EXHIBIT 10.2
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of September
7, 2004 (the "Effective Date"), by and between Able Laboratories, Inc., a
Delaware corporation (the "Corporation"), and Xxxxx X. Xxxxxx, the Vice
President, Sales and Marketing (the "Employee"). The Agreement will be effective
on the date on which the Employee begins employment.
W I T N E S S E T H:
WHEREAS, the Corporation desires to provide for the continuing
employment of Employee by the Corporation, and the Corporation and the Employee
desire to set forth the terms and conditions on which, from and after the
Effective Date, (i) the Corporation shall employ the Employee, (ii) the Employee
shall render services to the Corporation, and (iii) the Corporation shall
compensate the Employee for such services;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, the parties agree as follows:
1. EMPLOYMENT; DUTIES
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(a) The Corporation engages and employs the Employee Xxxxx X. Xxxxxx
as Vice President, Sales and Marketing, and the Employee hereby accepts
engagement and employment of the Corporation. In the capacity of Vice President,
Sales and Marketing, the Employee, will perform all such executive and
administrative duties and services for the Corporation as are consistent with
that position and as are assigned to the Employee from time to time by the
Corporation, including, but not limited to meeting production and growth
objectives set by the management.
2. TERM
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The Employee's employment hereunder shall be for an initial period
of three (3) years commencing on the Effective Date and continuing through the
third anniversary thereof, unless sooner terminated as hereinafter provided in
Section 5 below (the "Initial Term"). Thereafter, the term and each extension
will be automatically extended for successive one-year periods (each a "Renewal
Term"), subject to the provision of Section 5, unless either party gives written
notice of termination to the other party at least sixty (60) days prior to the
expiration of the Initial Term or the Renewal Term, as the case may be.
3. COMPENSATION
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(a) Subject to the terms and conditions of this Agreement, as
compensation for the performance of her duties on behalf of the Corporation, the
Employee shall be compensated as follows:
(i) The Corporation shall pay the Employee a base salary
("Base Compensation") at the rate of $200,000 per annum payable no less
frequently than monthly in arrears on or before the first day of each succeeding
month, plus other compensation as described below in Section 5.
(ii) The Corporation shall withhold all applicable
federal, state and local taxes,
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social security and workers' compensation contributions and such other amounts
as may be required by law or agreed upon by the parties with respect to the
compensation payable to the Employee pursuant to this paragraph 3(a).
(b) The Corporation shall reimburse the Employee for all reasonable
expenses incurred by the Employee in furtherance of the business and affairs of
the Corporation, including reasonable travel and entertainment, cell phone, home
office expenses and other incidental expenses and all such other expenses
against receipt by the Corporation of appropriate vouchers or other proof of the
Employee's expenditures and otherwise in accordance with such expense
reimbursement policy as may from time to time be adopted by the Board of
Directors of the Corporation.
(c) The Employee shall be entitled to accrue paid vacation at the
rate of twenty (20) business days per annum, plus all designated Corporation
holidays.
(d) The President shall review the Employee's objectives and
mutually agree to set targets and goals and review such objectives from time to
time. Upon the commencement of the employment, the initial bonus shall be set at
25% of the base salary for the remainder of the year. In subsequent years, the
annual bonus shall be no less than 25% of the base salary and will be based upon
achieving the objectives mutually developed and agreed to with the President.
(e) The Corporation shall provide health insurance coverage for the
Employee and her family, and such other employee benefit plans and/or fringe
benefits which, from time to time, the Corporation makes available to its senior
management employees.
(f) Upon the Effective Date, the Employee shall receive, from the
Corporation, an option to purchase fifty thousand (50,000) shares of common
stock of the Corporation (the "Option Shares") at an exercise price equal to the
fair market price per share of the Corporation's common stock. Such option shall
have a term of ten years and vest over three (3) years subject to the terms
contained in the Corporation's stock option agreement attached as Exhibit A
hereto.
(g) Travel compensation: The Corporation agrees to provide a
one-bedroom apartment paid for by the Corporation. Utilities, wireless
connections, cable and reasonable meal expenses shall be provided to the
Employee.
4. REPRESENTATIONS AND WARRANTIES BY HE EMPLOYEE AND CORPORATION
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The Employee hereby represents and warrants to the Corporation as
follows:
(a) Neither the execution and delivery of this Agreement nor the
performance by the Employee of her duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default under (whether immediately, upon the giving of
notice or lapse of time or both) any prior employment agreement, contract, or
other instrument to which the Employee is a party or by which she is bound.
(b) The Employee has the full right, power and legal capacity to
enter and deliver this Agreement and to perform her duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of
the Employee enforceable against her in accordance with its terms. No approvals
or consents of any persons or entities are required for the Employee to execute
and deliver this Agreement or perform her duties and other obligations
hereunder.
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The Corporation hereby represents and warrants to the Employee as
follows:
(c) The Corporation is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all requisite corporate
power and authority to own its properties and conduct its business in the manner
presently contemplated.
(d) The Corporation has full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.
(e) The execution, delivery and performance by the Corporation of
this Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of the
Corporation, or any agreement or instrument to which the Corporation is a party
or by which the Corporation of any of its properties may be bound or affected.
5. INVENTIONS ASSIGNMENTS; CONFIDENTIAL INFORMATION
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All inventions, improvements, ideas, names, patents, trademarks,
copyrights, and innovations (including all data and records pertaining thereto),
whether or not reduced to writing, which the Employee may originate, make or
conceive during the term of her employment and for a period of three (3) months
thereafter, either alone or with others and whether or not during working hours
or by the use of facilities of the Corporation, and which relate to or are or
may likely be useful in connection with the business or contemplated business of
the Corporation ("Inventions") shall be the exclusive property of the
Corporation.
The Employee agrees that during the course of her employment or at
any time after termination, she will not disclose or make accessible to any
other person, the Corporation's products, services and technology, both current
and under development, promotion and marketing programs, lists, trade secrets
and other confidential and proprietary business information of the Corporation
or any of its clients. The Employee agrees: (i) not to use any such information
for herself or others; and (ii) not to take any such material or reproductions
thereof from the Corporation's facilities at any time during her employment by
the Corporation, except as required in the Employee's duties to the Corporation.
The Employee agrees immediately to return all such material and reproductions
thereof in her possession to the Corporation upon request and in any event upon
termination of employment. The foregoing notwithstanding, the parties
acknowledge and agree that the confidential and proprietary information of the
Corporation and/or its clients shall not include the following: (a) information
already in the public domain or hereafter disclosed to the public through no
fault of the Employee; including but not limited to knowledge of (i) the
business of other companies in the field, (ii) general business methods and
structures useful in operating pharmaceutical marketing companies, (iii) the
status of patents and other technology in the field other than those of the
Corporation; (b) general knowledge about the field of pharmaceutical marketing
obtained through the Employee's academic experience, or (c) specific ideas and
projections of the field of evolution of pharmaceutical marketing.
Except with prior written authorization by the Corporation, the
Employee agrees not to disclose or publish any of the confidential, technical or
business information or material of the Corporation, its clients or any other
party to whom the Corporation owes an obligation of confidence, at any time
during or after her employment with the Corporation.
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6. TERMINATION
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(a) The Employee's employment hereunder shall terminate upon the
first to occur of the following events:
(i) the death of the Employee or the Disability of the Employee,
as defined below; or
(ii) termination by the Corporation, either with or without Cause
(as defined below); or
(iii) voluntary resignation by the Employee after providing the
Corporation with at least thirty (30) days prior written
notice.
The date on which any of the events described in Section 6(a)(i) or 6(a)(ii)
above, or the date that is thirty (30) days after the Employee has provided
written notice under Section 6(a)(iii) above, will be deemed the "Termination
Date."
(b) Upon termination pursuant to clause 6(a)(i), at least 5,000
additional option shares (of the option shares granted to the employee on
September 7, 2004) shall vest or have vested. "Disability" of the Employee shall
be deemed to have occurred if the Employee, by virtue of any injury, sickness,
or physical condition is unable to perform substantially and continuously the
duties assigned to her hereunder for more than sixty (60) consecutive or
non-consecutive days out of any consecutive twelve (12) month period, exclusive
of any accrued vacation.
(c) Upon termination pursuant to clause (a)(ii) for any reason other
than for Cause (as defined below), (i) the Corporation shall offer the Employee
three (3) months' Base Compensation as severance.
(d) Upon termination by the Corporation pursuant to clause (a)(ii)
for Cause or upon the voluntary resignation of the Employee pursuant to clause
(a)(iii), such termination shall be effective immediately or on the effective
date of the Employee's notice, as the case may be, and the Employee will be paid
a portion of the Base Compensation due through the Termination Date, which has
not been paid to her.
(e) For purposes of this Agreement, "Cause" shall mean the unlawful
conduct of the Employee constituting a felony under the law or dishonest conduct
of the Employee involving moral turpitude and causing material harm to the
Corporation, willful, reckless or grossly negligent misconduct or
insubordination which is or is reasonably likely to be injurious to the
Corporation, monetarily or otherwise, continuing after written notice thereof by
the Board of Directors or a material breach of any of the Employee's obligations
(not occasioned by the Employee's death or Disability) hereunder after written
notice by the Corporation and failure to cure within thirty (30) days of such
notice.
7. NOTICES
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Any notice or other communication under this Agreement shall be in
writing and shall be deemed to have been given upon receipt by the other party.
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8. SEVERABILITY OF PROVISIONS
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If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
9. ENTIRE AGREEMENT; MODIFICATION
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This Agreement contains the entire agreement of the Corporation and
the Employee with respect to the subject matter hereof, and the parties hereto
have made no agreements, representations or warranties relating to the subject
matter of this Agreement, which are not set forth herein. As of the Effective
Date, this Agreement supersedes any prior agreement or arrangement relative to
the Employee's employment with the Corporation; provided, that the Proprietary
Information, Confidentiality and Inventions Agreement dated as of September 7,
2004 by and between the Employee and the Corporation remains in full force and
effect. No modification or waiver of any provisions hereof shall be made unless
made in writing and signed by the Employee and a properly authorized
representative of the Corporation.
10. BINDING EFFECT
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The rights, benefits, duties and obligations under this Agreement
shall inure to, and be binding upon, the Corporation, its successors and
assigns, and upon the Employee and her legal representatives. This Agreement
constitutes a personal service agreement, and the performance of the Employee's
obligations hereunder may not be transferred or assigned by the Employee.
11. NON-WAIVER
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The failure of either party to insist upon the strict performance of
any of the terms, conditions and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith, and said
terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or condition of this Agreement on the part of either party
shall be effective for any purpose whatsoever unless such waiver is in writing
and signed by such party.
12. GOVERNING LAW; WAIVER OF JURY TRIAL
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This Agreement shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New Jersey without regard to
principles of conflict of laws. The parties irrevocably waive all right to a
trial by jury in any suit, action, or other proceeding hereafter instituted by
or against such party in respect of its obligations hereunder or the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ABLE LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Financial Officer
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EMPLOYEE
Agreed and Accepted
/s/ Xxxxx X. Xxxxxx
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Grant Date: September 7, 2004
Grant #34
INCENTIVE STOCK OPTION
Granted by
Able Laboratories, Inc.
Under the
2003 Stock Incentive Plan
For valuable consideration, the receipt of which is hereby
acknowledged, Able Laboratories, Inc., a Delaware corporation (hereinafter
together with its subsidiaries, where the context permits, referred to as the
"Company"), hereby grants to the Holder named in Schedule A attached hereto the
following Incentive Stock Option:
SECTION 1. GRANT OF OPTION. Subject to the terms and conditions
hereinafter set forth, the Holder is hereby given the right and option to
purchase from the Company shares of the Company's Common Stock, $.01 par value
per share (the "Common Stock"). Schedule A attached hereto and hereby
incorporated herein sets forth with respect to this option (i) its expiration
date, (ii) its exercise price per share, (iii) the maximum number of shares that
the Holder may purchase upon exercise hereof, (iv) the vesting schedule, and (v)
certain other terms and conditions applicable to this option and incorporated
herein. This option shall terminate in all respects, and all rights and options
to purchase shares hereunder shall terminate, ten years from the Grant Date set
forth above. The right to purchase shares hereunder shall be cumulative.
This option is and shall be subject in every respect to the
provisions of the Company's 2003 Stock Incentive Plan (the "Plan"), as amended
from time to time, which is incorporated herein by reference and made a part
hereof. In the event of any conflict or inconsistency between the terms hereof
and those of the Plan, the latter shall prevail. References herein to the
Committee shall mean the Committee as defined in the Plan.
SECTION 2. EXERCISE OF OPTION. This option shall be exercised by the
delivery of written notice to the Company (the "Notice") setting forth the
number of shares with respect to which the option is to be exercised and the
address to which the certificates for such shares are to be mailed, together
with (i) delivery of a personal, certified or bank check or postal money order
payable to the order of the Company for an amount equal to the option price for
the number of shares specified in the Notice, or (ii) with the consent of the
Committee, shares of Common Stock of the Company which (a) either have been
owned by the Holder for more than six (6) months and are not subject to
restrictions under any Plan on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (b) have a fair market value on
the date of surrender not greater than the option price for the shares as to
which such option is being exercised, or (iii) with the consent of the
Committee, delivering to the Company a properly
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executed Notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to
pay the purchase price; provided that in the event the Holder chooses to pay the
purchase price as so provided, the Holder and the broker shall comply with such
procedures and enter into such agreement of indemnity and other agreements as
the Committee shall prescribe as a condition of such payment procedure; provided
that the Company need not act upon such Notice until the Company receives full
payment of the exercise price, or (iv) with the consent of the Committee, a
personal recourse note issued by the Holder to the Company in a principal amount
equal to such aggregate exercise price and with such other terms, including
interest rate and maturity, as the Company may determine in its discretion,
provided that the interest rate borne by such note shall not be less than the
lowest applicable federal rate, as defined in Section 1274(d) of the Internal
Revenue Code of 1986, as amended, or (v) with the consent of the Committee, any
combination of such methods of payment. For the purpose of the preceding
sentence, the fair market value per share of the Common Stock so delivered to
the Company shall be the closing price per share on the date of delivery as
reported by such registered national securities exchange on which the Common
Stock is listed, or, if the Common Stock is not listed on such an exchange, as
quoted on NASDAQ; provided, that, if there is no trading on such date, the fair
market value shall be deemed to be the closing price per share on the last
preceding date on which the Common Stock was traded. If the Common Stock is not
listed on any national registered securities exchange or quoted on NASDAQ, the
fair market value of the Common Stock shall be determined in good faith by the
Committee.
SECTION 3. CONDITIONS AND LIMITATIONS. The Company, in its
discretion, may file a registration statement on Form S-8 under the Securities
Act of 1933 to register shares of Common Stock reserved for issuance under the
Plan. At any time at which such a registration statement is not in effect, it
shall be an additional condition precedent to any exercise of this option that
the Holder shall deliver to the Company a customary "investment letter"
satisfactory to the Company and its counsel in which, among other things, the
Holder shall state that the Holder is purchasing the shares for investment and
acknowledges that they are not freely transferable except in compliance with
state and federal securities laws.
SECTION 4. DELIVERY OF SHARES. Within a reasonable time after
receipt by the Company of the Notice and payment for any shares to be purchased
hereunder and, if required as a condition to exercise, the investment letter
described in Section 3, the Company will deliver or cause to be delivered to the
Holder (or if any other individual or individuals are exercising this option, to
such individual or individuals) at the address specified in the Notice a
certificate or certificates for the number of shares with respect to which the
option is then being exercised, registered in the name or names of the
individual or individuals exercising the option, either alone or jointly with
another person or persons with rights of survivorship, as the individual or
individuals exercising the option shall prescribe in writing to the Company at
or prior to such purchase; provided, however, that if any law or regulation or
order of the Securities and Exchange Commission or other body having
jurisdiction in the premises shall require the Company or the Holder (or the
individual or individuals exercising this option) to take any action in
connection with the shares then being purchased, the date for the delivery of
the certificates for such shares shall be extended for the period necessary to
take and complete such action, it being understood that the Company shall have
no obligation to take and complete any such action. The Company may imprint upon
such certificate the legend set forth in the Plan or such other legends
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referencing stock transfer restrictions which counsel for the Company considers
appropriate. Delivery by the Company of the certificates for such shares shall
be deemed effected for all purposes when the Company or a stock transfer agent
of the Company shall have deposited such certificates in the United States mail,
addressed to the Holder, at the address specified in the Notice.
SECTION 5. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The existence
of this option shall not affect in any way the right or power of the Company or
its stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior preference stock or
other capital stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a stock dividend, stock split or similar
change in capitalization affecting the shares of Common Stock outstanding, in
any such case without receiving compensation therefor in money, services or
property, then the number, class, and price per share of shares of Common Stock
subject to this option shall be appropriately adjusted in such a manner as to
entitle the Holder to receive upon exercise of this option, for the same
aggregate cash consideration, the same total number and class of shares as the
Holder would have received as a result of the event requiring the adjustment had
the Holder exercised this option in full immediately prior to such event.
Except as hereinbefore expressly provided, the issue by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
the conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
therefor shall be made with respect to, the number or price of shares of Common
Stock then subject to option.
SECTION 6. EFFECT OF CERTAIN TRANSACTIONS. After a merger of one or
more corporations with or into the Company or after a consolidation of the
Company and one or more corporations in which the stockholders of the Company
immediately prior to such merger or consolidation own after such merger or
consolidation shares representing at least fifty percent (50%) of the voting
power of the Company or the surviving or resulting corporation, as the case may
be, the Holder shall, at no additional cost, be entitled upon exercise of this
option to receive in lieu of the shares of Common Stock as to which this option
was exercisable immediately prior to such event, the number and class of shares
of stock or other securities, cash or property (including, without limitation,
shares of stock or other securities of another corporation or Common Stock) to
which the Holder would have been entitled pursuant to the terms of the agreement
of merger or consolidation if, immediately prior to such merger or
consolidation, the Holder had been the holder of record of a number of shares of
Common Stock equal to the number of shares for which this option shall be so
exercised.
If the Company is merged with or into or consolidated with another
corporation, other than a merger or consolidation in which the stockholders of
the Company immediately prior to
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such merger or consolidation continue to own after such merger or consolidation
shares representing at least fifty percent (50%) of the voting power of the
Company or the surviving or resulting corporation, as the case may be, or if the
Company is liquidated, or sells or otherwise disposes of substantially all its
assets to another corporation while this option remains outstanding, then (i)
subject to the provisions of clause (iii) below, after the effective date of
such merger, consolidation, liquidation, sale or disposition, as the case may
be, the Holder of this option shall be entitled, upon exercise of this option,
to receive, in lieu of the shares of Common Stock as to which this option was
exercisable immediately prior to such event, the number and class of shares of
stock or other securities, cash or property (including, without limitation,
shares of stock or other securities of another corporation or Common Stock) to
which the Holder would have been entitled pursuant to the terms of the merger,
consolidation, liquidation, sale or disposition if, immediately prior to such
event, the Holder had been the holder of a number of shares of Common Stock
equal to the number of shares as to which such option shall be so exercised;
(ii) the Committee may accelerate the time for exercise of this option, so that
from and after a date prior to the effective date of such merger, consolidation,
liquidation, sale or disposition, as the case may be, specified by the
Committee, such accelerated options shall be exercisable in full; or (iii) this
option may be canceled by the Committee as of the effective date of any such
merger, consolidation, liquidation, sale or disposition provided that (x) notice
of such cancellation shall be given to the Holder and (y) the Holder shall have
the right to exercise this option to the extent that the same is then
exercisable or, if the Committee shall have accelerated the time for exercise of
this option pursuant to clause (ii) above, in full during the 10-day period
preceding the effective date of such merger, consolidation, liquidation, sale or
disposition.
SECTION 7. RIGHTS OF HOLDER. No person shall, by virtue of the
granting of this option to the Holder, be deemed to be a holder of any shares
purchasable under this option or to be entitled to the rights or privileges of a
holder of such shares unless and until this option has been exercised with
respect to such shares and they have been issued pursuant to that exercise of
this option.
The Company shall, at all times while any portion of this option is
outstanding, reserve and keep available, out of shares of its authorized and
unissued stock or reacquired shares, a sufficient number of shares of its Common
Stock to satisfy the requirements of this option; shall comply with the terms of
this option promptly upon exercise of the option rights; and shall pay all fees
or expenses necessarily incurred by the Company in connection with the issuance
and delivery of shares pursuant to the exercise of this option.
SECTION 8. TRANSFER AND TERMINATION. This option is not transferable
by the Holder otherwise than by will or under the laws of descent and
distribution. The granting of this option shall not impose upon the Company any
obligation to employ or to continue to employ the Holder. The right of the
Company to terminate the employment of the Holder shall not be diminished or
affected by reason of the fact that this option has been granted to such Holder.
This Option is exercisable, during the Holder's lifetime, only by
the Holder, and by the Holder only while the Holder is an employee of the
Company, except that if the Holder's employment by the Company terminates for
any reason other than death, Disability (as defined in the Plan) or for Cause,
the Holder shall have the right to exercise this Option within thirty (30)
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days after the date of such termination of employment (but not later than the
expiration date of this Option) with respect to shares which were purchasable by
the Holder by exercise of this Option at the time of said termination of
employment.
As used herein, "Cause" shall mean (x) any material breach by the
Holder of any agreement to which the Holder and the Company (or any parent or
subsidiary) are both parties, (y) any act (other than retirement) or omission to
act by the Holder which may have a material and adverse effect on the business
of the Company (or any parent or subsidiary) or on the Holder's ability to
perform services for the Company (or any parent or subsidiary), including,
without limitation, the commission of any crime (other than ordinary traffic
violations), or (z) any material misconduct or material neglect of duties by the
Holder in connection with the business or affairs of the Company (or any parent
or subsidiary) or any affiliate of the Company (or any such parent or
subsidiary).
In the event of the death or Disability of the Holder while the
Holder is in the employ of the Company (or any parent or subsidiary of the
Company) and before the expiration date of this option, this option shall
terminate on the earlier of its expiration date or a date one (1) year after the
date of his death or Disability. After the death of the Holder, the Holder's
executors, administrators or any person or persons to whom the Holder's option
has been transferred by will or by the laws of descent and distribution shall
have the right to exercise this option at any time prior to the earlier of the
date of expiration of this option or one (1) year after the date of the death of
the original Holder.
SECTION 9. NOTIFICATION OF DISQUALIFYING DISPOSITION. The Holder
agrees to notify the Company in writing immediately after making a Disqualifying
Disposition of any shares of Common Stock received pursuant to the exercise of
this Option. The Holder also agrees to provide the Company with any information
that the Company shall request concerning any such Disqualifying Disposition.
9.1 DISQUALIFYING DISPOSITION. A "Disqualifying
Disposition" shall have the meaning specified in Section 421(b) of the Internal
Revenue Code of 1986, as amended, or any successor provision; as of the date of
grant of this Option, a Disqualifying Disposition is any disposition (including
any sale) of such shares before the later of (a) the second anniversary of the
date of grant of this Option or (b) the first anniversary of the date on which
the Holder acquired such shares by exercising this Option, PROVIDED that such
holding period requirements terminate upon the death of the Holder.
9.2 FORFEITURE OF FAVORABLE TAX TREATMENT. The Holder
acknowledges that he or she will forfeit the favorable income tax treatment
otherwise available with respect to the exercise of this Option if he or she
makes a Disqualifying Disposition of shares received upon exercise of this
Option.
SECTION 10. WITHHOLDING OF TAXES.
10.1 UPON A DISQUALIFYING DISPOSITION. If the Company in
its discretion determines that it is obligated to withhold tax with respect to a
Disqualifying Disposition of shares of Common Stock received on exercise of this
Option, the Holder agrees that the
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Company may withhold from the Holder's wages, or other amounts due to the Holder
from the Company, the appropriate amount of federal, state or local withholding
taxes attributable to such Disqualifying Disposition.
10.2 UPON TREATMENT AS A NON-STATUTORY OPTION. If any
portion of this Option is treated as a Non-Statutory Option (as defined in the
Plan), the Holder hereby agrees that the Company may withhold from the Holder's
wages, or other amounts due to the Holder from the Company, the appropriate
amount of federal, state and local withholding taxes attributable to the
Holder's exercise of such Non-Statutory Option.
10.3 ELECTION AS TO METHOD OF SATISFYING WITHHOLDING
OBLIGATION. At the Holder's election, the amount required to be withheld may be
satisfied, in whole or in part, by (a) authorizing the Company to withhold from
shares of Common Stock to be issued pursuant to the exercise of such
Non-Statutory Option a number of shares with an aggregate fair market value that
would satisfy the minimum withholding amount due with respect to such exercise,
or (b) transferring to the Company shares of Common Stock that have been
purchased by the Holder on the open market or have been beneficially owned by
the Holder for a period of at least six months and are not then subject to
restrictions under any Plan and with an aggregate fair market value that would
satisfy the minimum withholding amount due.
10.4 AGREEMENT TO REIMBURSE COMPANY FOR WITHHOLDING
OBLIGATION. The Holder further agrees that, if the Company does not withhold an
amount from the Holder's wages sufficient to satisfy the Company's withholding
obligation, the Holder will reimburse the Company on demand, in cash, for the
amount underwithheld.
SECTION 11. NOTICE. Any notice to be given to the Company hereunder
shall be deemed sufficient if addressed to the Company and delivered by hand or
by mail to the Chief Financial Officer of the Company, 0 Xxxxxxxxx Xxxxx, Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000 or such other address as the Company may hereafter
designate.
Any notice to be given to the Holder hereunder shall be deemed
sufficient if addressed to and delivered in person to the Holder or when
deposited in the mail, postage prepaid, addressed to the Holder at the Holder's
address furnished to the Company.
SECTION 12. GOVERNMENT AND OTHER REGULATIONS. This option is subject
to all laws, regulations and orders of any governmental authority which may be
applicable thereto and, notwithstanding any of the provisions hereof, the Holder
agrees that the Holder will not exercise the option granted hereby nor will the
Company be obligated to issue or sell any shares of stock hereunder if the
exercise thereof or the issuance or sale of such shares, as the case may be,
would constitute a violation by the Holder or the Company of any such law,
regulation or order or any provision thereof. The Company shall not be obligated
to take any affirmative action in order to cause the exercise of this option or
the issuance or sale of shares pursuant hereto to comply with any such law,
regulation, order or provision.
SECTION 13. GOVERNING LAW. This option shall be governed by, and
construed and enforced in accordance with, the substantive laws of the State of
Delaware.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in its name and on its behalf as of the date first written above.
Able Laboratories, Inc.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Its: Chief Financial Officer
-------------------------------
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SCHEDULE A
ABLE LABORATORIES, INC.
2003 INCENTIVE STOCK OPTION PLAN STOCK OPTION
---------------------------------------------
Date of Grant: September 7, 2004
Name of Holder: Xxxxx X. Xxxxxx
Address:
Social Security Number: __________
Maximum number of shares for which
this Option is exercisable: 50,000
Exercise (purchase) price per share: $20.82
------
Expiration date of this Option: September 7, 2014
Vesting schedule: September 7, 2005 - 17,000
March 7, 2006 - 8,500
September 7, 2006 - 8,500
December 7, 2006 - 4,000
March 7, 2007 - 4,000
June 7, 2007 - 4,000
September, 2007 - 4,000
OTHER TERMS AND CONDITIONS: The Holder agrees that upon request of the Company
or the underwriters managing any underwritten offering of the Company's
securities, the Holder shall agree in writing that for a period of time not to
exceed one hundred eighty (180) days from the effective date of any registration
of securities of the Company the Holder will not sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any shares
of Common Stock issued pursuant to the exercise of this option without the prior
written consent of the Company or such underwriters, as the case may be.
* * *
The undersigned Holder acknowledges receipt of the stock option of which this
Schedule A is a part.
-------------------------------
Holder's Signature
Print Name:
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