EXHIBIT 10.3
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FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this "Amendment"), is dated as of November 30, 2004 (the "Amendment Effective
Date"), by and between Able Laboratories, Inc., a Delaware corporation (the
"Corporation"), and Xxxxxx Xxxxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Corporation and the Employee entered into that certain
Amended and Restated Employment Agreement dated as of March 1, 2004 (the
"Agreement"), pursuant to which the Employee is employed as the Vice President
and Chief Financial Officer of the Corporation;
WHEREAS, the Corporation and the Employee have mutually agreed that
the Employee will cease to serve as Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary of the Corporation, effective as of the
Amendment Effective Date, and the Corporation and the Employee desire to provide
for the Employee's continued employment and the terms on which the Employee will
provide certain services to the Corporation for a transitional period in a
non-executive officer position as the Corporation's Director of Investor
Relations; and
WHEREAS, the Corporation and the Employee desire to amend the terms
and conditions of the Agreement, from and after the Amendment Effective Date, to
give effect to the foregoing;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, the parties agree as follows:
1. Employment; Duties. Section 1 of the Agreement is hereby amended
by striking it in its entirety and inserting in place thereof the following new
Section 1:
"1. Employment; Duties: The Employee is hereby appointed the
Corporation's Director of Investor Relations and upon such
appointment, hereby agrees to cease to serve as the Corporation's
Treasurer, Vice President, Chief Financial Officer and Assistant
Secretary. The Employee hereby accepts such appointment and agrees
to continue his employment by the Corporation and to perform all
such duties and services for the Corporation as are consistent with
that position and as are reasonably assigned to the Employee from
time to time by the Corporation and as are mutually agreed to
between the Corporation and the Employee from time to time. The
Employee shall devote such of his time as may be reasonably
necessary to perform such agreed-upon services in his designated
capacity; without limiting the foregoing, it is agreed and
acknowledged that the Employee may perform consulting work for other
persons during the Term, subject to the provisions hereof, so long
as such work does not, in the reasonable determination of the
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Corporation's board of directors, cause the Employee to engage in
any business that is directly or indirectly competitive with that of
the Corporation or otherwise conflict with the Employee's fiduciary
or other obligations as an employee of the Corporation. The
Corporation acknowledges that the services to be performed by the
Employee hereunder may be performed by the Employee from his home
office, as determined by the Employee in his reasonable discretion
consistent with his duties hereunder."
The Corporation acknowledges and agrees that, from and after the
Amendment Effective Date, the Employee shall no longer be named as
the principal financial or accounting officer of the Corporation or
considered an "officer" of the Corporation solely for the purposes
of, or as defined in, Section 16 of the Securities Exchange Act of
1934, as amended, or the rules promulgated thereunder and shall not
be performing any policy-making function for the Corporation.
Subject to the terms hereof, the Corporation acknowledges and agrees
that, except for termination of the Employee's employment hereunder
for "Cause," the cessation of the Employee's employment with the
Corporation hereunder shall be deemed to be a termination of the
Employee's employment by the Corporation "without Cause" for all
purposes of all agreements and plans relating to options to purchase
common stock of the Corporation granted to the Employee prior to the
date hereof."
2. Term. Section 2 of the Agreement is hereby amended by striking it
in its entirety and inserting in place thereof the following new Section 2:
"2. Term: The term of this Agreement (the "Term") shall
begin on the Effective Date and shall terminate on February 28, 2005."
3. Compensation. (a) Section 3(d) of the Agreement is hereby deleted
it in its entirety. Section 3(e) of the Agreement is amended by adding the
following:
"The Employee (i) shall be entitled to accrue paid vacation for four
(4) business days during the Term, plus all designated Corporation holidays
during the Term, and (ii) on the last day of the Term, shall be paid for all
accrued and unused vacation time, which, as of the date hereof, for nine (9)
days, is $6,923.07. Stock options previously granted to the Employee but not
vested as of the Amendment Effective Date will continue to vest during the Term
in accordance with and subject to their terms, such that unless the Employee's
employment is earlier terminated, of the options granted to the Employee on
November 25, 2002, unvested options to purchase 5,000 shares of the
Corporation's common stock at an exercise price per share of $8.30 shall vest on
February 25, 2005, and of the options granted to the Employee on February 24,
2004, unvested options to purchase 5,000 shares of the Corporation's common
stock at a per share exercise price of $17.15 shall vest on February 24, 2005
(such 10,000 options referred to as the "February Options")."
4. Termination. Section 5 of the Agreement is hereby amended as
follows:
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(a) Section 5(a) is hereby amended (i) to insert after the phrase
"The Employee's employment hereunder shall terminate upon" the following phrase:
"the earlier of the end of the Term or" and (ii) by deleting in clause (ii)
thereof the words "either" and "or without."
(b) Section 5(b) is hereby amended by deleting the first sentence
thereof in its entirety.
(c) Section 5(c) is amended by striking it in its entirety and
inserting in place thereof the following new Section 5(c):
"(c) Upon termination pursuant to clause 5(a)(i) or 5(a)(iii), the
Corporation shall offer the Employee as severance continuation of
his Base Compensation through the remainder of the Term (as amended
by the First Amendment hereto). The Corporation's obligation to make
such cash severance payments shall not be affected by the Employee's
taking any future employment or consulting work during the severance
period. The Employee shall inform the Company promptly upon
accepting any future employment or consulting work and agrees that
his failure to do so shall be deemed to be a termination for Cause
hereunder. The Employee's commencing new employment by another
employer, or continuing to perform any consulting work after the
Corporation's board of directors thereof reasonably determines and
notifies the Employee that such consulting work is not permitted by
Section 1 above, shall be deemed to be a voluntary termination of
this Agreement by the Employee. If the Employee voluntarily
terminates his employment hereunder after the Amendment Effective
Date but before February 24, 2005, then the Corporation shall pay to
the Employee an additional severance payment in an amount equal to
half the difference between aggregate exercise price of the February
Options and the aggregate market value of the shares of common stock
underlying such options based on the last sale price on the date of
such termination; provided, that if such voluntary termination takes
place during the first forty-five (45) days after the Amendment
Effective Date, then such cash payment shall be pro-rated on the
basis of days elapsed during such forty-five day period."
5. Employee Representations and Warranties and Release;
Indemnification by Corporation. The Employee represents and warrants to the
Corporation: (i) that he in good faith has no reason to believe that any
certification made by him in the Corporation's periodic reports under the
Securities Exchange Act were inaccurate in any material respect when made by
him, (ii) that he has not, since the date of the latest periodic report
containing such a certification, become aware of any matter that has not been
disclosed to the Corporation's board of directors that, if known at the time of
such certification, would have had to have been disclosed in order not to make
such certification inaccurate in any material respect, and (iii) that all of his
communications to third parties regarding the Corporation have been, in his
capacity as the CFO, and will continue to be, in his capacity as Director of
Investor Relations, solely in conformance with the Corporation's disclosure
policies and practices. In consideration of the Corporation's entering into the
Amendment and the agreements set forth therein, the Employee, on behalf of
himself, his or her successors, heirs, administrators, executors, assigns,
agents, representatives, and all those in
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privity with him, hereby releases and forever discharges the Corporation, all of
its present and former officers, directors, employees, representatives,
successors and assigns (collectively, the "Corporation Releasees"), of and from
any and all claims, causes of action, demands, obligations, liabilities,
damages, fees, expenses, and costs of any kind which Employee now has or ever
had arising out of, based on, or connected with his employment by the
Corporation, including but not limited to, any causes of action or claims
arising under or based on any state, federal or municipal statute or regulation,
executive order or any public policy affecting or relating to the claims or
rights of employees, and any and all actions and claims of whatever nature in
tort or contract, and any claims or suits relating to the breach of an oral or
written contract, misrepresentation, defamation, interference with prospective
economic advantage, interference with contract, intentional and negligent
infliction of emotional distress, negligence, breach of the covenant of good
faith, which the Employee had, now has, or claimed to have, known or unknown,
against the Corporation Releasees; provided, that the foregoing release shall
not relate to obligations of the Corporation arising under any statute or
agreement providing indemnification rights to the Employee in connection with
his services as an officer or employee of the Corporation. The Employee further
agrees to execute a written reaffirmation of this release at the Corporation's
written request as a condition to exercising any stock options held by the
Employee that are exercisable by their terms on or after the date hereof. In
addition, the Employee's failure for any reason to execute such a reaffirmation
at the Corporation's written request as of his last day of employment hereunder
shall constitute a termination for Cause under the Agreement. Conditioned on and
in consideration of the Employee's performance of the agreements herein, the
truth in all material respects of the Employee's representations and warranties
above, and the Employee's release set forth above, the Corporation hereby agrees
to indemnify the Employee in accordance with the provisions of, and to the
fullest extent to which a corporation is permitted by, Section 145(a)-(d) of the
General Corporation Law of Delaware to indemnify officers and directors, in
respect of any matter arising out of the Employee's employment by the
Corporation in any capacity, and for any act or omission made in any such
capacity, including without limitation any such matter brought by or in the
right of the Corporation.
6. Public Disclosure. The Corporation shall make prompt public
disclosure of this Amendment in accordance with its reporting obligations under
the Securities Exchange Act. The Corporation shall provide to the Employee, as
soon before filing the same as is practicable, a draft of the press release
concerning this Amendment and the Employee shall have the right to review,
provide comments to, and approve any such communication or filing. Each party
hereto shall not, either during the Term or thereafter, make any statements
about the other that are professionally or personally disparaging, or engage in
any conduct that is intended to harm the other professionally or personally,
except under process of law.
Except as amended hereby, the Agreement remains in full force and
effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
ABLE LABORATORIES, INC.
By: /s/ Xxxxxx X. Xxxxx
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Title: President
XXXXXX XXXXXXXXX
Agreed and Accepted
/s/ Xxxxxx Xxxxxxxxx
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