EXHIBIT 10.42
May 30, 1997
Mr. Joseph Gokkes
121 S. Maple Avenue
Park Ridge, New Jersey 07656
Dear Mr. Gokkes:
I am pleased to extend this offer to you to become Chief Operating Officer of
Par Pharmaceutical, Inc. ("Par"). The following are the basic terms of your
employment with the Company.
DEPARTMENT: Executive
REPORTING TO: Mr. Kenneth I. Sawyer
President and Chief Executive Officer
Pharmaceutical Resources, Inc. and Par
Pharmaceutical, Inc.
START DATE: May 1, 1997
INITIAL SALARY: $12,083.33 a month, $145,000 annually, to be reviewed on an
annual basis and adjusted by Par to reflect performance and responsibilities on
a discretionary basis.
BONUS: You will be eligible for an annual bonus based on both your performance
and the performance of the Company during the term of this Agreement. During
fiscal 1997, you will not receive a bonus if Par has a net annual loss for
fiscal year 1997. If, however, Par has a loss of $300,000 or less for fiscal
fourth quarter of 1997, (excluding Sano payments, extraordinary biostudy
expenses or other extraordinary payments and excluding income from sale of Sano
stock, or sale of Sano international rights), you will then receive a bonus of
15% of your then annual salary up to a maximum of $25,000. In addition, Par will
provide you with a "sign on" bonus of $10,000, less applicable taxes, payable as
of your commencing employment.
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Mr. Joseph Gokkes
May 30, 1997
Page Two
SPECIAL BONUS PROVISION: If on December 31, 1997, you are still employed by Par
Pharmaceutical, Inc. and there has not been a change of control you will be
entitled to receive a bonus of $15,000 and an additional grant of 10,000
options.
RELOCATION: Par will reimburse you for relocation costs for you and your wife
along with the reasonable shipping costs of household goods using a company
approved moving company. Par will also reimburse you for temporary living
expenses and costs associated with establishing a residence in the United
States, up to $20,000, deducting what the company has already paid on your
behalf, including the purchase of furniture and other out of pocket costs,
subject to submission of acceptable receipts and documentation. The monthly
apartment rent will be excluded from the deduction. This $20,000 allowance will
expire on June 15, 1998. The Company will continue to pay the rent excluding
utilities and you will have use of the apartment until December 31, 1997. If
within twelve months of your start date you should voluntarily terminate your
employment or are terminated for cause, you will be required to reimburse Par on
a prorated basis for all relocation expenses paid by Par based on the number of
full months you were employed.
The Company will provide you with one round trip business class airfare per year
to Israel for you and your spouse provided the trip is booked at least 21 days
in advance.
BENEFITS:
Group Insurance: Health, life and long-term disability insurance programs are
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provided to employees and their dependents by the Company, upon payment of the
applicable premium amount.
Vacation: You will be entitled to up to four weeks of paid vacation annually.
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Automobile: Par will provide you with the use of an automobile,. including
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reimbursement of all related maintenance, fuel, repairs, insurance and other
costs.
Other: You will be eligible to participate in the Company's 401 (k) Plan, the
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company-sponsored retirement plan, and our Employee Stock Purchase Plan, upon
meeting the eligibility requirements for, and subject to all other terms and
conditions of, each plan.
STOCK: I will recommend to the Board of Directors of Pharmaceutical Resources,
Inc., ("PRI") that you be granted options to purchase 30,000 shares of
Pharmaceutical Resources, Inc. Common Stock at an exercise price per share equal
to the closing price of
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Mr. Joseph Gokkes
May 30, 1997
Page Three
Pharmaceutical Resources, Inc. ("PRI") common stock on the date of the grant by
the Board of Directors. The grant should be completed within thirty (30) days
of your commencement of employment. The
terms of the options, including vesting and exercise will be in accordance with
the PRI 1990 Stock Incentive Plan.
TERM OF EMPLOYMENT/TERMINATION/CHANGE OF CONTROL: Your employment by Par
Pharmaceutical, Inc. will commence on May 1, 1997 after you have obtained and
continue to MAINTAIN the requisite visa or work permit from the United States
Government. You will be an at will employee.
If your employment is terminated by Par for any reason except for cause, you
will be entitled to severance pay equal to 12 months base salary in effect for
the year prior to your termination, which will be paid in accordance with the
normal payroll practices of the Company and after execution of a general release
in a form satisfactory to Par.
You may voluntarily terminate your employment at any time upon 90 days written
notice to the Company, provided that facts do not exist at the time that would
constitute cause for termination, as defined below, in which event your
termination would not be treated as voluntary, but for cause. In the event that
you voluntarily terminate your employment, you will not be entitled to any
severance pay except in the event that a President of Par Pharmaceutical, Inc.
other than you is put in place who is not the President of Pharmaceutical
Resources, Inc.
In addition to its meaning under applicable common law, "cause" for termination,
as used herein, shall include, without limitation: Failure to act in accordance
with the directives of management and the Board of Directors; failure to carry
out your responsibilities in a manner consistent with generally acceptable
standards of conduct for executives of similar position and stature; violation
of company rules, regulations or policies; gross negligence; wilful misconduct;
commission of a crime; excessive absence from work other than due to disability;
and unethical conduct.
In the event of a sale of Pharmaceutical Resources, Inc. or Par Pharmaceutical,
Inc. the result of which you are terminated within one (1) year of such sale,
Par will provide you with 12 months' continuation of your prevailing base salary
as severance compensation.
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Mr. Joseph Gokkes
May 30, 1997
Page Four
If after May 1, 2000 and provided that you have given the company six months
prior written notice and are still employed by Par Pharmaceutical, Inc., you
voluntarily choose to terminate your employment and return to Israel, you will
be given one year base salary provided and so long as you do not become employed
by a direct competitor to the Company's business.
Other than as set forth herein, you shall have no entitlement to any severance
payment upon termination of your employment.
As a condition to your employment, you will be required to execute Par's
standard Trade Secret, Non-Disclosure and Restrictive Covenant Agreement, a copy
of which is attached.
Your employment with the Company is not for a specified term and may be
terminated by you or the Company at any time for any reason, with or without
cause. The nature of your employment as set forth in this paragraph cannot be
modified in any way except by a written agreement signed by you and an officer
of the Company.
If you accept this offer of employment, please sign below and return the signed
copy to me as soon as convenient. Once signed by you, this letter will
constitute the complete agreement between you and the Company regarding
employment matters or oral agreements or understandings on these matters.
Sincerely,
Kenneth I. Sawyer
President and CEO
KIS:mh
attach.
Accepted and Agreed this 30th
day of May, 1997.
_________________________
Joseph Gokkes
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