{"id":38955,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-barr-laboratories-inc-and-bruce-l-downey.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-barr-laboratories-inc-and-bruce-l-downey","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-barr-laboratories-inc-and-bruce-l-downey.html","title":{"rendered":"Employment Agreement &#8211; Barr Laboratories Inc. and Bruce L. Downey"},"content":{"rendered":"<pre>                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT\n\n      AGREEMENT dated as of the 16th day of August, 2002 between Barr\nLaboratories, Inc., a New York corporation having its principal executive\noffices at 300 Corporate Drive, Building #10, Bradley Corporate Park, Blauvelt,\nNew York 10913 (the \"Company\"), and Bruce L. Downey (the \"Employee\").\n\n                                   WITNESSETH:\n\n      WHEREAS, the Company and the Employee entered into an employment agreement\ndated as of January 4, 1993, the term of which has been extended annually\npursuant to Section 2 of that agreement so that it is presently scheduled to\nexpire on January 4, 2005 (the \"Employment Agreement\"); and\n\n      WHEREAS, the Company and the Employee wish to amend and restate the\nEmployment Agreement in its entirety;\n\n      NOW, THEREFORE, the Company and the Employee hereby agree that, effective\nas of August 16, 2002, the Employment Agreement is amended and restated in its\nentirety to read as follows:\n\n      1. Employment. The Company agrees to employ the Employee, and the Employee\nagrees to remain in the employ of the Company, during the term of this Agreement\nand on the other terms and conditions hereafter set forth.\n\n      2. Term. The term of this Agreement shall commence on August 16, 2002 (the\n\"Commencement Date\") and shall terminate at the close of business on the third\nanniversary of the Commencement Date unless sooner terminated in accordance with\nthe terms of this Agreement or extended as hereinafter provided. The term of\nthis Agreement shall be extended, without further action by the Company or the\nEmployee, on the second anniversary of the Commencement Date (the \"Extension\nEffective Date\") and on each subsequent anniversary of the Commencement Date\n(each also an \"Extension Effective Date\"), for successive periods of twelve\nmonths each, unless either party shall have given written notice to the other\nparty, in the manner set forth in paragraph 13(e) or (f) below, prior to the\nExtension Effective Date in question, that the term of this Agreement that is in\neffect at the time such written notice is given is not to be extended or further\nextended, as the case may be. Examples that illustrate the intended operation of\nthe preceding sentence appear in the Appendix to this Agreement.\n\n      3. Positions and Responsibilities; Place of Performance.\n\n            (a) Throughout the term of this Agreement, the Employee agrees to\nremain in the employ of the Company, and the Company agrees to employ the\nEmployee, as the Chief Executive Officer of the Company, reporting only to the\nBoard of Directors of the Company (the \"Board\"). As the Chief Executive Officer\nof the Company, the Employee shall be the most senior officer of the Company and\nits subsidiaries, shall have \n\neffective supervision, control and policy-making authority over, and\nresponsibility for, the strategic direction and general leadership and\nmanagement of the business and affairs of the Company and its subsidiaries,\nsubject only to the authority of the Board, and shall have all of the powers,\nauthority, duties and responsibilities he has had prior to the Commencement Date\nand all of the powers, authority, duties and responsibilities usually incident\nto the position and role of Chief Executive Officer in public companies that are\ncomparable in size, character and performance to the Company. All employees of\nthe Company and its subsidiaries shall report, directly or indirectly, to the\nEmployee. The Company agrees to use its best efforts to secure the Employee's\nelection as a member and Chairman of the Board during the term of this\nAgreement, and the Employee agrees to serve as such without additional\ncompensation beyond that provided in this Agreement.\n\n            (b) In connection with his employment by the Company, the Employee\nshall be based at a location of his choosing in the greater Washington, D.C.\nmetropolitan area or at any other Company location, as he may determine to be\nappropriate for the performance of his duties, and he agrees to travel, to the\nextent reasonably necessary to perform his duties and obligations under this\nAgreement, to Company facilities and other destinations elsewhere.\n\n            (c) During the term of this Agreement, the Employee shall serve the\nCompany on an exclusive basis and shall devote all his business time, attention,\nskill and efforts to the faithful performance of his duties hereunder; provided\nthat the Employee may engage in community service and charitable activities and,\nwith the approval of the Board, may serve as a member of the board of directors\nof other companies (and retain remuneration for such service) if such activities\nand service do not materially interfere with the performance of his duties and\nresponsibilities hereunder.\n\n      4. Compensation. For all services rendered by the Employee in any capacity\nduring the term of this Agreement, and for his undertakings with respect to\nconfidential information, non-solicitation and disparaging remarks set forth in\nsections 6 and 7 below, the Employee shall be entitled to the following:\n\n            (a) a salary, payable in installments not less frequent than\nmonthly, at the annual rate of eight hundred and fifty thousand dollars\n($850,000), with such increases in such rate, if any, as the Compensation\nCommittee of the Board may approve from time to time during the term of this\nAgreement (the annual salary rate as increased from time to time during the term\nof this Agreement being hereafter referred to as the \"Base Salary\");\n\n            (b) participation in the Company's annual executive incentive or\nbonus plan as in effect from time to time, with the opportunity to receive an\naward in accordance with the terms and conditions of such plan, for each fiscal\nyear of the Company that commences or terminates during the term of this\nAgreement, of up to 50% of the Base Salary earned during such year (or such\nhigher percentage as the Board or a committee of the Board may allow from time\nto time during the term of this Agreement), it being understood that any award\nfor the fiscal year of the Company in which the term \n\n\n                                  page 2 of 19\n\nof this Agreement terminates pursuant to the terms hereof shall be prorated\nbased on the portion of such fiscal year that coincides with the term of this\nAgreement and shall be made at the same time as awards (if any) are made to\nother participants with respect to such fiscal year. The Employee recognizes and\nagrees that the Board may defer the payment of any portion of his annual bonus\nto the extent that, and for such period of time as, may be reasonably necessary\nto avoid a loss of the Company's tax deduction with respect to such portion of\nhis annual bonus under section 162(m) of the Internal Revenue Code. Any such\ndeferred amount shall be non-forfeitable, shall constitute an unfunded,\nunsecured obligation of the Company, and until paid shall be deemed invested in\nsuch hypothetical investments as the Employee may select from among the\nhypothetical investment options that are available from time to time during the\ndeferral period under the Company's excess 401(k) plan or, if no such investment\noptions are available at the time in question under that plan, then from among\nthe same hypothetical investment options that are available under such plan on\nthe date of this Agreement or a reasonable facsimile thereof;\n\n            (c) participation in the Company's stock incentive plan as from time\nto time in effect, subject to the terms and conditions of such plan;\n\n            (d) the business and personal use of an automobile at Company\nexpense including, without limitation, payment or reimbursement of automobile\ninsurance and maintenance expenses in accordance with the Company's automobile\npolicy applicable to senior officers on the Commencement Date; and\n\n            (e) participation in all Company health, welfare, savings and other\nemployee benefit and fringe benefit plans (including vacation pay plans or\npolicies and life and disability insurance plans) in which other senior officers\nof the Company participate during the term of this Agreement, subject in all\nevents to the terms and conditions of such plans as in effect from time to time.\nNothing in this paragraph (e) shall preclude the Company from amending or\nterminating any such plan at any time. The plans covered by this paragraph (e)\nshall not include the annual incentive or stock incentive plans, which are\ncovered by paragraphs (b) and (c) above.\n\n      5. Termination of Employment.\n\n            (a) Termination by the Company without Good Cause or by the Employee\n      for Good Reason.\n\n                  (i) If the Employee's employment with the Company is\nterminated by the Company without Good Cause or is terminated by the Employee\nfor Good Reason during the term of this Agreement and other than at or after the\nexpiration of the term of this Agreement as the same may have been extended in\naccordance with the provisions of section 2 above (any such employment\ntermination being hereafter referred to as a \"Compensable Termination\"), the\nCompany shall pay the Employee the portion of his Base Salary accrued through\nthe date of the Compensable Termination and any other amounts to which he is\nentitled by law or pursuant to the terms of any \n\n\n                                  page 3 of 19\n\ncompensation or benefit plan or arrangement in which he participated prior to\nthe Compensable Termination and, in addition, subject to compliance by the\nEmployee with the provisions of sections 6 and 7 below, relating to confidential\ninformation, non-solicitation and disparaging remarks, the Company shall, as\nliquidated damages or severance pay or both (whichever characterization(s) will\nserve to validate the payments), and as additional consideration for the\nEmployee's undertakings under sections 6 and 7 below, pay the Employee the\nfollowing:\n\n                        (A) his annual bonus for the fiscal year of the Company\npreceding the fiscal year of the Company in which the Compensable Termination\noccurs, if unpaid at the time of the Compensable Termination, the amount of such\nbonus to be determined by the Compensation Committee of the Board on a basis\nconsistent with its prior bonus determinations with respect to the Employee\nduring the term of this Agreement and, in the event a Change in Control or\nPotential Change in Control (as defined in section 11 below) occurred before the\nCompensable Termination, consistent with its bonus determinations with respect\nto the Employee prior to the Change in Control or Potential Change in Control;\n\n                        (B) a prorated annual bonus for the fiscal year of the\nCompany in which the Compensable Termination occurs, such prorated annual bonus\nto be determined by multiplying the \"Applicable Average Bonus\" as defined below\nin this subparagraph 5(a)(i)(B) by a fraction the numerator of which shall be\nthe number of days elapsed in such fiscal year through (and including) the date\non which the Compensable Termination occurs and the denominator of which shall\nbe the number 365. For purposes of this Agreement, the \"Applicable Average\nBonus\" means the higher of (I) the average annual bonus (including any deferred\nbonus) awarded to the Employee during the three year period immediately\npreceding the Compensable Termination, or (II) the average annual bonus\n(including any deferred bonus) awarded to the Employee during the three fiscal\nyears of the Company preceding the fiscal year in which the Compensable\nTermination occurs; provided that, if the Compensable Termination occurs after a\nChange in Control or Potential Change in Control, the Applicable Average Bonus\nshall not be less than the average annual bonus (including any deferred bonus)\nawarded to the Employee during the three years preceding the date on which the\nChange in Control or Potential Change in Control occurred; and\n\n                        (C) an amount of money (the \"Severance Payment\") equal\nto three (3) times the Employee's \"Annual Cash Compensation\" as hereafter\ndefined, unless the Employee attained age 65 but not age 70 (or such later age\nor ages as the Board may in its discretion determine) prior to the Compensable\nTermination, in which case the Severance Payment shall be equal to two (2) times\nsuch Annual Cash Compensation, or unless the Employee attained age 70 (or such\nlater age as the Board may in its discretion determine) prior to the Compensable\nTermination, in which case the Severance Payment shall be equal to one (1) times\nsuch Annual Cash Compensation. Except as otherwise provided hereafter in this\nsubparagraph 5(a)(i)(C), the Severance Payment shall be paid as follows: fifty\npercent (50%) of the Severance Payment (or, if the Employee attained age 65 but\nnot age 70 (or such later age or ages as the Board may in \n\n\n                                  page 4 of 19\n\nits discretion determine) prior to the Compensable Termination, seventy-five\npercent (75%) of the Severance Payment, or if the Employee attained age 70 prior\nto the Compensable Termination, one hundred percent (100%) of the Severance\nPayment) shall be paid in a lump sum within ten days after the date of the\nCompensable Termination. Any balance of the Severance Payment shall be paid in\neighteen (18) equal monthly installments one of which shall be paid at the end\nof each of the first eighteen (18) months after the date of the Compensable\nTermination, provided, in the case of each of the final 12 of such 18\ninstallments, that the Employee has not accepted full-time or regular part-time\nemployment with or regularly served as a consultant to a for-profit\npharmaceutical company prior to the date for payment of such installment, it\nbeing understood and agreed that the foregoing condition shall not be violated\nby the Employee's serving as a member of a board of directors of a for-profit\npharmaceutical company or by his performing consulting services on an ad hoc\nbasis for such a company. However, if the Employee attained age 65 (or such\nlater age as the Board may in its discretion determine) prior to the date of the\nCompensable Termination, then any balance of the Severance Payment shall be paid\nin six equal monthly installments one of which shall be paid at the end of each\nof the first six months after the date of the Compensable Termination, and the\npreceding sentence shall not apply. If a Change in Control or Potential Change\nin Control as defined in section 11 below occurs (either before or after the\nCompensable Termination), the Severance Payment (or, in the case of a Change in\nControl or Potential Change in Control that occurs after the Compensable\nTermination, any portion thereof that remains unpaid at the time such Change in\nControl or Potential Change in Control occurs) shall be paid in a lump sum\nwithin ten days after the Compensable Termination (or, in the case of a Change\nin Control or Potential Change in Control that occurs after the Compensable\nTermination, within ten days after the Change in Control or Potential Change in\nControl occurs), and the two preceding sentences of this subparagraph shall not\napply. During the 18 month period following a Compensable Termination, the\nCompany shall also provide the Employee with COBRA coverage at its expense. For\npurposes of this section 5, the Employee's \"Annual Cash Compensation\" shall mean\nthe sum of (I) the Employee's highest Base Salary (i.e., one year's salary at\nits highest rate), plus (II) the \"Applicable Average Bonus\" as defined in\nsubparagraph 5(a)(i)(B) above.\n\n                  (ii) If the term of this Agreement as the same may have been\nextended in accordance with the provisions of section 2 above is not extended or\nfurther extended because the Company gives written notice of non-extension to\nthe Employee as provided in section 2 above, and the Company does not have Good\nCause for termination of the Employee's employment at the time of giving such\nnotice, and the Employee does not thereafter resign for Good Reason during the\nterm of this Agreement as permitted by paragraph 5(d)(v) below, then the\nCompany, subject to fulfillment by the Employee of his obligations under this\nAgreement during the balance of the term and his compliance with the provisions\nof sections 6 and 7 below, relating to confidential information,\nnon-solicitation and disparaging remarks, shall, as non-renewal compensation,\nand as additional consideration for the Employee's undertakings under this\nAgreement including sections 6 and 7 below, pay the Employee an amount of money\n(the \"Non-Renewal Payment\") equal to two (2) times the Employee's Annual Cash\nCompensation as defined \n\n\n                                  page 5 of 19\n\nin subparagraph 5(a)(i)(C) above (unless the Employee has attained age 70 (or\nsuch later age as the Board may in its discretion determine) prior to the\ntermination date, in which case the Non-Renewal Payment shall be equal to one\n(1) times the Employee's Annual Cash Compensation), in addition to any other\namounts to which the Employee may be entitled hereunder (including without\nlimitation his annual bonus pursuant to paragraph 4(b) above for the fiscal year\nof the Company in which his employment terminates and any amounts to which he\nmay be entitled under section 8, 9 or 10 below) or by law or pursuant to the\nterms of any compensation or benefit plan or arrangement in which he\nparticipated before his employment terminated. Except as otherwise provided\nhereafter in this subparagraph 5(a)(ii), the Non-Renewal Payment shall be paid\nas follows: seventy-five percent (75%) of the Non-Renewal Payment, or if the\nEmployee attained age 70 prior to the termination of his employment, one hundred\npercent (100%) of the Non-Renewal Payment, shall be paid in a lump sum within\nten days after the date on which the Employee's employment terminates. Any\nbalance of the Non-Renewal Payment shall be paid in six (6) equal monthly\ninstallments one of which shall be paid at the end of each of the first six\nmonths after the date on which the Employee's employment terminates. If a Change\nin Control or Potential Change in Control as defined in section 11 below occurs\n(either before or after the termination of his employment), the Non-Renewal\nPayment (or, in the case of a Change in Control or Potential Change in Control\nthat occurs after the employment termination, any portion thereof that remains\nunpaid at the time such Change in Control or Potential Change in Control occurs)\nshall be paid in a lump sum within ten days after the employment termination\n(or, in the case of a Change in Control or Potential Change in Control that\noccurs after the employment termination, within ten days after the Change in\nControl or Potential Change in Control occurs). During the 18 month period\nfollowing the termination of his employment, the Company shall also provide the\nEmployee with COBRA coverage at its expense.\n\n                  (iii) The foregoing provisions of (including any payments\nunder) this paragraph 5(a) shall be in lieu of any severance pay that may be\npayable under any plan or practice of the Company, but shall be in addition to\n(and not in lieu of) any payments to which the Employee may be entitled under\nsections 8, 9 and 10 below. Subparagraphs 5(a)(i) and 5(a)(ii) above are\nintended to be mutually exclusive, and in no event shall such subparagraphs,\neither individually or collectively, be construed to require the Company to pay\nan amount of money in excess of three (3) times the Employee's Annual Cash\nCompensation under such subparagraphs, either individually or collectively. The\nEmployee shall not be required to mitigate the amount of any payment or benefit\nprovided for in this Agreement (including but not limited to any payment\nprovided for above in this paragraph 5(a)) by seeking other employment or\notherwise, nor shall any compensation earned by the Employee in other employment\nor otherwise reduce the amount of any payment or benefit provided for in this\nAgreement.\n\n            (b) Termination by the Company for Good Cause or by the Employee\nwithout Good Reason. If, during the term of this Agreement, the Employee's\nemployment by the Company is terminated by the Company for Good Cause or by the\nEmployee without Good Reason, the Employee shall not be entitled to receive any\n\n\n                                  page 6 of 19\n\ncompensation under section 4 above acruing after the date of such termination or\nany payment under paragraph 5(a) above. However, the Company's obligations under\nsections 8, 9 and 10 shall not be affected by such termination of employment.\nThe provisions of this paragraph 6(b) shall be in addition to, and not in lieu\nof, any other rights and remedies the Company may have at law or in equity or\nunder any other provision of this Agreement in respect of such termination of\nemployment. However, if during the term of this Agreement the Employee's\nemployment is terminated by the Employee without Good Reason and the Employee\ngives the Company at least 120 days' advance notice of such termination, then\nthe Employee shall not have any obligation or liability to the Company under\nthis Agreement in respect of such termination of employment, but his obligations\nunder Section 6 and 7 hereof shall not be affected by such termination of\nemployment.\n\n            (c) Good Cause Defined. For purposes of this Agreement, the Company\nshall have \"Good Cause\" to terminate the Employee's employment during the term\nof this Agreement only if:\n\n                  (i) the Employee fails to substantially perform his duties\nhereunder for any reason or fails to devote substantially all his business time\nexclusively to the affairs of the Company or fails to obtain the consent of the\nBoard to his service on the board of directors of another company, and such\nfailure is not discontinued within a reasonable period of time, in no event to\nexceed 30 days, after the Employee receives written notice from the Company of\nsuch failure; or\n\n                  (ii) the Employee commits an act of dishonesty resulting or\nintended to result directly or indirectly in gain or personal enrichment at the\nexpense of the Company; or\n\n                  (iii) the Employee is grossly negligent or engages in willful\nmisconduct or insubordination in the performance of his duties hereunder; or\n\n                  (iv) the Employee materially breaches his obligations under\nsection 6 or paragraph 7(a) below, relating to confidential information and\nnon-solicitation.\n\nAny foregoing provision of this paragraph 5(c) to the contrary notwithstanding,\nthe Company shall not have \"Good Cause\" to terminate the Employee's employment\nwithin three years after a Change in Control or Potential Change in Control (as\nsuch terms are defined in section 11 below) unless (A) the Employee's act or\nomission is willful and has a material adverse effect upon the Company, (B) the\nBoard of Directors gives the Employee (I) written notice warning of its\nintention to terminate the Employee for Good Cause if the specified act or\nomission alleged to constitute Good Cause is not discontinued and, if curable,\ncured, and (II) a reasonable opportunity after receipt of such written notice,\nbut in no event less than two weeks, to discontinue and, if curable, cure the\nconduct alleged to constitute Good Cause, and (C) the Employee fails to\ndiscontinue and, if curable, cure the act or omission in question; provided that\nclauses (B) and (C) of \n\n\n                                  page 7 of 19\n\nthis sentence shall not apply with respect to misconduct on the part of the\nEmployee that constitutes a felony in the jurisdiction in which the Employee\nengages in such misconduct, and, provided further, that this sentence shall not\napply to conduct involving moral turpitude. For all purposes of this Agreement,\nno act, or failure to act, on the Employee's part shall be deemed \"willful\"\nunless done, or omitted to be done, by him intentionally and in bad faith (i.e.,\nwithout reasonable belief that his action or omission was in furtherance of the\ninterests of the Company or a subsidiary of the Company).\n\n            (d) Good Reason Defined. For purposes of this Agreement, the\nEmployee shall have \"Good Reason\" to terminate his employment during the term of\nthis Agreement only if:\n\n                  (i) the Company fails to pay or provide any amount or benefit\nthat the Company is obligated to pay or provide under section 4 above or section\n8, 9 or 10 below and the failure is not remedied within 30 days after the\nCompany receives written notice from the Employee of such failure; or\n\n                  (ii) the Company assigns the Employee duties, responsibilities\nor reporting relationships not contemplated by section 3 above without his\nconsent, or limits his duties or responsibilities or power or authority\ncontemplated by section 3 above in any respect materially detrimental to him,\nand in either case the situation is not remedied within 30 days after the\nCompany receives written notice from the Employee of the situation; or\n\n                  (iii) he is removed from, or not elected or reelected to, the\nBoard of Directors of the Company or the office, title and position of Chairman\nof the Board and Chief Executive Officer of the Company, and the Company does\nnot have Good Cause for doing so; or\n\n                  (iv) the Company relocates his office outside of either (A)\nthe greater Washington, D.C. metropolitan area, or (B) such other Company\nlocation as he may determine to be appropriate for the performance of his\nduties, in either case (A) or (B) without his written consent (given in a\npersonal rather than representative capacity), and the situation is not remedied\nwithin 30 days after the Company receives written notice from the Employee of\nthe situation; or\n\n                  (v) the Company gives the Employee written notice, in the\nmanner set forth in paragraph 13(e) or (f) below, prior to any Extension\nEffective Date, that the term of this Agreement that is in effect at the time\nsuch written notice is given is not to be extended or further extended, as the\ncase may be; provided that the giving of such written notice to the Employee\nshall constitute Good Reason only if and when the Employee shall have performed\nsuch of his duties and responsibilities for such period of time, in no event to\nexceed six months after the giving of such notice, as the Board may reasonably\nrequest in writing to transition his duties and responsibilities; or\n\n\n                                  page 8 of 19\n\n                  (vi) a Change in Control occurs and as a result thereof either\n(A) equity securities of the Company cease to be publicly-traded, or (B) the\nEmployee is not elected or designated to serve as the sole Chief Executive\nOfficer of the surviving company; or\n\n                  (vii) a Change in Control or Potential Change in Control\noccurs and (A) the dollar value of the stock optioned to the Employee annually\nthereafter is less than the average annual dollar value of the stock that was\noptioned to the Employee during the four years prior to the Change in Control or\nPotential Change in Control, or (B) the material terms of such options\n(including without limitation vesting schedules) are less favorable to the\nEmployee than the material terms of the options that were granted to the\nEmployee during the four years prior to the Change in Control or Potential\nChange in Control, and in either case (A) or (B) the situation is not remedied\nwithin 30 days after the Company receives written notice from the Employee of\nthe situation.\n\nIn no event shall the Employee's continued employment after any of the foregoing\nconstitute his consent to the act or omission in question, or a waiver of his\nright to terminate his employment for Good Reason hereunder on account of such\nact or omission.\n\n      6. Confidential Information. The Employee agrees not to disclose, either\nwhile in the Company's employ or at any time thereafter, to any person not\nemployed by the Company, or not engaged to render services to the Company,\nexcept with the prior written consent of an authorized officer of the Company or\nas necessary or appropriate for the performance of his duties hereunder, any\nconfidential information obtained by him while in the employ of the Company,\nincluding, without limitation, information relating to any of the inventions,\nprocesses, formulae, plans, devices, compilations of information, research,\nmethods of distribution, suppliers, customers, client relationships, marketing\nstrategies or trade secrets of the Company or any subsidiary thereof; provided,\nhowever, that this provision shall not preclude the Employee from use or\ndisclosure of information known generally to the public or of information not\nconsidered confidential by persons engaged in the businesses conducted by the\nCompany or any subsidiary thereof, or from disclosure required by law or court\norder. The Employee also agrees that upon leaving the Company's employ he will\nnot take with him, without the prior written consent of an authorized officer of\nthe Company, and he will surrender to the Company, any record, list, drawing,\nblueprint, specification or other document or property of the Company or any\nsubsidiary thereof, together with any copy or reproduction thereof, mechanical\nor otherwise, which is of a confidential nature relating to the Company or any\nsubsidiary thereof, or without limitation, relating to its or their methods of\ndistribution, suppliers, customers, client relationships, marketing strategies\nor any description of any formulae or secret processes, or which was obtained by\nhim or entrusted to him during the course of his employment with the Company.\n\n\n                                  page 9 of 19\n\n      7. Restrictive Covenants\n\n            (a) Non-Solicitation. Employee covenants and agrees that, during his\nemployment by the Company and during the one year period immediately following\nthe termination of his employment with the Company for any reason (including,\nwithout limitation, a termination of employment by the Company without cause and\na voluntary termination of employment by the Employee, in either case whether\nduring the term of this Agreement, at the expiration of the term of this\nAgreement or at any time thereafter), he will not solicit or attempt to persuade\nany employee of the Company, its subsidiaries or affiliates (except the\nEmployee's personal secretary or administrative assistant), or any other person\nwho performs services for the Company, its subsidiaries or affiliates at the\ntime the Employee's employment terminates or at any time within one year\nthereafter, to terminate or reduce or refrain from engaging in his or her\nemployment or other service relationship with the Company, its subsidiaries or\naffiliates; provided, however, that responding to inquiries from any such\nemployees or other persons that are not initiated by the Employee, and\nsubsequently hiring such employees or other persons following the termination of\ntheir employment with the Company, its subsidiaries and affiliates shall be\npermitted.\n\n            (b) Specific Enforcement. Employee recognizes and agrees that, by\nreason of his knowledge, experience, skill and abilities, his services are\nextraordinary and unique, that the breach or attempted breach of any of the\nrestrictions set forth above in this section 7 will result in immediate and\nirreparable injury for which the Company will not have an adequate remedy at\nlaw, and that the Company shall be entitled to a decree of specific performance\nof those restrictions and to a temporary and permanent injunction enjoining the\nbreach thereof, and to seek any and all other remedies to which the Company may\nbe entitled, including, without limitation, monetary damages, without posting\nbond or furnishing security of any kind.\n\n            (c) Restrictions Reasonable. Employee specifically and expressly\nrepresents and warrants that (i) he has reviewed and agreed to the restrictive\ncovenants contained in this section 7 and their contemplated operation after\nreceiving the advice of counsel of his choosing; (ii) he believes, after\nreceiving such advice, that the restrictive covenants and their contemplated\noperation are fair and reasonable; (iii) he will not seek or attempt to seek to\nhave the restrictive covenants declared invalid, and, after receiving the advice\nof counsel, expressly waives any right to do so; and (iv) if the full breadth of\nany restrictive covenant and\/or its contemplated operation shall be held in any\nfashion to be too broad, such covenant or its contemplated operation, as the\ncase may be, shall be interpreted in a manner as broadly in favor of the\nbeneficiary of such covenant as is legally permissible. Employee recognizes and\nagrees that the restrictions on his activities contained in this section 7 are\nrequired for the reasonable protection of the Company and its investments; and\nthat the restriction on his activities set forth in paragraph 7(a) will not\ndeprive the Employee of the ability to earn a livelihood.\n\n            (d) Non-Disparagement. Employee covenants and agrees that, during\nthe one year period immediately following the termination of his employment with\nthe \n\n\n                                 page 10 of 19\n\nCompany for any reason (including, without limitation, a termination of\nemployment by the Company without cause and a voluntary termination of\nemployment by the Employee, in either case whether during the term of this\nAgreement, at the expiration of the term of this Agreement or at any time\nthereafter), he will not make disparaging remarks about the Company, its\nsubsidiaries or affiliates or any of their officers, directors or employees,\nunless required by law or reasonably necessary to assert or defend his position\nin a bona fide dispute arising out of or relating to this Agreement or the\nbreach thereof.\n\n            (e) Effect on Termination Payments. The Employee recognizes and\nagrees that the Company shall not be obligated to make any payments provided for\nin paragraph 5(a) above if the Employee violates the provisions of section 6 or\nparagraph 7(a) or 7(d) above during the one year period immediately following\nthe termination for any reason of his employment with the Company. In addition,\nthe Employee recognizes and agrees that, if the Employee violates such\nprovisions, the Company may recoup any payments the Company may have theretofore\nmade pursuant to paragraph 5(a) above and any payments the Company may\nthereafter make under paragraph 5(a). The foregoing provisions of this paragraph\n7(e) shall be in addition to and not by way of limitation of any other rights\nand remedies the Company may have in respect of the violation in question.\n\n      8. Indemnification\n\n      To the fullest extent permitted by applicable law, the Company shall\nindemnify, defend and hold harmless the Employee from and against any and all\nclaims, demands, actions, causes of action, liabilities, losses, judgments,\nfines, costs and expenses (including reasonable attorneys' fees and settlement\nexpenses) arising from or relating to his service or status as an officer,\ndirector, employee, agent or representative of the Company or any subsidiary of\nthe Company or in any other capacity in which the Employee serves or has served\nat the request of, or for the benefit of, the Company or its subsidiaries. The\nCompany's obligations under this section 8 shall be in addition to, and not in\nderogation of, any other rights the Employee may have against the Company to\nindemnification or advancement of expenses, whether by statute, contract or\notherwise.\n\n      9. Certain Additional Payments by the Company\n\n            (a) Anything in this Agreement (other than the second sentence of\nthis paragraph 9(a)) to the contrary notwithstanding, in the event it shall be\ndetermined that any payment or distribution by the Company to or for the benefit\nof the Employee (whether paid or payable or distributed or distributable\npursuant to the terms of this Agreement or otherwise, but determined without\nregard to any additional payments required under this section 9) (a \"Payment\"),\nwould be subject to the excise tax imposed by Section 4999 of the United States\nInternal Revenue Code (the \"Code\") or any interest or penalties are incurred by\nthe Employee with respect to such excise tax (such excise tax, together with any\nsuch interest and penalties, are hereinafter collectively referred to as the\n\"Excise Tax\"), then the Employee shall be entitled to receive an additional\n\n\n                                 page 11 of 19\n\npayment (an \"Gross-Up Payment\") in an amount such that after payment by the\nEmployee of all taxes and any benefits that result from the deductibility by the\nEmployee of such taxes (including, in each case, any interest or penalties\nimposed with respect to such taxes), including, without limitation, any income\ntaxes (and any interest and penalties imposed with respect thereto) and Excise\nTax imposed upon the Gross-Up Payment, the Employee retains an amount of the\nGross-Up Payment equal to the Excise Tax imposed upon the Payments. However, if\nit shall be determined that none of the Payments would be subject to the Excise\nTax if the total Payments were reduced in the aggregate by $50,000 or less, then\nin that event the total Payments shall be reduced by the smallest amount (in no\nevent to exceed $50,000 in the aggregate) necessary to ensure that none of the\nPayments will be subject to the Excise Tax. The decision as to which Payments\nshall be so reduced shall be made by the Employee.\n\n            (b) Subject to the provisions of paragraph 9(a) above and 9(c)\nbelow, all determinations required to be made under this section 9, including\nwhether and when a Gross-Up Payment is required and the amount of such Gross-Up\nPayment and the assumptions to be utilized in arriving at such determination,\nand whether Payments are to be reduced pursuant to the second sentence of\nparagraph 9(a) above, shall be made by Deloitte &amp; Touche or such other certified\npublic accounting firm as may be designated by the Employee (the \"Accounting\nFirm\") which shall provide detailed supporting calculations both to the Company\nand the Employee within 15 business days of the receipt of notice from the\nEmployee that there has been a Payment, or such earlier time as is requested by\nthe Company. In the event that the Accounting Firm is serving as accountant or\nauditor for the individual, entity or group effecting the \"change in ownership\nor effective control\" or \"change in the ownership of a substantial portion of\nassets\" (within the meaning of Code section 280G(b)(2)(A)) that gives rise to\nthe Excise Tax, the Employee shall appoint another nationally recognized\naccounting firm to make the determinations required hereunder (which accounting\nfirm shall then be referred to as the Accounting Firm hereunder). All fees and\nexpenses of the Accounting Firm shall be borne solely by the Company. Any\nGross-Up Payment, as determined pursuant to this section 9, shall be paid by the\nCompany to the Employee within five days of the receipt of the Accounting Firm's\ndetermination. Any determination by the Accounting Firm shall be binding upon\nthe Company and the Employee. As a result of the uncertainty in the application\nof Section 4999 of the Code at the time of the initial determination by the\nAccounting Firm hereunder, it is possible that Gross-Up Payments which will not\nhave been made by the Company should have been made (an \"Underpayment\"),\nconsistent with the calculations required to be made hereunder. In the event\nthat the Company exhausts its remedies pursuant to paragraph 9(c) and the\nEmployee thereafter is required to make a payment of any Excise Tax, the\nAccounting Firm shall determine the amount of the Underpayment that has occurred\nand any such Underpayment, along with any penalty and interest imposed with\nrespect to such Underpayment, shall be promptly paid by the Company to or for\nthe benefit of the Employee.\n\n            (c) The Employee shall notify the Company in writing of any claim by\nthe Internal Revenue Service that, if successful, would require either the\npayment by the Company of the Gross-Up Payment or the reduction of Payments\npursuant to the second \n\n\n                                 page 12 of 19\n\nsentence of paragraph 9(a) above. Such notification shall be given as soon as\npracticable but no later than ten business days after the Employee is informed\nin writing of such claim and shall apprise the Company of the nature of such\nclaim and the date on which such claim is requested to be paid. The Employee\nshall not pay such claim prior to the expiration of the 30-day period following\nthe date on which it gives such notice to the Company (or such shorter period\nending on the date that any payment of taxes with respect to such claim is due).\nIf the Company notifies the Employee in writing prior to the expiration of such\nperiod that it desires to contest such claim, the Employee shall:\n\n                  (i) give the Company any information reasonably requested by\nthe Company relating to such claim,\n\n                  (ii) take such action in connection with contesting such claim\nas the Company shall reasonably request in writing from time to time, including,\nwithout limitation, accepting legal representation with respect to such claim by\nan attorney reasonably selected by the Company,\n\n                  (iii) cooperate with the Company in good faith in order\neffectively to contest such claim, and\n\n                  (iv) permit the Company to participate in any proceedings\nrelating to such claim;\n\nprovided, however, that the Company shall bear and pay directly all costs and\nexpenses (including additional interest and penalties) incurred in connection\nwith such contest and shall indemnify and hold the Employee harmless, on an\nafter-tax basis, for any Excise Tax or income tax (including interest and\npenalties with respect thereto) imposed as a result of such representation and\npayment of costs and expenses. Without limitation on the foregoing provisions of\nthis paragraph 9(c), the Company shall control all proceedings taken in\nconnection with such contest and, at its sole option, may pursue or forgo any\nand all administrative appeals, proceedings, hearings and conferences with the\ntaxing authority in respect of such claim and may, at its sole option, either\ndirect the Employee to pay the tax claimed and sue for a refund or contest the\nclaim in any permissible manner, and the Employee agrees to prosecute such\ncontest to a determination before any administrative tribunal, in a court of\ninitial jurisdiction and in one or more appellate courts, as the Company shall\ndetermine, provided, however, that if the Company directs the Employee to pay\nsuch claim and sue for a refund, the Company shall advance the amount of such\npayment to the Employee, on an interest-free basis and shall indemnify and hold\nthe Employee harmless, on an after-tax basis, from any Excise Tax or income tax\n(including interest or penalties with respect thereto) imposed with respect to\nsuch advance; and further provided that any extension of the statute of\nlimitations relating to payment of taxes for the taxable year of the Employee\nwith respect to which such contested amount is claimed to be due is limited\nsolely to such contested amount. Furthermore, the Company's control of the\ncontest shall be limited to issues with respect to which a Gross-Up Payment\nwould be payable hereunder and the \n\n\n                                 page 13 of 19\n\nEmployee shall be entitled to settle or contest, as the case may be, any other\nissue raised by the Internal Revenue Service or any other taxing authority.\n\n            (d) If, after the receipt by the Employee of an amount advanced by\nthe Company pursuant to paragraph 9(a) or 9(c), the Employee becomes entitled to\nreceive any refund with respect to such claim, the Employee shall (subject to\nthe Company's complying with the requirements of paragraph 9(c)) promptly pay to\nthe Company the amount of such refund (together with any interest paid or\ncredited thereon after taxes applicable thereto). If, after the receipt by the\nEmployee of an amount advanced by the Company pursuant to paragraph 9(c), a\ndetermination is made that the Employee shall not be entitled to any refund with\nrespect to such claim and the Company does not notify the Employee in writing of\nits intent to contest such denial of refund prior to the expiration of 30 days\nafter such determination, then such advance shall be forgiven and shall not be\nrequired to be repaid and the amount of such advance shall offset, to the extent\nthereof, the amount of Gross-Up Payment required to be paid.\n\n      10. Certain Enforcement Matters\n\n            (a) If, after a Change in Control or Potential Change in Control, a\ndispute arises (i) with respect to this Agreement or the breach thereof, or (ii)\nwith respect to the Employee's or the Company's rights or obligations under this\nAgreement, including but not limited to any such dispute between the Employee\nand the Company, the Company shall pay or reimburse the Employee for all\nreasonable costs and expenses (including court costs, arbitrators' fees and\nreasonable attorneys' fees and disbursements) the Employee incurs in connection\nwith such dispute, including without limitation costs and expenses he incurs to\nobtain payment or otherwise enforce his rights under this Agreement, or to\nobtain payment of costs and expenses due under this paragraph 10(a). In\naddition, the Company shall pay the Employee such additional amount (a \"Gross\nUp\") as will be sufficient, after the Employee pays his tax liability with\nrespect to the Gross Up from the Gross Up, to pay all of his federal, state and\nlocal tax liability with respect to any costs and expenses that are paid by the\nCompany pursuant to this paragraph 10(a). The Company shall promptly pay or\nreimburse the Employee for all such costs and expenses as he incurs them, upon\npresentation of reasonable documentation of such costs and expenses, and shall\npromptly pay the related Gross Up as and when it pays or reimburses costs and\nexpenses. The Employee shall not be obligated to repay any such costs, expenses\nor Gross Up unless it is finally determined by the trier of fact in a\nnon-appealable judicial or arbitral decision or ruling (as applicable) that the\nEmployee's principal positions with respect to the principal matter(s) in\ndispute were unreasonable and pursued in bad faith.\n\n            (b) Any payments to which the Employee may be entitled under this\nAgreement, including, without limitation, under section 5, 8, 9 or 10 hereof,\nshall be made forthwith on the applicable date(s) for payment specified in this\nAgreement. If for any reason the amount of any payment due to the Employee\ncannot be finally determined on that date, such amount shall be estimated on a\ngood faith basis by the Company and the estimated amount shall be paid no later\nthan within 10 days after such date. As soon \n\n\n                                 page 14 of 19\n\nas practicable thereafter, the final determination of the amount due shall be\nmade and any adjustment requiring a payment to or from the Employee shall be\nmade as promptly as practicable.\n\n            (c) Any controversy or claim arising, after a Change in Control or\nPotential Change in Control, out of or related to this Agreement or the breach\nthereof, shall be settled by binding arbitration in the City of New York, in\naccordance with the employment dispute arbitration rules of the American\nArbitration Association then in effect, and the arbitrator's decision shall be\nbinding and final and judgment upon the award rendered may be entered in any\ncourt having jurisdiction thereof, except that the Employee may elect to have\nany such controversy or claim settled by judicial determination in lieu of\narbitration by bringing a court action, if he is the plaintiff or, if he is not\nthe plaintiff, demanding such judicial determination within the time to answer\nany complaint in any arbitration action that may be commenced.\n\n      11. Change in Control\n\n            (a) The term \"Change in Control\" as used in this Agreement means a\nchange of control of a nature that would be required to be reported in response\nto Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities\nExchange Act of 1934, as amended (the \"Exchange Act\"), whether or not the\nCompany is then subject to such reporting requirement; provided that, whether or\nnot any of the following events would constitute a change of control of such a\nnature, a Change in Control shall be deemed to occur for purposes of this\nAgreement if and when any of the following events occur:\n\n                  (i) any \"person\" (as such term is used in Sections 13(d) and\n14(d)(2) of the Exchange Act), other than--\n\n                        (A) the Company,\n                        (B) a Subsidiary,\n                        (C) a trustee or other fiduciary holding securities\n                  under an employee benefit plan of the Company or a Subsidiary,\n                  or \n                        (D) an underwriter engaged in a distribution of Company\n                  stock to the public with the Company's written consent,\n\nbecomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),\ndirectly or indirectly, of Voting Securities that meet two tests: (I) they\nrepresent more than thirty percent (30%) of the combined voting power of the\nthen outstanding Voting Securities, and (II) they also represent more than the\npercentage of the combined voting power of the then outstanding Voting\nSecurities beneficially owned, directly or indirectly, at that time by Bernard\nC. Sherman and his affiliates (as defined in Rule 12b-2 under the Exchange Act).\nHowever, the second test stated in clause (II) above shall not apply if the\n\"person\" in question is Bernard C. Sherman and\/or his affiliates (as defined in\nRule 12b-2 under the Exchange Act). In addition, if the \"person\" in question is\nan institutional investor whose investment in Voting Securities is purely\npassive when such \n\n\n                                 page 15 of 19\n\nperson becomes the beneficial owner of Voting Securities that meet the tests set\nforth in clause (I) and, if applicable, (II) above, then such event (i.e., such\nperson's becoming the beneficial owner of such Voting Securities) shall not be\ndeemed to constitute a Change in Control under this subparagraph 11(a)(i) for so\nlong as (and only for so long as) such person's investment in Voting Securities\nremains purely passive; or\n\n                  (ii) the stockholders of the Company approve a merger,\nconsolidation, recapitalization or reorganization of the Company or a\nSubsidiary, reverse split of any class of Voting Securities, or an acquisition\nof securities or assets by the Company or a Subsidiary, or consummation of any\nsuch transaction if stockholder approval is not obtained, other than (A) any\nsuch transaction in which the holders of outstanding Voting Securities\nimmediately prior to the transaction receive, with respect to such Voting\nSecurities (or, in the case of a transaction in which the Company is the\nsurviving corporation or a transaction involving a Subsidiary, retain), voting\nsecurities of the surviving or transferee entity representing more than fifty\npercent (50%) of the total voting power outstanding immediately after such\ntransaction, with the voting power of each such continuing holder relative to\nother such continuing holders not substantially altered in the transaction, or\n(B) any such transaction which would result in a Related Party beneficially\nowning more than 50 percent of the voting securities of the surviving entity\noutstanding immediately after such transaction; or\n\n                  (iii) the stockholders of the Company approve a plan of\ncomplete liquidation of the Company or an agreement for the sale or disposition\nby the Company of all or substantially all of the Company's assets other than\nany such transaction which would result in a Related Party owning or acquiring\nmore than 50 percent of the assets owned by the Company immediately prior to the\ntransaction; or\n\n                  (iv) the persons who were members of the Board of Directors of\nthe Company immediately before a tender or exchange offer for shares of Common\nStock by any person other than the Company or a Related Party, or before a\nmerger or consolidation of the Company or a Subsidiary, or contested election of\nthe Board of Directors of the Company, or before any combination of such\ntransactions, cease to constitute a majority of the Board of Directors of the\nCompany as a result of such transaction or transactions.\n\n            (b) For purposes of paragraph 11(a) above:\n\n                  (i) the term \"Related Party\" shall mean (A) a Subsidiary, (B)\nan employee or group of employees of the Company or any Subsidiary, (C) a\ntrustee or other fiduciary holding securities under an employee benefit plan of\nthe Company or any Subsidiary, or (D) a corporation or other form of business\nentity owned directly or indirectly by the stockholders of the Company in\nsubstantially the same proportion as their ownership of Voting Securities;\n\n                  (ii) the term \"Subsidiary means a corporation or other form of\nbusiness association of which shares (or other ownership interests) having more\nthan 50% \n\n\n                                 page 16 of 19\n\nof the voting power are, or in the future become, owned or controlled, directly\nor indirectly, by the Company; and\n\n                  (iii) the term \"Voting Securities\" shall mean any securities\nof the Company which carry the right to vote generally in the election of\ndirectors.\n\n            (c) For purposes of this Agreement, a \"Potential Change in Control\"\nmeans that (i) the Company enters into an agreement, the consummation of which\nwould result in the occurrence of a Change of Control; or (ii) the Board adopts\na resolution to the effect that, for purposes of this Agreement, a potential\nchange in control of the Company has occurred.\n\n      12. Severability; Survival\n\n            (a) In the event that any provision of this Agreement shall be\ndetermined to be invalid or unenforceable for any reason, the remaining\nprovisions of this Agreement not so invalid or unenforceable shall be unaffected\nthereby and shall remain in full force and effect to the fullest extent\npermitted by law; and\n\n            (b) Any provision of this Agreement which may for any reason be\ninvalid or unenforceable in any jurisdiction shall remain in effect and be\nenforceable in any jurisdiction in which such provision shall be valid and\nenforceable.\n\n            (c) The provisions of sections 6, 7, 8, 9 and 10 of this Agreement,\nand any other provision of this Agreement which is intended to apply, operate or\nhave effect after the expiration or termination of the term of this Agreement,\nor at a time when the term of this Agreement may have expired or terminated,\nshall survive the expiration or termination of the term of this Agreement for\nany reason.\n\n      13. General Provisions\n\n            (a) No right or interest to or in any payments to be made under this\nAgreement shall be subject to anticipation, alienation, sale, assignment,\nencumbrance, pledge, charge or hypothecation or to execution, attachment, levy\nor similar process, or assignment by operation of law. All payments to be made\nby the Company hereunder shall be subject to the withholding of such amounts as\nthe Company may determine it is required to withhold under the laws or\nregulations of any governmental authority, whether foreign, federal, state or\nlocal.\n\n            (b) To the extent that the Employee acquires a right to receive\npayments from the Company under this Agreement, such right shall be no greater\nthan the right of an unsecured general creditor of the Company. All payments to\nbe made hereunder shall be paid from the general funds of the Company and no\nspecial or separate fund shall be established and no segregation of assets shall\nbe made to assure payment of any amount hereunder.\n\n\n                                 page 17 of 19\n\n            (c) This Agreement shall be governed by and construed and enforced\nin accordance with the laws of the State of New York, without giving effect to\nthe principles of conflicts of laws of that State.\n\n            (d) This Agreement shall be binding upon and inure to the benefit of\nthe Company, its successors and assigns, and the Employee, his heirs, devisees,\ndistributees and legal representatives.\n\n            (e) Any notice or other communication to the Company pursuant to any\nprovision of this Agreement shall be given in writing and will be deemed to have\nbeen delivered:\n\n                  (i) when delivered in person to the Corporate Secretary or\nGeneral Counsel of the Company; or\n\n                  (ii) one week after it is deposited in the United States\ncertified or registered mail, postage prepaid, addressed to the Corporate\nSecretary of the Company at 300 Corporate Drive, Building #10, Bradley Corporate\nPark, Blauvelt, New York 10913 or at such other address of which the Company may\nfrom time to time give the Employee written notice in accordance with paragraph\n13(f) below.\n\n            (f) Any notice or other communication to the Employee pursuant to\nany provision of the Agreement shall be given in writing and will be deemed to\nhave been delivered:\n\n                  (i) when delivered to the Employee in person, or\n\n                  (ii) one week after it is deposited in the United States\ncertified or registered mail, postage prepaid, addressed to the Employee at his\naddress as it appears on the records of the Company or at such other address of\nwhich the Employee may from time to time give the Company written notice in\naccordance with paragraph 13(e) above.\n\n            (g) No provision of this Agreement may be amended, modified or\nwaived unless such amendment, modification or waiver shall be agreed to in a\nwriting signed by the Employee and an authorized officer of the Company.\n\n            (h) This instrument contains the entire agreement of the parties\nrelating to the subject matter of this Agreement and supersedes and replaces all\nprior agreements and understandings with respect to such subject matter, and the\nparties have made no agreements, representations or warranties relating to the\nsubject matter of this Agreement which are not set forth herein.\n\n\n                                 page 18 of 19\n\n      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of\nthe date first above written.\n\n                                          BARR LABORATORIES, INC.\n\n\n                                          By:_______________________\n[SEAL]\nAttest:\n\n\n__________________\nSecretary                                 __________________________\n                                          Employee\n\n\n                                 page 19 of 19\n\n                                                                        APPENDIX\n\n EXAMPLES ILLUSTRATING INTENDED OPERATION OF EXTENSION PROVISIONS OF PARAGRAPH 2\n\nExample 1:\n\n            Facts: Neither the Company nor the Employee gives the other party\n            written notice of non-extension before the second anniversary of the\n            Commencement Date.\n\n            Result: Effective as of the second anniversary of the Commencement\n            Date, the term of the Agreement is extended 12 months, so that it\n            will expire on the fourth anniversary of the Commencement Date\n            unless further extended in accordance with the provisions of\n            Paragraph 2 of the Agreement.\n\nExample 2:\n\n            Facts: Either the Company or the Employee gives the other party\n            written notice of non-extension before the second anniversary of the\n            Commencement Date.\n\n            Result: The term of the Agreement is not extended, and expires on\n            the third anniversary of the Commencement Date.\n\nExample 3:\n\n            Facts: Neither the Company nor the Employee gives the other party\n            written notice of non-extension before the third anniversary of the\n            Commencement Date.\n\n            Result: Effective as of the third anniversary of the Commencement\n            Date, the term of the Agreement as extended in accordance with\n            Example 1 above is further extended 12 months, so that it will\n            expire on the fifth anniversary of the Commencement Date unless\n            further extended in accordance with the provisions of Paragraph 2 of\n            the Agreement.\n\nExample 4:\n\n            Facts: Either the Company or the Employee gives the other party\n            written notice of non-extension on or after the third anniversary of\n            the Commencement Date and before the fourth anniversary of the\n            Commencement Date.\n\n            Result: The term of the Agreement as extended is not further\n            extended, and expires on the fifth anniversary of the Commencement\n            Date.\n\n\n                                 page 20 of 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