination of their employment
with the Company, the other Subsidiaries and Affiliates, or BPI, shall be permitted.

          (b) Specific Enforcement. Employee recognizes and agrees that, by reason of the
Employee’s knowledge, experience, skill and abilities, the Employee’s services are extraordinary
and unique, that the breach or attempted breach of any of the restrictions set forth above in this
Section 7 will result in immediate and irreparable injury for which the Company will not have an
adequate remedy at law, and that the Company shall be entitled to a decree of specific performance
of those restrictions and to a temporary and permanent injunction enjoining the breach thereof, and
to seek any and all other remedies to which the Company may be entitled, including, without
limitation, monetary damages, without posting bond or furnishing security of any kind.

          (c) Restrictions Reasonable. Employee specifically and expressly represents and
warrants that (i) the Employee has reviewed and agreed to the restrictive covenants contained in
this Section 7 and their contemplated operation after receiving the advice of counsel of the
Employee’s choosing; (ii) the Employee believes, after receiving such advice, that the restrictive
covenants and their contemplated operation are fair and reasonable; (iii) the Employee will not
seek or attempt to seek to have the restrictive covenants declared invalid, and, after receiving
the advice of counsel, expressly waives any right to do so; and (iv) if the full breadth of any
restrictive covenant and/or its contemplated operation shall be held in any fashion to be too
broad, such covenant or its contemplated operation, as the case may be, shall be interpreted in a
manner as broadly in favor of the beneficiary of such covenant as is legally permissible. Employee
recognizes and agrees that the restrictions on the Employee’s activities contained in this Section
7 are required for the reasonable protection of the Company, BPI and their investments; and that
the restriction on the Employee’s activities set forth in paragraph 7(a) will not deprive the
Employee of the ability to earn a livelihood.

- 14 -

 

     (d) Non-Disparagement. Employee covenants and agrees that, during the one (1)-year
period immediately following the termination of the Employee’s employment with the Company for any
reason (including, without limitation, a termination of employment by the Company, BPI or an
Affiliate without Cause and a voluntary termination of employment by the Employee, in either case
whether during the term of this Agreement, at the expiration of the term of this Agreement or at
any time thereafter), the Employee will not make disparaging remarks about the Company, any other
Subsidiary or Affiliate, BPI, or any of their officers, directors or employees, unless required by
law or reasonably necessary to assert or defend the Employee’s position in a bona fide dispute
arising out of or relating to this Agreement or the breach thereof.

     (e) Effect on Termination Payments. The Employee recognizes and agrees that the
Company shall not be obligated to make any payments provided for in paragraph 5(a) or 5(e) above if
the Employee violates the provisions of Section 6 or paragraph 7(a) or 7(d) above during the one
(1)-year period immediately following the termination for any reason of the Employee’s employment
with the Company. In addition, the Employee recognizes and agrees that, if the Employee violates
such provisions, the Company may recoup any payments the Company may have theretofore made pursuant
to paragraph 5(a) or 5(e) above and any payments the Company may thereafter make under paragraph
5(a) or 5(e). The foregoing provisions of this paragraph 7(e) shall be in addition to and not by
way of limitation of any other rights and remedies the Company may have in respect of the violation
in question.

     8. Indemnification. To the fullest extent permitted by applicable law, the Company
shall indemnify, defend and hold harmless the Employee from and against any and all claims,
demands, actions, causes of action, liabilities, losses, judgments, fines, costs and expenses
(including reasonable attorneys’ fees and settlement expenses) arising from or relating to the
Employee’s service or status as an officer, director, employee, agent or representative of the
Company, any other Subsidiary or Affiliate, or BPI or in any other capacity in which the Employee
serves or has served at the request of, or for the benefit of, the Company, another Subsidiary or
Affiliate, or BPI. The Company’s obligations under this Section 8 shall be in addition to, and not
in derogation of, any other rights the Employee may have against the Company, any other Subsidiary
or Affiliate or BPI to indemnification or advancement of expenses, whether by statute, contract or
otherwise.

     9. Certain Additional Payments by the Company.

          (a) Anything in this Agreement (other than the second sentence of this paragraph 9(a)) to the
contrary notwithstanding, in the event it shall be determined that any payment or distribution by
the Company, another Subsidiary or Affiliate, or BPI, to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required under this Section 9)
(a “Payment”), would be subject to the excise tax imposed by Code Section 4999 or any
interest or penalties are incurred by the Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Employee shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Employee of all taxes and
any benefits that result from the deductibility by the Employee of such taxes (including, in each
case, any interest or penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with

- 15 -

 

respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. However, if it shall be
determined that none of the Payments would be subject to the Excise Tax if the total Payments were
reduced in the aggregate by twenty five thousand dollars ($25,000) or less, then in that event the
total Payments shall be reduced by the smallest amount (in no event to exceed twenty-five thousand
dollars ($25,000) in the aggregate) necessary to ensure that none of the Payments will be subject
to the Excise Tax. Cash Payments shall be reduced first, and in the chronological order in which
they are payable to or on behalf of the Employee.

          (b) Subject to the provisions of paragraph 9(a) above and 9(c) below, all determinations
required to be made under this Section 9, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, and whether Payments are to be reduced pursuant to the second sentence of paragraph
9(a) above, shall be made by Deloitte & Touche or such other certified public accounting firm as
may be designated by the Employee (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and the Employee within fifteen (15) business days of
the receipt of notice from the Employee that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the “change in ownership or effective control” or
“change in the ownership of a substantial portion of assets” (within the meaning of Code Section
280G(b)(2)(A)) that gives rise to the Excise Tax, or in the event that the Accounting Firm for any
reason is unable or unwilling to make the determinations required hereunder, the Employee shall
appoint another nationally recognized accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to the Employee within five
business (5) days of the receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Employee. As a result of the uncertainty
in the application of Code Section 4999 at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company
should have been made (an “Underpayment”), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to paragraph 9(c) and
the Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment, along with
any penalty and interest imposed with respect to such Underpayment, shall be promptly paid by the
Company to or for the benefit of the Employee.

          (c) The Employee shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require either the payment by the Company of the Gross-Up
Payment or the reduction of Payments pursuant to the second sentence of paragraph 9(a) above. Such
notification shall be given as soon as practicable but no later than ten (10) business days after
the Employee is informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The Employee shall not pay
such claim prior to the expiration of the thirty (30)-day period following the date on which the
Employee gives such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the

- 16 -

 

Company notifies the Employee in writing prior to the expiration of such period that it desires to
contest such claim, the Employee shall:

     (i) give the Company any information reasonably requested by the Company relating to such
claim,

     (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

     (iii) cooperate with the Company in good faith in order effectively to contest such claim, and

     (iv) permit the Company to participate in any proceedings relating to such claim;

     provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing provisions of this
paragraph 9(c), the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and may, at its sole
option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Employee agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in one (1) or more
appellate courts, as the Company shall determine, provided, however, that if the Company directs
the Employee to pay such claim and sue for a refund, the Company shall, if permissible under
Section 402 of the Sarbanes-Oxley Act of 2002, advance the amount of such payment to the Employee
on an interest-free basis or, if such an advance is not permissible thereunder, pay the amount of
such payment to the Employee as additional compensation, and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or additional compensation; and further
provided that any extension of the statute of limitations relating to payment of taxes for the
taxable year of the Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the
Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

          (d) If, after the receipt by the Employee of an amount advanced or paid by the Company
pursuant to paragraph 9(a) or 9(c), the Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to the Company’s complying with the requirements
of paragraph 9(c)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the

- 17 -

 

receipt by the Employee of an amount advanced by the Company pursuant to paragraph 9(c), a
determination is made that the Employee shall not be entitled to any refund with respect to such
claim and the Company does not notify the Employee in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

          (e) Notwithstanding the foregoing provisions of this Section 9, the determination of the
amount necessary to indemnify the Employee shall be made taking into account all other payments
made to the Employee under any plans, agreements or arrangements aside from this Agreement that are
intended to indemnify the Employee with respect to excise taxes on “excess parachute payments.”
The Company shall reimburse any fees and expenses provided for under this Section 9 on or before
the last day of the Employee’s taxable year following the taxable year in which the fee or expense
was incurred, and in accordance with the other requirements of Code Section 409A and Treasury
Regulation §1.409A-3(i)(1)(v) (or any similar or successor provisions).

     10. Certain Enforcement Matters

     (a) If, after a Change in Control or Potential Change in Control, a dispute arises (i) with
respect to this Agreement or the breach thereof, or (ii) with respect to the Employee’s or the
Company’s rights or obligations under this Agreement, including but not limited to any such dispute
between the Employee and the Company, the Company shall pay or reimburse the Employee for all
reasonable costs and expenses (including court costs, arbitrators’ fees and reasonable attorneys’
fees and disbursements) the Employee incurs in connection with such dispute, including without
limitation costs and expenses the Employee incurs to obtain payment or otherwise enforce the
Employee’s rights under this Agreement, or to obtain payment of costs and expenses due under this
paragraph 10(a). In addition, the Company shall pay the Employee such additional amount (a
“Gross Up”) as will be sufficient, after the Employee pays the Employee’s tax liability
with respect to the Gross Up from the Gross Up, to pay all of the Employee’s federal, state and
local tax liability with respect to any costs and expenses that are paid by the Company pursuant to
this paragraph 10(a). The Company shall promptly pay or reimburse the Employee for all such costs
and expenses as the Employee incurs them, upon presentation of reasonable documentation of such
costs and expenses, and shall promptly pay the related Gross Up as and when it pays or reimburses
costs and expenses. The Employee shall not be obligated to repay any such costs, expenses or Gross
Up unless it is finally determined by the trier of fact in a non-appealable judicial or arbitral
decision or ruling (as applicable) that the Employee’s principal positions with respect to the
principal matter(s) in dispute were unreasonable and pursued in bad faith. The following
provisions apply to any costs and expenses that are to be paid or reimbursed pursuant to the
preceding provisions of this paragraph 10(a) but that are not covered by the exclusion from the
term “deferral of compensation” that is set forth in Treasury Regulation §1.409A-1(b)(11) (or any
similar or successor provisions). Any such reasonable costs and expenses are hereafter referred to
as “Non-Excluded Expenses.” Non-Excluded Expenses may consist of court costs, arbitration costs,
arbitrators’ fees, attorneys’ fees and disbursements (including without limitation disbursements
for transportation, printing, document production, consultants and experts), and transportation,
hotel, food and other out-of-pocket expenses (such as telecommunications charges) the Employee
incurs in preparing for and

- 18 -

 

attending depositions, hearings and meetings with attorneys and witnesses and in preparing for and
giving testimony. Non-Excluded Expenses will be paid or reimbursed if they are incurred during the
ten (10)-year period following a Change in Control. Non-Excluded Expenses shall be paid or
reimbursed on or before the last day of the year following the year in which the expense was
incurred, may not be liquidated or exchanged for another benefit, and may not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other year.

     (b) Any payments to which the Employee may be entitled under this Agreement, including,
without limitation, under Section 5, 8, 9 or 10 hereof, shall be made forthwith on the applicable
date(s) for payment specified in this Agreement. If for any reason the amount of any payment due to
the Employee cannot be finally determined on that date, such amount shall be estimated on a good
faith basis by the Company and the estimated amount shall be paid no later than ten (10) days after
such date. As soon as practicable thereafter, the final determination of the amount due shall be
made and any adjustment requiring a payment to or from the Employee shall be made as promptly as
practicable.

     (c) Any controversy or claim arising, after a Change in Control or Potential Change in
Control, out of or related to this Agreement or the breach thereof, shall be settled by binding
arbitration in the City of New York, in accordance with the employment dispute arbitration rules of
the American Arbitration Association then in effect, and the arbitrator’s decision shall be binding
and final and judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except that the Employee may elect to have any such controversy or claim settled by
judicial determination in lieu of arbitration by bringing a court action, if the Employee is the
plaintiff or, if the Employee is not the plaintiff, demanding such judicial determination within
the time to answer any complaint in any arbitration action that may be commenced.

     11. Change in Control

          (a) The term “Change in Control” as used in this Agreement means a change of control
of Barr Pharmaceuticals, Inc., a Delaware corporation (“BPI”), of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
BPI is then subject to such reporting requirement; provided that, whether or not any of the
following events would constitute a change of control of such a nature, a Change in Control shall
be deemed to occur for purposes of this Agreement if and when any of the following events occur:

     (i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) (a
“Person”), other than—

     (A) BPI,

     (B) a Subsidiary,

     (C) a trustee or other fiduciary holding securities under an employee benefit plan of BPI or a
Subsidiary, or

     (D) an underwriter engaged in a distribution of BPI stock to the public with BPI’s written
consent,

- 19 -

 

becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities that represent more than thirty percent (30%) of the combined
voting power of the then outstanding Voting Securities. However, if the Person in question is an
institutional investor whose investment in Voting Securities is purely passive when such Person
becomes such a more than thirty percent (30%) beneficial owner of Voting Securities, then such
event (i.e., such Person’s becoming a more than thirty percent (30%) beneficial owner of Voting
Securities) shall not be deemed to constitute a Change in Control under this subparagraph 11(a)(i)
for so long as (and only for so long as) such Person’s investment in Voting Securities remains
purely passive; or

     (ii) the stockholders of BPI approve a merger, consolidation, recapitalization
or reorganization of BPI or a Subsidiary, reverse split of any class of Voting Securities, or an
acquisition of securities or assets by BPI or a Subsidiary, or consummation of any such transaction
if stockholder approval is not obtained, other than (A) any such transaction in which the holders
of outstanding Voting Securities immediately prior to the transaction receive, with respect to such
Voting Securities (or, in the case of a transaction in which BPI is the surviving corporation or a
transaction involving a Subsidiary, retain), voting securities of the surviving or transferee
entity representing more than fifty percent (50%) of the total voting power outstanding immediately
after such transaction, with the voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction, or (B) any such transaction which
would result in BPI or a Related Party beneficially owning more than fifty percent (50%) of the
voting securities of the surviving entity outstanding immediately after such transaction; or

     (iii)
the stockholders of BPI approve a plan of complete liquidation of BPI or an agreement for the sale
or disposition by BPI of all or substantially all of BPI’s assets other than any such transaction
which would result in a Related Party owning or acquiring more than fifty percent (50%) of the
assets owned by BPI immediately prior to the transaction; or

     (iv) the persons who were members of
the Board immediately before a tender or exchange offer for shares of Common Stock of BPI by any
person other than BPI or a Related Party, or before a merger or consolidation of BPI or a
Subsidiary, or contested election of the Board, or before any combination of such transactions,
cease to constitute a majority of the Board as a result of such transaction or transactions.

     (b) For purposes of this Agreement, including paragraph 11(a) above:

     (i) the term “Related Party” shall mean (A) a Subsidiary, (B) an employee or group of
employees of BPI or any Subsidiary, (C) a trustee or other fiduciary holding securities under an
employee benefit plan of BPI or any Subsidiary, or (D) a corporation or other form of business
entity owned directly or indirectly by the stockholders of BPI in substantially the same proportion
as their ownership of Voting Securities;

     (ii) the term “Subsidiary” means a corporation or other form of business association
of which shares (or other ownership interests) having more than fifty percent

- 20 -

 

(50%) of the voting power are, or in the future become, owned or controlled, directly or
indirectly, by BPI;

     (iii) the term “Affiliate” means a Person that directly, or indirectly through one
(1) or more intermediaries, controls, or is controlled by, or is under common control with,
BPI. For the purposes of the preceding sentence, the word “control” (by itself and as used
in the terms “controlling”, “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise; and

     (iv) the term “Voting Securities” shall mean any securities of BPI that carry the
right to vote generally in the election of directors.

          (c) For purposes of this Agreement, a “Potential Change in Control” means that (i) BPI
or a Subsidiary enters into an agreement, the consummation of which would result in the occurrence
of a Change in Control; or (ii) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a potential change in control has occurred.

          (d) A “Change in Control” as such term is used in this Agreement shall also be deemed
to occur if the Company as defined in this Agreement (including paragraph 13(d) below) ceases to be
an Affiliate.

     12. Severability; Survival

          (a) In the event that any provision of this Agreement shall be determined to be invalid or
unenforceable for any reason, the remaining provisions of this Agreement not so invalid or
unenforceable shall be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law; and

          (b) Any provision of this Agreement that may be invalid for any reason
or unenforceable in any jurisdiction shall remain in effect and be enforceable in any jurisdiction
in which such provision shall be valid and enforceable.

          (c) The provisions of Sections 6, 7, 8, 9 and 10 and paragraphs 5(e), (f) and (g) of this
Agreement, and any other provision of this Agreement that is intended to apply, operate or have
effect after the expiration or termination of the term of this Agreement, or at a time when the
term of this Agreement may have expired or terminated, shall survive the expiration or termination
of the term of this Agreement for any reason.

     13. General Provisions

          (a) No right or interest to or in any payments to be made under this Agreement shall be
subject to anticipation, alienation, sale, assignment, encumbrance, pledge, charge or hypothecation
or to execution, attachment, levy or similar process, or assignment by operation of law. All
payments to be made by the Company hereunder shall be subject to the withholding of such amounts as
the Company may determine it is required to withhold under the laws or regulations of any
governmental authority, whether foreign, federal, state or local.

- 21 -

 

          (b) To the extent that the Employee acquires a right to receive payments from the Company
under this Agreement, such right shall be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder shall be paid from the general funds of
the Company and no special or separate fund shall be established and no segregation of assets shall
be made to assure payment of any amount hereunder.

          (c) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to the principles of conflicts of laws of that
State.

          (d) This Agreement shall be binding upon and inure to the benefit of the Company, its
successors and permitted assigns, and the Employee, the Employee’s heirs, devisees, distributees
and legal representatives. The Company may assign any or all of its rights and obligations under
this Agreement to any other Subsidiary or Affiliate or to BPI (collectively, “Permitted
Assignees”), and, if any rights or obligations are assigned pursuant to this sentence, the
assignee may thereafter assign any or all of such rights and obligations to any other Permitted
Assignee; provided that (i) the Employee’s title, authority, duties and responsibilities, reporting
level, reporting relationships and office location immediately before any such assignment are not
changed in any respect detrimental to the Employee in connection with such assignment without the
written consent of the Employee (given in a personal capacity rather than a representative
capacity), (ii) no such assignment shall relieve the Company of any past, present or future payment
or benefit obligations hereunder without the express written consent of the Employee (also given in
a personal capacity), and (iii) no assignment may be made after a Change in Control or Potential
Change in Control without the express written consent of the Employee (also given in a personal
capacity). In the event of an assignment in accordance with this paragraph, the term
“Company” as used in this Agreement shall be deemed to refer, with respect to the period
commencing on the effective date of such assignment, to the Permitted Assignee to which such rights
or obligations are assigned and, with respect to any obligations that are assigned hereunder, to
the Company and such Permitted Assignee jointly and severally. The foregoing provisions of this
paragraph are intended to enable the Company to assign its right to employ the Employee under this
Agreement to an Affiliate or BPI but only if (A) such assignment does not change to the detriment
of the Employee his title, authority, duties, responsibilities, reporting level, reporting
relationships, office location or compensation, (B) such assignment does not result in any
Affiliate or BPI replacing the Company as an obligor under this Agreement, and (C) the Employee
expressly consents in writing to any assignment that is to occur after a Change in Control or
Potential Change in Control. For the avoidance of doubt, as an example, in the event of an
assignment in accordance with this paragraph, from the effective date of such assignment the term
“Company” as used in subparagraphs 5(d)(ii) and (iii) above (relating to Good Reason for a
change in duties or in office, title or position) shall be deemed to refer to such Permitted
Assignee. Thus, the Employee would not have Good Reason under those subparagraphs if as a result of
the assignment the Employee were to cease to serve as the President and Chief Operating Officer of
the assignor, the Employee were appointed to serve as the President and Chief Operating Officer of
the Permitted Assignee, and the Employee’s authority, duties and responsibilities, reporting level,
reporting relationships and office location were to continue to be those described in paragraph
3(a) above as in effect immediately before the assignment. The term “BPI” as used in this Agreement
shall include any successor to BPI by merger or operation of law, and the term “Company” as
used in this Agreement shall include any

- 22 -

 

successor to the Company by merger or operation of law. The rights and obligations of the Employee
hereunder are personal to the Employee and may not be assigned by the Employee; provided that
nothing herein shall prevent the Employee from assigning the right to any amount that may be
payable under this Agreement after the death of the Employee by will or the laws of descent and
distribution or to a beneficiary designated by the Employee with the written consent of the
Company, BPI or an Affiliate.

          (e) Any notice or other communication to the Company pursuant to any provision of this
Agreement shall be given in writing and will be deemed to have been delivered:

     (i) when delivered in person to the General Counsel of BPI; or

     (ii) one (1) week after it is deposited in the United States certified or registered mail, postage
prepaid, addressed to the General Counsel of BPI at 225 Summit Avenue, Montvale, New Jersey
07645-1523, or at such other address of which the Company may from time to time give the Employee
written notice in accordance with paragraph 13(f) below.

          (f) Any notice or other communication to the Employee pursuant to any provision of the
Agreement shall be given in writing and will be deemed to have been delivered:

     (i) when delivered to the Employee in person, or

     (ii) one (1) week after it is deposited in the United States certified or registered mail, postage
prepaid, addressed to the Employee at the Employee’s address as it appears on the records of the
Company or at such other address of which the Employee may from time to time give the Company
written notice in accordance with paragraph 13(e) above.

          (g) No provision of this Agreement may be amended, modified or waived unless such amendment,
modification or waiver shall be agreed to in a writing signed by the Employee and an authorized
officer of the Company.

          (h) This instrument contains the entire agreement of the parties relating to the subject
matter of this Agreement and supersedes and replaces all prior agreements and understandings with
respect to such subject matter (including any employment agreement between the Employee and the
Company, BPI or an Affiliate that was entered into before the date of this Agreement), and the
parties have made no agreements, representations or warranties relating to the subject matter of
this Agreement which are not set forth herein. If this Agreement supersedes an employment agreement
between the Employee and the Company, BPI or an Affiliate that was entered into before the date of
this Agreement and that, but for the preceding sentence, would remain in effect after the date of
this Agreement, then no provision of this Agreement shall cause an amount to be paid in 2008 that
otherwise would not have been paid in 2008 or postpone a payment beyond 2008 that otherwise would
have been paid in 2008 in accordance with the transition rules under Code Section 409A.

     14. Code Section 409A. This Agreement is intended to comply with Code Section 409A and
the interpretative guidance thereunder, including the exceptions for short-term deferrals,
separation pay arrangements, reimbursements, and in-kind distributions, and shall be

- 23 -

 

administered accordingly. The Agreement shall be construed and interpreted with such intent. Each
payment under Section 5 of this Agreement or any Company or BPI benefit plan is intended to be
treated as one (1) of a series of separate payments for purposes of Code Section 409A and Treasury
Regulation §1.409A-2(b)(2)(iii) (or any similar or successor provisions). To the extent that
payments under the Agreement are subject to Code Section 409A and are on account of a Separation
from Service and the Employee is a “Specified Employee” (as defined below) as of the date of
termination, distributions to the Employee may not be made before the date that is six (6) months
after the date of Separation from Service or, if earlier, the date of the Employee’s death (the
“Six Month Delay Rule”). Payments to which the Employee would otherwise be entitled during the
first six (6) months following the date of termination (the “Six Month Delay”) will be accumulated
and paid on the first day of the seventh month following the date of termination (or the Employee’s
death, if earlier).

          (a) During the Six-Month Delay, the Company will pay to the Employee the applicable payments
set forth in Section 5 above, to the extent any of the following exceptions to the Six-Month Delay
Rule apply:

     (i) the short-term deferral rule of Code Section 409A and Treasury Regulation §1.409A-1(b)(4) (or
any similar or successor provisions) (including with the treatment of each payment as one (1) of a
series of separate payments for purposes of Code Section 409A and Treasury Regulation
§1.409A-2(b)(2)(iii)) (or any similar or successor provisions),

     (ii) payments permitted under the separation pay exception of Code Section 409A and Treasury
Regulation §1.409A-1(b)(9)(iii) (or any similar or successor provisions), and

     (iii) payments permitted under the limited payments exception of Code Section 409A and Treasury
Regulation §1.409A-1(b)(9)(v)(D) (or any similar or successor provisions),

provided that the amount paid under this paragraph will count toward, and will not be in addition
to, the total payment amount required to be made to the Employee by the Company under Section 5
above on account of the Separation from Service and any applicable Company or BPI benefit plan. The
Employee’s right to the compensation and benefits provided under Section 5 above is to be treated
as a right to a series of separate payments under Treasury Regulation §1.409A-2(b)(2)(iii) (or any
similar or successor provisions).

          (b) For purposes of this Agreement, the term “Specified Employee” has the meaning given to
that term in Code Section 409A and Treasury Regulation §1.409A-1(i) (or any similar or successor
provisions). The Company’s “specified employee identification date” (as described in Treasury
Regulation §1.409A-1(i)(3) (or any similar or successor provisions)) will be December 31 of each
year, and the Company’s “specified employee effective date” (as described in Treasury Regulation
§1.409A-1(i)(4) (or any similar or successor provisions)) will be April 1 of each succeeding year.

          (c) Following a Change in Control, if any payment made pursuant to this Agreement shall cause
the Employee or the Employee’s beneficiaries to incur any penalty tax

- 24 -

 

under Code Section 409A (including any interest or penalties imposed with respect to such penalty)
(a “409A Tax”), the Employee or the Employee’s beneficiaries shall be entitled to receive
an additional payment (a “409A Gross-Up Payment”) in an amount such that, after payment by
the Employee of all taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and tax imposed upon the 409A Gross-Up Payment, the Employee retains an amount of
the 409A Gross-Up Payment equal to the 409A Tax imposed as a result of such payment.

          (d) If any payment made pursuant to paragraph 5(e) of this Agreement shall cause the Employee
or the Employee’s beneficiaries to incur a 409A Tax, the Employee or the Employee’s beneficiaries
shall be entitled to receive a 409A Gross-Up Payment in an amount such that, after payment by the
Employee of all taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and tax imposed upon the 409A Gross-Up Payment, the Employee retains an amount of
the 409A Gross-Up Payment equal to the 409A Tax imposed as a result of such payment.

     15. Consent to Certain Amendments. The Employee agrees that the Company may amend this
Agreement to the minimum extent necessary to satisfy the applicable provisions of Code Section 409A
and the Treasury Regulations or other guidance issued thereunder. The Company cannot guarantee
that the payments and benefits that may be paid or provided pursuant to this Agreement will satisfy
all applicable provisions of Code Section 409A.

[This space left intentionally blank.]

- 25 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	BARR LABORATORIES, INC.,

a Delaware corporation	 	 	 	 
	 
	 	 	 	 	 	/s/  Michael
J. Bogda
	 
	 	 	 	 	 	Michael J. Bogda
	By:
	 	/s/  Jane F. Greenman	 	 	 	 
	    Its:
	 	 Executive Vice President,

Global Human Resources	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	[SEAL]
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	/s/  Sheldon
Hirt	 	 	 	 
	Secretary	 	 	 	 

- 26 -EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT 

     This
EMPLOYMENT AGREEMENT (this “Agreement”) dated as of the
15th day of July 2008,
between Barr Pharmaceuticals, Inc., a Delaware corporation having its principal executive offices
at 225 Summit Avenue, Montvale, New Jersey 07645-1523 (the “Company”), and Jane F. Greenman (the
“Employee”).

WITNESSETH:

     WHEREAS, the Company wishes to assure itself of the services of the Employee and provide an
inducement for the Employee to remain in its employ; and

     WHEREAS, the Employee is willing to remain
in the employ of the Company on the terms and conditions hereafter
set forth;

     NOW, THEREFORE, the
Company and the Employee hereby agree as follows:

     1. Employment. The Company agrees to employ the Employee, and the Employee agrees to
serve in the employ of the Company, during the term of this Agreement on the terms and conditions
hereafter set forth.

     2. Term.
The term of this Agreement shall commence on July 15th, 2008 (the
“Commencement Date”) and shall terminate at 5 P.M. (E.S.T.) on December 31, 2011 unless
sooner terminated in accordance with the terms of this Agreement or extended as hereinafter
provided. The term of this Agreement shall be extended, without further action by the Company or
the Employee, on the date (the “Extension Effective Date”) that is six (6) months before
December 31, 2011 and on the date (also an “Extension Effective Date”) that is six (6)
months before each subsequent December 31, for successive periods of twelve (12) months each,
unless the Company shall have given written notice to the Employee, or the Employee shall have
given written notice to the Company, in the manner set forth in paragraph 13(e) or (f) below, prior
to the Extension Effective Date in question, that the term of this Agreement that is in effect at
the time such written notice is given is not to be extended or further extended, as the case may
be.

     3. Position and Responsibilities; Place of Performance.

     (a) Throughout the term of this Agreement, the Employee agrees to serve in the employ of the
Company, and the Company agrees to employ the Employee, as its Executive Vice President, Global
Human Resources, reporting to the Chairman of the Board of Directors and Chief Executive Officer of
the Company (the “CEO”). As the Company’s Executive Vice President, Global Human Resources,
the Employee shall be responsible for managing and supervising, and shall have responsibility for
the day-to-day conduct of, all aspects of Human Resources (HR) for the Company and its Subsidiaries
and Affiliates in the United States, Europe and the rest of the world, including, without
limitation, structuring the global HR function to ensure that policies and practices are
coordinated and directed at the appropriate corporate level, formulating broad-based and executive
compensation and benefit plans and strategies, managing, coordinating and safeguarding employee
data so as to facilitate operation of the HR
function, designating the appropriate platforms for delivery of HR services, employee training and
development, and organization design and succession planning, and shall perform such other

 

 

reasonable duties, consistent with the position of Executive Vice President, Global Human
Resources, as may lawfully be assigned to the Employee by the Company’s Board of Directors (the
“Board”) and the CEO, and shall have all of the powers, authority, duties and
responsibilities usually incident to the position and role of Executive Vice President, Global
Human Resources of companies that are comparable in size, character and performance to the Company,
all subject to the authority of the Board and the CEO.

          (b) In connection with the Employee’s employment by the Company, the Employee shall be based
at the principal executive offices of the Company in the greater New York City metropolitan area,
including Montvale, New Jersey, and the Employee agrees to travel, to the extent reasonably
necessary to perform the Employee’s duties and obligations under this Agreement, to Company
facilities and other destinations elsewhere at the Company’s expense.

          (c) During the term of this Agreement, the Employee shall serve the Company on an exclusive
basis (it being understood that the Employee’s engaging in activities on behalf of an Affiliate
shall be deemed serving the Company for this purpose) and shall devote all the Employee’s business
time, attention, skill and efforts to the faithful performance of the Employee’s duties hereunder;
provided that the Employee may engage in community service and charitable activities or such other
activities as approved by the CEO and the Board, that do not materially interfere with the
performance of the Employee’s duties and responsibilities hereunder.

     4. Compensation. For all services rendered by the Employee in any capacity during the
term of this Agreement, and for the Employee’s undertakings with respect to confidential
information, non-solicitation and disparaging remarks set forth in Sections 6 and 7 below, the
Employee shall be entitled to the following:

          (a) a salary, payable in installments not less frequent than monthly, at the annual rate of
four hundred and seventy-five thousand dollars ($475,000), with such increases in such rate, if
any, as the Board or a committee of the Board may approve from time to time during the term of this
Agreement in accordance with the Company’s regular administrative practices applicable to senior
officers from time to time during the term of this Agreement (the Employee’s annual salary rate as
increased from time to time during the term of this Agreement being hereafter referred to as the
“Base Salary”);

          (b) participation in the Company’s annual executive incentive or bonus plan as in effect from
time to time, with the opportunity to receive, for each fiscal year of the Company that begins or
ends during the term of this Agreement, a target award of fifty percent (50%) of the Base Salary
earned during such year (or such higher amount as the
Board or a committee of the Board may determine, in its discretion, up to a maximum of the
lesser of (i) one hundred percent (100%) of Base Salary earned during such year or (ii) three
percent (3%) of the Company’s pre-tax and pre-bonus net operating income for such year), in
accordance with the terms and conditions of such incentive or bonus plan, it being understood that
any award for the fiscal year of the Company in which the term of this Agreement terminates
pursuant to the terms hereof shall be prorated based on the portion of such fiscal year that
coincides with the term of this Agreement and shall be made at the same time as awards (if any) are
made to other participants with respect to such fiscal year. The Company will pay the Employee’s
annual

- 2 -

 

incentive bonus for each year at the same time as annual incentive bonus payments for such year (if
any) are made to other participants with respect to such fiscal year, and in all events within the
two and one half (21/2) months following the end of the calendar year in which the bonus is earned.
Annual incentive bonuses are intended to qualify for the short-term deferral exception to Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”);

          (c) participation in the stock incentive plan applicable to Company officers as from time to time
in effect, subject to the terms and conditions of such plan;

          (d) the business and personal use of an automobile at Company expense including, without
limitation, payment or reimbursement of automobile insurance and maintenance expenses, or a cash
allowance in lieu thereof, in accordance with the Company’s automobile policy applicable to
similarly situated senior officers; and

          (e) participation in all health, welfare, savings and other employee benefit and fringe benefit
plans (including vacation pay plans or policies and life and disability insurance plans) in which
other senior officers of the Company participate during the term of this Agreement, subject in all
events to the terms and conditions of such plans as in effect from time to time. Nothing in this
paragraph (e) shall preclude the Company or an Affiliate from amending or terminating any such plan
at any time prior to a Change in Control or Potential Change in Control. The plans covered by this
paragraph (e) shall not include the annual incentive or stock incentive plans, which are covered by
paragraphs (b) and (c) above.

     5. Termination of Employment.

          (a) Termination by the Company or an Affiliate without Good Cause or by the Employee for
Good Reason; Non-Renewal Termination.

     (i) If the Employee’s employment with the Company is terminated by the Company or an
Affiliate without Good Cause (except as an incident of assigning the rights to Employee’s
services to a Permitted Assignee in accordance with paragraph 13(d) below) when the
Employee is willing and able to continue
performing service, or is terminated by the Employee for Good Reason, in either case
during the term of this Agreement and other than at the expiration of the term of this
Agreement as the same may have been extended in accordance with the provisions of Section 2
above (any such employment termination being hereafter referred to as a “Compensable
Termination”), the Company shall pay the Employee, in accordance with normal payroll
practices, the portion of the Employee’s Base Salary accrued through the date of the
Compensable Termination and any other amounts to which the Employee is entitled by law or
pursuant to the terms of any compensation or benefit plan or arrangement in which the
Employee participated prior to the Compensable Termination and, in addition, subject to all
of the provisions of this Section 5, Section 14 below, and further subject to compliance by
the Employee with the provisions of Sections 6 and 7 below, relating to confidential
information, non-solicitation and disparaging remarks, the Company shall, as liquidated
damages or severance pay or both (whichever characterization(s) will serve to validate the
payments), and as additional consideration for the Employee’s undertakings under Sections 6
and 7 below, pay the Employee the following:

- 3 -

 

     (A) the Employee’s annual bonus for the fiscal year of the Company preceding the
fiscal year of the Company in which the Compensable Termination occurs, if unpaid at the
time of the Compensable Termination. Such annual bonus shall be paid at the same time as
bonuses (if any) for such preceding fiscal year are paid to other officers, and in all
events within the first two and one half (21/2) months of the fiscal year in which the
Compensable Termination occurs. The amount of such bonus shall be determined by the Board
or a committee of the Board on a basis consistent with the prior bonus determinations with
respect to the Employee or, in the event a Change in Control or Potential Change in Control
(as defined in Section 11 below) occurred before the Compensable Termination, consistent
with the bonus determinations with respect to the Employee prior to the Change in Control
or Potential Change in Control. If the Board or a committee of the Board made no bonus
determinations with respect to the Employee before the Compensable Termination or, if
applicable, before the Change in Control or Potential Change in Control, the amount of such
bonus shall be determined on a basis consistent with the Board’s or Board committee’s bonus
determinations with respect to other Executive Vice Presidents before the Compensable
Termination or, if applicable, before the Change in Control or Potential Change in Control;
and

     (B) a prorated annual bonus for the fiscal year of the Company in which the
Compensable Termination occurs, payable at the same time as bonuses (if any) for such
fiscal year are paid to other officers, and in all events within the first two and one half
(21/2) months of the fiscal year following the fiscal year in which the Compensable
Termination occurs. Such prorated annual bonus shall be determined by multiplying the
“Applicable Average Bonus” as defined below in this subparagraph 5(a)(i)(B) by a fraction,
the numerator of which shall be the number
of days elapsed in such fiscal year through (and including) the date on which the
Compensable Termination occurs and the denominator of which shall be the number three
hundred sixty-five (365). For purposes of this Agreement, the “Applicable Average
Bonus” means the highest of (I) the average annual bonus (including any portion of the
bonus that is deferred) awarded to the Employee during the three (3)-year period
immediately preceding the Compensable Termination or, if the Employee was employed by the
Company for less than three (3) years before the Compensable Termination, during the period
of the Employee’s employment by the Company prior to the Compensable Termination
(annualizing any bonus awarded for less than a full year of employment), (II) the average
annual bonus (including any portion of the bonus that is deferred) awarded to the Employee
during the three (3) fiscal years of the Company that precede the fiscal year in which the
Compensable Termination occurs or during the portion of such three (3) fiscal years in
which the Employee was employed by the Company (annualizing any bonus awarded for less than
a full year of employment); provided that, if the Compensable Termination occurs after a
Change in Control or Potential Change in Control, the Applicable Average Bonus shall not be
less than the average annual bonus (including any portion of the bonus that is deferred)
awarded to the Employee during the three (3) years preceding the date on which the Change
in Control or Potential Change in Control occurred or during the portion of such three (3)
years in which the Employee was

- 4 -

 

employed by the Company (annualizing any bonus awarded for less than a full year of employment); or
(III) the Employee’s target bonus (based on the greatest of (i) the Employee’s target bonus
percentage and Base Salary rate as specified in Section 4 above, (ii) the Employee’s approved
target bonus percentage and Base Salary rate in effect on the date of the Compensable Termination,
or (iii) the Employee’s approved target bonus percentage and Base Salary rate in effect on the date
of notice of such Compensable Termination); and

     (C) an amount of money (the “Severance Payment”) equal to two (2) times the Employee’s
“Annual Cash Compensation” as hereafter defined, unless the Severance Payment is payable solely on
account of the Employee’s resignation for Good Reason pursuant to subparagraph 5(d)(v) below
(relating to the Company or an Affiliate giving the Employee notice of non-extension), in which
case the Severance Payment shall be equal to one and one-quarter (11/4) times the Employee’s “Annual
Cash Compensation” as hereafter defined. Except as otherwise provided hereafter in this
subparagraph 5(a)(i)(C) and Section 14, seventy-five percent (75%) of the Severance Payment shall
be paid in a lump sum within ten (10) days after the date of the Compensable Termination. The
twenty-five percent (25%) balance of the Severance Payment shall be paid in six (6) equal monthly
installments, one (1) of which shall be paid at the end of each of the first six (6) months after
the date of the Compensable Termination, provided, in the case of each of such six (6)
installments, that the Employee has not accepted full-time or regular part-time employment with or
regularly served as a consultant to a for-profit
pharmaceutical company prior to the date for payment of such installment, it being understood and
agreed that the foregoing condition shall not be violated by the Employee’s serving as a member of
a board of directors of a for-profit pharmaceutical company or by her performing consulting
services on an ad hoc basis for such a company. If a Change in Control occurs that is a “change in
control event” within the meaning of Code Section 409A and Treasury Regulation §1.409A-3(i)(5)(i)
(or any similar or successor provisions) (either before or after the Compensable Termination and in
accordance with Treasury Regulation §1.409A-3(c)), the Severance Payment (or, in the case of such a
“change in control event” that occurs after the Compensable Termination, any portion thereof that
remains unpaid at the time such “change in control event” occurs) shall be paid in a lump sum
within ten (10) days after the Compensable Termination (or, in the case of such a “change in
control event” that occurs after the Compensable Termination, within ten (10) days after the
“change in control event” occurs), and the two (2) preceding sentences of this subparagraph shall
not apply. For twenty-four (24) months following a Compensable Termination, the Company shall also
provide the Employee (and, as applicable, the Employee’s covered dependents), at Company expense,
with continuation coverage under the Company’s group health plan(s) covering similarly situated
executives. For purposes of this Section 5, the Employee’s “Annual Cash Compensation”
shall mean the sum of (I) the Employee’s highest Base Salary (i.e., one (1) year’s salary at its
highest rate), plus (II) the “Applicable Average Bonus” as defined in subparagraph 5(a)(i)(B)
above.

- 5 -

 

     (ii) If the term of this Agreement as the same may have been extended in accordance with the
provisions of Section 2 above is not extended or further extended because the Company or an
Affiliate gives written notice of non-extension to the Employee as provided in Section 2 above, and
there is not Good Cause for termination of the Employee’s employment at the time of giving such
notice, and the Employee does not thereafter resign for Good Reason during the term of this
Agreement as permitted by paragraph 5(d)(v) below, and the Employee is willing and able to renew or
execute a new agreement providing terms and conditions substantially similar to those in this
Agreement and to continue providing such services, then the Company shall pay the Employee, subject
to fulfillment by the Employee of the Employee’s obligations under this Agreement during the
balance of the term and the Employee’s compliance with the provisions of Sections 6 and 7 below,
relating to confidential information, non-solicitation and disparaging remarks, as non-renewal
compensation, and as additional consideration for the Employee’s undertakings under this Agreement,
including Sections 6 and 7 below, an amount of money (the “Non-Renewal Payment”) equal to
one and one-quarter (11/4) times the Employee’s Annual Cash Compensation as defined in subparagraph
5(a)(i)(C) above, in addition to any other amounts to which the Employee may be entitled hereunder
(including without limitation the Employee’s annual bonus pursuant to paragraph 4(b) above for the
fiscal year of the Company in which the Employee’s employment terminates and any amounts to which
the Employee may be entitled under Section 8, 9 or 10 below) or by law or pursuant to the terms of
any compensation or benefit plan or arrangement in which the Employee participated before
the Employee’s employment terminated. Except as otherwise provided hereafter in this
subparagraph 5(a)(ii), seventy-five percent (75%) of the Non-Renewal Payment shall be paid in a
lump sum within ten (10) days after the date on which the Employee’s employment terminates, subject
to paragraph 5(f) and Section 14. The twenty-five percent (25%) balance of the Non-Renewal Payment
shall be paid in six (6) equal monthly installments one (1) of which shall be paid at the end of
each of the first six (6) months after the date on which the Employee’s employment terminates. If a
Change in Control occurs that is a “change in control event” within the meaning of Code Section
409A and Treasury Regulation §1.409A-3(i)(5)(i) (or any similar or successor provisions) (either
before or after the Employee’s termination and in accordance with Treasury Regulation
§1.409A-3(c)), the Non-Renewal Payment (or, in the case of such a “change in control event” that
occurs after the Employee’s termination, any portion thereof that remains unpaid at the time such
“change in control event” occurs) shall be paid in a lump sum within ten (10) days after the date
on which the Employee’s employment terminates (or, in the case of such a “change in control event”
that occurs after the Employee’s termination, within ten (10) days after the “change in control
event” occurs), and the two (2) preceding sentences of this subparagraph shall not apply. For
twenty-four (24) months following the Employee’s termination, the Company shall also provide the
Employee (and, as applicable, the Employee’s covered dependents), at Company expense, with
continuation coverage under the Company’s group health plan(s) covering similarly situated
executives.

     (iii) Following a Change in Control, the Company shall pay the Employee any unpaid portion of
the “retention bonus” described in the offer letter between the Company and the Employee, dated
July 21, 2007 (the “Offer Letter”), upon the earlier of (A) the

- 6 -

 

date such retention bonus would otherwise be paid pursuant to the terms of such Offer
Letter, provided that the Employee has satisfied all of the conditions for payment set
forth in the Offer Letter, or (B) the date the Employee is terminated by the Company
without Good Cause or terminates for Good Reason, provided that the applicable date for
purposes of this clause (B) shall be subject to the Six Month Delay Rule (as defined in
Section 14 below) to the extent the Employee is a Specified Employee (as defined in Section
14 below).

     (iv) The foregoing provisions of (including any payments under) this paragraph 5(a)
shall be in lieu of any severance pay that may be payable under any plan or practice of the
Company, any other Subsidiary or Affiliate (as such terms are defined in Section 11 below),
or by law (including the WARN Act or any similar state or foreign law), but shall be in
addition to (and not in lieu of) any payments to which the Employee may be entitled under
Sections 8, 9 and 10 below. Subparagraphs 5(a)(i)(C) and 5(a)(ii) above are intended to be
mutually exclusive, and in no event shall such subparagraphs, either individually or
collectively, be construed to require the Company to pay an amount of money in excess of
two (2) times the Employee’s Annual Cash Compensation under such subparagraphs, either
individually or collectively, in addition to continuation
coverage under the Company’s group health plan(s) covering similarly situated
executives provided by the Company to the Employee (and, as applicable, the Employee’s
covered dependents), at Company expense, for twenty-four (24) months.

     (v) The Employee shall not be required to mitigate the amount of any payment or
benefit provided for in this Agreement (including but not limited to any payment provided
for above in this paragraph 5(a)) by seeking other employment or otherwise, nor shall any
compensation earned by the Employee in other employment or otherwise reduce the amount of
any payment or benefit provided for in this Agreement, except as provided in subparagraphs
5(a)(i)(C) and 5(a)(ii) above.

     (vi) A Compensable Termination shall not include a termination of employment by reason
of the Employee’s death.

          (b) Termination by the Company or an Affiliate for Good Cause or by the Employee without
Good Reason. If, during the term of this Agreement, the Employee’s employment by the Company
is terminated by the Company or an Affiliate for Good Cause or by the Employee without Good Reason,
the Employee shall not be entitled to receive any compensation under Section 4 above accruing after
the date of such termination or any payment under paragraph 5(a) above. However, any obligations of
the Company under Sections 8, 9 and 10 shall not be affected by such termination of employment. The
provisions of this paragraph 5(b) shall be in addition to, and not in lieu of, any other rights and
remedies the Company may have at law or in equity or under any other provision of this Agreement in
respect of such termination of employment. However, if during the term of this Agreement the
Employee’s employment is terminated by the Employee without Good Reason and the Employee gives the
Company at least one hundred twenty (120) days’ advance notice of such termination, then the
Employee shall not have any obligation or liability under this Agreement on account of such
termination of employment, but the Employee’s obligations under Section 6 and 7 hereof shall not be
affected by such termination of employment.

- 7 -

 

          (c) Good Cause Defined. For purposes of this Agreement, the Company and the Affiliates
shall have “Good Cause” to terminate the Employee’s employment by the Company during the
term of this Agreement only if:

     (i) (A) the Employee fails to substantially perform the Employee’s duties hereunder for any
reason or to devote substantially all the Employee’s business time exclusively to the affairs of
the Company (including Company activities on behalf of the other Affiliates), other than by reason
of a medical condition that prevents the Employee from substantially performing the Employee’s
duties hereunder even with a reasonable accommodation by the Company, and (B) such failure is not
discontinued within a
reasonable period of time, in no event to exceed thirty (30) days, after the Employee receives
written notice from the Company or an Affiliate of such failure; or

     (ii) the Employee commits an act of dishonesty resulting or intended to result directly or
indirectly in gain or personal enrichment at the expense of the Company or an Affiliate, or engages
in conduct that constitutes a felony in the jurisdiction in which the Employee engages in such
conduct; or

     (iii) the Employee is grossly negligent or engages in willful misconduct or insubordination in
the performance of the Employee’s duties hereunder; or

     (iv) the Employee materially breaches the Employee’s obligations under Section 6 or paragraph
7(a) below, relating to confidential information and non-solicitation.

     In addition, the Employee’s employment shall be deemed to have terminated for Good Cause if,
after the Employee’s employment has terminated, facts and circumstances arising during the course
of the Employee’s employment are discovered that would have justified a termination for Good Cause
under subparagraphs 5(c)(ii) or (iv) above.

     Any foregoing provision of this paragraph 5(c) to the contrary notwithstanding, the Company
and the Affiliates shall not have “Good Cause” to terminate the Employee’s employment within three
(3) years after a Change in Control or Potential Change in Control (as such terms are defined in
Section 11 below) unless (A) the Employee’s act or omission is willful and has a material adverse
effect upon the Company or an Affiliate, (B) the Board gives the Employee (I) written notice
warning of its intention to terminate the Employee for Good Cause if the specified act or omission
alleged to constitute Good Cause is not discontinued and, if curable, cured, and (II) a reasonable
opportunity after receipt of such written notice, but in no event less than two (2) weeks, to
discontinue and, if curable, cure the conduct alleged to constitute Good Cause, and (C) the
Employee fails to discontinue and, if curable, cure the act or omission in question; provided that
clauses (B) and (C) of this sentence shall not apply with respect to conduct on the part of the
Employee that constitutes a felony in the jurisdiction in which the Employee engages in such
conduct, and, provided further, that this sentence shall not apply to conduct involving moral
turpitude. For all purposes of this Agreement, no act, or failure to act, on the Employee’s part
shall be deemed “willful” unless done, or omitted to be done, by the Employee intentionally and in
bad faith (i.e., without reasonable belief that the Employee’s action or omission was in
furtherance of the interests of the Company, another Subsidiary or Affiliate).

- 8 -

 

          (d) Good Reason Defined. For purposes of this Agreement, the Employee shall have
“Good Reason” to terminate employment during the term of this Agreement only if:

     (i) the Company fails to pay or provide any amount or benefit that the Company is obligated to
pay or provide under Section 4 above or Section 8, 9, or 10
below and the failure is not remedied within thirty (30) days after the Company receives
written notice from the Employee of such failure; or

     (ii) the Employee is assigned duties, responsibilities, or reporting relationships not
contemplated by Section 3 above without the Employee’s consent, or the Employee’s duties or
responsibilities or power or authority contemplated by Section 3 above are limited in any respect
materially detrimental to the Employee, and in either case the situation is not remedied within
thirty (30) days after the Company receives written notice from the Employee of the situation; or

     (iii) the Employee is removed from, or not elected or reelected to, the office, title or
position of Executive Vice President, Global Human Resources of the Company, and the Company and
the Affiliates do not have Good Cause for doing so; or

     (iv) the Company or an Affiliate relocates the Employee’s office outside of either the
Company’s principal executive offices or the greater New York City metropolitan area without the
Employee’s written consent (given in a personal rather than representative capacity) and the
situation is not remedied within thirty (30) days after the Company receives written notice from
the Employee of the situation; or

     (v) the Company or an Affiliate gives the Employee written notice, in the manner set forth in
paragraph 13(f) below, prior to any Extension Effective Date, that the term of this Agreement that
is in effect at the time such written notice is given is not to be extended or further extended, as
the case may be; provided that the giving of such written notice to the Employee shall constitute
Good Reason only if and when the Employee shall have performed such of the Employee’s duties and
responsibilities for such period of time, in no event to exceed ninety (90) days after the giving
of such notice, as the CEO, another officer to whom the Employee reports in accordance with
paragraph 3(a) above, or the Board, may reasonably request in writing to transition the Employee’s
duties and responsibilities; or

     (vi) a Change in Control occurs and as a result thereof either (A) equity securities of the
Company cease to be publicly-traded, or (B) the Employee is not elected or designated to serve as
the sole Executive Vice President, Global Human Resources, of the Company or its survivor in the
Change in Control; or

     (vii) a Change in Control or Potential Change in Control occurs and (A) the dollar value of
the stock optioned to the Employee annually thereafter is less than the average annual dollar value
of the stock that was optioned to the Employee during the four (4) years prior to the Change in
Control or Potential Change in Control, or (B) the material terms of such options (including
without limitation vesting schedules) are less favorable to the Employee than the material terms of
the options that were granted to the Employee during the four (4) years prior to the Change in
Control or Potential Change in

- 9 -

 

Control, and in either case (A) or (B) the situation is not remedied within thirty (30)
days after the Company receives written notice from the Employee of the situation. For
purposes of (A) and (B) of this subparagraph 5(d)(vii), if free-standing stock appreciation
rights are granted to the Employee, the stock subject to such rights shall be considered
stock that is optioned to the Employee, and if alternative stock appreciation rights (a/k/a
tandem stock appreciation rights) are granted to the Employee, the stock appreciation
rights shall be considered terms of the options to which they are alternative/tandem; or

     (viii) the Company or a Permitted Assignee attempts to assign any of its rights or
obligations under this Agreement other than in accordance with paragraph 13(d) below and
does not remedy the situation within thirty (30) days after the Company receives written
notice from the Employee of the situation; or

     (ix) the Company or any Subsidiary or Affiliate materially breaches the terms of this
Agreement.

     In no event shall the Employee’s continued employment after any of the foregoing constitute
the Employee’s consent to the act or omission in question, or a waiver of the Employee’s right to
terminate employment for Good Reason hereunder on account of such act or omission, except as
provided in the following sentence. With respect to any act, omission, or occurrence that is
alleged to occur after the Commencement Date and prior to a Change in Control or Potential Change
in Control, the Employee must provide the Company with written notice of any one (1) or more of the
conditions set forth in this definition of Good Reason within six (6) months of the initial
existence of the condition for such condition to constitute Good Reason. Such notice shall not
excuse the Employee from continuing to perform the duties and responsibilities assigned to the
Employee until such time as the Employee terminates employment. Notwithstanding the foregoing, this
notice requirement shall not apply to acts or omissions alleged to constitute Good Reason that
arise after a Change in Control or Potential Change in Control.

          (e) Disability

     (i) Notwithstanding any provision of this Agreement to the contrary, (A) if during the
term of this Agreement as the same may be extended from time to time pursuant to Section 2
above, a medical condition prevents the Employee, even with a reasonable accommodation by
the Company, from substantially performing the Employee’s duties hereunder (it being
understood that a transitory illness, such as a cold or flu, that prevents the Employee
from substantially performing the Employee’s duties hereunder during a brief period is not
such a medical condition), then until the date, if any, on which the Employee recovers from
such medical condition (the “Evaluation Period”), the Company may terminate the
Employee’s employment only pursuant to subparagraph 5(e)(ii) below (a “Disability
Termination”) or for willful misconduct constituting Good Cause under paragraph 5(c)
above, and (B) if any notice of nonextension of the
term of this Agreement was given before the Evaluation Period, or is given during the
Evaluation Period, whether by the Company or an Affiliate or the Employee, pursuant to
Section 2 above, and, but for this clause (B), the term of this Agreement would expire
during the Evaluation Period as a result of such notice of nonextension having been given,
then the term of this Agreement will automatically be

- 10 -

 

extended without action by any party until the Employee recovers from such medical condition. For
purposes of this paragraph 5(e), the Employee will be deemed to recover from a medical condition
only if and when the Employee both (I) has been able to substantially perform the Employee’s duties
hereunder (either with or without a reasonable accommodation by the Company) for more than six (6)
months, consecutive or non-consecutive, within any period of twelve (12) or fewer consecutive
months commencing on or after the commencement of the Evaluation Period, and (II) is not entitled
to receive long-term disability (“LTD”) benefits under a LTD plan of the Company or a
Subsidiary.

     (ii) Except as otherwise provided in subparagraph 5(e)(i) above, during the Evaluation Period,
the Company may terminate the Employee’s employment only in the event of a “Disability,”
which for this purpose means that a medical condition either (A) has prevented the Employee, even
with a reasonable accommodation by the Company, from substantially performing the Employee’s duties
hereunder for six (6) months, consecutive or non-consecutive, in any period of twelve (12) or fewer
consecutive months, or (B) entitles the Employee to receive LTD benefits under a LTD plan of the
Company or any Subsidiary. The Company will give the Employee at least ten (10) days advance
written notice of a Disability Termination. Notwithstanding any provision of this Agreement to the
contrary, a Disability Termination will not be treated as a termination to which the provisions of
paragraph 5(a) or 5(b) apply.

     (iii) In the event of a Disability Termination, the Company will pay or provide the Employee
with the following:

     (A) With respect to the period ending on the date of the Disability Termination, the Employee
will receive all of the compensation and benefits provided by Section 4 above. The amount of any
compensation payable to the Employee with respect to the period ending on the date of the
Disability Termination may be reduced by (I) any payments which the Employee receives with respect
to the same period because of short- or long-term disability under any disability plan of the
Company or any Subsidiary, and (II) any income (whether from Social Security, workers compensation
or any other source) that is deducted in computing the amount of such payments under any disability
plan of the Company or any Subsidiary;

     (B) An amount of money equal to the Severance Payment. Except as otherwise provided hereafter
in this subparagraph 5(e)(iii)(B) and Section 14, seventy-five percent (75%) of the Severance
Payment shall be paid in a lump sum within ten (10) days after the date of the Disability
Termination. The twenty-five percent (25%) balance of the Severance Payment shall be paid in six
(6) equal monthly installments, one (1) of which shall be paid at the end of each of the first six
(6) months after the date of the Disability Termination. If a Change in Control occurs that is a
“change in control event” within the meaning of Code Section 409A and Treasury Regulation
§1.409A-3(i)(5)(i) (or any similar or successor provisions) (either before or after the Disability
Termination and in accordance with Treasury Regulation §1.409A-3(c)), the Severance Payment (or, in
the case of such a “change in control event” that occurs after the Disability

- 11 -

 

Termination, any portion thereof that remains unpaid at the time such “change in
control event” occurs) shall be paid in a lump sum within ten (10) days after the
Disability Termination (or, in the case of such a “change in control event” that occurs
after the Disability Termination, within ten (10) days after the “change in control event”
occurs), and the two (2) preceding sentences of this subparagraph shall not apply; and

     (C) During the period from the date of the Disability Termination until the first to
occur of (I) the date, if any, on which the Employee recovers from the disabling medical
condition, (II) the Employee’s attainment of age 65, and (III) the death of the Employee,
the Company will pay the Employee a monthly amount of money (the “Supplemental LTD
Payments”) equal to the excess, if any, of (aa) over (bb) where (aa) is 60% of one-twelfth
(1/12th) of the Employee’s Base Salary (as defined in paragraph 4(a) above)
immediately before the Disability Termination (i.e., 60% of the Employee’s monthly salary
at its highest rate), and (bb) is the sum of (1) the monthly LTD benefit (if any) which the
Employee receives with respect to the same month under a LTD plan of the Company or any
Subsidiary, plus (2) any income (whether from Social Security, workers compensation or any
other source) that is deducted in computing the amount of such monthly LTD benefit;
provided, however, that the Employee will be entitled to a Supplemental LTD
Payment for a given month only to the extent that the Employee’s cumulative Supplemental
LTD Payments (determined without regard to this proviso) through the end of that month
exceed the Severance Payment.

     The payments and benefits provided by the foregoing provisions of this subparagraph
5(e)(iii) are in addition to and not in lieu of any other amounts to which the Employee is
entitled by law or pursuant to the terms of any compensation or benefit plan or arrangement
in which the Employee participated prior to the Disability Termination, and any amounts
payable pursuant to Section 8, 9 or 10 below.

          (f) Release. Any and all amounts payable and benefits or additional rights provided
pursuant to this Agreement after Separation from Service beyond any accrued, vested amounts shall
only be payable if the Employee (i) signs after a Separation from Service a general release
prepared by the Company of all claims of the Employee occurring up to and including the date of
Separation from Service excluding claims under this Agreement, claims for compensation and benefits
that are vested as of such date, and claims for indemnification or advancement of expenses related
to the Employee’s service or status as an officer or employee (the “Release”), (ii) delivers the
signed Release to the Company within forty-five (45) calendar days of presentation thereof by the
Company to the Employee, which presentation shall be made no later than ten (10) calendar days
following the Employee’s Separation from Service, and (iii) does not revoke the Release during the
seven (7) calendar days following the date on which the Employee signs the Release. Subject to the
preceding sentence, any amounts that otherwise would be paid or provided pursuant to this Agreement
during the sixty-two (62) calendar days following the Employee’s Separation from Service shall be
paid or provided between the sixty-third (63rd) and seventy-fourth (74th) calendar days following
the Separation from Service.

          (g) Code Section 409A. All payments to be made pursuant to this Section 5 are subject
to Section 14 of this Agreement, including the Six Month Delay Rule, if applicable.

- 12 -

 

To the extent of any conflict between Section 14 and this Section 5, Section 14 will control. For
purposes of this Agreement, the Employee’s employment with the Company shall be deemed to be
terminated when the Employee has a “Separation from Service” within the meaning of Code
Section 409A, and references to termination of employment shall be deemed to refer to a Separation
from Service. For purposes of this Section 5, and in accordance with Treasury Regulation
§1.409A-1(h)(1)(ii) (or any similar or successor provisions), a termination of employment shall be
deemed to occur, without limitation, if the Company and the Employee reasonably anticipate that the
level of bona fide services the Employee will perform after a certain date (whether as an employee
or as an independent contractor) will permanently decrease to less than fifty percent (50%) of the
average level of bona fide services provided in the immediately preceding thirty-six (36) months.

     6. Confidential Information.

          (a) The Employee agrees not to disclose, either while in the employ of the Company, an
Affiliate or Subsidiary or at any time thereafter, to any person not employed by the Company or an
Affiliate, or not engaged to render services to the Company or an Affiliate, except with the prior
written consent of an authorized officer of the Company or an Affiliate or as necessary or
appropriate for the performance of the Employee’s duties hereunder, any confidential information
obtained by the Employee while in the employ of the Company, including, without limitation,
information relating to any of the inventions, processes, formulae, plans, devices, compilations of
information,
research, methods of distribution, suppliers, customers, client relationships, marketing
strategies or trade secrets of the Company, another Subsidiary or Affiliate; provided, however,
that this provision shall not preclude the Employee from use or disclosure of information known
generally to the public or of information not considered confidential by persons engaged in the
businesses conducted by the Company, another Subsidiary or Affiliate, or from disclosure required
by law or court order. The Employee also agrees that upon leaving the Company’s employ the Employee
will not take with the Employee, without the prior written consent of an authorized officer of the
Company or an Affiliate, and the Employee will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company, another Subsidiary or
Affiliate, together with any copy or reproduction thereof, mechanical or otherwise, which is of a
confidential nature relating to the Company, another Subsidiary or Affiliate, or without
limitation, relating to its or their methods of distribution, suppliers, customers, client
relationships, marketing strategies or any description of any formulae or secret processes, or
which was obtained by the Employee or entrusted to the Employee during the course of the Employee’s
employment with the Company.

          (b) The Employee agrees that the Company retains all rights to any and all intellectual or
proprietary properties created by the Employee during the Employee’s employment with the Company,
an Affiliate or Subsidiary, including but not limited to all concepts, discoveries and inventions
(whether or not patentable and whether or not reduced to practice); all copyrights (including all
copyrights covering notebooks, presentations, publications, advertising, promotional and/or
educational materials, labels, inserts and packaging materials); all trademarks, trade names and
other similar designations of origin; and all trade secrets, confidential information and ideas,
including but not limited to promotion and marketing plans, customer, supplier and other lists
(collectively “Intellectual Property”). To the extent that

- 13 -

 

any right, title or interest in or to any Intellectual Property vests in the Employee in a manner
contrary to this paragraph 6(b), the Employee agrees to, and hereby does, irrevocably assign to the
Company any and all such rights, titles, and interests in and to such Intellectual Property without
the need for any further action by the Company. The Employee agrees to assist the Company, its
Affiliates and Subsidiaries, including following the Employee’s employment with the Company, an
Affiliate or Subsidiary, in the transfer or assignment of such Intellectual Property.

     7. Restrictive Covenants

          (a) Non-Solicitation. Employee covenants and agrees that, during the Employee’s
employment by the Company and during the one (1)-year period immediately following the termination
of the Employee’s employment with the Company for any reason (including, without limitation, a
termination of employment by the Company or an Affiliate without Cause and a voluntary termination
of employment by the Employee, in either case whether during the term of this Agreement, at the
expiration of the term of
this Agreement or at any time thereafter), the Employee will not solicit or attempt to
persuade any employee of the Company, any other Subsidiary or Affiliate (except the Employee’s
personal secretary or administrative assistant), or any other person who performs services for the
Company, any other Subsidiary or Affiliate at the time the Employee’s employment terminates or at
any time within one (1) year thereafter, to terminate or reduce or refrain from engaging in his or
her employment or other service relationship with the Company, any other Subsidiary or Affiliate;
provided, however, that responding to inquiries from any such employees or other persons that are
not initiated by the Employee, and subsequently hiring such employees or other persons following
the termination of their employment with the Company, the other Subsidiaries and Affiliates, shall
be permitted.

          (b) Specific Enforcement. Employee recognizes and agrees that, by reason of the
Employee’s knowledge, experience, skill and abilities, the Employee’s services are extraordinary
and unique, that the breach or attempted breach of any of the restrictions set forth above in this
Section 7 will result in immediate and irreparable injury for which the Company will not have an
adequate remedy at law, and that the Company shall be entitled to a decree of specific performance
of those restrictions and to a temporary and permanent injunction enjoining the breach thereof, and
to seek any and all other remedies to which the Company may be entitled, including, without
limitation, monetary damages, without posting bond or furnishing security of any kind.

          (c) Restrictions Reasonable. Employee specifically and expressly represents and
warrants that (i) the Employee has reviewed and agreed to the restrictive covenants contained in
this Section 7 and their contemplated operation after receiving the advice of counsel of the
Employee’s choosing; (ii) the Employee believes, after receiving such advice, that the restrictive
covenants and their contemplated operation are fair and reasonable; (iii) the Employee will not
seek or attempt to seek to have the restrictive covenants declared invalid, and, after receiving
the advice of counsel, expressly waives any right to do so; and (iv) if the full breadth of any
restrictive covenant and/or its contemplated operation shall be held in any fashion to be too
broad, such covenant or its contemplated operation, as the case may be, shall be interpreted in a
manner as broadly in favor of the beneficiary of such covenant as is legally permissible. Employee
recognizes and agrees that the restrictions on the Employee’s activities contained in

- 14 -

 

this Section 7 are required for the reasonable protection of the Company and its investments; and
that the restriction on the Employee’s activities set forth in paragraph 7(a) will not deprive the
Employee of the ability to earn a livelihood.

     (d) Non-Disparagement. Employee covenants and agrees that, during the one (1)-year
period immediately following the termination of the Employee’s employment with the Company for any
reason (including, without limitation, a termination of employment by the Company without Cause and
a voluntary termination of employment by the Employee, in either case whether during the term of
this Agreement, at the expiration of the term of this Agreement or at any time thereafter), the
Employee will not make disparaging remarks about the Company, any other Subsidiary or Affiliate, or
any of their officers, directors or employees, unless required by law or reasonably necessary to
assert or defend the Employee’s position in a bona fide dispute arising out of or relating to this
Agreement or the breach thereof.

     (e) Effect on Termination Payments. The Employee recognizes and agrees that the
Company shall not be obligated to make any payments provided for in paragraph 5(a) or 5(e) above if
the Employee violates the provisions of Section 6 or paragraph 7(a) or 7(d) above during the one
(1)-year period immediately following the termination for any reason of the Employee’s employment
with the Company. In addition, the Employee recognizes and agrees that, if the Employee violates
such provisions, the Company may recoup any payments the Company may have theretofore made pursuant
to paragraph 5(a) or 5(e) above and any payments the Company may thereafter make under paragraph
5(a) or 5(e). The foregoing provisions of this paragraph 7(e) shall be in addition to and not by
way of limitation of any other rights and remedies the Company may have in respect of the violation
in question.

     8. Indemnification. To the fullest extent permitted by applicable law, the Company
shall indemnify, defend and hold harmless the Employee from and against any and all claims,
demands, actions, causes of action, liabilities, losses, judgments, fines, costs and expenses
(including reasonable attorneys’ fees and settlement expenses) arising from or relating to the
Employee’s service or status as an officer, director, employee, agent or representative of the
Company, any other Subsidiary or Affiliate, or in any other capacity in which the Employee serves
or has served at the request of, or for the benefit of, the Company, another Subsidiary or
Affiliate. The Company’s obligations under this Section 8 shall be in addition to, and not in
derogation of, any other rights the Employee may have against the Company, any other Subsidiary or
Affiliate to indemnification or advancement of expenses, whether by statute, contract or otherwise.

     9. Certain Additional Payments by the Company.

          (a) Anything in this Agreement (other than the second sentence of this paragraph 9(a)) to the
contrary notwithstanding, in the event it shall be determined that any payment or distribution by
the Company, another Subsidiary or Affiliate, to or for the benefit of the Employee (whether paid
or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required under this Section 9) (a
“Payment”), would be subject to the excise tax imposed by Code Section 4999 or any interest
or penalties are incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Employee shall be entitled to receive an additional

- 15 -

 

payment (a “Gross-Up Payment”) in an amount such that after payment by the Employee of all
taxes and any benefits that result from the deductibility by the Employee of such taxes (including,
in each case, any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
However, if it shall be determined that none of the Payments would be subject to the Excise Tax if
the total Payments were reduced in the aggregate by twenty five thousand dollars ($25,000) or less,
then in that event the total Payments shall be reduced by the smallest amount (in no event to
exceed twenty-five thousand dollars ($25,000) in the aggregate) necessary to ensure that none of
the Payments will be subject to the Excise Tax. Cash Payments shall be reduced first, and in the
chronological order in which they are payable to or on behalf of the Employee.

          (b) Subject to the provisions of paragraph 9(a) above and 9(c) below, all determinations
required to be made under this Section 9, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, and whether Payments are to be reduced pursuant to the second sentence of paragraph
9(a) above, shall be made by Deloitte & Touche or such other certified public accounting firm as
may be designated by the Employee (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and the Employee within fifteen (15) business days of
the receipt of notice from the Employee that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the “change in ownership or effective control” or
“change in the ownership of a substantial portion of assets” (within the meaning of Code Section
280G(b)(2)(A)) that gives rise to the Excise Tax, or in the event that the Accounting Firm for any
reason is unable or unwilling to make the determinations required hereunder, the Employee shall
appoint another nationally recognized accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to the Employee within five
business (5) days of the receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Employee. As a result of the uncertainty
in the application of Code Section 4999 at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company
should have been made (an “Underpayment”), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to paragraph 9(c) and
the Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment, along with
any penalty and interest imposed with respect to such Underpayment, shall be promptly paid by the
Company to or for the benefit of the Employee.

          (c) The Employee shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require either the payment by the Company of the Gross-Up
Payment or the reduction of Payments pursuant to the second sentence of paragraph 9(a) above. Such
notification shall be given as soon as practicable
but no later than ten (10) business days after the Employee is informed in writing of such
claim and shall apprise

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the Company of the nature of such claim and the date on which such claim is requested to be paid.
The Employee shall not pay such claim prior to the expiration of the thirty (30)-day period
following the date on which the Employee gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due). If the Company
notifies the Employee in writing prior to the expiration of such period that it desires to contest
such claim, the Employee shall:

     (i) give the Company any information reasonably requested by the Company relating to such claim,

     (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

     (iii) cooperate with the Company in good faith in order effectively to contest such claim, and

     (iv) permit the Company to participate in any proceedings relating to such claim;

     provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this paragraph 9(c), the
Company shall control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one (1) or more appellate
courts, as the Company shall determine, provided, however, that if the Company directs the Employee
to pay such claim and sue for a refund, the Company shall, if permissible under Section 402 of the
Sarbanes-Oxley Act of 2002, advance the amount of such payment to the Employee on an interest-free
basis or, if such an advance is not permissible thereunder, pay the amount of such payment to the
Employee as additional compensation, and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or additional compensation; and further provided that
any extension of the statute of limitations relating to payment of taxes for the taxable year of
the Employee with respect to which such contested amount is claimed to be due is limited solely to
such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

- 17 -

 

          (d) If, after the receipt by the Employee of an amount advanced or paid by the Company
pursuant to paragraph 9(a) or 9(c), the Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to the Company’s complying with the requirements
of paragraph 9(c)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to paragraph 9(c), a determination is made
that the Employee shall not be entitled to any refund with respect to such claim and the Company
does not notify the Employee in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

          (e) Notwithstanding the foregoing provisions of this Section 9, the determination of the
amount necessary to indemnify the Employee shall be made taking into account all other payments
made to the Employee under any plans, agreements or arrangements aside from this Agreement that are
intended to indemnify the Employee with respect to excise taxes on “excess parachute payments.”
The Company shall reimburse any fees and expenses provided for under this Section 9 on or before
the last day of the Employee’s taxable year following the taxable year in which the fee or expense
was incurred, and in accordance with the other requirements of Code Section 409A and Treasury
Regulation §1.409A-3(i)(1)(v) (or any similar or successor provisions).

     10. Certain Enforcement Matters

     (a) If, after a Change in Control or Potential Change in Control, a dispute arises (i) with
respect to this Agreement or the breach thereof, or (ii) with respect to the Employee’s or the
Company’s rights or obligations under this Agreement, including but not limited to any such dispute
between the Employee and the Company, the Company shall pay or reimburse the Employee for all
reasonable costs and expenses (including court costs, arbitrators’ fees and reasonable attorneys’
fees and disbursements) the Employee incurs in connection with such dispute, including without
limitation costs and expenses the Employee incurs to obtain payment or otherwise enforce the
Employee’s rights under this Agreement, or to obtain payment of costs and expenses due under this
paragraph 10(a). In addition, the Company shall pay the Employee such additional amount (a
“Gross Up”) as will be sufficient, after the Employee pays the Employee’s tax liability
with respect to the Gross Up from the Gross Up, to pay all of the Employee’s federal, state and
local tax liability with respect to any costs and expenses that are paid by the Company pursuant to
this paragraph 10(a). The Company shall promptly pay or
reimburse the Employee for all such costs and expenses as the Employee incurs them, upon
presentation of reasonable documentation of such costs and expenses, and shall promptly pay the
related Gross Up as and when it pays or reimburses costs and expenses. The Employee shall not be
obligated to repay any such costs, expenses or Gross Up unless it is finally determined by the
trier of fact in a non-appealable judicial or arbitral decision or ruling (as applicable) that the
Employee’s principal positions with respect to the principal matter(s) in dispute were unreasonable
and pursued in bad faith. The following provisions apply to any costs and expenses that are to be
paid or reimbursed pursuant to the preceding provisions of this paragraph 10(a) but that are not
covered by the exclusion from the term “deferral of compensation” that is set forth in Treasury
Regulation §1.409A-1(b)(11) (or any similar or successor provisions). Any

- 18 -

 

such reasonable costs and expenses are hereafter referred to as “Non-Excluded Expenses.”
Non-Excluded Expenses may consist of court costs, arbitration costs, arbitrators’ fees, attorneys’
fees and disbursements (including without limitation disbursements for transportation, printing,
document production, consultants and experts), and transportation, hotel, food and other
out-of-pocket expenses (such as telecommunications charges) the Employee incurs in preparing for
and attending depositions, hearings and meetings with attorneys and witnesses and in preparing for
and giving testimony. Non-Excluded Expenses will be paid or reimbursed if they are incurred during
the ten (10)-year period following a Change in Control. Non-Excluded Expenses shall be paid or
reimbursed on or before the last day of the year following the year in which the expense was
incurred, may not be liquidated or exchanged for another benefit, and may not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other year.

     (b) Any payments to which the Employee may be entitled under this Agreement, including,
without limitation, under Section 5, 8, 9 or 10 hereof, shall be made forthwith on the applicable
date(s) for payment specified in this Agreement. If for any reason the amount of any payment due to
the Employee cannot be finally determined on that date, such amount shall be estimated on a good
faith basis by the Company and the estimated amount shall be paid no later than ten (10) days after
such date. As soon as practicable thereafter, the final determination of the amount due shall be
made and any adjustment requiring a payment to or from the Employee shall be made as promptly as
practicable.

     (c) Any controversy or claim arising, after a Change in Control or Potential Change in
Control, out of or related to this Agreement or the breach thereof, shall be settled by binding
arbitration in the City of New York, in accordance with the employment dispute arbitration rules of
the American Arbitration Association then in effect, and the arbitrator’s decision shall be binding
and final and judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except that the Employee may elect to have any such controversy or claim settled by
judicial determination in lieu of arbitration by bringing a court action, if the Employee is the
plaintiff or, if the Employee is not the plaintiff, demanding such judicial determination
within the time to answer any complaint in any arbitration action that may be commenced.

     11. Change in Control

          (a) The term “Change in Control” as used in this Agreement means a change of control
of the Company of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), whether or not the Company is then subject to such reporting
requirement; provided that, whether or not any of the following events would constitute a change of
control of such a nature, a Change in Control shall be deemed to occur for purposes of this
Agreement if and when any of the following events occur:

     (i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) (a
“Person”), other than—

     (A) the Company,

     (B) a Subsidiary,

- 19 -

 

     (C) a trustee or other fiduciary holding securities under an employee benefit plan of the
Company or a Subsidiary, or

     (D) an underwriter engaged in a distribution of the Company stock to the public with the
Company’s written consent,

becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities that represent more than thirty percent (30%) of the combined
voting power of the then outstanding Voting Securities. However, if the Person in question is an
institutional investor whose investment in Voting Securities is purely passive when such Person
becomes such a more than thirty percent (30%) beneficial owner of Voting Securities, then such
event (i.e., such Person’s becoming a more than thirty percent (30%) beneficial owner of Voting
Securities) shall not be deemed to constitute a Change in Control under this subparagraph 11(a)(i)
for so long as (and only for so long as) such Person’s investment in Voting Securities remains
purely passive; or

     (ii) the stockholders of the Company approve a merger, consolidation, recapitalization or
reorganization of the Company or a Subsidiary, reverse split of any class of Voting Securities, or
an acquisition of securities or assets by the Company or a Subsidiary, or consummation of any such
transaction if stockholder approval is not obtained, other than (A) any such transaction in which
the holders of outstanding Voting
Securities immediately prior to the transaction receive, with respect to such Voting Securities
(or, in the case of a transaction in which the Company is the surviving corporation or a
transaction involving a Subsidiary, retain), voting securities of the surviving or transferee
entity representing more than fifty percent (50%) of the total voting power outstanding immediately
after such transaction, with the voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction, or (B) any such transaction which
would result in the Company or a Related Party beneficially owning more than fifty percent (50%) of
the voting securities of the surviving entity outstanding immediately after such transaction; or

     (iii) the stockholders of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all of the Company’s
assets other than any such transaction which would result in a Related Party owning or acquiring
more than fifty percent (50%) of the assets owned by the Company immediately prior to the
transaction; or

     (iv) the persons who were members of the Board immediately before a tender or exchange offer for
shares of Common Stock of the Company by any person other than the Company or a Related Party, or
before a merger or consolidation of the Company or a Subsidiary, or contested election of the
Board, or before any combination of such transactions, cease to constitute a majority of the Board
as a result of such transaction or transactions.

     (b) For purposes of this Agreement, including paragraph 11(a) above:

- 20 -

 

     (i) the term “Related Party” shall mean (A) a Subsidiary, (B) an employee or
group of employees of the Company or any Subsidiary, (C) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any Subsidiary, or (D)
a corporation or other form of business entity owned directly or indirectly by the
stockholders of the Company in substantially the same proportion as their ownership of
Voting Securities;

     (ii) the term “Subsidiary” means a corporation or other form of business
association of which shares (or other ownership interests) having more than fifty percent
(50%) of the voting power are, or in the future become, owned or controlled, directly or
indirectly, by the Company;

     (iii) the term “Affiliate” means a Person that directly, or indirectly through
one (1) or more intermediaries, controls, or is controlled by, or is under common control
with, the Company. For the purposes of the preceding sentence, the word “control”
(by itself and as used in the terms “controlling”, “controlled by” and “under common
control with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise; and

     (iv) the term “Voting Securities” shall mean any securities of the Company
that carry the right to vote generally in the election of directors.

          (c) For purposes of this Agreement, a “Potential Change in Control” means that (i) the
Company or a Subsidiary enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control; or (ii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a potential change in control has occurred.

          (d) A “Change in Control” as such term is used in this Agreement shall also be deemed
to occur if the Company as defined in this Agreement (including paragraph 13(d) below) ceases to be
an Affiliate.

     12. Severability; Survival

          (a) In the event that any provision of this Agreement shall be determined to be invalid or
unenforceable for any reason, the remaining provisions of this Agreement not so invalid or
unenforceable shall be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law; and

          (b) Any provision of this Agreement that may be invalid for any reason or unenforceable in any
jurisdiction shall remain in effect and be enforceable in any jurisdiction in which such provision
shall be valid and enforceable.

          (c) The provisions of Sections 6, 7, 8, 9 and 10 and paragraphs 5(e), (f) and (g) of this
Agreement, and any other provision of this Agreement that is intended to apply, operate or have
effect after the expiration or termination of the term of this Agreement, or at a time when the
term of this Agreement may have expired or terminated, shall survive the expiration or termination
of the term of this Agreement for any reason.

- 21 -

 

     13. General Provisions

          (a) No right or interest to or in any payments to be made under this Agreement shall be
subject to anticipation, alienation, sale, assignment, encumbrance, pledge, charge or hypothecation
or to execution, attachment, levy or similar process, or assignment by operation of law. All
payments to be made by the Company hereunder shall be subject to the withholding of such amounts as
the Company may determine it is required to withhold under the laws or regulations of any
governmental authority, whether foreign, federal, state or local.

          (b) To the extent that the Employee acquires a right to receive payments from the Company under
this Agreement, such right shall be no greater than the right of an
unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the
general funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of any amount hereunder.

          (c) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to the principles of conflicts of laws of that
State.

          (d) This Agreement shall be binding upon and inure to the benefit of the Company, its
successors and permitted assigns, and the Employee, the Employee’s heirs, devisees, distributees
and legal representatives. The Company may assign any or all of its rights and obligations under
this Agreement to any other Subsidiary or Affiliate (collectively,
“Permitted Assignees”), and, if
any rights or obligations are assigned pursuant to this sentence, the assignee may thereafter
assign any or all of such rights and obligations to any other Permitted Assignee; provided that (i)
the Employee’s title, authority, duties and responsibilities, reporting level, reporting
relationships and office location immediately before any such assignment are not changed in any
respect detrimental to the Employee in connection with such assignment without the written consent
of the Employee (given in a personal capacity rather than a representative capacity), (ii) no such
assignment shall relieve the Company of any past, present or future payment or benefit obligations
hereunder without the express written consent of the Employee (also given in a personal capacity),
and (iii) no assignment may be made after a Change in Control or Potential Change in Control
without the express written consent of the Employee (also given in a personal capacity). In the
event of an assignment in accordance with this paragraph, the term “Company” as used in
this Agreement shall be deemed to refer, with respect to the period commencing on the effective
date of such assignment, to the Permitted Assignee to which such rights or obligations are assigned
and, with respect to any obligations that are assigned hereunder, to the Company and such Permitted
Assignee jointly and severally. The foregoing provisions of this paragraph are intended to enable
the Company to assign its right to employ the Employee under this Agreement to an Permitted
Assignee but only if (A) such assignment does not change to the detriment of the Employee his
title, authority, duties, responsibilities, reporting level, reporting relationships, office
location or compensation, (B) such assignment does not result in any Permitted Assignee replacing
the Company as an obligor under this Agreement, and (C) the Employee expressly consents in writing
to any assignment that is to occur after a Change in Control or Potential Change in Control. For
the avoidance of doubt, as an example, in the event of an assignment in accordance with this
paragraph, from the effective date of such assignment the term “Company” as used in
subparagraphs 5(d)(ii) and (iii) above (relating to Good Reason for a change in duties or in
office, title or position) shall be

- 22 -

 

deemed to refer to such Permitted Assignee. Thus, the Employee would not have Good Reason under
those subparagraphs if as a result of the assignment the Employee were to cease to serve as the
Executive Vice President, Global Human Resources of the assignor, the Employee were appointed to
serve as the Executive Vice President, Global Human Resources of the Permitted Assignee, and the
Employee’s authority, duties and responsibilities, reporting level, reporting relationships and
office location were to continue to be those described in paragraph 3(a) above as in effect
immediately before the assignment. The term “Company” as used in this Agreement shall
include any successor to the Company by merger or operation of law. The rights and obligations of
the Employee hereunder are personal to the Employee and may not be assigned by the Employee;
provided that nothing herein shall prevent the Employee from assigning the right to any amount that
may be payable under this Agreement after the death of the Employee by will or the laws of descent
and distribution or to a beneficiary designated by the Employee with the written consent of the
Company or an Affiliate.

          (e) Any notice or other communication to the Company pursuant to any provision of this
Agreement shall be given in writing and will be deemed to have been delivered:

     (i) when delivered in person to the Company’s General Counsel; or

     (ii) one (1) week after it is deposited in the United States certified or registered mail, postage
prepaid, addressed to the Company’s General Counsel at 225 Summit Avenue, Montvale, New Jersey
07645-1523, or at such other address of which the Company may from time to time give the Employee
written notice in accordance with paragraph 13(f) below.

          (f) Any notice or other communication to the Employee pursuant to any provision of the
Agreement shall be given in writing and will be deemed to have been delivered:

     (i) when delivered to the Employee in person, or

     (ii) one (1) week after it is deposited in the United States certified or registered mail, postage
prepaid, addressed to the Employee at the Employee’s address as it appears on the records of the
Company or at such other address of which the Employee may from time to time give the Company
written notice in accordance with paragraph 13(e) above.

          (g) No provision of this Agreement may be amended, modified or waived unless such amendment,
modification or waiver shall be agreed to in a writing signed by the Employee and an authorized
officer of the Company.

          (h) This instrument contains the entire agreement of the parties relating to the subject
matter of this Agreement and supersedes and replaces all prior agreements and understandings with
respect to such subject matter (including any employment agreement between the Employee and the
Company or an Affiliate that was
entered into before the date of this Agreement), and the parties have made no agreements,
representations or warranties relating to the subject matter of this Agreement which are not set
forth herein. If this Agreement supersedes an employment agreement between the Employee and the
Company or an Affiliate that was entered into before the date of this Agreement and that, but for
the preceding sentence, would remain in effect after the date of this Agreement, then no provision
of this Agreement

- 23 -

 

shall cause an amount to be paid in 2008 that otherwise would not have been paid in 2008 or
postpone a payment beyond 2008 that otherwise would have been paid in 2008 in accordance with the
transition rules under Code Section 409A.

     14. Code Section 409A. This Agreement is intended to comply with Code Section 409A and
the interpretative guidance thereunder, including the exceptions for short-term deferrals,
separation pay arrangements, reimbursements, and in-kind distributions, and shall be administered
accordingly. The Agreement shall be construed and interpreted with such intent. Each payment under
Section 5 of this Agreement or any Company benefit plan is intended to be treated as one (1) of a
series of separate payments for purposes of Code Section 409A and Treasury Regulation
§1.409A-2(b)(2)(iii) (or any similar or successor provisions). To the extent that payments under
the Agreement are subject to Code Section 409A and are on account of a Separation from Service and
the Employee is a “Specified Employee” (as defined below) as of the date of termination,
distributions to the Employee may not be made before the date that is six (6) months after the date
of Separation from Service or, if earlier, the date of the Employee’s death (the “Six Month Delay
Rule”). Payments to which the Employee would otherwise be entitled during the first six (6) months
following the date of termination (the “Six Month Delay”) will be accumulated and paid on the first
day of the seventh month following the date of termination (or the Employee’s death, if earlier).

          (a) During the Six-Month Delay, the Company will pay to the Employee the applicable payments
set forth in Section 5 above, to the extent any of the following exceptions to the Six-Month Delay
Rule apply:

     (i) the short-term deferral rule of Code Section 409A and Treasury Regulation §1.409A-1(b)(4) (or
any similar or successor provisions) (including with the treatment of each payment as one (1) of a
series of separate payments for purposes of Code Section 409A and Treasury Regulation
§1.409A-2(b)(2)(iii)) (or any similar or successor provisions),

     (ii) payments permitted under the separation pay exception of Code Section 409A and Treasury
Regulation §1.409A-1(b)(9)(iii) (or any similar or successor provisions), and

     (iii) payments permitted under the limited payments exception of Code Section 409A and Treasury
Regulation §1.409A-1(b)(9)(v)(D) (or any similar or successor provisions),

provided that the amount paid under this paragraph will count toward, and will not be in addition
to, the total payment amount required to be made to the Employee by the Company under Section 5
above on account of the Separation from Service and any applicable Company benefit plan. The
Employee’s right to the compensation and benefits provided under Section 5 above is to be treated
as a right to a series of separate payments under Treasury Regulation §1.409A-2(b)(2)(iii) (or any
similar or successor provisions).

          (b) For purposes of this Agreement, the term “Specified Employee” has the meaning given to
that term in Code Section 409A and Treasury Regulation §1.409A-1(i) (or any similar or successor
provisions). The Company’s “specified employee identification date” (as

- 24 -

 

described in Treasury Regulation §1.409A-1(i)(3) (or any similar or successor provisions)) will be
December 31 of each year, and the Company’s “specified employee effective date” (as described in
Treasury Regulation §1.409A-1(i)(4) (or any similar or successor provisions)) will be April 1 of
each succeeding year.

          (c) Following a Change in Control, if any payment made pursuant to this Agreement shall cause
the Employee or the Employee’s beneficiaries to incur any penalty tax under Code Section 409A
(including any interest or penalties imposed with respect to such penalty) (a “409A Tax”),
the Employee or the Employee’s beneficiaries shall be entitled to receive an additional payment (a
“409A Gross-Up Payment”) in an amount such that, after payment by the Employee of all taxes
(including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto) and tax
imposed upon the 409A Gross-Up Payment, the Employee retains an amount of the 409A Gross-Up Payment
equal to the 409A Tax imposed as a result of such payment.

          (d) If any payment made pursuant to paragraph 5(e) of this Agreement shall cause the Employee
or the Employee’s beneficiaries to incur a 409A Tax, the Employee or the Employee’s beneficiaries
shall be entitled to receive a 409A Gross-Up Payment in an amount such that, after payment by the
Employee of all taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and tax imposed upon the 409A Gross-Up Payment, the Employee retains an amount of
the 409A Gross-Up Payment equal to the 409A Tax imposed as a result of such payment.

     15. Consent to Certain Amendments. The Employee agrees that the Company may amend this
Agreement to the minimum extent necessary to satisfy the applicable provisions of Code Section 409A
and the Treasury Regulations or other guidance issued thereunder. The Company cannot guarantee
that the payments and benefits that may be
paid or provided pursuant to this Agreement will satisfy all applicable provisions of Code
Section 409A.

[This space left intentionally blank.]

- 25 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	BARR PHARMACEUTICALS, INC.,	 	 	 	 
	a Delaware corporation
 	 	 	 	 
	 

	 	 	 	 	 	/s/  Jane F.
Greenman
	 

	 	 	 	 	 	Jane F. Greenman
	By:
	 	/s/  Frederick
J. Killion	 	 	 	 
	    Its:
	 	 Executive Vice President,

General Counsel and Secretary	 	 	 	 
	 

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	[SEAL]	 	 	 	 
	Attest:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	/s/  Sheldon
Hirt	 	 	 	 
	Secretary	 	 	 	 

- 26 -

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