Amendment to Employment Agreement between Andrx Corporation and Thomas P. Rice (March 12, 2006)
This letter agreement amends the employment agreement between Andrx Corporation and Thomas P. Rice, CEO. It modifies severance payments in the event of termination after a change in control, clarifies compliance with tax regulations (Sections 409A and 280G of the Internal Revenue Code), and updates provisions for tax gross-up payments and restricted stock unit deferrals. The agreement requires Mr. Rice to sign a release to receive severance benefits and confirms that all other terms of the original employment agreement remain unchanged.
Exhibit 10.110
March 12, 2006
Mr. Thomas P. Rice
Chief Executive Officer
1010 Seminole Drive #308
Ft. Lauderdale, Florida 33304
Re: Employment Agreement
Dear Tom:
Reference is made to your employment agreement dated February 3, 2004 (the “Employment Agreement”). We wish to confirm the following under the Employment Agreement (applying its defined terms):
| 1. | Severance Payments. The severance compensation to which you may become entitled under Section 7 of the Employment Agreement is modified as follows: in the event your employment is terminated pursuant to Section 6(b) or pursuant to Section 6(d), in each case on or after a Change in Control, then, in addition to the amounts and benefits set forth in Section 7 (i.e., those amounts and benefits that would be paid or provided upon a termination of your employment by the Company without Cause under Section 6(b) of the Employment Agreement), the Company shall pay you (i) a lump sum payment equal to six months of your Base Compensation amount, and (ii) a lump sum payment equal to fifty-percent of the most recent Bonus actually paid to you by the Company prior to such Change in Control (less applicable withholding). These severance amounts would be paid to you within thirty (30) days after written notice of a qualifying termination (subject to six months’ delay if and as required by Section 409A (defined below) in order to avoid adverse tax consequences to you under Section 409A). These severance benefits are subject to your execution of the Release referenced in Section 7 of the Employment Agreement. |
| 2. | Code Section 409A. We intend that the Employment Agreement and any other agreement or arrangement with the Company (the Employment Agreement and such other agreements and arrangements, together, the “Arrangements”) comply with Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”). If any provision of any Arrangement would result in the imposition on you of a penalty tax under Section 409A, or any related guidance issued by the U.S. Treasury Department or the Internal Revenue Service, the Company shall, after consulting with you, reform such Arrangement to avoid the imposition of such penalty; provided that any such reformation shall to the maximum extent possible retain the originally intended economic and tax benefits to you under such Arrangement, and the original purpose of such Arrangement, without violating Section 409A or creating any unintended or adverse tax consequences to you. Such reform may include, without limitation, imposition of a six month delay in the payment of severance benefits if required under Section 409A due to the fact that you are a “key employee” under Section 409A and the amounts payable to you under such Arrangement are considered “deferred compensation” of a type requiring six-month delay under Section 409A. The Company shall indemnify and hold you harmless, on an after-tax basis, for any additional tax (including interest and penalties with respect thereto) imposed on you as a result of Code Section 409A with regard to the payments and benefits hereunder. |
| 3. | 280G Gross Up. The Company wishes to modify the “gross up” payments provided for under Section 7 of the Employment Agreement. You will be paid “gross up” amounts in an aggregate amount equal to (i) any excise taxes incurred by you as a result of any amounts or benefits provided to you by the Company pursuant to the Employment Agreement, any other Arrangement or otherwise that are considered to be “parachute payments” under Internal Revenue Code Section 280G and the regulations promulgated thereunder, and (ii) any federal and state and local income tax liability arising as a result of the payment of such excise tax (in each case, including any interest and penalties imposed with respect to such taxes), payable within sixty (60) days after such excise and income taxes are incurred (subject to six months’ delay if and as required by Section 409A in order to avoid adverse consequences to you under Section 409A). |
| 4. | RSU Deferrals. Consistent with the foregoing, your ability to defer receipt of the common stock to be received upon vesting of the RSU grant referenced in Section 4(C) of the Employment Agreement is disallowed. |
All other terms of the Employment Agreement remain in full force and effect.
Please indicate your agreement with the terms and conditions set forth in this Letter Agreement by signing the enclosed copy of this Letter Agreement and returning it to me.
Very truly yours
ANDRX CORPORATION
By:
Name: Robert I. Goldfarb
Title: Senior Vice President, General Counsel and Secretary
Accepted and Agreed:
Thomas P. Rice
Dated: March 11, 2006
