AMENDMENT NO. 2
EXHIBIT
10.5
AMENDMENT
NO. 2
AMENDMENT NO. 2, dated June 23, 2009,
to that certain Employment Agreement, dated as of August 1, 2005, as amended by
Amendment No.1, dated October 30, 2007 (the “Employment Agreement”), by and
between Hi-Tech Pharmacal Co., Inc. (the “Corporation”) and Xxxxxxx Xxxxxx (the
“Executive”).
WHEREAS, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto have agreed to amend the Employment Agreement (i) to extend the
term of the Employment Agreement, (ii) to increase the compensation thereunder
and (iii) to change the definition of a Change in Control, as defined in
the Employment Agreement.
NOW, THEREFORE, the parties
hereto mutually agree as follows:
1. All
capitalized terms used herein but not defined herein shall have the meaning
ascribed to them in the Employment Agreement.
2. Section
3 of the Employment Agreement is hereby deleted and replaced in its entirety
with the following:
“Section 3. Term of Employment.
The term of this Employment Agreement shall commence on August 1, 2009 and shall
continue until July 31, 2011 and shall automatically renew for successive one
year terms unless terminated by the Corporation upon six (6) months’ advance
written notice to Executive of the Corporation’s decision not to renew the
Employment Agreement, or by Executive, upon sixty (60) days advance written
notice to the Corporation, or unless earlier terminated pursuant to the
provisions of Section 5 hereof.”
3. Section
4.1 of the Employment Agreement is hereby deleted and replaced in its entirety
with the following:
“4.1. Compensation. As
compensation for his services hereunder the Corporation shall pay Executive (i)
for the period August 1, 2009 through July 31, 2010 an annual salary (“Salary”)
equal to $280,000 ($5,384.62 per week) and (ii) for the period August 1, 2010
through July 31, 2011 a Salary equal to $300,000 ($5,769.23 per week). The
Salary shall be payable weekly less such deductions as shall be required to be
withheld by applicable law and regulations.”
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4. Section
11 of the Employment Agreement is hereby deleted and replaced in its entirety
with the following:
“Section
11. Change in
Control.
11.1.
Payment on Change in
Control. The Corporation will provide or cause to be provided to
Executive the rights and benefits described below during the term of this
Agreement, following a Change in Control. In the event of a Change in Control
the Corporation shall pay or cause its successor to pay to Executive, in cash,
in a lump sum within 15 days after the Change in Control, an amount equal to 2
times Executive’s base compensation which equals the sum of the following: (i)
Executive’s annual salary on the day preceding the Change in Control, plus (ii)
Executive’s annual bonus for the year immediately preceding the Change in
Control. In addition, following a Change in Control, at no cost to Executive,
the Corporation shall maintain for Executive and Executive’s dependents, all
health, insurance and welfare benefits for the lesser of one year or until
Executive and his dependents are eligible for similar health, insurance and
welfare benefits from Executive’s new employer.
11.2.
Change in Control
Defined. A “Change in Control” shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following
events:
(A) Acquisition of Stock by
Third Party. Any Person (as hereinafter defined) is or becomes the
Beneficial Owner (as hereinafter defined), directly or indirectly, of securities
of the Corporation representing forty (40%) percent or more of the combined
voting power of the Corporation’s then outstanding securities
(“Acquisition”);
(B) Change in Board of
Directors. The date when Continuing Directors cease to be a majority of
the Directors then in office, it being understood that it shall not be deemed a
Change in Control as long as the majority of the Directors were nominated by the
Continuing Directors;
(C) Corporate
Transactions. The effective date of a merger or consolidation of the
Corporation with any other entity, and with the power to elect at least a
majority of the board of directors or other governing body of such surviving
entity; and
(D) Liquidation. The
approval by the shareholders of the Corporation of a complete liquidation of the
Corporation or an agreement for the sale or disposition by the Corporation of
all or substantially all of the Corporation’s assets.
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(E) Certain Definitions.
For purposes of this Section 11, the following terms shall have the following
meanings:
(i) “Person”
shall have the meaning as set forth in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (“Exchange Act”); provided, however, that
Person shall exclude (i) the Corporation, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation, (iii) any
corporation owned, directly or indirectly, by the shareholders of the
Corporation in substantially the same proportions as their ownership of stock of
the Corporation, and (iv) any members of the Xxxxxxx family, including
affiliates, trusts and foundations for the benefit of Xxxxxxx family
members.
(ii) “Beneficial
Owner” shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act.
(iii) “Continuing
Directors” as used in this Agreement shall mean the persons who constitute the
Board of Directors of the Corporation on the date hereof together with their
successors whose nominations were approved by a majority of Continuing
Directors.”
5. Except
as modified by this Amendment No. 2, in all other respects the Employment
Agreement remains unchanged and in full force and effect.
IN WITNESS WHEREOF, the
parties hereto have executed this Amendment No. 2 to the Employment
Agreement as of the date set forth above.
| HI-TECH PHARMACAL CO., INC. | ||
| By: |
Xxxxx Xxxxxxx
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Xxxxx
Xxxxxxx, President
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Dated:
June 23, 2009
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| By: |
Xxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxx
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Dated:
June 23,
2009
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