PAR PHARMACEUTICAL COMPANIES, INC. TERMS OF RESTRICTED SHARES AWARD (Effective for 2011 Awards)

EX-10.5.13 4 exh10513termsofrestrictedsha.htm TERMS OF RESTRICTED SHARES AWARD Converted by EDGARwiz

EXHIBIT 10.5.13

PAR PHARMACEUTICAL COMPANIES, INC.


TERMS OF RESTRICTED SHARES AWARD


(Effective for 2011 Awards)


This document sets forth the terms of the award of Restricted Shares (as defined in Section 1.1 below) granted by PAR PHARMACEUTICAL COMPANIES, INC. (the “Company”) pursuant to a Certificate of Restricted Shares (the “Certificate”) displayed at the website of Morgan Stanley Smith Barney Benefits Access.  The Certificate, which specifies the person to whom the Restricted Shares 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 t he 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 Shares 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 Shares, 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.          RESTRICTED SHARES


1.1        Grant of Restricted Shares.


(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 shares of common stock, par value $.01 per share (“Comm on Stock”), set forth on the Certificate, and subject to the restrictions set forth in Section 1.2 of these Terms, the terms and conditions of the Plan and the other terms and conditions contained in these Terms (the “Restricted Shares”).  If and when the restrictions set forth in Section 1.2 expire in accordance with these Terms, and upon the satisfaction of all other applicable conditions as to the Restricted Shares, such shares (and any related stock dividends or distributions accrued under Section 1.2(a)(iii)) not forfeited pursuant to Section 1.4 hereof shall no longer be considered Restricted Shares for purposes of these Terms.



-1-




                       (b) As soon as practicable after the Date of Grant, the Company shall direct that a stock certificate or certificates representing the applicable Restricted Shares be registered in the name of, and issued to, the Participant.  Such certificate or certificates shall be held in the custody of the Company or its designee until such Shares have vested (or such applicable portion of the Shares as may become vested) in accordance with the schedule in Section 1.3(a).  On or before the date of acceptance of these Terms, the Participant has delivered to the Company one or more stock powers endorsed in blank relating to the Restricted Shares.


(c) Each certificate for the Restricted Shares shall bear the following legend (the Legend”):


The ownership and transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Par Pharmaceutical Companies, Inc. 2004 Performance Equity Plan and the associated Terms of Restricted Shares Award entered into between the registered owner and Par Pharmaceutical Companies, Inc.  Copies of such Plan and Terms are on file in the executive offices of Par Pharmaceutical Companies, Inc., 300 Tice Boulevard, Woodcliff Lake, NJ 07677.


In addition, the stock certificate or certificates for the Restricted Shares shall be subject to such stop-transfer orders and other 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 Common Stock is then listed, and any applicable federal or state securities law, and the Company may cause a legend or legends to be placed on such certificate or certificates to make appropriate reference to such restrictions.


(d) As soon as administratively practicable following the vesting of all or any portion of the Restricted Shares, and upon the satisfaction of all other applicable conditions as to such vested Restricted Shares, including the payment by the Participant of all applicable withholding taxes, the Company shall deliver or cause to be delivered to the Participant a certificate or certificates for the applicable vested Restricted Shares that shall not bear the Legend.  


1.2         Restrictions.


(a) Beginning with the Date of Grant, the Participant shall have all rights and privileges of a stockholder as to the Restricted Shares, including the right to vote and receive dividends or other distributions with respect to the Restricted Shares, except that the following restrictions shall apply:


(i)  the Participant shall not be entitled to delivery of the certificate or certificates for the Restricted Shares until such Restricted Shares are deemed vested in accordance with the schedule in Section 1.3(a), and are not otherwise forfeited pursuant to Section 1.4 hereof and upon the satisfaction of all other applicable conditions;





- 2-


 

                                     (ii)  none of the Restricted Shares may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of prior to the date such Restricted Shares are deemed vested in accordance with the schedule in Section 1.3(a), except as provided in Section 8.3 of 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;


(iii)  all shares of Common Stock distributed as a dividend or distribution, if any, with respect to the Restricted Shares prior to the date such Restricted Shares are deemed vested in accordance with the schedule in Section 1.3(a) shall be delivered to and held by the Company and subject to the same restrictions as the related Restricted Shares until the vesting of such Restricted Shares, and subject to the satisfaction of all other applicable conditions; and


(iv)  all of the Restricted Shares shall be subject to forfeiture on the terms and conditions set forth in Section 1.4 hereof; if forfeited, the Restricted Shares shall be returned to the Company and all rights of the Participant with respect to the Restricted Shares shall terminate in their entirety on the terms and conditions set forth in Section 1.4 hereof.


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


1.3        Vesting.  


(a) Such portion of the Restricted Shares shall be deemed vested and no longer subject to forfeiture under Section 1.4 hereof or the restrictions set forth in Section 1.2 hereof in accordance with the following schedule:


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%



(b) Notwithstanding paragraph (a) above, upon a “Change of Control” of the Company, all rights of the Participant to the Restricted Shares that have not vested shall immediately vest and no longer be subject to forfeiture under Section 1.4 hereof or the restrictions set forth in Section 1.2 hereof.  


 

- 3 -


 

1.4        Forfeiture.  


(a) Subject to Se ction 1.7 hereof, if prior to the date such Restricted Shares are deemed vested in accordance with the schedule in Section 1.3(a), (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 1.5(b) hereof, all rights of the Participant to the Restricted Shares that have not vested in accordance with Section 1.3(a) or 1.3(b) hereof 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 Restricted Shares 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 shares shall no longer be subject to forfeiture.  The remainder of any Restricted Shares that have not vested in accordance with the terms of Section 1.3 or this Section 1.4(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.  


(c) In the event of any forfeiture under this Section 1.4 hereof, the certificate or certificates representing the forfeited Restricted Shares shall be canceled to the extent of any Restricted Shares that were forfeited.


1.5        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 Restricted Shares.


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


(c) The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of shares of Common Stock 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.





-4 -


            1.6        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, partn er, 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 indirec tly, 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 s aid 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 , as amended.


(ii) the Company would be irreparably injured in the event of a breach of any of the Participant’s obligations under Section 1.6(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.


(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 1.6(a), then:





-5 -

 


 

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


(ii)  to the extent that the Participant holds shares of Common Stock acquired upon vesting of Restricted Shares, the Participant upon notice from the Company of the Participant’s obligations under this Section 1.6(b)(ii), shall, at the option of the Company, either: (1) immediately deliver to the Company an amount in cash equal to the then-Fair Market Value of such Common Stock, or (2) deliver all such shares of Common Stock to the Company; and


(iii) to the extent that the Participant has disposed of shares of Common Stock acquired upon vesting of any Restricted Shares, the Participant upon notice from the Company of the Participant’s obligations under this Section 1.6(b)(iii), shall immediately pay the Company an amount equal to the amount realized by the Participant upon the disposi tion of such Common Stock or, if the disposition was not an arm’s-length transaction with an unrelated party, an amount equal to the then-Fair Market Value of such Common Stock.


The notice described in subsections (ii) and (iii) above may be given at any time within twelve months after the expiration of the applicable covenant period under Section 1.6(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 sh all 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.


1.7        Committee’s Discretion.  Notwithstanding any provision of these Terms to the contrary, the Committee shall have discretion under Section 17.1 of the Plan to waive any forfeiture of the Restricted Shares as set forth in Section 1.4 hereof, the restrictions set forth in Section 1.2 hereof and any other conditions set forth in these Terms.

 

2.        REPRESENTATIONS OF THE PARTICIPANT


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 award.




- 6-

 


 

3.        &nbs p;NOTICES


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


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 communicatio n shall be (a) delivered by hand (with written confirmation of receipt) or sent by a nationally recognized overnight delivery service (receipt requested) or (b) registered electronically through the Smith-Barney website or other online administrator, subject to any applicable confirmation process established by the online administrator, or (c) 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.


4.          ASSIGNMENT; BINDING AGREEMENT


These Terms shall be binding upon and inure to the benefit of the heirs and representatives of the Participant an d 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.


5.          ENTIRE AGREEMENT; AMENDMENT; TERMINATION


These Terms, the Plan and the Certificate represent the entire agreement of the parties with respect to the subject matter hereof, subject to any applicable accelerated vesting provisions of a written employment, severance or similar agreement between the Participant and the Company, its Affiliates and/or its Subsidiaries.  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 Cer tificate 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.




- 7 -


 

6.          GOVERNING LAW


The Certificate and these Terms, and 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.


7.          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.


8.          NO RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; 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.  & nbsp;       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.


10.        USE OF THE WORD “PARTICIPANT”


Wherever the word “Participant” is used in any provision of these Terms under circumstances where t he provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Restricted Shares may be transferred by will or the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons.


11.        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 (including, without limitation, stock powers with respect to shares of Common Stock issued as a dividend or distribution on Restricted Shares) that may be reasonably required by the Com pany



- 8 -


 

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)




- 9 -