Canada
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001-14956
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98-0448205
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(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number)
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2150 St. Elzéar Blvd. West, Laval, Quebec
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H7L 4A8
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(Address of principal executive offices)
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(Zip Code)
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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10.1
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Separation Agreement between Valeant Pharmaceuticals International, Inc. and Jason Hanson, dated May 8, 2013
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VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
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Date: May 14, 2013
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By:
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/s/ Robert Chai-Onn
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Robert Chai-Onn
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Executive Vice President, General Counsel, Corporate Secretary and Corporate Business Development
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1.
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Capitalized Terms. Unless otherwise defined herein, capitalized terms shall have the meaning set forth in the 2012 Agreement.
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2.
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Termination Date.
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(a)
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The Parties agree that May 8, 2013 shall be Mr. Hanson's last day of employment with Valeant (the "Termination Date") and his service as Executive Vice President – Company Group Chairman shall terminate as of the Termination Date. Effective as of the Termination Date, Mr. Hanson hereby resigns from all positions he holds as an officer, director, benefit plan trustee or otherwise with respect to Valeant and its subsidiaries.
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(b)
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Upon the Termination Date, each of Mr. Hanson's equity compensation awards shall immediately terminate, without further compensation due, in accordance with their terms.
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3.
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Remuneration Upon Termination. The Parties acknowledge that in connection with Mr. Hanson’s termination of employment with Valeant, he shall be entitled to (or eligible for, as the case may be) the following:
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(a)
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any accrued but unpaid salary or vacation pay, which shall be paid to him in accordance with Valeant's policies with respect to such remuneration;
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(b)
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subject to Mr. Hanson executing the general release of claims attached hereto as Annex A (the “First Release”), a lump sum amount equal to $681,000, such amount to be payable within ten (10) days of the date hereof;
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(c)
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subject to Mr. Hanson executing the general release of claims attached hereto as Annex B (the “Second Release”) within 21 days following the Termination Date, and the applicable seven (7) calendar day revocation period expiring without revocation (the date upon which such revocation period expires being referred to hereinafter as the "Effective Date"), a lump sum amount equal to $681,000 (which includes Mr. Hanson’s pro rated target annual bonus in respect of 2013 in the amount of $172,000 and a payment in respect of outplacement services in the amount of $20,000), such amount to be payable within ten days following the Effective Date;
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(d)
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within thirty (30) days following the receipt of an invoice from Mr. Hanson's attorney (provided that such invoice is received within 90 days of the Effective Date), Valeant shall pay Mr. Hanson’s attorney up to $10,000 for services rendered in connection herewith;
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(e)
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subject to the occurrence of the Effective Date, Mr. Hanson and his eligible dependents will continue to be covered under any health, medical, dental and vision care plan in which he was eligible to participate immediately prior to the Termination Date for twelve (12) months following the Termination Date on terms no less favorable to Mr. Hanson and his dependents (including with respect to payment for the costs thereof) than those in effect immediately prior to the Termination Date; and
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(f)
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subject to Mr. Hanson executing the general release of claims attached hereto as Annex C (the “Third Release”), within 21 days following the last day of the Consulting Period, and the applicable seven (7) calendar day revocation period expiring without revocation (the date upon which such revocation period expires being referred to hereinafter as the "Second Effective Date"), a lump sum amount equal to $466,700, such amount to be payable within ten days following the Second Effective Date.
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4.
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Consulting Services.
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(a)
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For a period beginning on the Termination Date and expiring two (2) months thereafter (the “Consulting Period”), Mr. Hanson agrees to make himself reasonably available to consult with Valeant as reasonably requested by Valeant from time to time (“Services”). Unless otherwise agreed by Mr. Hanson, he will
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perform all of the services in Arizona. The Consulting Period may be extended, on a month-by-month basis, by mutual agreement of the parties. Mr. Hanson shall not be required to perform more than fifteen (15) hours of Services per week; provided that during the week of June 3, 2013 (or another one-week period during the Consulting Period selected by Valeant), Mr. Hanson agrees to perform up to forty (40) hours of service if so requested by Valeant.
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(b)
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In exchange for the Services performed hereunder, Valeant agrees to pay Mr. Hanson $54,167 per month. Compensation for any partial month will be prorated. Valeant shall reimburse Mr. Hanson for any reasonable and documented out of pocket travel and meal expenses incurred by Mr. Hanson in providing the Services, provided that they are consistent with Valeant's Travel Policy applicable to senior officers of Valeant and that appropriate proof of expenditure is provided. The fee for the Services shall be paid monthly, no later than the last day of each calendar month during the Consulting Period, with the last payment due promptly after the termination or expiration of the Consulting Period.
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(c)
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Valeant or Mr. Hanson may terminate the Services by written notice at any time prior to the end of the Consulting Period. If Valeant terminates the Services for reasons other than Cause, Mr. Hanson shall be entitled to receive the compensation that he would have received under Section 4(b) for the remainder of the Consulting Period, payable as set forth above, as if such termination had not occurred.
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(d)
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In all matters relating to the Services, Mr. Hanson shall be acting as an independent contractor. Neither Mr. Hanson, nor any affiliated employees or subcontractors, shall be the agent(s) or employee(s) of Valeant under the meaning or application of any federal or state laws, including but not limited to unemployment insurance or worker’s compensation laws. Mr. Hanson will be solely responsible for all income, business or other taxes such as social security and unemployment payable as a result of fees paid for the Services. Mr. Hanson shall not sign any agreements or make any commitments on behalf of Valeant, or bind Valeant in any way, nor shall Mr. Hanson make any public statements concerning the Services that purport to be on behalf of Valeant, in each case without prior express written authorization from Valeant.
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5.
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Confidentiality. Mr. Hanson will not disclose to, or use for the benefit of, any third party any Confidential Information. "Confidential Information" means any information about Valeant or any of its affiliates, their clients or personnel which is not known or available publicly or generally within the pharmaceutical industry, including, but not limited to, information relating to business operations, including customer and supply lists, customer files, marketing data, business plans, strategies, employee lists, contracts, financial records and accounts, products in development, product plans, projections and budgets, and similar information. Anything herein to the contrary notwithstanding, the provisions of Section 5 shall not apply (a) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee
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thereof) with actual or apparent jurisdiction to order Mr. Hanson to disclose or make accessible any information, (b) with respect to any other litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, or (c) as to information that is or becomes available to Mr. Hanson on a non-confidential basis from a source outside of Valeant.
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6.
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Restrictive Covenants. The Sections entitled "Covenant Not to Solicit," "Remedies for Breach of Obligations Under the Restrictive Covenant Above," and “Non-Disparagement,” each as set forth in the 2012 Agreement, are incorporated by reference herein, and the covenant not to solicit shall apply during the Consulting Period and for a period of twelve (12) months thereafter and the non-disparagement provision shall apply for a period of four (4) years from the date hereof. Any internal communication to senior management announcing Mr. Hanson's departure from Valeant shall be consistent with the form previously agreed to by the Parties.
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7.
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Cooperation
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(a)
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During the eighteen (18) month period following the Termination Date, Mr. Hanson agrees to make himself reasonably available (after taking into account his personal and professional schedule) to cooperate with Valeant and its affiliates in matters that materially concern: (i) requests for information about the services or advice Mr. Hanson provided to Valeant, its affiliates and their predecessors during his employment with Valeant, its affiliates and their predecessors, (ii) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of Valeant, its affiliates and their predecessors which relate to events or occurrences that transpired while Mr. Hanson was employed by Valeant, its affiliates or their predecessors or (iii) any investigation or review by any federal, state or local regulatory, quasi-regulatory or self-governing authority (including, without limitation, the US Department of Justice, the US Federal Trade Commission or the US Securities and Exchange Commission) as any such investigation or review relates to events or occurrences that transpired while Mr. Hanson was employed by Valeant, its affiliates and their predecessors. Mr. Hanson's cooperation shall include: (A) making himself reasonably available to meet and speak with officers or employees of Valeant, Valeant's counsel or any third-parties at the request of Valeant at times and locations to be determined by Valeant reasonably and in good faith, taking into account Mr. Hanson's business and personal needs and (B) giving accurate and truthful information at any interviews and accurate and truthful testimony in any legal proceedings or actions. Unless required by law or legal process or in the course of, or related to, his subsequent employment, Mr. Hanson will not knowingly or intentionally furnish information to or cooperate with any non-governmental entity (other than Valeant) in connection with any potential or pending proceeding or legal action involving matters arising during Mr. Hanson’s employment with Valeant, its affiliates and their predecessors.
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(b)
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If Valeant requests services pursuant this Section 7 after the termination or expiration of the Consulting Period, Valeant will reimburse Mr. Hanson at a rate
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of $585 per hour for any cooperation requested as well as for any reasonable, out-of-pocket travel, hotel and meal expenses incurred in connection with Mr. Hanson's performance of obligations pursuant to this Section 7 for which Mr. Hanson has obtained prior approval from Valeant.
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(c)
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If Mr. Hanson reasonably determines that he should be separately represented in connection with any matter described in this Section 7, Valeant shall agree to, and shall, promptly pay the reasonable costs and expenses of counsel selected by Mr. Hanson for matters with respect to which Mr. Hanson is cooperating with Valeant pursuant to this Section 7.
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(d)
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Nothing in this Agreement, the 2012 Agreement or any other agreement by and between the parties (i) is intended to or shall preclude or in any way limit or restrict Mr. Hanson from providing accurate and truthful testimony in response to a valid subpoena, court order, regulatory or governmental request or other judicial, administrative or legal process or otherwise as required by law (in the case of formal legal process in which event Mr. Hanson shall notify Valeant in writing as promptly as practicable after receiving any such request of the anticipated testimony and at least ten (10) days prior to providing such testimony (or, if such notice is not possible under the circumstances, with as much prior notice as is possible)) or (ii) requires Mr. Hanson to take any action he reasonably determines is prejudicial to his personal or professional interests.
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8.
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Representations. Mr. Hanson represents and agrees that, except for any concerns which he has previously identified to Valeant, he is not aware of any violations of any laws, rules or regulations with respect to any accounting, financial, reporting, regulatory or any other others at Valeant or its affiliates by any of their respective officers, directors, employees, agents or any other person providing services to them. Mr. Hanson represents that he has complied with obligations to which he has agreed in writing that are currently in effect concerning the treatment of confidential information, it being understood and agreed that he has disclosed confidential information to his attorneys, who have agreed not to disclose such confidential information to any third parties, except as required by law or legal process.
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9.
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Other Company Policies. During the Consulting Period, Mr. Hanson agrees that he shall be bound by and comply with the terms of the following policies, copies of which have been provided to Mr. Hanson: Standards of Business Conduct; Insider Trading Policy; Blackout Policy; Anti-Bribery Policy; and Corporate Integrity Agreement.
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10.
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Indemnification. From and after the date hereof, Valeant agrees to indemnify and hold harmless Mr. Hanson (and his heirs and representatives), advance reasonable expenses associated with any such indemnification (subject to his execution of a customary undertaking that solely requires Mr. Hanson to repay such advances in the event a court of competent jurisdiction finally determines that Mr. Hanson was not entitled to indemnification hereunder), and provide and pay reasonable fees for separate counsel for Mr. Hanson to the fullest extent Mr. Hanson's underlying actions at issue can be indemnified under Valeant's by-laws as a result of any claim or proceeding (including
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any investigatory proceeding), or any threatened claim or proceeding (including any investigatory proceeding), against Mr. Hanson that arises out of or relates to Mr. Hanson’s (a) service as an officer, director or employee, as the case may be, of Valeant or its affiliates or predecessors (including Medicis and its subsidiaries), (b) Services during the Consulting Period, and (c) services rendered by Mr. Hanson pursuant to Section 7 above, provided, however, that, all such services and Services referenced in this Section 10 shall be deemed to be those of an officer of Valeant for purposes of determining Mr. Hanson's rights under this Section 10.
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11.
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Valeant Release. Conditioned upon execution of the First Release by Mr. Hanson, Valeant and its direct or indirect subsidiaries hereby release Mr. Hanson from any and all known and unknown claims, liabilities and obligations that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date Valeant signs this Agreement, including, without limitation, (1) all claims arising out of or in any way related to Mr. Hanson's employment with Valeant and its predecessors and (2) all claims for breach of contract, and breach of the implied covenant of good faith and fair dealing; provided that this release shall not apply to claims for fraud, self dealing, intentional breach of Mr. Hanson's duty of loyalty, material breach of any non-disclosure obligation or claims involving crimes by Mr. Hanson in connection with his employment by Valeant that, in each case, are not known to Valeant or its officers. Valeant represents that it is not aware of any claims against Mr. Hanson described in the proviso in the preceding sentence.
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12.
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Section 409A; Other Tax Matters. The Parties intend for the payments and benefits under this Agreement to be exempt from Section 409A or, if not so exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this Agreement shall be construed and administered in accordance with such intention. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment of compensation. Notwithstanding any other provision of this Agreement, Valeant may withhold from amounts payable under this Agreement all amounts that are required or authorized to be withheld, including, but not limited to, federal, state, local and foreign taxes required to be withheld by applicable laws or regulations.
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13.
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Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey, without regard to the application of any choice-of-law rules that would result in the application of another state’s laws.
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14.
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Entire Agreement. This Agreement and the 2012 Agreement (to the extent expressly incorporated herein including as set forth in Section 6) set forth the entire agreement between Mr. Hanson and Valeant concerning the termination of Mr. Hanson’s employment, and supersedes any other written or oral promises concerning the subject matter of this Agreement, including, without limitation, those set forth in the 2012 Agreement; provided, however, that Mr. Hanson's (a) right to a gross up payment (and related legal fees) under the Section of the 2012 Agreement entitled "Currently Existing
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Arrangements" shall survive and (b) rights to indemnification as set forth in the Agreement and Plan of Merger Among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International, Valeant and Merlin Merger Sub, Inc., dated September 2, 2012 or in the articles of incorporation or by-laws (or other constituent documents) of Medicis Pharmaceutical Corporation, shall survive. No waiver or amendment of this Agreement will be effective unless it is in writing, refers to this Agreement, and is signed by Mr. Hanson and the Chief Executive Officer as an authorized representative of Valeant. Mr. Hanson represents and agrees that other than the payments and benefits set forth in Section 3 of this Agreement (and subject to the terms and conditions of Section 3 of this Agreement), he is not entitled to any payments or benefits from Valeant, its affiliates or their predecessors.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.
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VALEANT PHARMACEUTICALS
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INTERNATIONAL, INC.
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By: | /s/ J. Michael Pearson | ||
Title: | J. Michael Pearson | ||
Name: | Chairman & Chief Executive Officer | ||
EMPLOYEE
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/s/ Jason Hanson | |||
JASON HANSON
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(a)
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any and all claims of violation of any foreign or United States federal, state, provincial and local law arising from or relating to Employee’s recruitment, hire, employment and termination of employment with the Company;
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(b)
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any and all claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of contractual obligations, promissory estoppel, negligence, assault and battery, and violation of public policy;
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(c)
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all claims to disputed wages, compensation, and benefits, including any claims for violation of applicable state laws relating to wages and hours of work;
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(d)
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any and all claims for violation of any state or federal statute or regulation relating to termination of employment, unlawful discrimination, harassment or retaliation under applicable federal, state and local constitutions, statutes, laws, and regulations (which includes, but is not limited to, Title VII of the Civil Rights Act of 1964, 42 U.S.C. 1981, the Employee Retirement Income Security Act (“ERISA”), the Family and Medical Leave Act of 1993, the Americans with
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Disabilities Act, the Rehabilitation Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the New Jersey Law Against Discrimination and Conscientious Employee Protection Act, the California Fair Employment and Housing Act and the California Family Rights Act, and the Arizona Employment Protection Act and Arizona Civil Rights Act), the Ontario Employment Standards Act, 2000, Human Rights Code, and Workplace Safety and Insurance Act; and
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(e)
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any and all claims for monetary damages and any other form of personal relief.
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(a)
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unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable state law;
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(b)
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continuation of existing participation in Company-sponsored group health benefit plans, at Employee’s full expense, under the United States federal law known as “COBRA” and/or under any applicable state counterpart law;
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(c)
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any benefit entitlements that are vested as of the Separation Date pursuant to the terms of a Company-sponsored benefit plan governed by the United States federal law known as “ERISA;”
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(d)
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violation of any foreign or United States federal, state or local statutory and/or public policy right or entitlement that, by applicable law, is not waivable;
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(e)
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any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever arising out of or relating to the Employee’s right to enforce the terms of this First Release and the Separation Agreement dated May 8, 2013 between the Employee and the Company (the "Separation Agreement");
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(f)
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any claims for indemnity or contribution; and
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(g)
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any wrongful act or omission occurring after the date Employee signs this First Release.
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Date:_________________________
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____________________________________
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Jason Hanson
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(a)
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any and all claims of violation of any foreign or United States federal, state, provincial and local law arising from or relating to Employee’s recruitment, hire, employment and termination of employment with the Company;
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(b)
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any and all claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of contractual obligations, promissory estoppel, negligence, assault and battery, and violation of public policy;
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(c)
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all claims to disputed wages, compensation, and benefits, including any claims for violation of applicable state laws relating to wages and hours of work;
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(d)
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any and all claims for violation of any state or federal statute or regulation relating to termination of employment, unlawful discrimination, harassment or retaliation under applicable federal, state and local constitutions, statutes, laws, and
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regulations (which includes, but is not limited to, the Age Discrimination in Employment Act, as amended (“ADEA”), Title VII of the Civil Rights Act of 1964, 42 U.S.C. 1981, the Employee Retirement Income Security Act (“ERISA”), the Family and Medical Leave Act of 1993, the Americans with Disabilities Act, the Rehabilitation Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the New Jersey Law Against Discrimination and Conscientious Employee Protection Act, the California Fair Employment and Housing Act and the California Family Rights Act, and the Arizona Employment Protection Act and Arizona Civil Rights Act), the Ontario Employment Standards Act, 2000, Human Rights Code, and Workplace Safety and Insurance Act; and
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(e)
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any and all claims for monetary damages and any other form of personal relief.
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(a)
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unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable state law;
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(b)
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continuation of existing participation in Company-sponsored group health benefit plans, at Employee’s full expense, under the United States federal law known as “COBRA” and/or under any applicable state counterpart law;
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(c)
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any benefit entitlements that are vested as of the Separation Date pursuant to the terms of a Company-sponsored benefit plan governed by the United States federal law known as “ERISA;”
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(d)
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violation of any foreign or United States federal, state or local statutory and/or public policy right or entitlement that, by applicable law, is not waivable;
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(e)
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any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever arising out of or relating to the Employee’s right to enforce the terms of this Second Release and the Separation Agreement dated May 8, 2013 between the Employee and the Company (the "Separation Agreement");
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(f)
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any claims for indemnity or contribution; and
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(g)
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any wrongful act or omission occurring after the date Employee signs this Second Release.
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Date:_________________________
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____________________________________
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Jason Hanson
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(a)
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any and all claims of violation of any foreign or United States federal, state, provincial and local law arising from or relating to Employee’s recruitment, hire, employment and termination of employment with the Company;
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(b)
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any and all claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of contractual obligations, promissory estoppel, negligence, assault and battery, and violation of public policy;
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(c)
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all claims to disputed wages, compensation, and benefits, including any claims for violation of applicable state laws relating to wages and hours of work;
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(d)
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any and all claims for violation of any state or federal statute or regulation relating to termination of employment, unlawful discrimination, harassment or retaliation under applicable federal, state and local constitutions, statutes, laws, and
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(e)
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any and all claims for monetary damages and any other form of personal relief.
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(a)
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unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable state law;
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(b)
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continuation of existing participation in Company-sponsored group health benefit plans, at Employee’s full expense, under the United States federal law known as “COBRA” and/or under any applicable state counterpart law;
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(c)
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any benefit entitlements that are vested as of the Separation Date pursuant to the terms of a Company-sponsored benefit plan governed by the United States federal law known as “ERISA;”
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(d)
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violation of any foreign or United States federal, state or local statutory and/or public policy right or entitlement that, by applicable law, is not waivable;
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(e)
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any claims, causes of actions, suits, lawsuits, debts, or demands whatsoever arising out of or relating to the Employee’s right to enforce the terms of this Third Release and the Separation Agreement dated May 8, 2013 between the Employee and the Company (the "Separation Agreement");
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(f)
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any claims for indemnity or contribution; and
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(g)
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any wrongful act or omission occurring after the date Employee signs this Third Release.
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Date:_________________________
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____________________________________
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Jason Hanson
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