THE PERRIGO EMPLOYEE SEVERANCE PROGRAMME IRELAND

The Severance Programme commenced on 18 December 2013 for a period of three years to 18 December 2016. On 8 November 2016 the Severance Programme was approved for a further period of three years and will terminate on 18 December 2019.

The Severance Programme will apply where you are

The Severance Programme outlines:

•    the financial terms and conditions of the Programme;

•    details of how it will operate in practice, and

•    the support services made available to you.

The Company will engage the services of specialist advisors who will be able to provide additional guidance in the areas of:

•    Your estimated tax position

•    Your pension entitlements

•    Outplacement service for career planning and guidance

Throughout this process, all information will be treated in confidence. The Company encourages you to make full use of the services provided to help you effectively prepare for your future.

Perrigo provides an enhanced severance payment over & above the statutory entitlement as set out below:

Note: The Discretionary Ex-Gratia amount is subject to the employee’s co-operation being provided during their transition period and remaining with the company until the termination date, agreed with the company.

This payment is discretionary on behalf of the Company and will be subject to and will only be paid on receipt of a Voluntary Settlement Agreement/ Termination Letter signed by the employee. The terms of this benefit are at all times at the sole discretion of the company and may be subject to review and amendment at any time. If an employee elects not to sign the Voluntary Settlement Agreement/ Termination Letter the employee will receive their statutory entitlements only.

In addition to the above terms there are enhanced terms for Employees at Band 6 (Vice President) level and above, which are as follows:.

Your notice period is as stated in your individual contract of employment (e.g., a month for employee’s in Bands 1 to 3 or 3 months notice for employee’s at Associate Director or above). The Minimum Notice & Terms of Employment Act lays down statutory minimum periods of notice which are dependent on an employee’s length of service as follows:

You will be entitled to receive the higher of the two notice periods. For example if you have 2 month’s notice under your contract of employment but have 5 years service with the Company you will be entitled to the 2 month’s notice.

Employees are expected to be available for and to work at a minimum 2 weeks of their notice period; however the Company ultimately reserves the right to make payment in lieu of notice periods in full or part. Where an employee on their own request seeks an earlier release date and the Company agrees to facilitate this, no payments shall be made in lieu of notice period.

When monies are paid in lieu of notice the date of termination for Statutory Redundancy purposes is the date in which the minimum notice (identified in the above table), had it been given, would have expired. Notice required under the Redundancy Acts may run concurrently with other notice requirements.

The following list will advise eligible employees on how each Perrigo benefit will be treated. Please review the following details to ensure you fully understand the status of each benefit that may apply to you.

Please Note: Where these benefits continue for a period of time after you have left Perrigo payroll due to being paid in lieu of notice – existing benefits will remain in place until your termination of employment.

Employer contributions to your pension fund will be paid up until the termination of your employment. In addition employee contributions will also continue to be deducted from your payroll up until your termination date. Upon termination Liberty Asset Management (“LAM”) will send you out a withdrawal statement to your home address within a couple of weeks. This statement will outline all pension options available to you.

As your pension entitlement can impact your overall tax liability, with regard to any severance lump sum payment that you may receive, the company will make arrangements for a representative of LAM to be on site to provide you with information and advice on the options available to you. Prior to this meeting with LAM, individual details will be submitted to LAM to determine pension augmentation options and tax implications.

You will continue to have Death in Service Benefit up until your termination date (inclusive of notice period). In addition Perrigo has arranged to provide you with a special Death in Service Benefit for a period of 6 months from your termination date at the end which the extended cover will automatically lapse. This special Death in Service benefit cover will be based on your salary at the date of leaving and the level of cover will be four times your salary. Please note that where underwriting is in place and terms of cover are less than four times salary these terms will automatically be carried forward into this extended cover.

Once the six month extended cover has been reached you have the option to continue part or all of your death benefit under the scheme however a Statement of Health form and/or medical examination will be required.  This option remains available to you for one month after your leaving date. If you wish to continue part or all of your cover after this date, please discuss this with LAM directly and they can arrange to prepare a quotation for you.

We strongly encourage you to ensure that alternative life cover is put in place before the extended period finishes.

You will have Disability Benefit cover up until your termination date (inclusive of notice period). After this period, your cover under the Perrigo plan will cease.

Your current health insurance cover will remain in place up until your date of termination. If you are paying for your health insurance cover via payroll deduction, the cost of this cover up until your termination date will be deducted from your final payroll. In addition, any health insurance allowance being paid to you via payroll will cease as of your termination date. If you currently are not paying for health insurance cover via payroll deduction and instead are paying the health insurer directly please ensure that you submit a health insurance allowance claim form along with proof of payment immediately to HR or Payroll in order to claim for any health insurance allowance that may be due to you. This allowance would be processed in your final payroll (subject to applicable withholdings).

Upon termination of employment it will be your responsibility to pay your Health Insurance provider directly in order to maintain cover. If you are currently a member of the Perrigo Group Scheme with VHI and would like to transfer your healthcare cover to an individual membership from the date of leaving Perrigo please contact the following:

Where applicable, the total amount owing on the cost of your tax saver commuter ticket will be fully deducted from your final payroll cheque as the ticket cannot be cancelled. Please note that Annual Tickets are non transferable. Only the person named on the ticket may use it for travel. It cannot be resold or used by anyone else.

You will continue to have access to the Employee Assistance Program (StaffCare) through the last day of the month of your termination date.

You will be paid in lieu for any holidays that you have accrued or accrue during your employment up to the date of termination. These will be paid in your final payroll and taxed as normal. If you have taken more than your accrued entitlement, the excess will be deducted from your final payroll.

There will be no claw backs on money already advanced and paid out by the company in association with education courses.

Membership of the Sports & Social Club will cease upon termination of employment.

All company property without exception must be returned on or before your last day of employment. This includes:-

Equipment less than 3 years old cannot be purchased for personal use. For equipment greater than 3 years old, it may be purchased at the market rate.

Statutory redundancy and certain ex-gratia lump sums may be subject to favourable tax exemptions and reliefs on termination.

Severance packages generally form two parts – Statutory Redundancy and an additional ex-gratia payment that may be made available by an employer. Statutory redundancy payments are exempt from income tax, if due. The current tax rules relating to severance in excess of statutory redundancy are somewhat complex.

A brief summary of the main tax exemptions and reliefs available on the additional ex-gratia payment that an employer may provide are outlined below.

Employees may also be entitled to claim the highest of the following three tax exemptions, on the additional ex-gratia amount:

The tax exemptions relevant to an individual are based on personal circumstances, for example years’ service in the employment, remuneration, pension entitlements. These tax exemptions are calculated using complete years’ service only. The date of termination for tax exemption purposes is the date that the employment actually ceases and the individual leaves the employment.

It should be noted that the total exemptions an employee can claim over their lifetime is capped at €200,000. The Increased Exemption is also restricted if the employee claimed any tax exemption other than the Basic Exemption in the last 10 years.

The basic exemption is €10,160 plus €765 for each complete year of service with the company.

If we take the example of a person who joined the company in December 2001 and leaves the company in 2013, they would have 11 full years of service, so their basic exemption would be €10,160 plus €765 x 11 = €18,575.

The basic exemption of €10,160, plus €765 for each full year of service can be increased by a further €10,000. The increased exemption is only available to individuals who have not made any claims in respect of a lump sum received in the previous ten tax years.

If you are a member of the company pension scheme, the increased exemption of €10,000 is reduced by the amount of:

Employees will have the option of waiving their entitlements to their tax-free lump sum from the company pension scheme in order to avail of the full €10,000 increased exemption. A waiver form must be signed in this regard. If the lump sum from the pension scheme is more than €10,000 and you do not waive your entitlement to same, you are not due the increased exemption.

Revenue approval is required for the Increased Exemption.

This relief generally applies to those employees who have high earnings and/or long service with the company.

The formula for calculating the SCSB is:

A X B / 15 - C

Where:

A is the average annual remuneration for the last 36 months service to the date of termination

B is the number of complete years of service

C is the value of any tax free lump sum received/receivable under the company approved pension scheme.

See Table below for contact details of some local Department of Social Protection offices in Dublin.

If you are made redundant you will receive a Preliminary Personal Statement at your initial consultation meeting. This form sets out:-

These figures will give you a near approximation of your gross entitlements. Part of your severance package may be subject to tax as per revenue guidelines.

Note: Your final figures will be calculated based on actual data at termination date and therefore may differ to preliminary estimates.

Advice sessions will be available on a one-to-one basis with consultants from Liberty Asset Management. They will be able to provide you with more detailed information on pension options particularly as they relate to the tax reliefs available. Further details to follow.

Outplacement support is a range of services that will be provided with the aim of assisting employees leaving the company. This will include workshops and guidance: preparation of CVs, jobsearch, preparing for interviews, etc.

Details will be made available over the next couple of weeks.

HR will provide a standard, factual reference for all employees stating when the employee commenced employment with Perrigo, how much they earned, date of last promotion (if applicable) on request from a new employer.

If your manager provides a reference it would be in his/her own personal capacity and not on Perrigo’s behalf. More detailed references may be available in response to a direct request from a potential employer.