TRANSITION AND GENERAL RELEASE AGREEMENT
This Transition and General Release Agreement ("Agreement") is entered
into by and between Allergan, Inc. (the "Company") and Lester J. Kaplan (the
"Employee") (collectively referred to as the "Parties"). This Agreement is
effective on the date that the Employee signs and dates the Agreement
("Agreement Date").
1. Benefits to Employee.
The benefits to employee under this section are provided under the
Allergan, Inc. Severance Pay Plan.
a. Transition.
Employee and the Company have mutually agreed that Employee will resign
his position with the Company effective August 6, 2005 (the "Retirement Date")
and will transition his responsibilities to a replacement employee in an orderly
fashion. Accordingly, to permit a transition to his replacement, Employee and
Company agree as follows:
(i) Employee will use his best efforts to assist in the
recruitment, hiring, orientation and orderly transition to a replacement
Executive Vice President of Research and Development (the "Transition"). It is
currently anticipated by Employee and the Company that the Transition will be
completed by May 31, 2004. However, the Transition will be considered complete
on the date that the Company's CEO provides notice to the Employee of its
completion;
(ii) In addition to his role in the Transition, until the
Transition is complete, Employee will continue to use his best efforts in his
role as Executive Vice President of Research and Development to lead the
Company's Research and Development Department and research and development
activities and to perform his other Company duties;
(iii) Company currently intends to pursue a successor through
an executive search firm on a confidential basis. The Company will determine the
timing and extent of internal and external disclosure of the search and
Transition. Accordingly, Employee agrees to keep the search, the proposed
Transition and the existence of this Agreement strictly confidential, both
externally and internally, unless and until he has been expressly permitted to
make a particular disclosure by the CEO. The Company, however, acknowledges
that the Company's CEO has informed a limited number of internal and external
individuals regarding this matter on a "need to know" basis;
(iv) Upon completion of the Transition, Employee will resign
from his position as Executive Vice President of Research and Development, will
cease to be an Executive Officer of the Company, and will tender his resignation
as a member of the Company's Board of Directors;
(v) Although he will resign his position as Executive Vice
President Research and Development, upon completion of the Transition, Employee
will remain an employee of the Company through his Retirement Date and will
make himself available on an as-needed basis to assist in research and
development related activities and projects. Any
such work will require reasonable advance notice by the Company and the
schedule, timing and scope of such work will be subject to the mutual agreement
of Company and Employee;
(vi) From the Agreement Date through the Retirement Date,
Employee will be paid his current base salary at the rate of $495,000 per year.
However, if by August 6, 2004 the Transition Date has not occurred, Employee's
base salary rate shall be increased by four percent (4%), effective August 6,
2004. Likewise, if the Transition Date has not occurred on or before January 1,
2005, Employee's base salary rate shall increase an additional four percent
(4%), effective January 1, 2005. At the discretion of and subject to the
approval of the Company's Organization and Compensation Committee of the Board
of Directors (the "OCC"), Employee will be eligible to receive a pro rated
management bonus covering the period January 1, 2004 through the completion of
the Transition based on Employee's base compensation as of the date of the
Agreement Date, the bonus percentage payable to employees at Employee's grade
level (grade 15E), and the performance modifier determined for bonuses paid to
employees in the Research & Development Department. Assuming that the Transition
Date has occurred prior to January 1, 2005, Employee will not be eligible to
receive a management bonus for 2005 performance. This Agreement has no effect on
Employee's eligibility for a management bonus covering the calendar year 2003;
(vii) At the discretion of and subject to the approval of the
OCC, Employee will be eligible for a regular 2004 grant of Non-Qualified Stock
Options ("NQSO");
(viii) If Employee discharges his obligations hereunder, any
unvested NQSOs held by Employee at his Retirement Date will vest and all NQSOs
held by Employee on the Retirement Date will expire on the earlier of (a) the
expiration date provided in the NQSO grant or (b) August 6, 2008;
(ix) On or about January 1, 2000, Employee and Company entered
into a Change of Control Agreement (the "COC Agreement"). Subject to Company's
right of termination provided in the COC Agreement, the COC Agreement will
remain in force and effect until the Transition Date. If a "Change of Control"
(as that term is defined in the COC Agreement) occurs before the Transition
Date, the COC Agreement will take precedence over this Agreement and this
Agreement shall be deemed null and void. Assuming no "Change of Control" has
occurred prior to the Transition Date, on the Transition Date the COC Agreement
shall be deemed null and void and any and all rights of Employee thereunder will
cease.
(x) Employee agrees to re-execute a release in substantially the
same form as Section 3 hereof on, and effective as of, his Retirement Date.
b. No Other Payments or Benefits.
All of Employee's current benefits and perquisites, including
Medical/Dental & Vision Care insurance benefits, LTD, vacation accrual, life
insurance, personal accident coverage, tax and financial planning, club dues,
automobile allowance, pension accruals, Savings and Investment Plan accruals and
gasoline allowance will continue until the Retirement Date. For the avoidance of
doubt, in connection with this Agreement, Employee does not waive or
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relinquish any rights Employee may have in the Allergan Pension Plan, the
Allergan Savings and Investment Plan, or the Allergan Employee Stock Ownership
Plan.
The Employee relinquishes and waives any right to receive
any other remuneration, income, salary, options, benefits, or bonuses from the
Company not outlined herein. Employee will not be eligible to receive NQSOs,
restricted stock, or special incentive plan payouts granted to other employees
at his grade level for any period between the date of this Agreement and the
Retirement Date unless expressly provided in Section 1(a) above.
2. Expenses.
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Commencing on the completion date of the Transition, Employee
will incur no expenses on behalf of the Company nor will Employee have any
authority to act on behalf of the Company unless expressly provided such
authority by the Company's Chief Executive Officer in writing. Any advances
should be repaid by the Retirement Date.
3. Release of the Company.
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a. General Release. In exchange for the
Benefits set forth above, the Employee herby releases and forever discharges the
Company, its parents, subsidiaries, predecessors, successors and each of their
associates, owners, stockholders, members, assigns, employees, agents,
directors, officers, partners, representatives, lawyers, and all persons acting
by, through, under, or in concert with them, or any of them, (collectively the
"Releases") of and from any and all manner of action or actions, cause or causes
of action, in law or in equity, suits, debts, liens, contracts, agreements,
promises, liabilities, claims, demands, damages, losses, costs or expenses, of
any nature whatsoever, known or unknown, fixed or contingent (hereinafter called
"Claims"), which the Employee now has or may hereafter have against the Releases
by reason of any and all acts, omissions, events or facts occurring or existing
prior to the Retirement Date, except as expressly provided herein. The Claims
released hereunder include, without limitation, any alleged breach of any
employment agreement; any alleged breach of any covenant of good faith and fair
dealing, express or implied; any alleged torts or other alleged legal
restrictions relating to the Employee's employment and the termination thereof;
and any alleged violation of any federal, state or local statute or ordinance
including, without limitation, Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, the Americans With
Disabilities Act, the California Fair Employment and Housing Act, and the
California Labor Code. This Release shall not apply to the Employee's right to
receive the benefits provided for in this Agreement including retirement and/or
employee welfare benefits that have vested and accrued prior to the Retirement
Date.
b. Release of Unknown Claims.
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THE EMPLOYEE ACKNOWLEDGES THAT HE IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE
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RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.
THE EMPLOYEE, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES
ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR
COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
c. Older Worker's Benefit Protection Act. The Employee agrees and
expressly acknowledges that this Severance Agreement and General Release
includes a waiver and release of all claims which he has or may have under the
Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Sec. 621,
et seq. ("ADEA"). The following terms and conditions apply to and are part of
the waiver and release of the ADEA claims under this Agreement:
1. That this paragraph and this Agreement are written in a
manner calculated to be understood by Employee.
2. The waiver and release of claims under the ADEA contained
in this Agreement do not cover rights or claims that may arise after the date
on which Employee signs this Agreement.
3. This Agreement provides for consideration in addition to
anything of value to which Employee is already entitled.
4. The Employee is advised to consult an attorney before
signing this Agreement.
5. The Employee has been granted forty-five (45) days after
being presented with this Agreement to decide whether or not to sign this
Agreement. If the Employee executes this Agreement prior to the expiration of
such period, he does so voluntarily and after having had the opportunity to
consult with an attorney.
6. The Employee has been provided with disclosures concerning
the ages of employees eligible and ineligible to receive severance under this
offer.
7. The Employee will have the right to revoke this Agreement
within seven (7) days of signing this Agreement. In the event this Agreement is
revoked, this Agreement will be null and void in its entirety.
8. If the Employee wishes to revoke this agreement, the
Employee shall deliver written notice stating his intent to revoke this
Agreement to David Pyott, Chairman, President and CEO, Allegan, Inc. 2525
Dupont Drive, Irvine, California 92612 on or before 5:00 p.m. on the Seventh
(7th) Day after Employee's execution of this Agreement.
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4. No Assignment of Claims.
The Employee represents and warrants to the Releasees that there has been
no assignment or other transfer of any interest in any Claim which the Employee
may have against the Releasees, or any of them, and the Employee agrees to
indemnify and hold the Releasees harmless from any liability, claims, demands,
damages, costs, expenses and attorneys' fees incurred as a result of any person
asserting any such assignment or transfer of any rights or Claims under any
such assignment or transfer from such party.
5. No Suits or Actions.
Employee has not filed any claims, actions or charges against the
Releasees and represents that he does not have any other claims of any kind
whatsoever against the Releasees, including without limitation any claims for
workers' compensation injuries. The Employee agrees that if he hereafter
commences, joins in, or in any manner seeks relief through any suit arising out
of, based upon, or relating to any of the Claims released hereunder, or in any
manner asserts against the Releasees any of the Claims released hereunder,
including without limitation through any motion to reconsider, reopen or appeal
the dismissal of the Action, then Employee will pay to the Releasee's against
whom such Claim is asserted, in addition to any other damages caused thereby,
all attorneys' fees incurred by such Releasees in defending or otherwise
responding to said suit or Claim. Provided however, that this provision shall
not obligate Employee to pay the Releasee's attorney's fees, in any action
challenging the release of claims under the Older Workers Benefit Protection
Act or the Age Discrimination in Employment Act, unless otherwise authorized by
law.
6. Advice of Counsel.
The Employee represents and warrants that he has read this Agreement, has
had adequate time to consider it, has been advised to consult with an attorney
prior to executing this Agreement, understands the meaning and application of
this Agreement and has signed this Agreement knowingly, voluntarily and of his
own free will with the intent of being bound by it.
7. Severability; Modification of Agreement.
If any provision of this Agreement is found invalid or unenforceable in
whole or in part, then such provisions shall be deemed to be modified or
restricted to the extent and in the manner necessary to render the same valid
and enforceable or shall be deemed excised from this Agreement as such
circumstances may require, and this Agreement shall be construed and enforced
to the maximum extent permitted by law as of such provision had been originally
incorporated herein as so modified or restricted or as if such provision had
not been originally incorporated herein, as the case may be.
8. Arbitration; Waiver of Jury Trial.
Except for claims for emergency equitable or injunctive relief which
cannot be timely addressed through arbitration, the parties hereby agree to
submit any claim or dispute arising out of the terms of this Agreement and/or
any dispute arising out of or relating to the
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Employee's employment with the Company in any way, to private and confidential
arbitration by a single neutral arbitrator through JAMS/Endispute ("JAMS"). All
arbitration proceedings, unless otherwise required by law and subject to the
terms of this paragraph, shall be governed by the then current JAMS rules
governing employment disputes, and shall take place in Orange County,
California. The decision of the arbitrator shall be final and binding on all
parties to this Agreement, and judgment thereon may be entered in any court
having jurisdiction. All costs of the arbitration proceeding or litigation to
enforce this Agreement, including attorneys' fees and witness expense fees,
shall be paid as the arbitrator or court awards in accordance with applicable
law. To the extent required by law, the Company will advance fees payable to
JAMS. Except for claims for emergency equitable or injunctive relief, which
cannot be timely addressed through arbitration, this arbitration procedure is
intended to be the exclusive method of resolving any claim relating to the
obligations set forth in this Agreement. THE EMPLOYEE HEREBY WAIVES ANY RIGHT TO
A JURY TRIAL ON ANY DISPUTE OR CLAIM COVERED BY THIS PARAGRAPH WHETHER OR NOT
THE CLAIM IS ADJUDICATED IN ARBITRATION.
9. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, neither this Agreement nor any rights hereunder
may be assigned to any party by any party without the prior written consent of
all other parties hereto.
10. Company Information.
Employee acknowledges that during the term of his employment he had, and
that during the term of this Agreement and subsequent thereto may have, access
to information confidential and/or proprietary to the Company, including but not
limited to, trade secrets, technical data or know-how relating to
investigational or marketed products, research, or manufacturing processes,
information concerning the skills and qualifications of Company employees, or
any other information of a business, financial or technical nature (not already
publicly available in a reasonably integrated form), and that such information
is and will remain at all times the exclusive property of the Company. Employee
agrees to maintain such information in confidence and will not disclose such
information to anyone else, nor use it for Employee's own benefit or for the
benefit of others, except as expressly directed in writing by the Company during
the term of this Agreement or at any time thereafter. This paragraph does not
supercede any agreement relating to confidential or proprietary information
previously entered into by the Employee. Instead, any such agreement is
incorporated herein as if fully set forth.
11. Company Property.
Employee agrees to return all Company property on his Retirement Date. This
includes, but is not limited to, credit, phone and travel cards, building and
card keys, office equipment such as calculators, dictation equipment, computers,
modems, and all other items which are Company property. This also includes any
report, customer list, price list, files, notebooks or other materials
pertaining to the Company's business which are in Employee's possession or under
Employee's control.
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12. Headings.
The headings in this Agreement are for convenience only, and
shall not be given any affect in the interpretation of this Agreement.
13. Entire Agreement; No Oral Modification.
The parties each represent and warrant that no promise or
inducement has been offered or made except as set forth herein and that the
consideration stated herein is the sole consideration for this Agreement. This
Agreement may not be modified other than in writing executed by both parties and
stating its intent to modify or supersede this Agreement.
14. Choice of Law.
The parties agree that this Agreement shall be construed and
enforced in accordance with federal laws and the laws of the State of
California.
15. Survival.
Section 3 shall survive the termination of this Agreement.
16. Counterparts; Facsimile Signature.
This Agreement may be executed in one or more counterparts, each
of which shall constitute an original but all of which shall be but one and the
same Agreement. Delivery of a facsimile signature page shall be deemed to be
delivery of a manually executed original.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective on the Agreement Date, as defined above.
ALLERGAN, INC.
/s/ Lester J. Kaplan By: /s/ David E.I. Pyott
___________________________________ ___________________________________
Employee: Lester J. Kaplan David E.I. Pyott
Title: CHAIRMAN, PRESIDENT & CEO
___________________________________
Date: Dec. 8, 2003 Date: 12/1/03
___________________________________ ___________________________________
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