AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
EXHIBIT
10.6
AMENDMENT
NO. 1
AMENDMENT NO. 1, effective as
of April 1, 2009, to that certain Employment Agreement, dated as of December 27,
2007 (the “Employment Agreement”), by and between Hi-Tech Pharmacal Co., Inc.
(the “Corporation”) and Xxxxx X. Xxxxxx (the “Employee”).
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 number of stock options for which Employee will be
eligible.
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 contract shall continue until March 31, 2011
unless earlier terminated by Employee upon 30 days advance written notice to the
Corporation, or unless earlier terminated pursuant to the provisions of Section
5 hereof (the “Term”).”
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 Employee,
provided he remains employed with the Corporation, an annual salary (“Salary”)
equal to (i) $257,500 for the period April 1, 2009 through March 31, 2010 and
(ii) $267,500 for the period April 1, 2010 through March 31, 2011. 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 4.2 of the Employment Agreement is hereby deleted and replaced in its
entirety with the following:
“4.2.
Stock Options.
On or after April 1, 2009, Employee may receive stock options at the sole
discretion of the Corporation’s management, such discretion to be exercised via
recommendation by the Corporation’s Chief Executive Officer to the Compensation
Committee, who shall recommend that for 2009, Employee receive an option to
purchase ten thousand (10,000) shares of the Corporation’s Common Stock, when
the Corporation makes its annual grant of stock options; provided however, that
the Compensation Committee shall make the final determination, in its
discretion, as to the number of options or other stock or equity-based
compensation, if any, to be granted to Employee. The stock options granted shall
vest in 25% increments on the first through the fourth anniversaries of the
grant date and shall be governed by the terms of the Plan, a copy of which has
been provided to Employee.”
5. Section
4.3 of the Employment Agreement is hereby deleted and replaced in its entirety
with the following:
“4.3.
Bonus. During
the Term of this Agreement;
(a) For
each calendar year during the term of this Agreement, provided that Employee
remains employed with the Corporation, Employee shall receive a bonus equal to
the sum of (i) 1.5% of the first $2,000,000 of the Division’s Pre-Tax Net Income
(as hereinafter defined) for the applicable year; plus (ii) 5% of the Division’s
Pre Tax Net Income in excess of $2,000,000 for such year (“Bonus”).
(b) “Pre-Tax
Net Income” shall mean gross sales less the sum of (i) returns, chargebacks,
refunds, rebates and discounts; (ii) cost of goods sold; and (iii) all costs
directly attributable to the Division, including without limitation, Selling,
General and Administrative expenses (SG&A) and Research and Development
expenses (R&D), all as determined in accordance with generally accepted
accounting principles of financial reporting in the United States, applied on a
consistent basis.
(c) Within
sixty (60) days after the end of each calendar year during the term of this
Agreement, the Corporation shall deliver to the Employee the unaudited financial
statements of the Division for such calendar year, together with a determination
(“Bonus Determination”) of the amount of Bonus earned for such calendar year and
showing the calculations thereof. Any Bonus payable as reflected in such Bonus
Determination shall be paid to the Employee concurrently with the delivery of
such Bonus Determination. Absent manifest error or calculation errors, such
Bonus Determination shall be final, conclusive, and binding upon the parties
hereto.
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(d) In
the event that the Employee ceases to be employed with the Corporation, the
Employee shall receive a Bonus pro rated for the number of days actually
employed during the calendar year for which such Bonus is applicable; provided,
however, that if the Employee is terminated by the Corporation For Cause, he
shall not be entitled to receive a Bonus.
6. Section
7 of the Employment Agreement is hereby deleted and replaced in its entirety
with the following:
Section
7. Vacations, Holidays Sick
Days, other benefits. Employee shall be entitled to a vacation of four
(4) weeks for each calendar year, during which period his Salary shall be paid
in full. Employee shall take his vacation at such time or times as Employee and
the Corporation shall determine is mutually convenient. Employee shall also be
entitled to the same number of holidays, sick days and other benefits as are
generally allowed to other executives of the Corporation in accordance with the
Corporation policy in effect from time to time
7.
Except as modified by this Amendment No. 1, 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. 1 to the Employment
Agreement as of the date set forth above.
| HI-TECH PHARMACAL CO., INC. | ||||
|
/s/Xxxxx X. Xxxxxx
|
By: |
/s/Xxxxx X. Xxxxxxx
|
||
|
Xxxxx
X. Xxxxxx
|
Name: | Xxxxx X. Xxxxxxx | ||
| Title: | President and | |||
| Chief Executive Officer | ||||
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