Document:

EXHIBIT 10.6

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”),
dated as of November 15, 2005, but effective as of July 1, 2005 (the “Effective
Date”), is made between RELIANT PHARMACEUTICALS, INC., a Delaware corporation
(the “Company”), and ERNEST MARIO (the “Executive”).

 

WHEREAS, Reliant Pharmaceuticals, LLC, predecessor to
the Company, and the Executive entered into an Employment Agreement dated April
29, 2003 (the “Original Agreement”) pursuant to which the Company employed
the Executive;

 

WHEREAS, the Company and the Executive desire to amend
and restate the Original Agreement in its entirety pursuant to the terms of
this Agreement and thereby continue the Executive’s employment with the Company,
upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual
premises contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend and restate the Original Agreement in its entirety as follows:

 

1.               Employment.
The Executive’s employment with the Company will continue following the
Effective Date, upon the terms and conditions herein set forth.

 

2.               Employment
Period. The terms and conditions of employment under this Agreement shall
commence on the Effective Date hereof and continue for a period ending on June 30,
2008, subject to earlier termination as provided herein (as extended pursuant
to the terms hereof, the “Employment Period”). In the event that the
Executive continues to be employed by the Company following the termination of
the Agreement, such employment shall be governed by this Agreement, except that
it will be “at-will,” without a fixed term, and may be terminated by the
Company or the Executive at any time, with or without notice, for any reason or
no reason (and no reason need be given), and without any further obligations of
the Company beyond that owed for periods that the Executive was actually
employed by the Company.

 

3.               Position
and Duties. The Executive hereby agrees to serve as the Chairman and Chief
Executive Officer of the Company, and shall have those duties, responsibilities
and authority customarily accorded a person holding such a position in a company
such as the Company. In such capacity the Executive shall report to the Board
of Directors of the Company (the “Board”). The Executive shall devote
his best efforts and attention to the performance of services to the Company in
accordance with the terms hereof and as may reasonably be requested by the
Company. The Company acknowledges that the Executive shall continue to pursue
his several external obligations during the term of this Agreement.

 

 

4.               Compensation
and Other Terms of Employment. In consideration of the performance of his
duties for the Company, the Executive shall be entitled to receive the
following:

 

(a)                                  Base
Salary. During the Employment Period (and thereafter to the extent that the
Executive continues to be employed by the Company), the Executive shall be
entitled to receive an annual salary equal to Six Hundred Thousand Dollars ($600,000)
per year (the “Base Salary”). The Base Salary shall be payable in
accordance with the Company’s regular payroll practices (e.g., timing of
payments and standard employee deductions such as income and employment
withholding taxes).

 

(b)                                 Bonus.
During the Employment Period (and thereafter to the extent that the Executive
continues to be employed by the Company) and at the discretion of the
Compensation Committee of the Board (the “Comp Committee”), the
Executive shall be eligible to participate in and earn annual bonus
compensation under the Company’s Executive Bonus Plan (the “Bonus Plan”)
of up to one hundred sixty five percent (165%) of his Base Salary, subject to
satisfaction of performance criteria established by the Comp Committee under
the terms of the Bonus Plan in consultation with the Executive for each relevant
fiscal year that the Executive is employed hereunder.

 

(c)                                  Restricted
Stock. As of the Effective Date, Executive shall be granted and the Company
shall issue to the Executive under the Reliant Pharmaceuticals, Inc. 2004 Equity
Incentive Plan (the “Plan”), Four Hundred Twenty Five Thousand (425,000)
shares of restricted common stock of the Company (the “Section 4(c) Restricted
Shares”). The Section 4(c) Restricted Shares shall be issued pursuant and
subject to the terms of a restricted stock agreement between the Company and
the Executive substantially in the form of Exhibit A attached hereto
(the “Restricted Stock Agreement”), which agreement shall provide, among
other things, that the Executive shall vest in one-third of the Section 4(c) Restricted
Shares on each anniversary of the Effective Date, over a period of three (3)
years.

 

(d)                                 2008
Share Grant. In the event that a Liquidity Event (as defined below) has not
occurred before June 30, 2008 and either (i) Executive is employed by the
Company on June 30, 2008, or (ii) Executive’s employment has been terminated by
the Company without Cause (as defined below) or by Executive for Good Reason
(as defined below), then with effect as of  July 1, 2008 the Company shall grant and issue
to the Executive under the Plan or any subsequent equity incentive plan of the
Company adopted in replacement thereof, Three Hundred Thirty Three Thousand
(333,000) shares of restricted common stock of the Company (the “Section
4(d) Shares”), which shares shall be fully vested and transferable upon
grant, subject only to any stockholders agreement which may be effective
between the Company and the Executive.

 

(e)                                  Options.
As of the Effective Date, the Company shall grant to the Executive options to
purchase Two Hundred Thousand (200,000) shares of common stock of the Company,
at an exercise price of Twenty Dollars ($20.00) per share (the “Section 4(e)Options”).
The Section 4(e) Options shall be evidenced by and subject to the terms of an
option agreement between the Company and the Executive substantially in the
form of Exhibit B attached hereto (the “Option Agreement”).

 

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(f)                                    Liquidity
Event Bonus.

 

(i)                                     In
the event of a transaction during the Employment Period resulting in a Change
of Control (as defined below) of the Company (a “Liquidity Event”), the
Executive shall be entitled to a bonus equal to 1.0% of the Net Proceeds (as
defined below) actually received by the stockholders of the Company in
connection with such Liquidity Event with respect to their capital stock in the
Company (the “Liquidity Event Bonus”). The Liquidity Event Bonus will be
paid in the same consideration as, and to the extent (if the transaction is a
mix of cash and other consideration) received by the holders of shares of
common stock of the Company. The Liquidity Event Bonus shall be in addition to
any rights that Employee shall have by reason of the Liquidity Event with
respect to any equity ownership or other rights to equity ownership he may hold
in the Company. For the purposes of this Agreement, “Net Proceeds” means
the total value of all consideration actually received by the stockholders of
the Company with respect to a Liquidity Event, less investment banking fees and
other transaction costs incurred by the Company in connection with the
Liquidity Event. In the event that any of the consideration received by the stockholders
of the Company is paid into escrow or is a contingent payment, the Executive
shall be paid his Liquidity Event Bonus in respect of such escrowed or
contingent payments at the time that such payments are received by the other stockholders
(or former stockholders) of the Company; provided, however, that payment of the
Liquidity Event Bonus may be structured to be paid at a time different than the
stockholders to the extent necessary to avoid adverse treatment of such payments
under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(ii)                                  For
the purposes of this Section 4(f), “Change of Control” means
(i) the sale, lease exchange license or other disposition of all or
substantially all of the Company’s assets in one transaction or a series of
related transactions, (ii) a merger or consolidation as a result of which the
holders of Company’s issued and outstanding voting securities immediately
before such transaction own or control less than a majority of the voting
securities of the continuing or surviving entity immediately after such
transaction and/or (iii) the acquisition (in one or more transactions) by
any person or persons acting together or constituting a “group” under Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
together with any affiliates thereof (other than stockholders of the Company as
of the date hereof and their respective affiliates) of beneficial ownership (as
defined in Rule 13d-3 under such Exchange Act) or control, directly or
indirectly, of at least eighty percent (80%) of the total voting power of all
classes of securities entitled to vote generally in the election of the Company’s
board of directors; provided that for the purposes of the immediately preceding
clause (iii) neither a public offering of Company’s securities nor any
financing transaction or series of financing transactions shall constitute a
Change of Control.

 

(iii)                               In the event that any
portion of the Liquidity Event Bonus constitutes an “excess parachute payment”
within the meaning of Sections 280G and 4999 of the Code (such amount being the
“Excess Parachute Payment”), then the Company shall pay the Executive an
additional amount equal to twenty (20%) of the amount of such Excess Parachute
Payment.

 

3

 

(g)                                 Aircraft.
The Company owns a 3/16ths NetJets fractional ownership interest in a Citation
Excel aircraft, tail number N668QS (such interest, the “Aircraft”). The
Aircraft shall be available to the Executive for business and personal use;
provided, however, that the Executive shall be imputed income for all personal
usage of the Aircraft pursuant to Section 132 of the Internal Revenue Code.

 

(h)                                 Housing.
The Company will provide, at the Company’s cost, an apartment for the Executive’s
use reasonably close to the Company’s corporate headquarters in Liberty Corner,
New Jersey. All taxes, utilities and maintenance/repair obligations related to
the apartment shall be borne by the Company.

 

(i)                                     Transportation/Automobile.
The Company shall provide the Executive, at the Company’s expense, with the use
of a car service for business-related transportation. A vehicle from the
Company’s fleet of PSR vehicles will be available for Executive’s use.

 

(j)                                     Business
Expenses. The Executive shall be entitled to receive reimbursement in
accordance with the policies and procedures of the Company maintained from time
to time for all reasonable documented business expenses incurred in the
performance of his duties for the Company. In addition, the Executive shall be
entitled to a one time reimbursement of reasonable fees and expenses of legal
counsel incurred by the Executive in connection with the negotiation of this
Agreement.

 

(k)                                  Vacation.
The Executive shall be entitled to vacation during each year of the Employment
Period in accordance with the Company’s policies in effect from time to time
applicable to other members of the Company’ senior management.

 

(l)                                     Benefits.
Except as specifically provided herein or oh Exhibit C attached hereto,
the Executive shall not participate in the Company’s employment benefit plans,
including but not limited to the Section 401(k) retirement plan, health,
dental, life insurance, and long term disability plans or any bonus or other
incentive plans.

 

(m)                               No
Additional Compensation. Except as otherwise specifically provided in this Section
4 or as determined in the discretion of the Compensation Committee of the
Board, the Executive shall not be entitled to any other compensation, salary or
bonuses for services as an employee of the Company.

 

5.               Termination
and Consequences.

 

(a)                                  The
Executive’s Rights to Terminate. Notwithstanding any other provision of
this Agreement to the contrary, the Executive may terminate this Agreement at
any time, on at least 30 days’ prior written notice to the Company for any
reason.

 

(b)                                 The
Company’s Right to Terminate. Notwithstanding any other provision of this
Agreement to the contrary, the Company may terminate this Agreement at any time
during the term hereof with or without Cause; provided that the Company shall
give Executive at least 30 days’ prior written notice prior to termination
without Cause.

 

4

 

(c)                                  Consequences
of Termination without Cause or for Good Reason. If the Company terminates
this Agreement without Cause or if the Executive terminates this Agreement with
Good Reason, the Executive and the Company shall have the following rights and
obligations:

 

(i)                                     Notwithstanding
anything in the Plan or in the applicable option or restricted stock agreements
to the contrary, the Executive shall become fully vested in all of the Section
4(c) Restricted Shares and the Section 4(e) Options;

 

(ii)                                  if
such termination occurs prior to a Liquidity Event, the Company shall pay the
Executive the Liquidity Event Bonus; provided, that the Executive would have
otherwise been entitled to such Liquidity Event Bonus pursuant to Section 4(f)
but for the termination of his employment as described in this Section 5(c);

 

(iii)                               if the conditions of Section
4(d) are met, then on June 30, 2008, the Company shall grant the Executive
the Section 4(d) Shares; and

 

(iv)                              the
Executive shall be entitled to any Base Salary accrued but unpaid through the
date of termination.

 

Upon termination of employment, the Executive shall
have no further rights to receive additional grants of options, restricted
shares or any other benefits or compensation set forth in Section 4. Following
such termination of Executive’s employment, the Company shall have no further
obligations to the Executive under the terms of this Agreement.

 

(d)                                 Consequences
of Termination With Cause or Without Good Reason. If the Company terminates
this Agreement with Cause or the Executive terminates this Agreement without
Good Reason:

 

(i)                                     the
Executive shall forfeit all rights to the Section 4(c) Restricted Shares and
the Section 4(e) Options, to the extent not vested;

 

(ii)                                  all
Restricted Shares and Options, in each case to the extent vested, shall be
subject to the terms of the Plan and the Restricted Share Agreement and Option Agreement;

 

(iii)                               the Executive shall be
entitled to any Base Salary accrued but unpaid through the date of termination;

 

(iv)                              the
Executive shall have no further rights to any other benefits or compensation
set forth in Section 4; and

 

(v)                                 the
Company shall have no further obligations to the Executive under this
Agreement.

 

(e)                                  Definition
of Good Reason. “Good Reason” means (i) a material reduction of
Executive’s duties and responsibilities from those in effect immediately prior
to the reduction;

 

5

 

provided, however, that a reduction in title or
responsibilities from “Chairman and Chief Executive Officer” to “Chairman” will
not constitute Good Reason, or (ii) material breach by the Company of any
provision of this Agreement after receipt of written notice thereof from the
Executive and failure by the Company to cure the breach within thirty (30) days
thereafter.

 

(f)                                    Definition
of Cause. “Cause” means the Executive’s (i) conviction of or a plea
of guilty or nolo contendere to a felony or a
crime involving moral turpitude which in the judgment of the Board causes or
will likely cause substantial economic damage to the Company or substantial
injury to the business reputation of the Company, (ii) commission of acts of
fraud, misappropriation, embezzlement, theft, dishonesty or breach of the duty
of loyalty in performance of the Executive’s duties on behalf of the Company
and (iii) failure lasting at least 30 consecutive calendar days to discharge
his duties under this Agreement due to gross negligence. The foregoing
notwithstanding, the Company shall provide the Executive prior written notice
of its intent to terminate the Executive for Cause pursuant to Section
5(f)(iii) if the Executive fails to commence to cure such alleged failure
to discharge his duties within thirty (30) days of such written notice.

 

6.               Records
and Confidential Data.

 

(a)                                  Acknowledgement.
The Executive acknowledges that in connection with the performance of his
duties during the term of his employment the Company will make available to the
Executive, or the Executive will have access to, certain Confidential
Information (as defined below) of the Company and its affiliates.

 

(b)                                 Confidentiality
Obligations. During the term of his employment and thereafter Executive
shall keep all Confidential Information confidential and will not use such
Confidential Information other than in connection with the Executive’s
discharge of his duties hereunder, and will be safeguarded by the Executive
from unauthorized disclosure. This covenant is not intended to, and does not
limit in any way Executive’s duties and obligations to the Company under
statutory and common law not to disclose or make personal use of the
Confidential Information or trade secrets.

 

(c)                                  Return
of Confidential Information. Following the Executive’s termination of
employment, as soon as possible after the Company’s written request, the
Executive will return to the Company all written Confidential Information which
has been provided to the Executive and the Executive will destroy all copies of
any analyses, compilations, studies or other documents prepared by the
Executive or for the Executive’s use containing or reflecting any Confidential
Information. Within ten (10) business days of the receipt of such request by
the Executive, the Executive shall, upon written request of the Company,
deliver to the Company a notarized document certifying that such written
Confidential Information has been returned or destroyed in accordance with this
Section 6(c).

 

(d)                                 Definition.
For the purposes of this Agreement, “Confidential Information” shall
mean all confidential and proprietary information of the Company, and its
affiliates, including, without limitation, the Company’s marketing strategies,
pricing policies or characteristics, customers and customer information,
product or product specifications, designs, software

 

6

 

systems, leasing costs, cost of equipment, customer
lists, business or business prospects, plans, proposals, codes, marketing
studies, research, reports, investigations, or other information of similar
character. For purposes of this Agreement, the Confidential Information shall
not include and the Executive’s obligations under this Section 6 shall
not extend to (i) information which is generally available to the public, (ii)
information obtained by the Executive from third persons other than Executives
of the Company, its subsidiaries, the Company and the Company’s affiliates not
under agreement to maintain the confidentiality of the same and (iii)
information which is required to be disclosed by law or legal process.

 

(e)                                  Construction.
Any reference to the Company in this Section 6 shall include the Company
and/or its subsidiaries.

 

7.               Additional
Covenants.

 

(a)                                  Non-Competition.
Except for such matters and activities approved by the Board in writing, the
Executive covenants and agrees that (i) during his employment and (ii) for
a period of six (6) months following the termination of his employment by the
Company, the Executive shall not serve as a President, Chief Executive Officer
and/or Executive Chairman in any corporation, partnership, proprietorship,
firm, association, person, or other entity that engages in any business,
activity or service whose principle business is the discovery, development,
manufacture and sales of prescription pharmaceuticals (a “Company Activity”).
This Covenant (as defined below) applies to Company Activities in any territory
or jurisdiction in which the Company is doing business or is making an active
effort to do business during the term of the Executive’s employment and with
respect to the Executive’s Covenant regarding the six (6) month period after
the termination of the Employment Period. This Covenant does not prohibit the
mere passive ownership of less than five percent (5%) of the outstanding stock
of any public corporation as long as the Executive is not otherwise in
violation of this Covenant.

 

(b)                                 No
Diversion. During the Employment Period, the Executive covenants and agrees
that the Executive shall not divert or attempt to divert or take advantage of
or attempt to take advantage of any actual or potential business opportunities
of the Company (e.g., joint ventures, other business combinations, investment
opportunities, potential investors in the Company, and other similar
opportunities) which the Executive became aware of as the result of his
employment with the Company.

 

(c)                                  Non-Recruitment.
The Executive agrees that the Company has invested substantial time and effort
in assembling its present workforce. Accordingly, the Executive covenants and
agrees that during his employment and for a period of six (6) months following
the termination of the Employment Period, the Executive shall not directly or
indirectly entice or solicit or seek to induce or influence any of the Company’s
executives to leave their employment.

 

(d)                                 Remedies.
The Executive acknowledges that should he violate any of the covenants
contained in Sections 6, and 7(a), (b), and (c)
above (collectively “Covenants”), it will be difficult to determine the
resulting damages to the Company and, in addition to any other remedies it may
have, the Company shall be entitled to temporary injunctive relief without
being

 

7

 

required to post a bond and permanent injunctive
relief without the necessity of proving actual damage. The Company may elect to
seek one or more of these remedies at its sole discretion on a case by case
basis. Failure to seek any or all remedies in one case does not restrict the
Company from seeking any remedies in another situation. Such action by the
Company shall not constitute a waiver of any of its rights.

 

(e)                                  Severability
and Modification of Any Unenforceable Covenant. It is the parties’ intent
that each of the Covenants be read and interpreted with every reasonable
inference given to its enforceability. However, it is also the parties’ intent
that if any term, provision or condition of the Covenants is held to be
invalid, void or unenforceable, the remainder of the provisions thereof shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. Finally, it is also the parties’ intent that if it is determined that
any of the Covenants are unenforceable because of overbreadth, then the
Covenants shall be modified so as to make it reasonable and enforceable under
the prevailing circumstances.

 

(f)                                    Litigation.
The Executive agrees to render assistance and cooperation to the Company at its
request regarding any matter, dispute or controversy with which the Company may
become involved and of which the Executive has or may have reason to have
knowledge, information or expertise. Such services will be without additional
compensation if the Executive is then employed by the Company and for
reasonable compensation and subject to his reasonable availability if he is
not.

 

(g)                                 Construction.
Any reference to the Company in this Section 7 shall include the
Company and/or its subsidiaries.

 

8.               No
Assignment. This Agreement shall not be assigned, delegated, transferred,
pledged or sold by either the Executive or the Company without the prior
written consent of the other party.

 

9.               Miscellaneous
Provisions.

 

(a)                                  Payment
of Taxes. Any payments otherwise due under this Agreement to the Executive
shall either be (i) reduced by the minimum required withholdings for federal,
state, local and/or employment taxes, or (ii) the Executive shall deliver to the
Company in cash the amount necessary for the Company to satisfy its required
tax withholding obligations.

 

(b)                                 Notices.
All notices, offers or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as
properly given or made (i) if delivered personally or (ii) after the expiration
of five days from the date upon which such notice was mailed from within the
United States by certified mail, return receipt requested, postage prepaid, (iii)
upon receipt by prepaid telegram or facsimile transmission (with written
confirmation of receipt) or (iv) after the expiration of the second business
day following deposit with documented overnight delivery service. All notices
given or made pursuant hereto shall be so given or made to the following
addresses:

 

8

 

	
  if to the
  Executive:

  	
  Ernest Mario, Ph.D.

  
	
   

  	
  20 Greenhouse Drive

  
	
   

  	
  Princeton, NJ 08540

  
	
   

  	
  Facsimile: (609)
  924-7641

  
	
   

  	
   

  	
   

  	
   

  
	
  with
  copy to:

  	
  Coblentz, Patch, Duffy
  & Bass

  
	
   

  	
  222 Kearny Street, 7th
  Floor

  
	
   

  	
  San Francisco, CA 94108

  
	
   

  	
  Attention:

  
	
   

  	
  Facsimile: (415)
  989-1663

  
	
   

  	
   

  
	
  if to the
  Company:

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
  110 Allen Road

  
	
   

  	
  Liberty Corner, New
  Jersey 07938

  
	
   

  	
  Attention: Chief
  Financial Officer

  
	
   

  	
  Facsimile: (908)
  542-9406

  
	
   

  	
   

  
	
  with
  copy to:

  	
  Latham & Watkins
  LLP

  
	
   

  	
  5800 Sears Tower

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
  Attention: Michael A.
  Pucker

  
	
   

  	
  Facsimile: (312)
  993-9767

  

 

(c)                                  Severability.
If any provision of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal or unenforceable, such provision shall be severed and
enforced to the extent possible or modified in such a way as to make it
enforceable, and the invalidity, illegality or unenforceability thereof shall
not affect the validity, legality or enforceability of the remaining provisions
of this Agreement.

 

(d)                                 Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey applicable to contracts executed in and to
be performed entirely within that state. The parties irrevocably agree that all
actions to enforce an arbitrator’s decision pursuant to Section 9(k)
of this Agreement shall be instituted and litigated only in federal, state or
local courts sitting in Newark, New Jersey and each of such parties hereby
consents to the exclusive jurisdiction and venue of such court and waives any
objection based on forum non conveniens.

 

(e)                                  WAIVER OF JURY TRIAL. THE PARTIES
HEREBY WAIVE, RELEASE AND RELINQUISH ANY AND ALL RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY ACTIONS TO ENFORCE AN ARBITRATOR’S DECISION
PURSUANT TO SECTION 9(k) OF THIS AGREEMENT.

 

(f)                                    Counterparts.
This Agreement may be executed in counterparts, each of which shall be an
original, but all of which shall constitute one and the same instrument.

 

9

 

(g)                                 Entire
Understanding. This Agreement including the Plan, all Exhibits and Recitals
hereto which are incorporated herein by this reference, together with the other
agreements and documents being executed and delivered concurrently herewith by
the Executive and the Company, constitute the entire understanding among all of
the parties hereto and supersedes any prior understandings and agreements,
written or oral, among them respecting the subject matter within, including,
without limitation, the Original Agreement. The foregoing notwithstanding, the
agreements documenting the equity and equity linked securities executed
pursuant to the Original Agreement shall remain in full force and effect in
accordance with their terms.

 

(h)                                 Pronouns
and Headings. As used herein, all pronouns shall include the masculine,
feminine, neuter, singular and plural thereof wherever the context and facts
require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof.

 

(i)                                     Amendments.
Except as set forth in Sections 7(e) and/or 9(c) above, this
Agreement shall not be changed or amended unless in writing and signed by both
the Executive and the Company.

 

(j)                                     The
Executive’s Acknowledgement. The Executive acknowledges (i) that he has
consulted with or has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement and has been advised to do so by
the Company, and (ii) that he has read and understands this Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own
judgment.

 

(k)                                  Arbitration.
Except as provided in Section 9(e) hereof, in the event that there
shall be a dispute among the parties arising out of or relating to this
Agreement, or the breach thereof, the parties agree that such dispute shall be
resolved by final and binding arbitration in Newark, New Jersey, administered
by the American Arbitration Association (the “AAA”), in accordance with
AAA’s Commercial Arbitration Rules, to which shall be added the provisions of
the Federal Rules of Civil Procedure relating to the Production of Evidence,
and the parties agree that the arbitrators may impose sanctions in their
discretion to enforce compliance with discovery and other obligations. Such
arbitration shall be presided over by a single arbitrator. If the Executive, on
the one hand, and the Company, on the other hand, do not agree on the
arbitrator within fifteen (15) days after a party requests arbitration, the
arbitrator shall be selected by the Executive and the Company from a list of
five (5) potential arbitrators provided by AAA. Such list shall be provided
within ten (10) days of the request of any party for arbitration. The party
requesting arbitration shall delete one name from the list. The other party
shall delete one name from the list. This process shall then be repeated in the
same order, and the last remaining person on the list shall be the arbitrator. This
selection process shall take place within the two (2) business days following
both parties’ receipt of the list of five (5) potential arbitrators. Hearings
in the arbitration proceedings shall commence within twenty (20) days of the
selection of the arbitrator or as soon thereafter as the arbitrator is
available. The arbitrator shall deliver his or her opinion within twenty (20)
days after the completion of the arbitration hearings. The arbitrator’s
decision shall be final and binding upon the parties, and may be entered and
enforced

 

10

 

in any court of competent jurisdiction by either of
the parties. The arbitrator shall have the power to grant temporary,
preliminary and permanent relief, including without limitation, injunctive
relief and specific performance. Unless otherwise ordered by the arbitrator
pursuant to this Agreement, the arbitrator’s fees and expenses shall be shared
equally by the parties.

 

(l)                                     Attorney’s
Fees. If any arbitration is brought under Section 9(k), the
arbitrator may award the successful or prevailing party reasonable attorneys’
fees and other costs incurred in that action or proceeding, in addition to any
other relief to which it may be entitled. If any other proceeding is brought by
one party against the other in connection with or relating in any manner to
this Agreement, or to enforce an arbitration award, the successful or
prevailing party (as determined by an independent third party, e.g. a judge)
shall be entitled to recover its reasonable attorneys’ fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it may be entitled.

 

(m)                               Survival.
Sections 6, 7, and 9 (as well as any provisions of this
Agreement necessary to give effect thereto) shall survive the termination of
this Agreement.

 

[Signature
page follows]

 

11

 

IN WITNESS WHEREOF, this Agreement has been executed
as of the date and year first above written.

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  RELIANT PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Ernest Mario

  

 

 

[SIGNATURE PAGE TO
ERNEST MARIO A/R EMPLOYMENT AGREEMENT]

 

12

 

EXHIBIT A

 

RESTRICTED
SHARE AGREEMENT

 

[Exhibit 10.23]

 

13

 

EXHIBIT B

OPTION AGREEMENT

 

[Exhibit 10.24]

 

14

 

EXHIBIT C

BENEFITS

 

Workers Compensation

 

Life Insurance consistent
with policy in place on July 1, 2005

 

15EXHIBIT 10.7

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”), dated this 13th day of January, 2007, but effective
as of January 15, 2007 (the “Effective Date”), is made between RELIANT
PHARMACEUTICALS, INC., a Delaware company (the “Company”), and BRADLEY
T. SHEARES, Ph.D. (the “Executive”).

 

WHEREAS, the
Company desires to employ the Executive, and the Executive desires to be
employed by the Company, upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual premises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

EMPLOYMENT TERMS AND CONDITIONS

 

1.1                               Employment.
The Company hereby employs the Executive, and the Executive agrees to accept
such employment, upon the terms and conditions herein set forth.

 

1.2                               Employment
Period. The term of employment hereunder shall commence on the Effective
Date and continue for a period ending on the fifth anniversary of the Effective
Date, subject to earlier termination as provided herein (the “Employment
Period”). Notwithstanding the preceding sentence, commencing on the fifth
(5th) anniversary of the Effective Date and on each subsequent anniversary of
such date, the Employment Period shall be extended automatically for a one (1)
year term unless at least six (6) months before the fifth (5th) anniversary of
the Effective Date (and each subsequent anniversary of the Effective Date
thereafter, if any) the Company or the Executive shall deliver written notice
to the other party that the Employment Period shall not be extended. The
employment of Executive by the Company shall not be terminated other than in
accordance with Article IV.

 

ARTICLE II

DUTIES

 

2.1                               Duties.
The Executive hereby agrees to serve as the Chief Executive Officer of the
Company, and shall have those duties, responsibilities and authority
customarily accorded a person holding such a position in a company such as the
Company. In such capacity the Executive shall report to the Board of Directors
of the Company (the “Board”). All employees of the Company shall report,
directly or indirectly, to the Executive, other than due to good corporate
governance practices and customary exceptions, subject, however, to the
agreement of the Executive, which agreement shall not be unreasonably withheld
or delayed. During the Employment Period, excluding any periods of Disability,
vacation, or sick leave to which the

 

 

Executive is entitled, Executive shall perform the
duties properly assigned to him hereunder, shall devote substantially all of
his business time, attention and effort to the affairs of the Company and shall
use his reasonable best efforts to promote the interests of the Company.

 

2.2                               Other
Activities. The Executive shall be permitted to (a) engage in civic,
philanthropic or similar activities, and teach or speak at educational, civic
institutions or organizations, which activities, upon the Company’s written
request, from time to time, shall be disclosed to the Company by the Executive,
(b) manage his personal affairs and investments, and (c) engage in other
activities consented to in advance by the Compensation Committee of the Board
(the “Compensation Committee”); provided, however, that in
the reasonable determination of the Compensation Committee or its designee
(which may be the Board or another committee of the Board), such activities
under clauses (a), (b) and (c) of this Section 2.2 do not, interfere
materially with his duties and responsibilities hereunder or otherwise violate
this Agreement. The Company acknowledges Executive currently serves on the
Board of Directors of Honeywell International Inc. and The Progressive
Corporation, and, as long as the services associated therewith remain
substantially similar to the services being provided as of the Effective Date
of this Agreement, such directorships shall not be deemed to interfere
materially with his duties and responsibilities hereunder or otherwise violate
this Agreement; provided, however, that in the event that the
Compensation Committee determines in its reasonable discretion that such board
service actually interferes materially with the Executive’s duties and
responsibilities hereunder, at the request of the Board, the Executive will
step down from one or both of his directorships.

 

2.3                               Board
of Directors. As soon as reasonably practicable following the Effective
Date, the Executive shall be appointed to the Board for so long as (a) the
Executive serves as the Chief Executive Officer of the Company, and (b) the
Company is privately held. Following the Company’s initial public offering, if
any, so long as the Executive serves as the Chief Executive Officer of the
Company, the Company shall recommend Executive for election to the Board.

 

ARTICLE III

COMPENSATION AND BENEFITS

 

3.1                               Compensation
and Benefits. In consideration of the performance of his duties for the
Company, the Executive shall be entitled to receive the Compensation and
Benefits described in this Article III.

 

3.2                               Base
Salary. During the Employment Period, the Executive shall be entitled to
receive an annual salary equal to One Million Dollars ($1,000,000) (the “Base
Salary”). The Base Salary shall be paid not less frequently than monthly
and otherwise in accordance with the Company’s regular payroll practice. The
Board shall review Base Salary at least annually and may increase Base Salary
in its sole discretion. The increased Base Salary shall thereafter be
considered the Base Salary and may not be decreased once increased.

 

3.3                               Bonus.
During the Employment Period, the Executive shall be eligible to participate in
and earn annual bonus compensation under the Company’s Executive Bonus Plan (as
amended from time to time, the “Bonus Plan”).

 

2

 

(a)                                 Target
Bonus. The annual target bonus amount payable to the Executive shall be one
hundred percent (100%) of his Base Salary (“Annual Target Bonus”)
subject to satisfaction of performance criteria established by the Compensation
Committee, under the terms of the Bonus Plan, in consultation with the
Executive for each relevant fiscal year that the Executive is employed
hereunder. Determination of whether the Executive has met the performance
criteria will be made by the Compensation Committee in its reasonable
discretion.

 

(b)                                 Maximum
Bonus. The maximum annual bonus amount payable to Executive shall in no
event exceed one hundred fifty (150%) of his Base Salary for the relevant
fiscal year.

 

(c)                                  Pro
Rata Bonus. In the event the Company terminates this Agreement without
Cause or if the Executive terminates this Agreement with Good Reason in
accordance with Section 4.1(c) or the Executive terminates employment
due to death or Disability (as defined in Section 4.1(j) of this Agreement),
the Executive (or his Beneficiary or estate, as the case may be) shall be
entitled to payment of the Annual Target Bonus that would have been payable
under the terms of the Bonus Plan for the calendar year that includes the date
of termination (hereafter, “Termination Date”) and for which any
objective or subjective performance goals will be deemed satisfied at 100% of
target, except that such Annual Target Bonus shall be pro rated based on the
portion of such year (measured by completed and partial months employed and
counting any partial month as a whole month) that includes the Employment
Period and shall be payable in accordance with Section 3.3(d) (the “Pro
Rata Bonus”).

 

(d)                                 Timing
and Method. The Company shall pay the annual bonus payable for each year in
a lump sum cash payment, and such payment shall be made on or before March 15th
of the year immediately following the year the Executive earned such bonus
unless it is administratively not practicable to make payment by March 15 due
to unforeseen circumstances, in which case it shall be paid as soon as
administratively practical to make such payment but no later than December 31
of such year.

 

3.4                               Options.

 

(a)                                 Standard
Option. Within thirty (30) days following the Effective Date, pursuant to
the Reliant Pharmaceuticals, Inc. 2004 Equity Incentive Plan (as amended from
time to time, the “Plan”) the Company shall grant to the Executive
options to purchase Four Hundred Thousand (400,000) shares of common stock of
the Company, at an exercise price equal to the Fair Market Value (as defined in
the Plan) of the common stock per share (the “Standard Options”) on such
date. The Standard Options shall be evidenced by and subject to the terms of an
option agreement between the Company and the Executive in the form of Exhibit
A attached hereto (the “Option Agreement”) which agreement shall
provide, among other things, that the Standard Options shall vest and become
exercisable annually in four equal installments on each of the first, second,
third and fourth anniversaries of the Effective Date.

 

3

 

(b)                                 Super-performance
Options. Within thirty (30) days following the Effective Date, the Company
shall grant to the Executive an option for One Hundred Thousand (100,000)
shares of common stock of the Company, at an exercise price equal to the Fair
Market Value (as defined in the Plan) on such date (the “Super-performance
Options”). The Super-performance Options shall be evidenced by and subject
to the terms of an Option Agreement in the form attached hereto as Exhibit B,
which agreement shall provide that the Super-performance Options shall vest and
become exercisable annually in five (5) equal installments on each of the
first, second, third, fourth and fifth anniversaries of the Effective Date;
provided that the stretch goals (determined as described in the next two
sentences of this Section 3.4(b)) are satisfied, as determined in the
reasonable discretion of the Compensation Committee. The stretch goals for the
first installment shall be determined by the Compensation Committee in
consultation with the Executive, no later than July 15, 2007. The stretch goals
for the remaining four (4) installments shall be determined by the Compensation
Committee in consultation with the Executive no later than January 31 of each
year in which the relevant installment of Super-performance Options is eligible
for vesting. Failure to meet the stretch goals for any year shall result in the
Super-performance Options that otherwise would have vested in such year to be
cancelled.

 

3.5                               Restricted
Stock. Within thirty (30) days following the Effective Date, Executive
shall be granted and the Company shall issue to the Executive under the Plan,
Two Hundred Thousand (200,000) shares of restricted common stock of the Company
(the “Restricted Shares”). The Restricted Shares shall be issued
pursuant and subject to the terms of a restricted stock agreement between the
Company and the Executive in the identical form of Exhibit C attached
hereto (the “Restricted Stock Agreement”), which agreement shall
provide, among other things, that the Restricted Shares shall vest annually in
four equal installments on each of the first, second, third and fourth
anniversaries of the Effective Date.

 

3.6                               Housing.
The Company will provide, at the Company’s cost, a furnished apartment for the
Executive’s use reasonably close to the Company’s corporate headquarters in
Liberty Corner, New Jersey. All expenses including, but not limited to, taxes,
utilities, maintenance, and repair obligations related to the apartment shall
be borne by the Company, and to the extent taxable the Executive shall be
entitled to a Tax Gross-Up Payment (as defined in Section 9.16(b) of the
Agreement).

 

3.7                               Transportation/Automobile.
The Company shall provide the Executive, at the Company’s expense, with the use
of a car service for business-related transportation, including to and from his
primary residence (so long as such primary residence is within one hundred
(100) miles of the Company’s headquarters), and to the extent taxable the
Executive shall be entitled to a Tax Gross-Up Payment (as defined in Section
9.16(b) of the Agreement).

 

3.8                               Business
Expenses. The Company will reimburse the Executive in accordance with the
policies and procedures of the Company maintained from time to time for all
reasonable documented business expenses incurred in the performance of his
duties for the Company.

 

4

 

3.9                               Vacation.
The Executive shall be entitled to not less than four (4) weeks vacation during
each year of the Employment Period in accordance with the Company’s policies in
effect from time to time applicable to other members of the Company’s senior
management.

 

3.10                        Benefits.

 

(a)                                 Retirement
Benefits. Subject to generally applicable eligibility requirements, the
Executive will also be entitled to participate in all of the Company’s
retirement and deferred compensation plans, programs and arrangements
including, but not limited to, tax-qualified and non-qualified profit sharing,
401(k), pension, retirement, supplemental retirement (e.g., SERP, Excess and
Restoration plans), deferred compensation and savings plans then available to
its senior executives, as the same may be amended and in effect from time to time,
at levels and having interests commensurate with the Executive’s then current
period of service, compensation and position. The foregoing shall not require
the Company to establish or maintain any such plan, program or arrangement.

 

(b)                                 Welfare
Benefits. Subject to generally applicable eligibility requirements, the
Executive will also be eligible to participate in all of the Company’s welfare
benefit plans, programs and arrangements including, without limitation, life,
group health plans, medical, dental, vision and prescription drug benefits,
short term disability, long term disability, and life insurance or benefit
plans, then available to its senior executives, as the same may be amended and
in effect from time to time, at levels and having interests commensurate with
the Executive’s then current period of service, compensation and position. The
foregoing shall not require the Company to establish or maintain any such plan,
program or arrangement.

 

(c)                                  Perquisites
and Fringe Benefits. The Executive will be entitled to participate in all
perquisite programs and all fringe benefit programs generally available from
time to time to senior executives of the Company on the terms and conditions
then prevailing under such programs.

 

3.11                        Best
Results Parachute Payment. In the event that any payment, deemed payment or
other benefit pursuant to this Agreement, together with any other payment,
deemed payment or other benefit the Executive may receive under any other plan,
program, policy, arrangement or agreement (collectively, “Payment”)
would (a) constitute an “excess parachute payment” under section 280G of the
Internal Revenue Code (the “Code”) (an “Excess Parachute Payment”),
and (b) but for this Section 3.11 would result in the imposition on the
Executive of an excise tax under section 4999 of the Code or similar provision
of state or local law (the “Excise Tax”), then the Payment made to the
Executive shall either be (1) delivered in full, or (2) delivered in such
amount thereby resulting in no portion of such Payment being subject to the
Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, that
results in the receipt by the Executive on an after-tax basis the greatest amount
of Payment, notwithstanding that all or some portion of such Payment may be
taxable under section 4999 of the Code. If, as a result of subsequent events or
conditions (including a subsequent Payment or absence of a subsequent Payment
under this Agreement or other plans, programs, policies, arrangements or
agreements maintained by the Company or one

 

5

 

of its affiliates), it is determined that one or more
Payments under this Agreement to the Executive have been reduced by more than
the minimum amount required to prevent any Payment from constituting an Excess
Parachute Payment, then an additional Payment shall be promptly made to the
Executive in an amount equal to the additional amount that can be paid without
causing any Payment to constitute an Excess Parachute Payment. Unless the
Company and the Executive otherwise agree in writing, any determination
required by this Section 3.11, shall be made by a nationally recognized
certified public accounting firm designated by the Company and reasonably
acceptable to the Executive (the “Designated Accountants”). In the event
of a reduction as described in (2) above, the Executive shall be given the
choice of which Payment the Company will reduce. Such Designated Accountants
shall make reasonable assumptions and approximations concerning the application
of sections 280G and 4999 of the Code. The Company and the Executive shall
furnish to the Designated Accountants such information and documents as the
Designated Accountants reasonably request in order to make a determination
under this Section 3.11. The Company shall bear all costs the Designated
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 3.11.

 

3.12                        No
Additional Compensation. Except as otherwise specifically provided in this Article
III or as determined in the discretion of the Compensation Committee and
approved by the Board, the Executive shall not be entitled to any other
compensation, salary or bonuses for services as an employee of the Company.

 

ARTICLE IV

TERMINATION AND CONSEQUENCES

 

4.1                               Termination
and Consequences.

 

(a)                                 The
Executive’s Rights to Terminate. Notwithstanding any other provision of
this Agreement to the contrary, the Executive may terminate this Agreement at
any time, on at least thirty (30) days prior written notice to the Company for
any reason. Executive’s employment will terminate automatically upon death.

 

(b)                                 The
Company’s Right to Terminate. Notwithstanding any other provision of this
Agreement to the contrary, the Company may terminate this Agreement at any time
during the Employment Period hereof with or without Cause (as defined below) or
by reason of Disability (as defined below); provided that the Company
shall give Executive at least thirty (30) days prior written notice prior to
termination without Cause or for Disability.

 

(c)                                  Consequences
of Termination without Cause or for Good Reason. In the event Company
terminates this Agreement without Cause or if the Executive terminates this Agreement
with Good Reason (as defined below), the Executive shall receive the Accrued
Rights (as defined below). Subject to the Executive executing the Release of
Claims in the form attached hereto as Exhibit D (the “Release”)
and not revoking the Release, the Executive shall be entitled to, and the
Company shall be obligated to provide, the following:

 

6

 

1)                                     If
the Agreement is terminated prior to a Change of Control (as defined below) or
following the six (6) month anniversary of the consummation of such a Change of
Control, a lump sum payment equal to two (2) times his Base Salary as in effect
on the date of termination (“Termination Date”) no later than fifteen
(15) days after the Termination Date;

 

2)                                     If
a Change of Control (as defined below) occurs within the three (3) month period after
the Termination Date, the Executive shall be paid an additional lump sum
payment equal to one (1) times his Base Salary in effect on the Termination
Date no later than fifteen (15) days after the Change of Control;

 

3)                                     If the Agreement is
terminated on or within six (6) months after a Change of Control (as defined
below), a lump sum payment equal to three (3) times the Executive’s Base Salary
as in effect on the Termination Date no later than fifteen (15) days after the
Termination Date;

 

4)                                     Any
Standard Options granted under this Agreement that are non-exercisable on the
Termination Date shall become exercisable on such Termination Date to the
extent the options would have become exercisable had the Executive remained
continuously employed by the Company through the second (2nd) anniversary of
such Termination Date;

 

5)                                     Any
Restricted Shares granted under this Agreement that are non-vested on the
Termination Date shall become vested on such Termination Date to the extent the
Executive would have vested had the Executive remained continuously employed by
the Company through the second (2nd) anniversary of such Termination Date;

 

6)                                     If
the Agreement is terminated prior to a Change of Control, the Executive shall
be entitled to continue participation in the Company’s group health plan for
twenty-four (24) months following the Termination Date at the same cost as
active employees of the Company; provided that such continuation coverage
shall cease upon his becoming eligible to participate in a group health plan of
a subsequent employer;

 

7)                                     If
the Agreement is terminated on or after a Change of Control, Executive shall be
entitled to continue participation in the Company’s group health plan for
thirty-six (36) months following the Termination Date at the same cost as
active employees of the Company, provided that such continuation
coverage shall cease

 

7

 

upon his becoming eligible to participate in a group
health plan of a subsequent employer; and

 

8)                                     Any
Pro Rata Bonus as defined in Section 3.3(c) of this Agreement.

 

Other than the obligations of the Company as set forth
in this Section, following such termination of Executive’s employment, the
Company shall have no further obligations to the Executive under the terms of
this Agreement.

 

For purposes herein, the term “Change of Control”
means (i) the sale, lease, exchange, license or other disposition of all or
substantially all of Company’s assets in one transaction or series of related
transactions; (ii) a merger or consolidation as a result of which the holders
of Company’s issued and outstanding voting securities immediately before such
transaction own or control less than a majority of the voting securities of the
continuing or surviving entity immediately after such transaction or (iii) the
acquisition (in one or more transactions) by any Person or Persons acting
together or constituting a “group” under Section 13(d) of the Exchange Act
together with any affiliates thereof (other than stockholders of the Company as
of the date hereof and their respective affiliates) of beneficial ownership (as
defined in Rule 13d-3 under such Exchange Act) or control, directly or
indirectly, of more than fifty percent (50%) of the total voting power of all
classes of securities entitled to vote generally in the election of the Board
or similar governing body; provided that for the purposes of the immediately
preceding clause (iii) neither a public offering of Company’s securities nor
any financing transaction or series of financing transactions shall constitute
a Change of Control. Upon a Change of Control, all Standard Options and
Restricted Shares and all other equity awards granted under this Agreement
(other than the Super-performance Options) shall become one hundred percent
(100%) vested and exercisable.

 

(d)                                 Consequences
of Termination With Cause or Without Good Reason. If the Company terminates
this Agreement with Cause or the Executive terminates this Agreement without
Good Reason, the Executive shall only have the right to the Accrued Rights.

 

(e)                                  Consequences
of Termination Due to Death or Disability. If Executive’s employment
terminates due to death or the Company terminates his employment due to
Disability, then the Executive shall have the right to (i) the Accrued Rights,
(ii) any Standard Options that are non-exercisable on the Termination Date
shall become exercisable on such Termination Date to the extent the options
would have become exercisable had the Executive remained continuously employed
by the Company through the second (2nd) anniversary of such Termination Date,
(iii) any Restricted Shares granted under this Agreement that are non-vested on
the Termination Date shall become vested on such Termination Date to the extent
the Executive would have vested had the Executive remained continuously
employed by the Company through the second (2nd) anniversary of such
Termination Date, (iv) any Pro Rata Bonus (as defined in Section 3.3(c)
of this Agreement), and (v) the health benefits specified in Section 3.10(b)
to which Executive is entitled as of the Termination Date shall be provided to

 

8

 

Executive or his spouse for twenty-four (24) months
following the Termination Date; provided that such benefits shall be
reduced by any similar benefits provided by a subsequent employer.

 

(f)                                   Consequences
of Expiration of Employment Period. In the event the Company provides (i)
written notice at least six (6) months before the fifth (5th) anniversary of
the Effective Date, or (ii) written notice at least six (6) months before any
subsequent anniversary of the Effective Date thereafter of its intent not to
extend the Employment Period for an additional one (1) year term, the Executive
shall be entitled to the Accrued Rights and a lump sum payment equal to one (1)
times his Base Salary on the Termination Date no later than fifteen days after
the Termination Date.

 

(g)                                  Definition
of Good Reason. “Good Reason” means (i) an assignment to the
Executive of any duties materially and adversely inconsistent with his position
as Chief Executive Officer and those duties and responsibilities described in
Section 2.1 of this Agreement including, but not limited to, status, office, or
responsibilities as contemplated under Article II herein, (ii) a material diminution
in the duties or responsibilities of the Executive as Chief Executive Officer
or, so long as the Company is privately held, a material interference by members
of the Board with the performance by the Executive of his duties and
responsibilities as Chief Executive Officer, which material interference is
outside the scope of the reasonable actions of board members acting in their
capacity as such, (iii) a change in the Executive’s reporting
relationship such that he no longer reports directly to the Board, (iv) a
material breach by the Company of any provision of this Agreement, the 2004
Equity Incentive Plan (and any amendment and restatement of such 2004 Equity
Incentive Plan), the Standard Option Agreement, the Super-performance Option
Agreement or the Restricted Share Agreement after receipt of written notice
thereof from the Executive and failure by the Company to cure the breach within
thirty (30) days thereafter, (v) failure of the Company to cause all employees of the
Company to report, directly or indirectly, to the Executive, unless such
failure occurs due to good corporate governance practices and customary
exceptions, subject however, to the agreement of the Executive whose agreement
shall not be unreasonably withheld or
delayed, (vi) the reduction of the Executive’s Base Salary or
Annual Target Bonus opportunity, (vii) the failure of the Board to elect or re-elect the
Executive as Chief Executive Officer, or the failure of the Executive to be
elected or to continue to be re-elected to the Board (other than due to the
fact that the Executive fails or refuses to accept nomination for election or
re-election), (viii) the relocation of the Executive’s office as
assigned to him by the Company to a location more than 50 miles from the
Company’s corporate headquarters on the Effective Date and (ix) the failure of
the successor to the Company (within the scope of Section 8.1 herein) to
explicitly assume and be bound by the terms and provisions of this Agreement. In
order to constitute “Good Reason” the Executive must provide a written notice
to the Company (which notice shall contain a reasonably detailed description of
the event or events constituting Good Reason) within ninety (90) days after the
Executive becomes aware of the event or events constituting Good Reason; provided,
however, that such notice shall not be effective if within the period of
thirty (30) days after the giving of such notice, the event or events otherwise
constituting “Good Reason” are cured by the Company to the Executive’s
reasonable satisfaction.

 

9

 

(h)                                 Definition
of Cause. “Cause” means the Executive’s (i) conviction of or a plea
of guilty or nolo contendere to a felony or a
crime involving moral turpitude which in the judgment of the Board causes or
will likely cause substantial economic damage to the Company or substantial
injury to the business reputation of the Company, (ii) commission of acts of
fraud or embezzlement, (iii) engaging in gross misconduct with respect to his
employment duties, and (iv) failure lasting at least thirty (30) consecutive
calendar days to discharge his duties under this Agreement due to gross
negligence or willful misconduct; provided, that with respect to the
matters described in the immediately preceding clauses (iii) and (iv), written
notice of the alleged failure was delivered to Executive and (if curable) he
fails to commence any action to cure such alleged failure within thirty (30)
days. Any termination for Cause shall be effective upon delivery of notice of
termination for Cause to the Executive.

 

(i)                                     Definition
of Accrued Rights. “Accrued Rights” shall consist of the following:
(i) any Base Salary accrued but unpaid through the Termination Date, (ii) any
Bonus accrued but unpaid through the Termination Date, (iii) payment for any
accrued but unused vacation through the Termination Date, and (iii) all accrued
and vested Employee Benefits.

 

(j)                                  Definition
of Disability. “Disability” means a mental or physical condition
that in the opinion of a licensed physician
(or group of licensed physicians) selected by the Compensation Committee and
approved by the Executive (or by the Executive’s authorized representative), which approval
shall not be unreasonably withheld or delayed, would render the Executive unable to perform
essential duties and responsibilities of his employment assigned at the
time the disability was incurred (as described in Section 2.1 of this Agreement
and as determined in the reasonable discretion of the Compensation Committee)
with reasonable accommodation, for a period of at least six (6) consecutive
months and is expected to be permanent or last for an indefinite duration in
excess of an additional six (6) month period. The Executive (or the Executive’s
authorized representative) shall cooperate with the Company in submitting to
such medical examinations and related testing as such licensed physician (or
group of licensed physicians) shall reasonably request from time to time.

 

ARTICLE V

SPECIAL PAYMENT PROVISIONS

 

5.1                               Special
Payment Provisions.

 

Notwithstanding any provision in the Agreement to the
contrary:

 

(a)                                 If
payment or provision of any amount or other benefit that is a “deferral of compensation”
subject to section 409A of the Code at the time otherwise specified in this
Agreement or elsewhere would subject such amount or benefit to additional tax
pursuant to section 409A(a)(1)(B) of the Code, and if payment or provision
thereof at a later date would avoid any such additional tax, then the payment
or provision thereof shall be postponed to the earliest date on which such
amount or benefit can be paid or provided without incurring such additional tax.
In the event this Section 5.1(a) requires a deferral of any payment,
such payment shall be accumulated and paid in a single lump sum on such
earliest date together with interest

 

10

 

for the period of delay, compounded annually, equal to
the prime rate (as published in The Wall Street Journal),
and in effect as of the date the payment should otherwise have been provided.

 

(b)                                 If
any payment or benefit permitted or required under this Agreement is reasonably
determined by either party to be subject for any reason to a material risk of
additional tax pursuant to section 409A(a)(1)(B) of the Code, then the parties
shall promptly agree in good faith on appropriate provisions to avoid such risk
without materially changing the economic value of this Agreement to either
party.

 

ARTICLE VI

RECORDS AND CONFIDENTIAL DATA

 

6.1                               Records
and Confidential Data.

 

(a)                                 Acknowledgement.
The Executive acknowledges that in connection with the performance of his
duties during the term of his employment the Company will make available to the
Executive, or the Executive will have access to, certain Confidential
Information (as defined below) of the Company and its affiliates.

 

(b)                                 Confidentiality
Obligations. During and following termination of his employment with the Company
for any reason, except in connection with the performance of his duties
hereunder, the Executive shall not, without the written consent of the Board or
a person authorized thereby, disclose to any person  any Confidential Information, except for disclosure
to the Executive’s legal counsel to the extent such legal counsel needs to know
the information to protect the Executive’s legal rights under this Agreement,
provided that such legal counsel shall maintain the confidentiality of such
information and shall be bound by this Article VI to the same extent as the
Executive. The Executive shall be fully responsible for any disclosure by such
legal counsel. This covenant is not intended to, and does not limit in any way
Executive’s duties and obligations to the Company under statutory and common
law not to disclose or make personal use of the Confidential Information or
trade secrets.

 

(c)                                  Return
of Confidential Information. Following the Executive’s termination of
employment, as soon as possible after the Company’s written request, the
Executive will return to the Company all written Confidential Information which
has been provided to the Executive and the Executive will destroy all copies of
any analyses, compilations, studies or other documents prepared by the
Executive or for the Executive’s use containing or reflecting any Confidential
Information. Within ten (10) business days of the receipt of such request by
the Executive, the Executive shall, upon written request of the Company,
deliver to the Company a notarized document certifying that such written
Confidential Information has been returned or destroyed in accordance with this
Section 6(c).

 

(d)                                 Definition.
For the purposes of this Agreement, “Confidential Information” shall
mean all confidential and proprietary information of the Company, and its
affiliates, including, without limitation, the Company’s marketing strategies,
pricing policies or characteristics, customers and customer information,
product or product specifications, designs, software systems, leasing costs,
cost of equipment, customer lists, business or business

 

11

 

prospects, plans, proposals, codes, marketing studies,
research, reports, investigations, or other information of similar character. For
purposes of this Agreement, the Confidential Information shall not include and
the Executive’s obligations under this Article VI shall not extend to
(i) information which is or becomes generally available to the public, (ii)
information obtained by the Executive from third persons other than executives
of the Company, its subsidiaries, the Company and the Company’s affiliates not
under agreement to maintain the confidentiality of the same and (iii)
information which is required to be disclosed by the Executive by law or legal
process.

 

(e)                                  Construction.
Any reference to the Company in this Article VI shall include the
Company and/or its subsidiaries.

 

ARTICLE VII

ADDITIONAL COVENANTS

 

7.1                               Additional
Covenants.

 

(a)                                 Non-Competition.
The Executive covenants and agrees that (i) during his employment and
(ii) for a period of two (2) years following the termination of his
employment by the Company (the “Restriction Period”), the Executive
shall not directly or indirectly own an interest in, operate, join, control,
advise, consult to, work for, serve as a director of, have a financial
interest, or participate in any corporation, partnership, proprietorship, firm,
association, person, or other entity that engages in any business, activity or
service whose principle business is the discovery, development, manufacture and
sales of prescription pharmaceuticals (a “Company Activity”). This
Covenant (as defined below) applies to Company Activities in any territory or
jurisdiction in which the Company is doing business or is making an active
effort to do business during the term of the Executive’s employment. This
Covenant does not prohibit the mere passive ownership of less than five percent
(5%) of the outstanding stock of any public corporation as long as the Executive
is not otherwise in violation of this Covenant.

 

(b)                                 No
Diversion. During the Restriction Period, the Executive covenants and
agrees that the Executive shall not divert or attempt to divert or take
advantage of or attempt to take advantage of any actual or potential business
opportunities of the Company (e.g., joint ventures, other business
combinations, investment opportunities, potential investors in the Company, and
other similar opportunities) which the Executive became aware of as the result of
his employment with the Company.

 

(c)                                  Non-Recruitment.
The Executive agrees that the Company has invested substantial time and effort
in assembling its present workforce. Accordingly, the Executive covenants and
agrees that during the Restriction Period, the Executive shall not hire away,
nor directly or indirectly entice or solicit or seek to induce or influence any
of the Company’s  employees to leave
their employment.

 

(d)                                 Remedies.
The Executive acknowledges that should he violate any of the covenants
contained in Article VI, and Sections 7.1(a), 7.1(b), and 7.1(c)
above (collectively “Covenants”), it will be difficult to determine the
resulting damages to the Company and, in

 

12

 

addition to any other remedies it may have, the
Company shall be entitled to temporary injunctive relief without being required
to post a bond and permanent injunctive relief without the necessity of proving
actual damage. The Company may elect to seek one or more of these remedies at
its sole discretion on a case by case basis. Failure to seek any or all
remedies in one case does not restrict the Company from seeking any remedies in
another situation. Such action by the Company shall not constitute a waiver of
any of its rights.

 

(e)                                  Severability
and Modification of Any Unenforceable Covenant. It is the parties’ intent
that each of the Covenants be read and interpreted with every reasonable
inference given to its enforceability. However, it is also the parties’ intent
that if any term, provision or condition of the Covenants is held to be
invalid, void or unenforceable, the remainder of the provisions thereof shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. Finally, it is also the parties’ intent that if it is determined
that any of the Covenants are unenforceable because of overbreadth, then the
Covenants shall be modified so as to make it reasonable and enforceable under
the prevailing circumstances.

 

(f)                                   Litigation.
The Executive agrees to render assistance and cooperation to the Company at its
request regarding any matter, dispute or controversy with which the Company may
become involved and of which the Executive has or may have reason to have
knowledge, information or expertise. Such services will be without additional
compensation if the Executive is then employed by the Company, and thereafter,
subject to the Executive’s reasonable availability, for an amount per day equal
to the Executive’s Base Salary on the Termination Date divided by three hundred
sixty five (365), plus reasonable and documented out-of pocket expenses,
including, travel and lodging.

 

(g)                                  Construction.
Any reference to the Company in this Article VII shall include the
Company and/or its subsidiaries.

 

ARTICLE VIII

ASSIGNMENT

 

8.1                               Assignment.
This Agreement shall be binding upon the Executive and shall not be subject to
assignment or delegation by the Executive without the Company’s express written
consent. This Agreement shall likewise be binding upon the Company and its
successors (by the sale of all or substantially all of the assets of the
Company, or a merger, consolidation, change of control or similar transaction
involving the Company) and the Company shall require any successor to assume
and agree in writing to perform the obligations of the Company under this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

 

ARTICLE IX

MISCELLANEOUS

 

9.1                               Public
Announcement. The Company shall give Executive reasonable opportunity to
review and comment on any public announcement (including any filing with a
governmental agency or stock exchange) relating to this Agreement or Executive’s
employment

 

13

 

by the Company. The Executive shall not make any
public announcement without the prior written consent of the Company.

 

9.2                               Approvals.
The Company represents and warrants to Executive it has taken all corporate
action necessary to authorize this Agreement.

 

9.3                               No
Obligation to Mitigate Damages and No Offset. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment. Except as specifically provided in Section
3.10(b) and for any amounts owed by the Executive to the Company as of the
Termination Date, no amounts paid to or earned by Executive following his
termination of employment with the Company shall reduce or be offset against
any amounts payable to Executive under this Agreement.

 

9.4                               Payment
of Taxes. Any payments otherwise due under this Agreement to the Executive
shall either be (i) reduced by the minimum required withholdings for federal,
state, local and/or employment taxes, or (ii) the Executive shall deliver to
the Company in cash the amount necessary for the Company to satisfy its
required tax withholding obligations.

 

9.5                               Notices.
All notices, offers or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as
properly given or made (i) if delivered personally or (ii) after the expiration
of five days from the date upon which such notice was mailed from within the
United States by certified mail, return receipt requested, postage prepaid,
(iii) upon receipt by facsimile or other electronic transmission (with written
confirmation of receipt) or (iv) after the expiration of the second business
day following deposit with documented overnight delivery service. All notices
given or made pursuant hereto shall be so given or made to the following
addresses:

 

	
  if to the
  Executive:

  	
  [to his
  last known  address as shown on the
  records of the Company]

  
	
   

  	
   

  
	
  with
  copy to:

  	
  Greenberg Traurig, LLP

  
	
   

  	
  77 West Wacker Drive

  
	
   

  	
  Suite 2500

  
	
   

  	
  Chicago, Illinois 60601

  
	
   

  	
  Attention: Leslie A.
  Klein

  
	
   

  	
  Facsimile: (312)
  899-0345

  
	
   

  	
   

  
	
  if to the
  Company:

  	
  Reliant
  Pharmaceuticals, Inc.

  
	
   

  	
  110 Allen Road

  
	
   

  	
  Liberty Corner, New
  Jersey 07938

  
	
   

  	
  Attention: Chief
  Financial Officer

  
	
   

  	
  Facsimile: (908)
  542-9406

  

 

14

 

	
  with
  copy to:

  	
  Latham & Watkins
  LLP

  
	
   

  	
  5800 Sears Tower

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
  Attention: Michael A.
  Pucker

  
	
   

  	
  Facsimile: (312)
  993-9767

  

 

9.6                               Severability.
If all or any part of this Agreement is held by any court or governmental
authority to be unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidate any portion of this Agreement not declared to be unlawful
or invalid. Any provision so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
provision to the fullest extent possible while remaining lawful and valid.

 

9.7                               Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey applicable to contracts executed in and to
be performed entirely within that state. The parties irrevocably agree that all
actions to enforce an arbitrator’s decision pursuant to Section 9.9
of this Agreement shall be instituted and litigated only in federal, state or
local courts sitting in Newark, New Jersey and each of such parties hereby
consents to the exclusive jurisdiction and venue of such court and waives any
objection based on forum non conveniens.

 

9.8                               WAIVER OF JURY TRIAL. THE PARTIES HEREBY
WAIVE, RELEASE AND RELINQUISH ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY ACTIONS TO ENFORCE AN ARBITRATOR’S DECISION PURSUANT
TO SECTION 9.9 OF THIS AGREEMENT.

 

9.9                               Arbitration.
Except as provided in Section 9.8 hereof, in the event that there
shall be a dispute among the parties arising out of or relating to this
Agreement, or the breach thereof, the parties agree that such dispute shall be
resolved by final and binding arbitration in Newark, New Jersey, administered
by the American Arbitration Association (the “AAA”), in accordance with
AAA’s Commercial Arbitration Rules, to which shall be added the provisions of
the Federal Rules of Civil Procedure relating to the Production of Evidence,
and the parties agree that the arbitrators may impose sanctions in their
discretion to enforce compliance with discovery and other obligations. Such
arbitration shall be presided over by a single arbitrator. If the Executive, on
the one hand, and the Company, on the other hand, do not agree on the
arbitrator within fifteen (15) days after party requests arbitration, the
arbitrator shall be selected by the Executive and the Company from a list of
five (5) potential arbitrators provided by AAA. Such list shall be provided
within twenty five (25) days of the request of any party for arbitration. The
party requesting arbitration shall delete one name from the list. The other
party shall delete one name from the list. This process shall then be repeated
in the same order, and the last remaining person on the list shall be the
arbitrator. This selection process shall take place within the two (2) business
days following both parties’ receipt of the list of five (5) potential
arbitrators. Hearings in the arbitration proceedings shall commence within
twenty (20) days of the selection of the arbitrator or as soon thereafter as
the arbitrator is available. The arbitrator shall deliver his or her opinion
within twenty (20) days after the completion of the arbitration hearings. The

 

15

 

arbitrator’s decision shall be final and binding upon
the parties, and may be entered and enforced in any court of competent
jurisdiction by either of the parties. The arbitrator shall have the power to
grant temporary, preliminary and permanent relief, including without
limitation, injunctive relief and specific performance. The arbitrator’s fees
and expenses shall be paid by the Company.

 

9.10                        Attorney’s
Fees. Without limiting Section 9.9 above, if any arbitration, proceeding, or other action is
brought under this Agreement, each party shall pay their own attorneys’ fees
and costs in that arbitration, proceeding, or action.

 

9.11                        Counterparts.
This Agreement may be executed in counterparts, each of which shall be an
original, but all of which shall constitute one and the same instrument.

 

9.12                        Entire
Understanding. This Agreement including the Plan, all Exhibits and Recitals
hereto which are incorporated herein by this reference, together with the other
agreements and documents being executed and delivered concurrently herewith by
the Executive and the Company, constitute the entire understanding among all of
the parties hereto and supersedes any prior understandings and agreements,
written or oral, among them respecting the subject matter within.

 

9.13                        Pronouns
and Headings. As used herein, all pronouns shall include the masculine,
feminine, neuter, singular and plural thereof wherever the context and facts
require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof.

 

9.14                        Amendments;
Waiver. No provisions of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is approved by the
Board (or the Compensation Committee to the extent the Board has delegated
authority with respect to such matters) or a person or persons authorized
thereby and is agreed to in writing by the Executive and such officer(s) as may
be authorized by the Board (or the Compensation Committee to the extent the
Board has delegated authority with respect to such matters). No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
waiver of any provision of this Agreement shall be implied from any course of
dealing between or among the parties hereto or from any failure by any party
hereto to assert its right hereunder on any occasion or series of occasions.

 

9.15                        The
Executive’s Acknowledgement. The Executive acknowledges (i) that he has
consulted with or has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement and has been advised to do so by
the Company, and (ii) that he has read and understands this Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own
judgment.

 

16

 

9.16                        Reimbursement
of Fees.

 

(a)                                 The
Company shall pay Executive’s reasonable legal fees and expenses incurred in
connection with the completion of this Agreement, and to the extent taxable the
Executive shall be entitled to a Tax Gross-Up Payment (as defined in Section
9.16(b) of the Agreement).

 

(b)                                 The
term “Tax Gross-Up Payment” means an amount payable to Executive such
that after payment of taxes on such amount there remains a balance sufficient
to pay taxes being reimbursed.

 

9.17                        Indemnification
and D&O Insurance. The Executive will be entitled to the same
indemnification and D&O insurance coverage as other directors and officers
of the Company in effect from time to time and subject to the terms and
conditions thereof.

 

9.18                        Inconsistency.
In the event of any inconsistency between this Agreement and any other
Agreement, plan, program or practice of the Company, this Agreement shall
control.

 

9.19                        Representations.

 

(a)                                 The
Executive represents and warrants to the Company that he will not, nor will he
cause or assist any other person to, make any statement to a third party or
take any action which is intended to or would reasonably have the effect of disparaging
or harming the Company or the business reputation of Company’s directors,
employees, officers and managers; provided, however, that this
provision shall not preclude the truthful disclosure or testimony as may be
required before any tribunal or administrative agency, or under any applicable
law, regulations or rules or by any listing requirements of any securities
exchange on which any securities of the Company are listed.

 

(b)                                 The
Company represents and warrants to Executive that its senior executives will
not, nor will it cause or assist any other person to, make any statement to a
third party or take any action which is intended to or would reasonably have
the effect of disparaging or harming the Executive or his business reputation;
provided, however, that this provision shall not preclude the truthful
disclosure or testimony as may be required before any tribunal or
administrative agency, or under any applicable law, regulations or rules or by
any listing requirements of any securities exchange on which any securities of
the Company are listed.

 

9.20                        Binding
Effect. This Agreement shall be binding on and inure to the benefit of the
Company and its successors and permitted assigns. This Agreement shall also be
binding on and inure to the benefit of the Executive and his heirs, executors,
administrators and legal representatives. If the Executive dies before all
amounts payable to him hereunder have been paid, the unpaid amounts to be paid
under this Agreement will be paid to his beneficiary designated by the
Executive (“Beneficiary”) or, if none (or if otherwise not permitted),
to his estate.

 

17

 

9.21                        Survival
of Rights and Obligations. All of Executive’s rights and the Company’s
obligations hereunder, including Executive’s rights to compensation and
benefits (including under Article III and Article IV hereof),
Executive’s obligations under Article VI and Article VII, and
Executive’s and Company’s rights and obligations under Article IX
hereof, (as well as any provisions of this Agreement necessary to give effect
thereto) shall survive the termination of Executive’s employment and/or the
termination of this Agreement.

 

[Signature
Page Follows]

 

18

 

IN WITNESS WHEREOF, this
Agreement has been executed as of the date and year first above written.

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  RELIANT PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bradley T. Sheares,
  Ph.D.

  

 

19

 

EXHIBIT A

 

STANDARD
OPTION AGREEMENT

 

[Exhibit 10.25]

 

20

 

EXHIBIT B

 

SUPER-PERFORMANCE
OPTION AGREEMENT

 

[Exhibit 10.26]

 

21

 

EXHIBIT C

 

RESTRICTED
STOCK AGREEMENT 

 

[Exhibit 10.27]

 

22

 

EXHIBIT D

 

RELEASE
OF CLAIMS 

 

1.             General
Release

 

In consideration for the
undertakings and promises of Reliant Pharmaceuticals, Inc. (“Reliant”) set forth in Section 4.1(c) of the Employment
Agreement dated January 13, 2007 by and between Bradley T. Sheares (the “Executive”) and Reliant (as amended from time to time, the “Employment Agreement”), Executive unconditionally releases,
discharges, and holds harmless Reliant, its officers, directors, shareholders,
employees, agents, attorneys, suppliers and contractors (herein collectively
referred to as “Releasees”), from each and every
claim, cause of action, right, liability or demand of any kind and nature, and
from any claim which may be derived therefrom (collectively referred to as “Claims”), that Executive had, has, or may have against
Releasees at the time Executive executes this Release of Claims (the “Release”) (other than Claims described in Section 2 of this
Release) including, but not limited to, any and all of the Claims:

 

a.             arising from Executive’s employment, pay, bonuses,
commissions, vacation, sick leave, stock options, or any other Executive
benefits, and other terms and conditions of employment or employment practices
of Reliant;

 

b.             relating to the termination of Executive’s employment
with Reliant, the surrounding circumstances thereof, or any communications
about the termination of Executive’s employment;

 

c.             based on discrimination on the basis of race, color,
religion, sex, national origin, handicap, disability, age or any other category
protected by law under Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, Executive Order 11246, the Equal Pay Act, the Americans
With Disabilities Act, the Rehabilitation Act of 1973, the Age Discrimination
in Employment Act of 1967, the Older Workers Benefits Protection Act, COBRA,
the Employee Retirement Income Security Act of 1974, the New Jersey Law Against
Discrimination, the Family Medical Leave Act, the Uniformed Services and
Redeployment Rights Act of 1994, the New Jersey Law Against Discrimination, the
New Jersey Conscientious Employee Protection Act, the New Jersey Family Leave
Act, the New Jersey Wage Payment Law (as any of these laws may have been
amended) or any other similar labor, employment or anti-discrimination laws;

 

d.             based on any contract, tort, whistleblower, personal
injury, or wrongful discharge theory; and

 

e.             based on any other federal, state or local constitution,
regulation, law (statutory or common), or legal theory.

 

2.             Exceptions to General Release.

 

Notwithstanding Section 1 or any other provision in this Release to the
contrary, the Release shall expressly not include:

 

 

 

a.             rights of the Executive under this Release and
provisions of the Employment Agreement that survive termination thereof;

 

b.             rights of the Executive relating to vested stock
options, restricted stock and other equity awards held by the Executive as
determined on his Termination Date (as defined in the Employment Agreement);

 

c.             vested and accrued benefits of the Executive as of the
Termination Date under any of the Company’s employee or executive benefit
plans, programs, arrangements, practices or policies including, but not limited
to, retirement and deferred compensation Plans generally described as
tax-qualified and/or non-qualified profit sharing plans, 401(k) and other cash
or deferred arrangements, pension, retirement, supplemental retirement (e.g.
SERP, Excess and Restoration plans), deferred compensation and savings plans
which Executive participates on the Termination Date;

 

d.             rights the Executive may have to indemnification (1)
under applicable corporate law, (2) pursuant to the by-laws or certificate of
incorporation of Reliant or otherwise, and (3) as an insured under a director’s
and officer’s liability policy now or previously in effect in accordance with
the terms and conditions thereof; and

 

e.             rights for reimbursement of business expenses incurred
prior to the Termination Date of the Executive that pursuant to Company policy
should be reimbursed, but have not been yet reimbursed on the date this Release
is executed.

 

3.             Covenant Not to Sue or Accept Recovery; No Prior
Assignment

 

Executive covenants not
to sue Reliant or any Releasees on account of any claim released hereby.  Executive further covenants not to accept,
recover or receive any monetary damages or any other form of relief which may
arise out of or in connection with any administrative remedies which may be
filed with or pursued independently by any governmental agency or agencies,
whether federal, state or local. 
Executive represents and warrants that he has not assigned or
transferred, in any manner, including by subrogation or operation of law, any
portion of any claim, action, complaint, charge or suit encompassed by the
releases set forth in this Release.

 

4.             On The Job Illness or Injury At
The Time of Execution

 

Executive has no
knowledge or claim of any condition, symptom or events that could give rise to
or be the result of any on the job illness or injury.

 

 

2

 

5.             Return of Property

 

Executive agrees that he has not removed any Reliant property from
Reliant’s premises, except as authorized by Reliant in writing, or that
Executive will return all of Reliant’s property immediately upon execution of
this Release.  Such property includes,
but is not limited to, the original and any copies of any confidential information
or trade secrets, all Reliant-issued vehicles, computers, PDA’s keys, pass
cards, customer lists, files, brochures, documents or computer disks or
printouts, equipment and any other item relating to Reliant and its
business.  Further, Executive agrees that
he has not taken, procured, or copied any property of Reliant on or after his
termination of employment (the “Termination Date”).

 

6.             No Interest in Reinstatement

 

Executive hereby
acknowledges that Executive has no interest in reinstatement, reemployment or
employment with Reliant, and Executive forever waives any interest in or claim
of right to any future employment by Reliant. 
Executive further covenants not to apply for future employment with
Reliant.

 

7.             Resignations

 

Executive hereby
resigns as an officer and director of Reliant, each of its subsidiaries and any
committees of the boards of directors of Reliant and each of its subsidiaries.

 

8.             Governing Law

 

This Release shall be
governed by and interpreted and construed in accordance with the laws of the
State of New Jersey without reference to its internal conflict of law
principles.

 

9.             Full
and Knowing Waiver

 

By signing this Release,
Executive certifies that:

 

a.             Executive carefully read and fully
understands the provisions of this Agreement;

 

b.             Executive
was advised by Reliant in writing to consult with an attorney before signing
this Release;

 

c.             Reliant allows Executive twenty-one
(21) days from its initial presentation to Executive to consider this Release
before signing it; and,

 

d.             Executive agrees to its terms
knowingly, voluntarily and without intimidation, coercion or pressure.

 

 

3

 

10.          Revocation of Agreement

 

Executive may revoke this Release within seven (7) calendar days after
signing it.  To be effective, such revocation
must be received in writing by the then acting General Counsel of Reliant at
Reliant Pharmaceutical, Inc., 110 Allen Road Liberty Corner, New Jersey  07938. 
Revocation can be made by hand delivery, telegram, facsimile, or
postmarking before the expiration of this seven (7) days period.  None of the obligations of Reliant under
Section 4.1(c) of the Employment Agreement shall be effective in the event that
Executive revokes this Agreement pursuant to this Section 10.

 

[Signature
Page Follows]

 

 

4

 

IN WITNESS WHEREOF the
undersigned has executed this Agreement on the date written below.

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  BRADLEY T. SHEARES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bradley T. Sheares

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
				

 

 

5

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