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  EXHIBIT 10.5.15
 PAR PHARMACEUTICAL COMPANIES, INC.
 

 TERMS OF RESTRICTED STOCK UNIT AWARD
 

 (Effective for 2011 Awards)
 

 This document sets forth the terms of the award of Restricted Stock Units (as defined in Section 1 below) granted by PAR PHARMACEUTICAL COMPANIES, INC. (the “Company”) pursuant to a Certificate of Restricted Stock Units (the “Certificate”) displayed at the website of Morgan Stanley Smith Barney Benefits Access.  The Certificate, which specifies the person to whom the Restricted Stock Units have been awarded (the “Participant”), other specific details of the award, and the electronic acceptance of the Certificate at the website of Morgan Stanley Smith Barney, are incorporated herein by reference.
 

 WHEREAS, the Board of Directors (the “Board”) of the Company has authorized and approved the Par Pharmaceutical Companies, Inc. 2004 Performance Equity Plan (the “Plan”), which has been approved by the stockholders of the Company;  
 

 WHEREAS, the Plan, in part, provides for the grant of Restricted Stock Units to certain employees of the Company and any Subsidiary of the Company;
 

 WHEREAS, pursuant to the Plan, the Committee has approved an award to the Participant of Restricted Stock Units, designated in the Certificate, on the terms and conditions set forth in the Plan and in these Terms.  Capitalized terms used but not defined in these Terms shall have the meanings set forth in the Plan.
 

 NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
 

 1.         Grant of Restricted Stock Units.
 

 (a) Subject to the terms and conditions hereinafter set forth and set forth in the Plan, the Company grants as of the date of grant specified on the Certificate (the “Date of Grant”) to the Participant that number of Restricted Stock Units set forth in the Certificate (the “Units”), which are based on the value of shares of the Company’s common stock, par value $.01 per share (“Shares”).  The Units are subject to the restrictions set forth in Section 2 of these Terms, the terms and conditions of the Plan and the other terms and conditions contained in these Terms.  
 

 (b) The Units granted under these Terms shall be reflected in a bookkeeping account maintained by the Company during the Restricted Period.  If and when the restrictions set forth in Section 2 expire in accordance with these Terms, and upon the satisfaction of all other applicable conditions as to the Units, such Units (and any related Dividend Units described in Section 1(c) below) not forfeited pursuant to Section 4 hereof shall be settled in cash as provided in Section 1(e) of these Terms and otherwise in accordance with the Plan.
 

  
 
 
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                         (c) With respect to each Unit, whether or not vested, that has not been forfeited (but only to the extent such award of Units has not been settled for cash), the Company shall, with respect to any cash dividends paid on the Shares, accrue and credit to the Participant’s bookkeeping account a number of Units having a Fair Market Value as of the date such dividend is paid equal to the cash dividends that would have been paid with respect to such Unit if it were an outstanding Share (the “Dividend Units”).  These Dividend Units thereafter shall (i) be treated as Units for purposes of future dividend accruals pursuant to this Section 1(c); and (ii) vest in such amounts (rounded to the nearest whole Unit) at the same time as the Units with respect to which such Dividend Units were received.  
 

 (d) The Company’s obligations under these Terms (with respect to both the Units and the Dividend Units, if any) shall be unfunded and unsecured, and no special or separate fund shall be established and no other segregation of assets shall be made.  The rights of Participant under these Terms shall be no greater than those of a general unsecured creditor of the Company.  In addition, the Units shall be subject to such restrictions as the Company may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which Shares are then listed, any Company policy and any applicable federal or state securities law.
 

 (e) Except as otherwise provided in these Terms, settlement of the Units in accordance with the provisions of this Section 1(e) shall be delivered within sixty (60) days after the end of the Restricted Period, and upon the satisfaction of all other applicable conditions as to the Units (including the payment by the Participant of all applicable withholding taxes).  The Units so payable to the Participant shall be paid solely in cash based on the Fair Market Value of the Shares (based on the closing price of the Shares as of the first business day next following the last day of the Restricted Period).  
 

 2.         Restrictions.
 

 (a) The Participant shall have no rights as a stockholder of the Company by virtue of any Unit.
 

 (b)   None of the Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period, except as may be permitted by the Plan or as otherwise permitted by the Committee in its sole discretion or pursuant to rules adopted by the Committee in accordance with the Plan.
 

 (c) Any attempt to dispose of the Units or any interest in the Units in a manner contrary to the restrictions set forth in these Terms shall be void and of no effect.
  
 3.         Restricted Period and Vesting.  
 

 (a) The “Restricted Period” is the period beginning on the Date of Grant and ending on the date the Units, or such applicable portion of the Units, are deemed vested in accordance with the following schedule or as otherwise provided under these Terms:
 

 

 

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                  Vesting Date                                            Vested Percentage
 

 1st  Anniversary of the Date of Grant                                   25%
 2nd Anniversary of the Date of Grant                                   50%
 3rd Anniversary of the Date of Grant                                    75%
 4th Anniversary of the Date of Grant                                   100%
 

 The Units shall be deemed vested and no longer subject to forfeiture under Section 4 upon expiration of the Restricted Period, and the satisfaction of all other applicable conditions as to the Units (including the payment by the Participant of all applicable withholding taxes).  
 

 (b) Notwithstanding the foregoing vesting schedule, the Restricted Stock Unit Award will be deemed fully vested and no longer subject to forfeiture in the event of a Change of Control of the Company (as defined in and subject to the provisions of the Plan).
 

 4.         Forfeiture.  
 

 (a) Subject to Section 7 hereof, if during the Restricted Period (i) the Participant’s employment with the Company, its Affiliates and/or its Subsidiaries is terminated for any reason, including termination by reason of resignation, other than due to death or disability, (ii) there occurs a material breach of these Terms by the Participant, or (iii) the Participant fails to meet the tax withholding obligations described in Section 5(b) hereof, all rights of the Participant to the Units that have not vested in accordance with Section 3 as of the date of such event shall terminate immediately and be forfeited in their entirety. 
 

 (b) In the event that the Participant’s employment with the Company, its Affiliates and/or its Subsidiaries is terminated due to the Participant’s death or disability prior to the fourth anniversary of the Date of Grant, the Participant shall be deemed vested as of the date of such termination in that percentage of the Units which the Participant would have become vested in if the Participant had remained employed through the next anniversary of the Date of Grant that first occurs on or after the date of such termination, and that number of Units shall no longer be subject to forfeiture.  The remainder of any Units that have not vested in accordance with the terms of Section 3 or this Section 4(b) as of the date of the Participant’s termination shall terminate immediately and be forfeited in their entirety.  The determination of whether the Participant has terminated employment due to disability shall be made in the good faith judgment of the Committee.
 

 5.         Withholding.
 

 (a) The Committee shall determine the amount of any withholding or other tax required by law to be withheld or paid by the Company with respect to any income recognized by the Participant with respect to the Units.
 

 (b) The Participant shall be required to meet any applicable tax withholding obligation in accordance with the provisions of Article 18 of the Plan.
 

 

 

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                          (c) The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of Units to satisfy tax withholding obligations as it deems necessary or appropriate to facilitate and promote the conformity of the Participant’s transactions under the Plan and these Terms with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, if such Rule is applicable to transactions by the Participant.
 

 6.         Covenants and Conditions on Awards and Recovery.
 

 (a) Covenants.  As a condition for participation in the Plan and the receipt of any benefits under these Terms, the Participant shall agree and covenant as follows:
 

 (i) at any time during the Participant’s employment with the Company, its Affiliates or its Subsidiaries and for a period of twenty-four (24) months following the Participant’s termination of such employment, the Participant shall not, directly or indirectly, either (A) personally or (B) as an employee, agent, partner, stockholder, officer or director of, consultant to, or otherwise of any entity or person engaged in any business in which the Company, its Affiliates or its Subsidiaries is engaged, or is actively proposing to engage at the time of such termination of employment, engages in conduct that breaches the Participant’s duty of loyalty to the Company, its Affiliates or its Subsidiaries or that is in material competition with the Company, its Affiliates or its Subsidiaries or is materially injurious to the Company, its Affiliates or its Subsidiaries, monetarily or otherwise, which conduct shall include, but not be limited to:  (1) disclosing or using any confidential information pertaining to the Company, its Affiliates or its Subsidiaries; (2) any attempt, directly or indirectly, to induce any employee of the Company, its Affiliates or its Subsidiaries to be employed or perform services elsewhere; or (3) any attempt, directly or indirectly, to solicit the trade of any customer or supplier or prospective customer or supplier of the Company, its Affiliates or its Subsidiaries; or (4) disparaging the Company, its Affiliates or its Subsidiaries or any of their respective officers or directors.  The determination of whether any conduct, action or failure to act falls within the scope of activities contemplated by this Section shall be made by the Committee, in its discretion, and shall be final and binding upon the Participant.  A determination that any particular conduct, action or failure falls outside the scope of activities contemplated by this Section shall not imply that, or be determinative of whether, such conduct, action or failure is otherwise lawful or appropriate.  For purposes of this Section, the Participant shall not be deemed to be a stockholder of a competing entity if the Participant’s record and beneficial ownership of equity securities of said entity amount to not more than one percent (1%) of the outstanding equity securities of any company subject to the periodic and other reporting requirements of the Securities Exchange Act of 1934, as amended.
 

 (ii) the Company would be irreparably injured in the event of a breach of any of the Participant’s obligations under Section 6(a)(i), monetary damages would not be an adequate remedy for any such breach and the Company shall be entitled to injunctive relief, in addition to any other remedies that it may have, in the event of any such breach.
 

 

 

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                         (b) Recovery of Award Upon Violation of Covenants.  In the event that the Committee determines that the Participant has violated any of the covenants contained in Section 6(a), then:
 

 (i) all of the Participant’s unvested Units shall be forfeited immediately and all rights of the Participant with respect to such Units shall terminate; and
 

 (ii) to the extent that the Participant has received cash in settlement of any Units upon vesting of such Units, the Participant upon notice from the Company of the Participant’s obligations under this Section 6(b)(ii), shall immediately deliver to the Company an amount in cash equal to the payment previously received by the Participant in settlement of the vested Units.
 

 The notice described in subsection (ii) above may be given at any time within twelve months after the expiration of the applicable covenant period under Section 6(a).  
 

 (c) Recovery of Compensation in Connection with Financial Restatement.  Notwithstanding any other provision of these Terms, if the Board determines that the Company is required to restate its financial statements due to material noncompliance with any financial reporting requirement under the law, whether such noncompliance is the result of misconduct or other circumstances, the Participant shall be required to reimburse the Company for any amounts earned or payable with respect to this Award to the extent required by and otherwise in accordance with applicable law and any Company policies.
 

 7.         Committee’s Discretion.  Notwithstanding any provision of these Terms to the contrary, the Committee shall have discretion to waive any forfeiture of the Units as set forth in Section 4 hereof, the restrictions set forth in Section 2 hereof and any other conditions set forth in these Terms.
 

 8.         Participant Representations.  The Participant hereby represents to the Company that the Participant has read and fully understands the provisions of the Certificate, these Terms and the Plan and the Participant’s decision to participate in the Plan is completely voluntary.  Further, the Participant acknowledges that the Participant is relying solely on his or her own advisors with respect to the tax consequences of this restricted stock unit award.
 

 9.         Miscellaneous.
 

 9.1 Notices.  All notices or communications under these Terms shall be in writing, addressed as follows:
 

 

 

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 To the Company:
 

 Par Pharmaceutical Companies, Inc.
 300 Tice Boulevard
 Woodcliff Lake, NJ  07677
 Attention:  General Counsel
 

 To the Participant:
 

 Address on file with the Company
 

 Any such notice or communication shall be (a) delivered by hand (with written confirmation of receipt) or sent by a nationally recognized overnight delivery service (receipt requested) or (b) be sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in writing from time to time), and the actual date of receipt shall determine the time at which notice was given.
 9.2       Waiver.  The waiver by any party hereto of a breach of any provision of the Certificate or these Terms shall not operate or be construed as a waiver of any other or subsequent breach.
 

 9.3       Entire Agreement; Amendment.  These Terms, the Certificate and the Plan represent the entire agreement between the parties with respect to the subject matter hereof.  The provisions of the Plan are incorporated in these Terms in their entirety.  In the event of any conflict between the provisions of these Terms and the Certificate and the Plan, the provisions of the Certificate or the Plan, as the case may be, shall control.  These Terms may be amended at any time by written agreement of the parties hereto.
 

 9.4       Assignment; Binding Agreement.  These Terms shall be binding upon and inure to the benefit of the heirs and representatives of the Participant and the assigns and successors of the Company, but neither these Terms nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Participant.
 

 9.5       Governing Law.  The Certificate and these Terms, including their validity, interpretation, performance and enforcement shall be governed by the laws of the State of Delaware other than the conflict of laws provisions of such laws.
 

 9.6       Severability.  Whenever possible, each provision in these Terms shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of these Terms shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended to accomplish the objectives of the provision as originally written to the fullest extent permitted by law and (b) all other provisions of these Terms shall remain in full force and effect.
 

 

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 9.7       No Right to Continued Employment; Effect on Other Plans.  These Terms shall not confer upon the Participant any right with respect to continued employment by the Company, its Affiliates or its Subsidiaries or continued participation under the Plan, nor shall it interfere in any way with the right of the Company, its Affiliates and its Subsidiaries to terminate the Participant’s employment at any time.  Payments received by the Participant pursuant to these Terms shall not be included in the determination of benefits under any pension, group insurance or other benefit plan of the Company, its Affiliates or any Subsidiaries in which the Participant may be enrolled or for which the Participant may become eligible, except as may be provided under the terms of such plans or determined by the Board.
 

 9.8       No Strict Construction.  No rule of strict construction shall be implied against the Company, the Committee or any other person in the interpretation of any of the terms of the Plan, these Terms or any rule or procedure established by the Committee.
 

 9.9       Further Assurances.  The Participant agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver and perform all additional documents, instruments and agreements which may be reasonably required by the Company or the Committee, as the case may be, to implement the provisions and purposes of the Certificate, these Terms and the Plan.
 

 IN WITNESS WHEREOF, the parties have duly executed these Terms, as of the day and year first above written.
 

 PAR PHARMACEUTICAL COMPANIES, INC.
 

 Thomas J. Haughey
 Executive Vice President and General Counsel
 

 

 PARTICIPANT
 

 (Acceptance designated electronically at the
 website of Morgan Stanley Smith Barney)
 

 - 7 -SEPARATION AGREEMENT AND

  Execution Version
 

 EXHIBIT 10.7.15
 SEPARATION AGREEMENT AND RELEASE
 

 THIS SEPARATION AGREEMENT AND RELEASE (this “Release”), is entered into as of December 17, 2010 by and between Par Pharmaceutical, Inc., a Delaware corporation (the “Company”), and John A. MacPhee, a resident of the State of New Jersey (“Employee”).  The Effective Date of this Release shall be as set forth in Section 6 herein.
 

 RECITALS
 

 WHEREAS, Employee has been employed by the Company in high level executive positions;
 

 WHEREAS, Employee and the Company have agreed to discontinue the employment relationship effective as of January 31, 2011; 
 

 WHEREAS, Employee signed an Employment Agreement with the Company on March 6, 2008, as amended by an Amendment to Employment Agreement, dated March 4, 2009 (the “Employment Agreement”) in which Employee agreed that all payments and benefits upon his separation from the Company were contingent upon his execution of a release for the benefit of the Company within thirty (30) days after the date of separation; and
 

 WHEREAS, as a result of Employee’s separation from the Company, the parties wish to fully and finally resolve all issues concerning Employee’s employment relationship with the Company and to reiterate certain terms contained in the Employment Agreement.
 

 NOW, IN CONSIDERATION of the mutual promises and covenants in the Employment Agreement and this Release, the sufficiency of which Employee acknowledges, the parties agree as follows:
 

 OPERATIVE PROVISIONS
 Section 1.      Separation of Employment.  The Company and Employee agree that Employee shall separate from the Company effective at the end of business on January 31, 2011 (the “Separation Date”), such separation of employment with the Company occurring pursuant to Section 3.2.5 of the Employment Agreement by and between the parties.  Employee’s employment obligations to the Company shall be deemed satisfied so long as Employee makes himself available to perform services for the Company reasonably related to his position with the Company and the transition of the responsibilities of his position with the Company.
 Section 2.      Pay, Benefits and Stock Options Upon Separation.
 (a) Separation Pay.  On account of Employee’s separation from the Company and provided Employee remains employed through the Separation Date, the Company shall pay Employee the severance amount of seven hundred fifty thousand dollars ($750,000.00) (the “Severance Amount”) in installments and with interest in the manner detailed in Section 3.3.2 of the Employment Agreement.  For purposes of clarification, the “Severance Delayed Payment Date” (as defined in Section 3.3.2 of the Employment Agreement) shall be August 1, 2011, and subsequent installment payments shall be made on a semimonthly basis thereafter through February 2013.  The installments shall be subject to all appropriate federal and state withholding and employment taxes.
 

 NY-839076v6
 

 
 (b)      Benefits/Termination.  In accordance with the terms of the Employment Agreement and applicable law, Employee will have the opportunity and responsibility to elect COBRA continuation coverage pursuant to the terms of that law and will thus be responsible for the execution of the continuation of coverage forms upon termination of his insurance coverage.  In the event that Employee elects COBRA coverage, the Company will pay Employee taxable, bi-weekly installment payments equal to one-half of the applicable COBRA premium, in accordance with the Company’s payroll practices, for the period during which Employee maintains health care coverage in accordance with COBRA (and in no event will the Company make more than thirty-six (36) such installment payments), with the initial bi-weekly installment commencing on March 15, 2011.  Except as provided herein, the Company will have no obligation to Employee under Section 3.3.6 of the Employment Agreement.
 (c)      Equity Awards.  Notwithstanding the Employment Agreement or any provision of an applicable equity plan or equity award agreement and provided Employee remains employed through the Separation Date, Employee’s unvested equity awards shall vest or be forfeited, as applicable, as set forth below:
 (1)    Employee’s 5,400 shares of currently unvested restricted stock awarded on December 20, 2006 and scheduled to vest on December 20, 2010 shall vest on such date.
 (2)    Employee’s 5,175 shares of currently unvested restricted stock awarded on March 22, 2007 and scheduled to vest on March 22, 2011 shall vest on the Separation Date.
 (3)    Employee’s 6,080 shares of currently unvested restricted stock awarded on January 11, 2008 and scheduled to partially vest on January 11, 2011 shall partially vest in the amount of 3,040 shares on January 11, 2011 and the remaining 3,040 shares shall vest on the Separation Date.
 (4)    Employee’s 24,689 shares of currently unvested performance-based restricted stock awarded on January 11, 2008 and any earned premium which may vest according to the terms of Employee’s 2008 Award Agreement on January 11, 2011 shall vest, if earned, on such date.
 (5)    Employee’s 15,164 shares of currently unvested retention-based restricted stock awarded on November 18, 2008 and scheduled to vest on November 18, 2011 shall partially vest in the amount of 2,527 shares on the Separation Date and the remaining 12,637 shares shall be forfeited on the Separation Date.
 (6)    Employee’s 11,729 shares of currently unvested restricted stock awarded on January 4, 2010 and scheduled to partially vest on January 4, 2011 shall partially vest in the amount of 2,932 shares on January 4, 2011 and the remaining 8,797 shares shall be forfeited on the Separation Date.
 (7)    Employee’s currently unvested options for 2,700 shares of common stock awarded on March 22, 2007 and scheduled to vest on March 22, 2011 shall vest on the Separation Date.  Employee shall have twenty-four (24) months from the Separation Date to exercise all vested options granted on March 22, 2007.
 

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 (8)    Employee’s currently unvested retention-based options for 34,290 shares of common stock awarded on November 18, 2008 and scheduled to vest on November 18, 2011 shall partially vest in the amount of options to purchase 5,715 shares of common stock on January 8, 2011 and the remaining options to purchase 28,575 shares of common stock shall be forfeited as of the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise all vested options granted on November 18, 2008.
 (9)    Employee’s currently unvested options to purchase 74,656 shares of common stock awarded on January 8, 2009 and scheduled to partially vest on January 8, 2011 shall partially vest in the amount of options to purchase 24,885 shares of common stock on January 8, 2011 and the remaining options to purchase 49,771 shares of common stock shall be forfeited on the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise all vested options granted on January 8, 2009.
 (10)    Employee’s currently unvested options to purchase 23,457 shares of common stock awarded on January 4, 2010 and scheduled to partially vest on January 4, 2011 shall partially vest in the amount of options to purchase 5,864 shares of common stock on January 4, 2011 and the remaining options to purchase 17,593 shares of common stock shall be forfeited on the Separation Date.  Employee shall have three (3) months from the Separation Date to exercise all vested options granted on January 4, 2010.
 (d)    Unused Vacation.  The Company shall pay Employee two (2) weeks of accrued vacation days in accordance with the Company’s vacation policy.
 (e)    Reimbursement of Expenses.  The Company will reimburse Employee for all unpaid expenses due and owing Employee as of the Separation Date in accordance with Company policy.
 (f)    No Other Payments.  Employee acknowledges and agrees that subject to and including those payments referenced herein, he has been paid in full for all work performed, and has received reimbursement for all business expenses, and is entitled to no further payments or bonuses from the Company whatsoever for services rendered or any other reason, except as set forth herein.
 (g)    Payment Terms.  In accordance with and subject to the covenants contained in the Employment Agreement, the payments and benefits contained in this Section 2 are contingent upon Employee’s continued compliance with the continuing terms of the Employment Agreement, as referenced in Sections 7 through 9 herein.
 (h)    Recovery of Compensation in Certain Circumstances.  Notwithstanding any other provision of this Agreement, if the Company determines that it is required to restate its financial statements due to material noncompliance with any financial reporting requirement under the law, whether such noncompliance is the result of misconduct or other circumstances, Employee shall be required to reimburse the Company for any bonus, equity awards or other incentive compensation received by Employee to the extent required by and otherwise in accordance with applicable law.
 

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 Section 3.      Consideration.
 (a)    No Disparagement.  Employee agrees to refrain from any publication or any type of communication, oral or written, of a defamatory or disparaging statement pertaining to the Company, its past, present and future officers, directors, agents, employees or representatives.  The Company agrees to refrain from any publication or any type of communication, oral or written, of a defamatory or disparaging statement pertaining to Employee.  Nothing in this Section 3 shall be construed as prohibiting the Company from making any disclosures as required by law or statute, including the release of such information as is required to be disclosed by the Company in connection with any legal proceeding, filing with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, or as otherwise required by law.
 (b)    Sufficiency of Consideration; No Admission of Liability.  The parties agree that the consideration paid to Employee by the terms of this Release is good and sufficient consideration for this Release.  Employee acknowledges that neither this Release, nor any of the payments or benefits tendered in conjunction herewith, shall be taken or construed to be an admission or concession of any kind with respect to alleged liability or alleged wrongdoing by the Company.
 Section 4.      General Release and Waiver of Claims.
 (a)    Solely in connection with Employee’s employment relationship with the Company, in accordance with the terms of the Employment Agreement, and in consideration of the additional promises and covenants made by the Company in this Release, Employee hereby knowingly and voluntarily compromises, settles and releases the Company and its predecessors, successors in interest, assigns, parent and subsidiary organizations, affiliates, and partners, and its past, present, and future officers, directors, shareholders, agents, and employees, and their heirs and assigns, from any and all past or present claims, demands, obligations, or causes of action, whether based on tort, contract, statutory or other theories of recovery for anything that has occurred up to and including the date of Employee’s execution of this Release.  The released claims include those Employee may have or has against the Company, or which may later accrue to or be acquired by Employee against the Company and its predecessors, successors in interest, assigns, parent and subsidiary organizations, affiliates, and partners, and its past and present officers, directors, shareholders, agents, and employees, and their heirs and assigns, whether directly or indirectly related to the employment relationship between the parties or not.  Such release shall not constitute a waiver of the Employee’s right to indemnification which may be provided to him pursuant to the terms and conditions of any policy or bylaw of the Company in effect on the Separation Date.  
 (b)    By way of specification, but not of limitation, Employee specifically agrees to release and waive all claims for wrongful termination any claim for retaliation or discrimination in employment under federal, state or local law or regulation including, but not limited to, discrimination based on age, sex, race, disability, handicap, national origin or any claims under Title VII of The Civil Rights Act of 1964, 42 U.S.C. §2000 et seq.; Section 1981 of the Civil Rights Act of 1866, as amended; The Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act (ADEA); the Fair Labor Standards Act, 29 U.S.C. §201 et seq. (FLSA) (to the extent permitted by law); the Lilly Ledbetter Fair Pay Act; the Family and Medical Leave Act, 29 U.S.C. §2601 et seq. (FMLA); the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA); the Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et seq. (ADA); the Rehabilitation Act, 29 U.S.C. §701 et seq.; the Employee Retirement 
 

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 Income Security Act of 1974, 29 U.S.C. §1001 et seq. (ERISA); the National Labor Relations Act, 29 U.S.C. §151 et seq. (NLRA); the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (NJLAD); the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et seq. (CEPA); the New Jersey Family Leave Act, N.J.S.A. 34:11B-1 et seq. (NJFLA); The New Jersey Workers’ Compensation Act, N.J.S.A. 34:15-1 et seq. (to the extent permitted by law); the New Jersey Wage and Hour Laws, N.J.S.A. 34:11-56a et seq.; as well as any and all common law claims for compensatory and punitive damages and attorneys' fees, costs or other expenses.  
 (c)    Employee agrees to deliver on the Separation Date a release substantially similar to this Section 4 covering claims up to and including the Separation Date.
 Section 5.      Covenant Not to Sue.
 (a)    Employee represents and agrees that Employee has not filed any lawsuits or arbitrations against the Company, or filed or caused to be filed any charges or complaints against the Company with any municipal, state or federal agency charged with the enforcement of any law or any self-regulatory organization.
 (b)    Employee agrees, not inconsistent with EEOC Enforcement Guidance on Non-Waivable Employee Rights Under EEOC-Enforced Statutes dated April 11, 1997, and to the fullest extent permitted by law, not to sue or file a charge, complaint, grievance or demand for arbitration against the Company in any claim, arbitration, suit, action, investigation or other proceeding of any kind which relates to any matter that involved the Company, and that occurred up to and including the date of Employee’s execution of this Release, other than those non-employment-related counterclaims that Employee might assert against the Company if the Company were to sue Employee, unless required to do so by court order, subpoena or other directive by a court, administrative agency, arbitration panel or legislative body, or unless required to enforce this Release.
 (c)    Nothing in this Release shall prevent Employee from (i) commencing an action or proceeding to enforce this Release, or (ii) exercising Employee’s right under the Older Workers Benefit Protection Act of 1990 to challenge the validity of Employee’s waiver of ADEA claims set forth in this Release.
 Section 6.     Consideration and Revocation Periods; Effective Date.  Employee understands and acknowledges that the ADEA requires the Company to provide Employee with at least twenty one (21) calendar days to consider this Release (the “Consideration Period”) prior to its execution.  Employee also understands that he is entitled to revoke this Release at any time during the seven (7) days following Employee’s execution of this Release (the “Revocation Period”) by notifying the Company in writing of his revocation. This Release shall become effective on the day after the seven-day Revocation Period has expired unless timely notice of Employee’s revocation has been delivered to the Company (the “Effective Date”). 
 Section 7.      Non-Disclosure Covenant.  Employee acknowledges and agrees that he remains subject to the non-disclosure of Confidential Information (as defined in the Employment Agreement) covenant contained in Section 4.2 of the Employment Agreement following the Separation Date.
 Section 8.      Non-Solicitation Covenant.  Employee acknowledges and agrees that he remains subject to the non-solicitation covenant contained in Section 4.3 of the Employment Agreement following the Separation Date; provided that the parties hereby agree that such covenant shall not apply to prospective customers.
 

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 Section 9.      Non-Competition Covenant.  The parties agree that following the Separation Date, Employee will not be subject to the Non-Competition restrictive covenant contained in Section 4.4 of the Employment Agreement.  Notwithstanding the foregoing, Employee acknowledges and agrees that he will remain subject to the other restrictive covenants contained in Section 4 of the Employment Agreement and as otherwise contained herein following the Separation Date.
 Section 10.      Confidentiality.  Employee agrees to keep the facts surrounding the negotiation and execution of this Release completely confidential, except that Employee may discuss this Release with Employee’s attorney, accountant, or other professional person who may assist Employee in evaluating, reviewing, or negotiating this Release, and as otherwise permitted or required under applicable law.  Employee understands and agrees that his disclosure of the terms of this Release contrary to the terms set forth herein will constitute a breach of this Release; provided that Employee may disclose the existence of his non-solicitation covenant to a successor employer or potential successor employer.
 Section 11.      Return of Company Property.  On the Separation Date or any earlier date directed by the Company, Employee agrees to deliver forthwith to the Company all of the Company’s property in his possession or under his custody and control, including but not limited to all keys, and tangible items, notebooks, documents, records and other data relating to research or experiments conducted by any person relating to the products, formulas, formulations, processes or methods of manufacture of the Company, and to its customers and pricing of products.
 Section 12.      Continued Availability and Cooperation.
 (a)   Following the Separation Date, Employee agrees as follows:
 (1)    Employee will make himself reasonably available to the Company either by telephone or, if reasonably necessary, in person upon reasonable advance notice, to assist the Company in connection with any matter relating to services performed by him on behalf of the Company prior to the Separation Date.
 (2)    Employee further agrees that he will take reasonable actions to cooperate fully with the Company in relation to any investigation or hearing with the SEC or any other governmental agency, as well as in the defense or prosecution of any claims or actions now in existence, including but not limited to ongoing commercial litigation matters, shareholder derivative actions, and class action law suits, or which may be brought or threatened in the future against or on behalf of the Company, its directors, shareholders, officers, or employees.
 (3)    Employee will take reasonable actions to cooperate in connection with such claims or actions referred to above including, without limitation, his being available to meet with the Company to prepare for any proceeding (including depositions, fact-findings, arbitrations or trials), to provide affidavits, to assist with any audit, inspection, proceeding or other inquiry, and to act as a witness in connection with any litigation or other legal proceeding affecting the Company.
 (4)    Employee further agrees that should he be contacted (directly or indirectly) by any individual or any person representing an individual or entity that is or may be legally or competitively adverse to the Company in connection with any claims or legal proceedings against the Company, he will promptly notify the Company of that fact in writing. Such notification shall include a reasonable description of the content of the communication with the legally or competitively adverse individual or entity.
 

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 (5)    Notwithstanding the provisions herein, Employee acknowledges that his cooperation obligation requires him to participate truthfully and accurately in all matters contemplated under this Section.
 (b)    Following the Separation Date, the Company agrees to continue paying for counsel for Employee in connection with the Department of Justice investigation of the Company’s promotional activities with respect to Megace® ES consistent with applicable law and the Company’s bylaws, provided that Employees complies with his obligations hereunder.
 Section 13.      Injunctive Relief.  In accordance with the terms of the Employment Agreement, Employee acknowledges that his failure to abide by Sections 7, 8, 9 and 10 of this Release will result in immediate and irreparable damage to the Company and will entitle the Company to injunctive relief from a court having appropriate jurisdiction.
 Section 14.      Representation by Attorney.  Employee acknowledges that he has been given the opportunity to be represented by independent counsel in reviewing this Release, whether at the time of execution or in conjunction with execution of his Employment Agreement, and that Employee understands the provisions of this Release and knowingly and voluntarily agrees to be bound by them.
 Section 15.      No Reliance Upon Representations.  Employee hereby represents and acknowledges that in executing this Release, Employee does not rely and has not relied upon any representation or statement made by the Company or by any of the Company’s past or present agents, representatives, employees or attorneys with regard to the subject matter, basis or effect of this Release other than as set forth in this Release.
 Section 16.      Tax Advice.
 (a)    The Company makes no representations regarding the federal or state tax consequences of the payments or benefits referred to above and provided for herein, and shall not be responsible for any tax liability, interest or penalty including but not limited to those which may arise under Internal Revenue Code Section 409A and the Patient Protection and Affordable Care Act of 2010, incurred by Employee which in any way arises out of or is related to said payments or benefits.  With the exception of the regular payroll deductions for federal and state withholding and employment taxes, Employee agrees that it shall be his sole responsibility to pay any amount that may be due and owing as federal or state taxes, interest and penalties, including but not limited to those which may arise under Internal Revenue Code Section 409A, arising out of the payments or benefits provided for herein.
 (b)    Employee agrees and understands that he is not relying upon the Company or its counsel for any tax advice regarding the tax treatment of the payments made or benefits received pursuant to this Release.  Employee agrees that he is responsible for determining the tax consequences of all such payments and benefits hereunder, including but not limited to those which may arise under Internal Revenue Code Section 409A, and for paying taxes, if any, that he may owe with respect to such payments or benefits, and Employee agrees to hold harmless and indemnify the Company with respect to any liabilities incurred by the Company, including taxes, penalties and interest, which are the direct result of Employee’s failure to properly pay any taxes.
 (c)    Notwithstanding the foregoing provisions of subsections (a) or (b) of this Section 16, the Company agrees to reimburse Employee for any additional taxes, penalties or interest incurred by Employee under Code Section 409A(a)(1)(B) (“409A Taxes”), including a gross-up payment covering Employee’s taxes on such reimbursement, where the 409A Taxes are the direct 
 

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 result of the Company’s failure to comply with the operational or documentary requirements of Code Section 409A.  Employee agrees to provide notice of payment of any such 409A Taxes within thirty (30) days of making such payment and the Company’s reimbursement shall be made within thirty (30) days following such notice. 
 (d)    Employee and the Company further agree that they and their attorneys will give mutual notice of any such claims.  Employee agrees that he will cooperate in the defense of all claims arising out of or relating to Employee’s reporting of the payments made or benefits received hereunder.  In any action commenced against Employee to enforce the provisions of this paragraph, the Company and its attorneys shall be entitled to recover their attorneys’ fees, costs, disbursements, and the like incurred in prosecuting the action.
 Section 17.      Employment Agreement.  The parties acknowledge and agree that all pertinent terms of the Employment Agreement (as amended herein) shall remain in full force and effect and are enforceable, to the extent any such terms therein survive or govern the period after the employment term set forth in that Employment Agreement.  The event of revocation of this Release in accordance with Section 6 herein in no way affects the validity or enforceability of the Employment Agreement (except as and to the extent amended herein); and in the event of revocation, to the extent any pertinent terms of this Release reiterate or confirm the terms of the Employment Agreement, the Employment Agreement shall govern.
 Section 18.      Entire Agreement.  When read in conjunction with the Employment Agreement, this Release constitutes the entire agreement between the parties relating to Employee’s separation from and release of employment-related claims against the Company, and it shall not be modified except in writing signed by the party to be bound.
 Section 19.      Severability.  If a court finds any provision of this Release invalid or unenforceable as applied to any circumstance, the remainder of this Release and the application of such provision shall be interpreted so as best to effect the intent of the parties hereto. The parties further agree to replace any such void or unenforceable provision of this Release with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, or other purposes of the void or unenforceable provision.
 Section 20.      Execution in Counterparts.  This Release may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same Release (and all signatures need not appear on any one counterpart), and this Release shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto.
 Section 21.      Governing Law and Jurisdiction.  This Release shall be governed by the laws of the State of New Jersey and any claims hereunder shall be pursued in the state or federal courts located in the State of New Jersey.
 Section 22.      Construction.  The terms and language of this Release are the result of arm’s length negotiations between both parties hereto and their attorneys.  Consequently, there shall be no presumption that any ambiguity in this Release should be resolved in favor of one party and against another.  Any controversy concerning the construction of this Release shall be decided neutrally without regard to authorship.
 

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 Section 23.      Headings.  The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Release.
 Section 24.      Binding Effect; Successors and Assigns.  Employee may not delegate any of his duties or assign his rights hereunder. This Release shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. 
 Section 25.      Waiver.  The failure of either of the parties hereto to at any time enforce any of the provisions of this Release shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Release or any provision hereof or the right of either of the parties hereto thereafter to enforce each and every provision of this Release. No waiver of any breach of any of the provisions of this Release shall be effective unless set forth in a written instrument executed by the party against whom or which enforcement of such waiver is sought, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
 Section 26.      Capacity.  Employee and the Company hereby represent and warrant to the other that, as the case may be: (a) he or it has full power, authority and capacity to execute and deliver this Release, and to perform his or its obligations hereunder; (b) such execution, delivery and performance shall not (and with the giving of notice or lapse of time or both would not) result in the breach of any agreements or other obligations to which he or it is a party or he or it is otherwise bound; and (c) this Release is his or its valid and binding obligation in accordance with its terms.
 

 [SIGNATURE PAGE FOLLOWS]
 

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 Execution Version
 

 IN WITNESS WHEREOF, the Company and Employee have executed this Release as of the date set forth in the first paragraph hereof.
 

 

 PAR PHARMACEUTICAL, INC.
 

 

 

 By:  /s/ Patrick G. LePore
 Name: Patrick G. LePore
 Title:  Chairman, CEO and President
 

 

 EMPLOYEE
 

 

 

 /s/ John A. MacPhee
 John A. MacPhee
 

 [Signature Page to Separation Agreement and Release]

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