macandrews & forbes v. donald g. drapkin

8/3/2019 MacAndrews & Forbes v. Donald G. Drapkin

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Case 1:09-cv-04513-PGG Document 1 Filed 05/12/09 Page 1 of 19


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EXHIBIT A



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April 2( 2007

Donald G. Drapkin58 Old Quarry RoadEnglewood, NJ 07631Dear Donald:

This letter agreement (the "Agreement") confirms our mutual understandingregarding the termination of your employment with MacAndrews & Forbes Inc. (the"Company") and the termination of the Fourth Amended and Restated EmploymentAgreement, between the Company and you, dated as ofApril 7, 1992 and effective as ofJanuary 1, 1992, together with all amendments and appendices thereto (collectively, the"Prior Employment Agreement").1. The Prior Employment Agreement is hereby terminated effective May 1,2007, and of no further force and effect. We agree that no further amounts are due andowing to you from the Company and its affiliates under the Prior EmploymentAgreement (except amounts, if any, as have accrued to you pursuant to the Company's orits affiliates' employee benefit plans and are unpaid as ofthe date hereof). The Companyand you agree that termination of the Prior Employment Agreement is consideration forthe Company and you entering into this Agreement and accordingly, that the Company'sobligations under this Agreement will not be subject to any duty on your part to mitigate

damages;whether under the Prior Employment Agreement or otherwise.2. You and the Company have agreed that your last day of employment willbe May 1,2007 (the "Termination Date") and that you will vacate your current office assoon as practicable.3. If you agree to the terms and conditions set forth in this Agreement, theCompany will provide you with the following benefits:

a. The Company will pay to you an aggregate amount of$15,500,000, less such deductions or amounts to be withheld as required by applicablelaw and regulations, payable as follows: $2,250,000 on July 1, 2009; $2,250,000 onJanuary 1,2010, $2,250,000 on July 1,2010; $2,250,000 on January 1,2011; $2,250,000on July 1,2011; $2,250,000 on January 1,2012; and $2,000,000 on July 1, 2012.

b. Until you reach the age of 65, the Company will reimburse you foranymedical expenses (defined as those expenses covered by the executive medicalreimbursement program then in effect for the Company, from time to time) incurred byyou and your immediate family which are not otherwise reimbursed through medical

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plans, if any, covering you or your immediate family. Reimbursement ofmedicalexpenses will be based upon presentation ofmedical bills or such other supportinginformation as the Company customarily may require of its executive officers.

c. The Company will afford you continued use of the driver andautomobile currently used by you through December 31, 2007, at which time you willreturn the automobile to the Company. The Company shall continue to furnish you witha private secretary of your choice and a Bloomberg terminal and service, throughDecember 31, 2007.d. The Company and you agree that the $6,000,000 in aggregateoutstanding indebtedness owed by you to the Company will be forgiven in installments of$600,000 per year beginning in 2007 and ending in 2016.e. The Company shall payor reimburse you for all reasonablebusiness expenses incurred or paid by you through May 1, 2007, upon presentation ofexpense statements or vouchers or such other supporting information as the Companycustomarily may require of its executive officers.f. Concurrently with the execution of this Agreement, you andRonald O. Perelman shall enter into the termination of the TransTech Pharma, Inc.Agreement attached as Annex A hereto.g. Concurrently with the execution of this Agreement, the Companyshall deliver to you a stock certificate evidencing the transfer to you of 673,324 shares ofSeries E Convertible Preferred Stock, par value $.001 per share (the "Shares"), dated thedate hereof, and in such form satisfactory to you as shall be effective to vest in you good

and valid title to the Shares, free and clear of any option, call, contract, commitment,demand, lien, charge, security interest or encumbrance whatsoever. The Company shallat any time, and from time to time, after the date hereof, execute, acknowledge anddeliver all further assignments, transfers, and any other such instruments of conveyance,upon your request, to confirm the transfer of the Shares hereunder.h. Concurrently with the execution of this Agreement, you and theCompany will enter into the amended promissory note with respect to Allied SecurityHoldings LLC attached as Annex B hereto.

4. You agree, if and when requested, to resign from each office of theCompany and its affiliates held by you.

5. You agree not to take any action or to make any statement that does, or isreasonably likely to, enter the public domain and disparages the business or managementof the Company or any of the Company's affiliates, or any of its Related Persons, withrespect to any period during which you were either employed by the Company or receivebenefits under this Agreement. The Company agrees that it shall not instruct or authorizeany directors, officers, agents, or employees of the Company or any of the Company's

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affiliates or any of its Related Persons to take any action or make any statement, writtenor oral, that disparages or criticizes you. Nothing in this Section 5 shall prevent you orthe Company, the Company's affiliates or any of its Related Persons from truthfullyresponding in connection with governmental inquiries or as required by subpoena, courtorder or legal process. Upon receipt by either party ofwritten notice of any breach of thisSection 5, the party receiving such notice shall have a period of 10 days to respond to andcure any such breach.

6. a. You agree to keep and retain in the strictest confidence allconfidential matters of the Company and its affiliates, including, without limitation,"know how", trade secrets, customer lists, pricing policies, operational methods, technicalprocesses, fonnulae, inventions and research projects, other business affairs of theCompany and its affiliates, and any infonnation whatsoever concerning any stockholder,director, officer, employee or agent of the Company or its affiliates or their respectivefamily members learned by you heretofore or hereafter, and not to disclose them toanyone outside of the Company either after your employment with the Company orduring or after the tenn of this agreement, except in the course ofperfonning your dutiesunder this agreement or with the Company's express written consent. The foregoingprohibitions shall include, without limitation, directly or indirectly publishing (orcausing, participating in, assisting or providing any statement, opinion or infonnation inconnection with the publication of) any diary, memoir, letter, story, photograph,interview, article, essay, account or description (whether fictionalized or not) concerningany of the foregoing, publication being deemed to include any presentation orreproduction of any written, verbal or visual material in any communicationmedium,including any book, magazine, newspaper, theatrical production or movie, or televisionor radio programming or commercial. All advertising, sales, manufacturers' and othermaterials or articles of infonnation, including without limitation, data processing reports,customer sales analyses, invoices, price lists or infonnation, samples, or any othermaterials or data of any kind furnished to you by the Company or its affiliates ordeveloped by you at the Company's or its affiliates' direction or for the Company's or itsaffiliates' use are, and shall remain the sole and confidential property of the Company.You also agree to deliver promptly to the Company at any time the Company may sorequest all memoranda, notes, records, reports, manuals, drawings, blueprints and otherdocuments (and all copies thereof), including data stored in computer memories or onother media used for electronic storage and retrieval, relating to the Company's businessor the business of its affiliates and all property associated therewith, which you maypossess or have under your control.

b. The Company agrees to keep and retain in the strictest confidenceall confidential matters of the Executive and not to disclose them to anyone outside of theCompany, provided, however, that this Section 6.b shall not apply to infonnation that isrequired to be disclosed by application of law or in connection with submissions toapplicable regulatory authorities, valid subpoena, court order or by any rule or regulationof a court of competent jurisdiction.

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c. For a period of two years from the date hereof, you shall not,directly or indirectly, (i) induce or attempt to influence any employee of the Company orits affiliates (other than Nancy Link) to terminate his or her employment with theCompany or (ii) advise, engage in (as a principal, partner, director, officer, agent,employee, consultant, or otherwise) or be financially interested in any company whichderived more than fifty percent (50%) ofits net revenues and operating income for suchcompany's most recent fiscal year from a business or businesses that are directlycompetitive with any operating business ofMacAndrews & Forbes Holdings Inc. ownedas of the date hereof. However, nothing contained in this Section 6.c shall prevent youfrom acquiring no more than five percent (5%) of any class of equity securities of suchcompany, acquiring controlling interests in non-competitive enterprises, establishing abiotechnology fund, or engaging in investment or merchant banking with JPMorganChase, BlackRock, Kelso & Company, Gleacher Partners or Lazard, so long as youremain in compliance with Sections 6.c and 6.d

d. You agree that until two years from the date of this agreement, youwill not, without the prior approval of the Board ofDirectors of the Company, (i) acquireor make any proposal to acquire any securities of any ofAllied Security Holdings, LLC,Clarke American Corp., M&F Worldwide Corp., Revlon Consumer ProductsCorporation, Revlon, Inc. and Scientific Games Corporation (or any of their successorentities) (the" Public MacAndrews Companies"), (ii) propose to enter into any merger orbusiness combination involving any of the Public MacAndrews Companies or purchase amaterial.portion of the assets of any of the Public MacAndrews Companies, (iii) make orparticipate in any solicitation ofproxies to vote, or seek to advise or influence any personwith respect to the voting of any securities of any of the Public MacAndrews Companies,(iv) form,join or participate in a "group" (within the meaning ofSection 13(d)(3) of theSecurities Exchange Act of 1934) with respect to any voting securities of any of thePublic MacAndrews Companies, (v) otherwise act or seek to control or influence themanagement, Board ofDirectors or policies of any of the Public MacAndrewsCompanies, (vi) disclose any intention, plan or arrangement inconsistent with theforegoing or (vii) take any action which might require any of the Public MacAndrewsCompanies to make a public announcement regarding the possibility of a businesscombination or merger. Except as provided in the immediately preceding sentence, youalso agree that, during such two year period, you will not request the Company or ourrepresentatives to amend or waive any provision of the immediately preceding sentence.

e. If the period of time in Section 6.c above shall be adjudgedunreasonable in any proceeding, then the period of time shall be reduced by such numberofmonths so that the restrictions contained in Section 6.c may be enforced for such timeas is adjudged to be reasonable. If you violate any of the restrictions contained in theforegoing Section 6.c, the restrictive period shall extend for the period beginning fromthe time of commencement of any such violation until such time as such violation shallbe cured by you to the satisfaction of the Company.

f. In the event that you receive any request for confidentialinformation, whether by court order, subpoena or other judicial or administrative process

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or otherwise, prior to responding to such request, you will promptly notify, Barry F.Schwartz, at (212) 572-5170, or his designee at least twenty days in advance of the datedesignated for the production or furnishing of such materials, or as far in advance of suchdate as circumstances permit if notification within a twenty day period is not possible.You further agree to cooperate with any efforts by or on behalfof the Company,including pennitting the Company to participate with counsel of its choice, to modify,limit, quash or take other appropriate action in connection with any such subpoena,discovery demand, legal process or other request for Company Infonnation.

g. Moreover, should you be approached by anyone requesting anyconfidential infonnation about the Company and/or Related Persons, you will not divulgeany such infonnation, unless it is unlawful to do so, and you will contact Barry F.Schwartz, at (212) 572-5170, or his designee, to report such contact and take all stepsreasonably directed by him and/or his designee to prevent disclosure ofany suchinfonnation.h. Notwithstanding anything in Section 6.ato the contrary, for solong as you abide by the tenns and conditions set forth in this agreement, you maycontinue to possess the equipment identified in Section I ofAnnex C, which equipmentshall become your property on December 31, 2007, provided that you promptly provideto the Company copies of all electronic files in your (or your personal assistant's)personal possession relating to the Company or its affiliates and not otherwise availableto the Company, after which you delete (and do not attempt to recover) all copies of suchfiles in your possession. You will reasonably cooperate with the Company in arrangingpromptly for the delivery directly to you in your name of all bills with respect to servicesprovided after May 1, 2007 in connection with the equipment identified in Section I ofAnnex C or any other equipment in your possession, other than the Bloomberg terminal.

Except as set forth in this Section 6.h, you will promptly return the equipment identifiedin Section II ofAnnex C and any other Company equipment in your possession. For aperiod of two years from the date of this Agreement, the Company will arrange for theforwarding of all email addressed to [email protected] or [email protected] to anemail account or accounts designated by you. The Company will, for 18 months from thedate hereof, pennit you to remove from the Company's or its affiliates' archives all filesrelating to your personal activities.

7. a. In consideration of the benefits to you described in Section 3above, the sufficiency ofwhich are hereby acknowledged, you voluntarily, knowinglyand willingly release and forever discharge the Company, its parents, subsidiaries andaffiliates, together with their respective present or fonner officers, directors, partners,shareholders, employees and agents, Ronald Perelman, his family and associates, andeach of their predecessors, successors and assigns, family members of theaforementioned people and any other person with whom you have come in contact solelyas a result of your employment with the Company (collectively, "Related Persons"), fromany and all charges, complaints, claims, promises, agreements, controversies, causes ofaction and demands of any nature whatsoever, known or unknown, suspected orunsuspected, which against them you or your executors, administrators, successors or

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assigns ever had, now have or hereafter can, shall or may have by reason of any matterwhatsoever arising from the beginning of time to the time you sign this Agreement. Thisrelease is a general release and includes, but is not limited to, any rights or claims relatingin any way to your employment relationship with the Company, or the separation thereof,any rights or claims relating to or arising under any statute or regulation, including TitleVII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discriminationin Employment Act of 1967, the Americans with Disabilities Act of 1990, the EmployeeRetirement Income Security Act, the Family and Medical Leave Act of 1993, the EqualPay Act of 1963, each as amended, the New York Human Rights Law, the New YorkCity Administrative Code, or any other federal, state or local law, regulation, ordinanceor common law, or under any policy, agreement, understanding or promise, written ororal, formal or informal, between the Company and you.

b. In consideration of the benefits to the Company described inSections 3, 4,5 and 6, the sufficiency ofwhich are hereby acknowledged, the Companyvoluntarily, knowingly and willingly releases and forever discharges you from any andall charges, complaints, claims, promises, agreements, controversies, causes of action anddemands of any nature whatsoever, known or unknown, suspected or unsuspected, whichagainst you the Company or its affiliates ever had, now have or hereafter can, shall ormay have by reason of any matter whatsoever arising from the beginning of time to thetime you sign this Agreement. This release is a general release and includes, but is notlimited to, any rights or claims relating in any way to your employment relationship withthe Company, or the separation thereof, any rights or claims relating to or arising underany statute or regulation, including Title VII of the Civil Rights Act of 1964, the CivilRights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americanswith Disabilities Act of 1990, the Employee Retirement Income Security Act, the Familyand Medical Leave Act of 1993, the Equal Pay Act of 1963, each as amended, the NewYork Human Rights Law, the New York City Administrative Code, or any other federal,state or local law, regulation, ordinance or common law, or under any policy, agreement,understanding or promise, written or oral, formal or informal, between the Company andyou.

8. You understand and agree that any violation ofSection 6 of thisAgreement will result in irreparable loss and harm to the Company and/or its RelatedPersons that cannot reasonably or adequately be compensated by damages in an action atlaw, and accordipgly, that the Company will be entitled to injunctive and other equitablereliefto prevent or cure any breach or threatened breach thereof, without the necessity ofposting any bond or security or proving the inadequacy ofmoney damages, but no actionfor any such reliefshall be deemed to waive the Company's right to an action fordamages. The Company agrees that any violation ofSection 5 or 6.b of this Agreementwill result in irreparable loss and harm to you that cannot reasonably or adequately becompensated by damages in an action at law, and accordingly, that you will be entitled toinjunctive and other equitable relief to prevent or cure any breach or threatened breachthereof, without the necessity ofposting any bond or security'or proving the inadequacyofmoney damages, but no action for any such relief shall be deemed to waive your rightto an action for damages. The Company shall also have the right and remedy to require

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you to account for and pay over to the Company all compensation, profits, monies,accruals, increments or other benefits (collectively "Benefits") derived or received by youas the result of any transactions constituting a breach of any of the provisions of Sections5 or 6, and you hereby agrees to account for and pay over such Benefits to the Company.9. You understand and agree that you have the right and have been given theopportunity to review this Agreement and, specifically, the release in Section 7, with anattorney of your choice should you so desire. You also understand and agree that (a) theCompany is under no obligation to offer you all of the payments and benefits set forth inSection 3, (b) you are under no obligation to consent to the release set forth in Section 7,(c) you have entered into this Agreement freely and voluntarily, (d) all of your covenantsset forth in this agreement, including without limitation your covenants set forth inSections 5 and 6, are material inducements causing the Company to enter into thisagreement, and (e) any material breach by you of this agreement, including withoutlimitation any material breach of Sections 5 or 6, will give the Company the rights,among other things, to seek (i) to rescind this agreement and reclaim all benefits

previously provided to you under this agreement, (ii) damages, equitable relief (asappropriate) and other remedies arising from the breach, and (iii) to excuse its furtherperformance under this agreement, which rights the Company may exercise together orseparately, in any combination, to the full extent permitted by law.10. The Company's offer to you of this Agreement and the payments andbenefits set forth herein are not intended as, and shall not be construed as, any admission

of liability, wrongdoing or improper conduct by the Company or its affiliates.11. This agreement will be governed by and construed and enforced inaccordance with the laws of the State ofNew York applicable to agreements made and to

be performed entirely in New York. This agreement, along with Annex A, Annex B andAnnex C hereto, sets forth the entire agreement and understanding of the parties relatingto the subject matter hereof, and supersedes all prior agreements, arrangements andunderstandings, written or oral, relating to the subject matter hereof. No representation,promise or inducement has beenmade by either party that is not embodied in thisagreement, and neither party will be bound by or liable for any alleged representation,promise or inducement not so set forth. This agreement may be amended, modified,superseded, canceled, renewed or extended and the terms or covenants hereofmay bewaived, only by a written instrument executed by both of the parties hereto, or in the caseofa waiver, by the party waiving compliance. lfthe Company and you become involvedin litigation relating to any alleged breach of this agreement, and if a judgment in suchlitigation is rendered in your favor, the Company will reimburse to you, uponpresentation of an expense statement, all reasonable costs (including reasonable fees anddisbursements of counsel) incurred by you in connection with such litigation. Thefailure of either party at any time or times to require performance of any provision hereofwill in no manner affect the right at a later time to enforce the same. No waiver by eitherparty of the breach of any term or covenant contained in this agreement, whether byconduct or otherwise, in anyone or more instances, will be deemed to be, or construed as,

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If you consent to the terms set forth above, please so signify by executing theenclosed copy of this Agreement and returning it to me.

Date

Very truly yours,

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nald G. Drapkin

13. This Agreement is binding upon you, your heirs, representatives,administrators, and assigns, and upon the Company's successors and assigns.

12. In the event that anyone or more of the provisions of this Agreement shallbe held to be invalid, illegal or unenforceable, the validity, legality and enforceability ofthe remainder of the Agreement shall not in any way be affected or impaired thereby.Moreover, if anyone or more of the provisions contained in this Agreement is held to beexcessively broad as to duration, activity or subject, such provisions shall be construed bylimiting and reducing them so as to be enforceable to the maximum extent compatiblewith applicable law.

a further or continuing waiver of any such breach, or a waiver of the breach of any otherterm or covenant contained in this agreement.

Agreed to and Accepted:



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AnnexA

Termination ofTransTech Pharma, Inc. Agreement

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Annex BAllied Security Holdings LLC Promissory Note

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AnnexC

Equipment Listing l

Section I (Equipment to be retained by the Employee):KRZR cellphoneLOCD 5000 cellphoneSonyVaio 505gx computer located in Englewood, NJToshiba Libretto 100 computer located in Englewood,NJDell Dimension 4xxx series computer located in Alpine, NJIBM Thinkpad computer located in ColoradoTecra 9000 series computer (Nancy Link's machine)Earthlink internet access accountVerizon aircardCellphone attached to 917-453-2821Cellphone in car attached to 917-757-9340Cellphone in car attached to 917-923-5839SidekickBlackberry attached to 646-496-7057Cellphone attached to (201) 388-0689 (Nancy Link)

Section II (Equipment to be returned to the Company):GX520 Dimension desktop computer located at 35 E. 62 St.Dell monitor located at 35 E. 62 St.Satellite phone

1This list is subject to verification and amendment.


macandrews & forbes v. donald g. drapkin

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