EMPLOYMENT AGREEMENT
EXHIBIT
10.26
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is made this 31st day
of August, 2009, by and between CARACO PHARMACEUTICAL LABORATORIES, LTD. (the
“Company”) and XXXXXXXX X. XXXXX (“Executive”).
WITNESSETH
WHEREAS, the Company desires
to employ Executive as interim Chief Executive Officer; and
WHEREAS, Executive desires to
be employed by the Company as its interim Chief Executive Officer;
and
WHEREAS, the parties hereto
are desirous of entering into a formal agreement of employment.
NOW, THEREFORE, in
consideration of the premises and covenants herein contained, the parties
covenant and agree as follows:
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1.
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Employment. Executive
shall serve as the Chief Executive Officer of the Company on an interim
basis.
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2.
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Duties. Executive
shall diligently and conscientiously devote, on a full-time basis, his
best efforts to the discharge of his duties as established from time to
time by the Bylaws of the Company, the Board of Directors of the Company
and the Compensation Committee of the
Company.
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3.
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Compensation. Executive
shall receive the following compensation from the
Company:
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(a) Base
Salary. The Company shall pay Executive a base salary at a
rate of $275,000 annually, subject to all applicable withholdings, for services
rendered as the interim Chief Executive Officer. To the extent
applicable, Executive’s base salary shall be reviewed annually, and may be
adjusted based upon performance and other relevant factors deemed reasonable by
the Company.
(b) Other
Benefits. Executive shall be entitled to participate in any
plan or program of employee benefits maintained by the Company for all employees
as of the date hereof, and which may be hereafter adopted or modified by the
Company, and which is or shall be available to Executive as a result of his
employment by the Company pursuant to this Agreement, subject to the
requirements of such plans or programs. In addition, a list of specific benefits
to which Executive shall be entitled is set forth in Exhibit “A,” a copy of
which is attached hereto and is herein incorporated by reference.
(c) Vacations. Executive shall be
entitled to four (4) weeks paid vacation on an annual basis.
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4.
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Term. Unless
terminated earlier in accordance with Section 5 hereof, the term of this
Agreement shall be deemed to have commenced as of July 28, 2009, and shall
continue for a period of one (1) year thereafter, and shall automatically
renew for successive one-year periods at the end of the each one (1) year
term.
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1
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5.
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At-Will
Employment. The parties agree that the Executive’s
employment with the Company will be “at-will” employment and may be
terminated at any time with or without cause or
notice. However, as described in Section 6 hereof, Executive
may be entitled to severance benefits depending upon the circumstances of
Executive’s termination of
employment.
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6.
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Severance
Benefits. Executive shall receive the severance
described below in full settlement of the termination of his employment
with the Company:
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(a) If
the Company terminates Executive for “just cause” or if Executive terminates his
employment without cause or in the event of the death of Executive, Executive
shall only be entitled to the base salary and benefits earned by him prior to
such termination or date of death. For purposes of this Agreement,
“just cause” shall mean dishonesty, or refusal or failure by Executive to
faithfully or diligently perform the duties contemplated by this Agreement,
including but not limited to the failure of Executive to adhere to the policies
of the Board.
(b) In
the event that the Company terminates Executive without “just cause”, or if
Executive terminates for “cause not attributable to him,” Executive shall
receive a severance package as follows:
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i.
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Executive
shall receive monthly base salary payments, less all applicable
withholdings, for six (6) months from the date of
termination;
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ii.
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The
Company shall continue premium coverage payments for health insurance for
six (6) months from the date of such termination;
and
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iii.
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Any
stock options that would become available for exercise at the end of the
year during which such termination occurred shall
vest.
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For
purposes of this Agreement, for “cause” not attributable to Executive shall mean
the Company failing to make any payment of base salary to him within thirty (30)
days after such payment is due.
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7.
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Resignation
From Board. Upon termination from employment for any
reason, Executive shall be deemed to thereby resign from the Board of
Directors of the Company and shall also be deemed to thereby resign from
all director and officer positions with any subsidiary of the
Company. Executive shall provide the Company, upon request,
with a signed letter(s) further evidencing such
resignation(s).
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8.
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Confidentiality. At
all times, Executive shall keep secret and inviolate and shall not
divulge, communicate, use to the detriment of the Company or for the
benefit of any other person or persons or misuse in any way any knowledge
or secrets, personnel histories, sales information, computer programs,
assets, accounts, books, records, customers, operations, personnel and
contracts of the Company which Executive knows or hereafter comes to know
as a result of his association with or which is unique to the Company
(“Confidential Information”). Executive may disclose
Confidential Information if required by any judicial or governmental
request, requirement or order; provided that he take reasonable steps to
give the Company sufficient prior notice to contest such request,
requirement or order. The provisions of this Paragraph 8 shall
survive the termination of this Agreement and Executive’s employment with
the Company.
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2
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9.
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Waiver. Failure
by either party to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver by that party
of any such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of any such right or power at any other
time or times.
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10.
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Severability. The
invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other
provision.
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11.
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Nontransferability. Neither
Executive, nor his heirs, assigns or estate shall have the right to
assign, encumber or dispose of any payment or right hereunder, which
payment and right is expressly declared nonassignable and nontransferable
except as otherwise specifically provided
herein.
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12.
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Successors
and Assigns. The Company and Executive bind themselves,
and their respective partners, successors, permitted assigns, heirs and
legal representatives to all of the terms and conditions of this
Agreement.
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13.
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Assignment. This
Agreement, and any or all rights hereunder, may not be assigned, in whole
or in part, by Executive. The Company may assign this
Agreement, in whole or in part, and any or all of its rights
hereunder.
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14.
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Notices. Every
notice or other communication required or permitted to be given under this
Agreement (“Notice”) shall be in writing and shall be given by registered
or certified mail, postage prepaid, return receipt requested, or by
delivery of such Notice personally or by causing such Notice to be
delivered next day delivery by reputable air courier. All such
Notices shall be mailed or delivered to the parties at the following
addresses:
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If to
Company: CARACO PHARMACEUTICAL LABORATORIES, LTD.
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Board
of Directors
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0000
Xxxxxx XxXxx Xxxxx
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Xxxxxxx,
Xxxxxxxx 00000
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If to
Employee: Xxxxxxxx X. Xxxxx
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0000
Xxxxxx Xx.
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Xxxxxx,
Xxxx 00000
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or other
such addresses as the parties may from time to time designate by written
notice. Delivery under this Paragraph 14, when by mail, shall be
effective as of the date upon which the return receipt is accepted or
refused. A Notice personally delivered under this Section 14 shall be
effective upon such delivery or, if delivery is refused, upon such
refusal. A Notice delivered next day delivery by reputable air
courier shall be effective upon the next business day after having been
sent.
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15.
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Applicable
Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of
Michigan.
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16.
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Counterparts. This
Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but such counterparts
together shall constitute one
instrument.
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17.
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Entire
Agreement. The foregoing provisions contain the entire
agreement of the parties hereto, and no modification hereof shall be
binding upon the parties unless the same is in writing and signed by the
respective parties hereto.
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3
IN WITNESS WHEREOF, the
parties have executed this Agreement on the date first above
written.
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CARACO
PHARMACEUTICAL
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LABORATORIES,
LTD.
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a
Michigan corporation
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By:
/s/ Xxxxx X.
Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
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Chair,
Compensation Committee
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EMPLOYEE
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By:
/s/ Xxxxxxxx X.
Xxxxx
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Xxxxxxxx
X. Xxxxx
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