Exhibit 10.3
EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated November 13,
2006, by and between Elite Pharmaceuticals, Inc., a Delaware
corporation ("COMPANY"), and Xxxxx Xxxx ("EXECUTIVE").
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R E C I T A L S:
WHEREAS, Executive desires to provide employment services to the
Company, and the Company desires to retain the employment services of Executive.
In consideration of the mutual promises herein contained, the
parties hereby agree as follows:
A G R E E M E N T:
1. EMPLOYMENT.
1.1. GENERAL. The Company hereby employs Executive in
the capacity of Executive Vice President of Corporate Development at the
compensation rate and benefits set forth in Section 2 hereof for the Term (as
defined in Section 3.1 hereof). Executive hereby accepts such employment,
subject to the terms herein contained. In such capacity (a) Executive shall
report to, and follow the directions of, the Board of Directors (the "BOARD")
and the Chief Executive Officer (the "CEO"), (b) perform and carry out such
duties and responsibilities that are reasonably consistent with Executive's
position and responsibilities and this Agreement, and (c) perform and discharge
such additional duties and responsibilities as may be determined from time to
time by the CEO of the Company or the Board that are reasonably consistent with
Executive's position.
1.2. TIME DEVOTED TO POSITION. During the Term,
Executive shall devote substantially all of his business time, attention and
skills to the business and affairs of Company, including its subsidiaries,
entities and organizations presently existing or hereafter formed, organized or
acquired by Company (each, a "SUBSIDIARY" and collectively, the "SUBSIDIARIES").
Nothing in this Agreement shall prevent Executive from devoting reasonable time
and attention to personal, public and charitable affairs, as long as such
activities do not interfere with the effective performance of his duties
hereunder.
2. COMPENSATION AND BENEFITS.
2.1. SALARY. During the Term, the Company shall pay
to Executive, and Executive shall accept, as full compensation for any and all
services rendered and to be rendered by him during such period to Company in all
capacities the following: (i) a base salary at the annual rate of Two Hundred
Thousand Dollars ($200,000) during the Term (the "BASE SALARY"); and (ii) any
additional bonus and the benefits set forth in Sections 2.2, 2.3 and 2.4 hereof.
The Base Salary shall be payable in accordance with the regular payroll
practices of the Company applicable to its senior executives, less such
deductions as shall be required to be withheld by applicable law and regulations
or otherwise. The Board may increase the Base Salary in the sole discretion.
2.2. BONUS.
(a) GUARANTEED BONUS. The Executive shall be
entitled to Twenty Five Thousand Dollars ($25,000) bonus payable in cash within
thirty (30) days of the end of each fiscal year of the Company (the "FISCAL
YEAR") during the Term.
(b) DISCRETIONARY BONUSES. Following the end of each
Fiscal Year during the Term commencing on January 1, 2007, wholly subject to the
discretion of the Board (or any committee of the Board delegated authority over
employee compensation matters), the Company may award Executive a bonus of up to
fifty percent (50%) of the Executive's then Base Salary (initially, One Hundred
Thousand Dollars ($100,000)), payable (at the option of the Company) in cash or
in shares of Common Stock (as defined below) valued at the closing price of the
Common Stock on the immediately preceding trading day, for the relevant Fiscal
Year (pro-rated for periods of less than a full Fiscal Year). For purposes of
determining whether such discretionary bonuses shall be payable, the Board (or
any committee of the Board delegated authority over employee compensation
matters), shall discuss with the Executive certain annual goals to the achieved
by the Company and/or the Executive during the applicable year. Such goals will
be established by the Company and discussed with the Executive in good faith and
within a reasonable time of the commencement of each Fiscal Year. If such
discretionary bonuses are to be paid in shares of Common Stock, the number of
shares issuable shall be determined by reference to the average of the closing
price of a share of Common Stock during the five trading days immediately
preceding the date of issuance of such shares.
(c) LIMITATION ON BONUSES. Notwithstanding anything
to the contrary in this Section 2.2 or Section 3, no annual bonus shall be
deemed to have accrued or otherwise to have become payable for the purposes of
this Agreement unless this Agreement shall not have been terminated prior to the
end of the Fiscal Year in respect of which such bonus was to be awarded.
2.3. STOCK OPTIONS.
2.3.1. INITIAL OPTIONS. Effective on the date
hereof, the Company shall grant to Executive options (the "INITIAL OPTIONS") to
purchase two hundred fifty thousand (250,000) shares of common stock, par value
$0.01 per share (the "COMMON STOCK") of the Company, pursuant to the Company's
2004 Stock Option Plan, as amended (the "PLAN"). The Initial Options:
(i) shall, to the maximum extent permitted under applicable
law, qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code;
(ii) be fully vested and immediately exercisable in full as
of the date hereof;
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(iii) have a per share exercise price equal to $2.25; and
(iv) be subject to the terms and conditions set forth in the
Plan and a stock option agreement to be entered into by the Company and
Executive, simultaneously herewith (the "OPTION AGREEMENT"). Such grant
of options pursuant to this Section 2.3.1 shall be fully vested and
exercisable, subject to the terms of the Plan and the Option Agreement
and acceleration pursuant to Section 3 hereof. The shares of Common
Stock issuable upon exercise of the Initial Options are subject to an
effective registration statement filed with the Securities and Exchange
Commission (the "SEC").
2.3.2. OPIOID PRODUCT OPTIONS. In addition to
the other grants set forth in this Section 2.3, effective on the date hereof,
the Company shall grant to Executive options (the "OPIOID PRODUCT OPTIONS") to
purchase up to three hundred thousand (300,000) shares of Common Stock, pursuant
to the Plan. The Opioid Product Options:
(i) shall, to the maximum extent permitted under applicable
law, qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code;
(ii) have a per share exercise price equal to $2.25;
(iii) have one hundred fifty thousand (150,000) options vest
and become immediately exercisable in full only upon the closing of an
exclusive product license for the first of the United States national
market, the entire European Union market or the Japan market or product
sale transaction of all of the Company's ownership rights in the United
States (only once for each individual product) for the Company's first
Non-Generic Opioid Drug;
(iv) have one hundred fifty thousand (150,000) options vest
and become immediately exercisable in full only upon the closing of an
exclusive product license for the United States national market, the
entire European Union market or the Japan market or product sale
transaction of all of the Company's ownership rights in the United
States (only once for each individual product) for the Company's second
Non-Generic Opioid Drug; and
(v) be subject to the terms and conditions set forth in the
Plan and Option Agreement.
All such options shall be subject to acceleration pursuant to Section 3 hereof.
The shares of Common Stock issuable upon exercise of the Opioid Product Options
are subject to an effective registration statement filed with the SEC. For
purposes of this Section 2.3.2, "Non-Generic Opioid Drug" means a drug developed
by the Company for which FDA approval will be sought
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under a NDA (including under a 505(b)(2) application) for oxycodone,
hydrocodone, hydromorphone, oyxmorphone or morphine.
2.3.3 INTENTIONALLY OMITTED
2.3.4. MILESTONE OPTIONS. Subject to Section
2.3.7. hereof, in addition to the other grants set forth in this Section 2.3,
effective on the date hereof, the Company shall grant to Executive options (the
"MILESTONE OPTIONS") to purchase up to two hundred thousand (200,000) shares of
Common Stock, pursuant to the Plan. The Milestone Options:
(i) shall, to the maximum extent permitted under applicable
law, qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code;
(ii) have a per share exercise price equal to $2.25;
(iii) shall vest and become exercisable only upon the
occurrence of the following events which occur during the Initial Term
(up to a maximum of 200,000 shares of Common Stock in the aggregate):
(a) Milestone Options exercisable for one hundred
twenty-five thousand (125,000) shares of Common Stock shall vest and
become immediately exercisable in full upon the commencement of the
first Phase III clinical trial relating to the first Non-Generic Opioid
Drug developed by the Company;
(b) Milestone Options exercisable for seventy-five
thousand (75,000) shares of Common Stock shall vest and become
immediately exercisable in full upon the commencement of the first Phase
III clinical trial relating to the second Non-Generic Opioid Drug
developed by the Company;
(c) Milestone Options exercisable for fifty thousand
(50,000) shares of Common Stock shall vest and become immediately
exercisable in full only upon the closing of an exclusive product
license for the United States national market or product sale
transaction of all of the Company's ownership rights (on a product by
product basis and only once for each individual product) for each
Company drug product, other than the Non-Generic Opioid Drugs for which
Opioid Product Options were granted under Section 2.3.2 above;
(d) Milestone Options exercisable for ten thousand
(10,000) shares of Common Stock shall vest and become immediately
exercisable in full upon the filing by the Company (in the Company's
name) with the United States Food and Drug Administration (the "FDA") of
either an abbreviated new drug application (an "ANDA") or a new drug
application (including a NDA filed with the FDA under Section 505(b)(2)
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of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301 ET
SEQ.) (a "NDA"), for a product not covered by a previous FDA
application;
(e) Milestone Options exercisable for forty thousand
(40,000) shares of Common Stock shall vest and become immediately
exercisable in full upon the approval by the FDA of any ANDA or NDA
(filed in the Company's name) for a product not previously approved by
the FDA;
(f) Milestone Options exercisable for twenty-five
(25,000) shares of Common Stock shall vest and become immediately
exercisable in full upon filing of an application for U.S. patent by the
Company (filed in the Company's name); and
(g) Milestone Options exercisable for twenty-five
(25,000) shares of Common stock shall vest and become immediately
exercisable in full upon the granting by U.S. Patent and Trademark
Office ("PTO") of a patent to the Company (filed in the Company's name);
and
(iv) be subject to the terms and conditions set forth in the
Plan and Option Agreement. All such options shall be subject to
acceleration pursuant to Section 3 hereof.
Upon the earlier to occur of the expiration of the Initial Term of this
Agreement or the termination of Executive's employment hereunder, all unvested
Milestone Options granted shall automatically terminate and all vested but
unexercised Milestone Options shall terminate in accordance with the terms of
the stock option agreement by and between the Executive and the Company with
respect to the Milestone Options and the Plan; provided that, in the case of any
Milestone Options that may be vested pursuant to clause (e) or clause (g) of
Section 2.3.4(iii) above, if (x) the applicable filing with the FDA or PTO, as
the case may be, was made by the Company during the Initial Term but prior to
the termination of the Executive by the Company without Cause, (y) the approval
relating to such filing (either from the FDA or the PTO) occurs within five
hundred forty (540) days of such filing and (x) such approval occurring within
the three year Initial Term, the Milestone Options relating to such filing shall
vest in accordance with clause (e) or clause (g), as the case may be. The shares
of Common Stock issuable upon exercise of the Milestone Options are subject to
an effective registration statement filed with the SEC.
2.3.5 ADDITIONAL MILESTONE OPTIONS. Subject to
Section 2.3.7. hereof, if the maximum number of Milestone Options shall have
vested during the Initial Term of this Agreement, the Company shall grant to the
Executive additional options to purchase shares of Common Stock (the "ADDITIONAL
MILESTONE OPTIONS"), pursuant to the Plan. The Additional Milestone Options (ii)
shall, to the maximum extent permitted under applicable law, qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code, (ii) shall have a per share exercise price equal to the closing
price of a share of Common Stock, as listed on the American Stock Exchange, on
the date of grant, (iii) shall be subject to the terms and conditions set forth
in the Plan and the stock option agreement to be entered into by the Company and
the Executive on the date of grant which shall be substantially the same as the
Option Agreement, (iv) shall be fully vested and exercisable in full upon grant,
and (v) shall be granted at the end of the then current Fiscal Year in which any
of the following triggering events
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shall occur (and, in the case of grants related to events occurring after the
end of the last fiscal year during the Initial Term, such grants shall be made
at the end of the first Fiscal Year after the Initial Term):
(a) Additional Milestone Options for one hundred
twenty-five thousand (125,000) shares of Common Stock shall be granted
at the end of the then current Fiscal Year (and immediately vested
exercisable in full) upon the commencement of first Phase III clinical
trial relating to the first Non-Generic Opioid Drug developed by the
Company only to the extent that such Milestone Options did not
previously vest under clause (iii)(a) of Section 2.3.4, it being
understood that in no event shall the total of Milestone Options vesting
under 2.3.4(iii)(a) and Additional Milestone Options granted under this
Section 2.3.5(iii)(a) exceed options for 125,000 shares of Common Stock
in the aggregate;
(b) Additional Milestone Options for one hundred and
twenty five thousand (125,000) shares of Common Stock shall be granted
at the end of the then current Fiscal Year upon the commencement of the
first Phase III clinical trial relating to the second Non-Generic Opioid
Drug developed by the Company only to the extent Milestone Options did
not previously vest under clause (clause (iii)(b) of Section 2.3.4, it
being understood that (i) in no event shall the total of Milestone
Options vesting under 2.3.4(iii)(b) and the Additional Milestone Options
granted under this Section 2.3.5(iii)(b) exceed 125,000 shares of Common
Stock in the aggregate, and (ii) in no event shall the options vested
and/or granted under Sections 2.3.4(a), 2.3.4(b), 2.3.5(a) and 2.3.5(b)
exceed options for 250,000 shares of Common Stock in the aggregate.
(c) Additional Milestone Options for fifty thousand
(50,000) shares of Common Stock shall be granted at the end of the then
current Fiscal Year upon the closing of an exclusive product license for
the United States national market or product sale transaction of all
ownership rights (on a product by product basis and only once for each
individual product) for each Company drug product, other than the
Non-Generic Opioid Drugs for which any Opioid Product Options were
granted under Section 2.3.2 above;
(d) Additional Milestone Options for ten thousand
(10,000) shares of Common Stock shall be granted at the end of the then
current Fiscal Year (and immediately vested exercisable in full) upon
the filing by the Company (in the Company's name) with the FDA of either
an ANDA or NDA for a product not covered by a previous FDA application;
(e) Additional Milestone Options for forty thousand
(40,000) shares of Common Stock shall be granted at the end of the then
current Fiscal Year (and immediately vested exercisable in full) upon
the approval by the FDA of any ANDA, NDA or 505(b)(2) application of the
Company (filed in the Company's name) for a product not previously
approved by the FDA;
(f) Additional Milestone Options for twenty-five
(25,000) shares of Common Stock shall be granted at the end of the then
current Fiscal Year (and
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immediately vested exercisable in full) upon filing of an application
for an additional U.S. patent by the Company (filed in the Company's
name); and
(g) Additional Milestone Options for twenty-five
(25,000) shares of Common Stock shall be granted as of the end of the
then current Fiscal Year (and immediately vested exercisable in full)
upon the granting by U.S. Patent and Trademark Office of such additional
patent to the Company (filed in the Company's name).
Upon the earlier to occur of the expiration of the Initial Term of this
Agreement or the termination of Executive's employment hereunder, all Additional
Milestone Options shall automatically terminate in accordance the applicable
stock option agreement to be entered into by and between the Executive and the
Company with respect to such Additional Milestone Options (which agreement shall
be substantially similar to the other stock option agreements by and between the
Executive and the Company) and the Plan. For the avoidance of doubt, (i) under
no circumstances shall Additional Milestone Options be granted as a result of
the occurrence of an event which had previously triggered, or simultaneously
therewith will trigger, the vesting of any Milestone Options granted under
Section 2.3.4 above and (ii) no Opioid Product Options, Milestone Options or
Additional Milestone Options shall be granted or vest under this Agreement as a
result of any transaction entered into, or any FDA or PTO application or filing
made, by, or in the name of, any Person in which the Company has an equity
interest but which is not a wholly-owned subsidiary of the Company.
2.3.6. ADDITIONAL OPTIONS. In addition to the
other grants set forth in this Section 2.3, the Company, in its sole discretion,
may grant to Executive additional options (the "ADDITIONAL OPTIONS") to purchase
shares of Common Stock, pursuant to the Plan. The Additional Options shall (i)
to the maximum extent permitted under applicable law, qualify as "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code,
(ii) have a per share exercise price equal the then fair market value of a share
of Common Stock, (iii) vest, as determined by the Board, in its sole discretion
and (iv) be subject to the terms and conditions set forth in the Plan and Option
Agreement. All such options shall vest and be exercisable, as determined by the
Board, in its sole discretion and shall be subject to acceleration pursuant to
Section 3 hereof.
2.3.7. LIMITATION UPON DUPLICATIVE
GRANTING/VESTING OF OPTIONS. Notwithstanding anything set forth in this Section
2.3 of this Agreement, in the event that Opioid Product Options are vested under
Section 2.3.2 as result of the sale transaction involving Non-Generic Opioid
Drug, (x) no Milestone Options shall vest under clauses (iii)(a) or (iii)(b) of
Section 2.3.4 and (y) no Additional Milestone Options shall be granted and/or
vest under clauses (v)(a) or (v)(b) of Section 2.3.5, in each case, as a result
of any Phase III clinical trials relating to the same drug product. The
limitations set forth in this Section 2.3.7 shall not affect the granting and/or
vesting of Milestone Options or Additional Milestone Options as a result of any
Phase III clinical trials relating to a Non-Generic Opioid Drug which is the
subject of an exclusive license.
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2.3.8. PLEDGE OF COMMON STOCK UNDERLYING THE
OPTIONS. Executive may not, directly or indirectly, sell, assign, transfer,
offer, grant a participation in, mortgage, pledge, hypothecate, create a
security interest in or lien upon, encumber, donate, contribute, place in trust,
enter into any voting agreement with respect to, the shares of Common Stock
underlying the Initial Options, Opioid Product Options, Milestone Options,
Additional Milestone Options or Additional Options without the prior written
consent of the Company. During the Term, Executive shall not, directly or
indirectly, enter into any short sales or "derivative" or "hedging" transactions
or strategies, nor maintain any "short" positions, with respect to the Common
Stock.
2.3.9. CONFLICT. In the event of any conflict
between the terms of the Plan or this Agreement, the terms of this Agreement
shall govern.
2.3.10 PIGGY-BACK REGISTRATION RIGHTS.
(a) If at any time after the Initial Term, (x) the
Company shall propose to register shares of Common Stock under the
Securities Act of 1933 (other than in a registration statement on Form
S-3 relating to sales of securities to participants in a Company
dividend reinvestment plan, or Form S-4 or S-8 or any successor form or
in connection with an acquisition or exchange offer or an offering of
securities solely to the existing shareholders or employees of the
Company), and (y) any Additional Milestone Options that may be granted
under Section 2.3.5 hereof shall have been granted to, and are
exercisable by, the Executive, the Company (i) will give prompt written
notice to the Executive of its intention to effect such a registration
and (ii) subject to Section 2.3.10(b) below, will include in such
registration all shares of Common Stock issued or issuable upon exercise
of such granted and vested Additional Milestone Options (the
"Registrable Securities") which are permitted under applicable
securities laws to be included in the form of registration statement
selected by the Company and with respect to which the Company has
received written requests for inclusion therein within 30 days after the
receipt of the Company's notice (each, a "PIGGYBACK REGISTRATION"). The
Executive will be permitted to withdraw all or any part of the
Registrable Securities from a Piggyback Registration at any time prior
to the effective date of such Piggyback Registration.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. If a
Piggyback Registration is to be an underwritten offering, and the
managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the
Company will include in such registration:
(i) first, the securities the Company
proposes to sell;
(ii) second, securities held by holders other
than Executive, directors, officers or employees of the Company;
(iii) third, the Registrable Securities
requested to be included in such registration by the Executive
and any securities requested to be included in such
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registration by any other Person other than Persons having a lower
priority of registration than the Executive, PRO RATA among Executive
and such other Persons, on the basis of the number of securities
requested to be included in such registration by each of such Holders
and such other Persons; and
(iv) thereafter, other securities requested to be
included in such registration, as determined by the Company.
As a condition to the inclusion of his Registrable Securities in such
registration, the Executive will execute an underwriting agreement in customary
form and in form and substance satisfactory to the managing underwriters.
(c) RIGHT TO TERMINATE REGISTRATION. If at any time after
giving written notice of its intention to register any of its securities
as set forth in Section 2.3.10(a) and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities,
the Company may, at its election, give written notice of such
determination to the Executive and thereupon be relieved of its
obligation to register any Registrable Securities in connection with
such registration.
2.4. EXECUTIVE BENEFITS.
2.4.1. EXPENSES. Company shall promptly
reimburse Executive for expenses he reasonably incurs in connection with the
performance of his duties (including business travel and entertainment expenses)
hereunder, against receipts or other appropriate written evidence of such
expenditures as required by the appropriate Internal Revenue Service regulations
or by the Company; PROVIDED, that, all expenses in excess of US$2,000 per month,
individually or in the aggregate, shall be approved by the Chief Executive
Officer as a condition to reimbursement thereof.
2.4.2. COMPANY PLANS. Executive shall be
entitled to participate in such employee benefit and welfare plans and programs
as Company may from time to time generally offer or provide to senior executive
officers of Company or the Subsidiaries, including participation in life
insurance, health and accident, medical plans and programs, and profit sharing
and retirement plans. Nothing in the foregoing shall limit or restrict the
Company's discretion to amend, revise or terminate any benefit or plan without
notice to or consent of the Executive.
2.4.3. VACATION. Executive shall be entitled to
five (5) weeks of paid vacation per Fiscal Year, pro rated for periods of less
than a full Fiscal Year; PROVIDED, that the timing and duration of any
particular vacation shall not interfere with the business of the Company or the
effective performance of Executive's duties hereunder, as reasonably determined
in good faith by the Chief Executive Officer.
2.4.4. AUTOMOBILE ALLOWANCE. During the Term,
the Company shall pay the Executive a monthly automobile allowance in the amount
of Seven Hundred Dollars ($700).
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2.4.5. LIFE INSURANCE. The Company will obtain
and maintain during the Term a term life insurance policy in the amount of Five
Hundred Thousand Dollars ($500,000) on the life of the Executive payable to the
estate of the Executive in the event of the Executive's death during the Term.
3. EMPLOYMENT TERM; TERMINATION.
3.1. EMPLOYMENT TERM. Executive's employment
hereunder shall commence as of the date hereof (the "COMMENCEMENT DATE") and,
subject to Section 1.2 hereof and except as otherwise provided in Section 3.2
hereof, shall continue for three (3) years following the date hereof (the
"INITIAL TERM"). Thereafter, this Agreement shall automatically be renewed (upon
the compensation terms provided herein other than option grants which shall be
negotiated with the Executive at such time) for successive one (1) year terms
commencing at the end of the Initial Term (the Initial Term, together with any
prior or subsequent employment or consulting term(s), being also referred to
herein as the "TERM"), unless Executive or Company shall have provided a Notice
of Termination (as defined in Section 3.4.2 hereof) electing not to renew the
Term to the other party at least sixty (60) days prior to such scheduled
expiration. Upon the expiration or non-renewal of the Term pursuant to this
Section 3.1 or its termination pursuant to Sections 3.2.1 through 3.2.5 hereof,
inclusive, Executive shall be released from all duties hereunder (except as set
forth in Sections 4 and 5 hereof) and the obligations of Company to Executive
shall be as set forth in Section 3.3 hereof only.
3.2. EVENTS OF TERMINATION. The Executive's
employment shall terminate upon the occurrence of any one or more of the
following events:
3.2.1. DEATH. In the event of Executive's
death, Executive's employment shall terminate on the date of his death. Amounts
payable to Executive's estate upon Executive's death are set forth in Section
3.3.2 below.
3.2.2. DISABILITY. In the event of Executive's
Disability (as hereinafter defined), Company may, at its option, terminate
Executive's employment by giving a Notice of Termination to Executive. The
Notice of Termination shall specify the Date of Termination (as defined in
Section 3.4.3. hereof), which date shall not be earlier than thirty (30) days
after the Notice of Termination is given. For purposes of this Agreement,
"DISABILITY" means a disability as defined in any long-term disability insurance
policy (reasonably satisfactory to the Executive) provided by Company and
insuring Executive or, in the absence of any such policy, the inability of
Executive for 120 days in any twelve (12) month period to substantially perform
his duties hereunder as a result of a physical or mental illness, all as
determined in good faith by the Board, in its sole discretion. Amounts payable
to Executive upon termination due to Disability are set forth in Section 3.3.2
below.
3.2.3. CAUSE. Company may, at its option,
terminate Executive's employment for "CAUSE" as set forth in a Notice of
Termination to Executive specifying the reasons for termination. The Notice of
Termination shall specify the Date of Termination, which date may be the date of
such Notice of Termination. For purposes of this Agreement, "Cause" shall mean
(i) Executive's conviction of, guilty or no contest plea to, or confession of
guilt of,
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any felony or any other crime involving moral turpitude; (ii) an act or omission
by Executive in connection with his employment that constitutes fraud, criminal
misconduct, breach of fiduciary duty, dishonesty, gross negligence, malfeasance,
willful misconduct or other conduct that is materially harmful or detrimental to
Company; (iii) excessive use of alcohol or illegal drugs so as to interfere with
the performance of Executive's obligations under this Agreement; (iv) a breach
by Executive of this Agreement which breach or failure the Executive shall fail
to remedy within thirty (30) days after written demand from the Company
specifying in reasonable detail such breach or failure; (v) a continuing failure
by Executive to perform such duties as are assigned to Executive by the CEO or
the Board in accordance with this Agreement, other than a failure resulting from
a Disability, after receipt from the Company of written notice of such
continuing failure and, to the extent such failure is curable, a thirty (30) day
period to cure such failure; (vi) Executive's knowingly taking any action on
behalf of Company or any of its affiliates without appropriate authority to take
such action (the approval of the CEO shall be deemed to be appropriate
authority), after receipt from the Company of written notice of such action and,
to the extent the damage resulting from such action is curable, a thirty (30)
day period to cure such damage; (vii) Executive's knowingly taking any action in
conflict of interest with Company or any of its affiliates given Executive's
position with Company; and/or (viii) the commission of an act of personal
dishonesty by Executive in connection with Company that involves personal profit
to him or his family members. Amounts payable to Executive upon termination for
Cause are set forth in Section 3.3.1 below.
3.2.4. WITHOUT CAUSE BY COMPANY. Company may,
at its option, terminate Executive's Employment for any reason or no reason
whatsoever (other than for the reasons set forth elsewhere in this Section 3.2)
by giving a Notice of Termination to Executive. The Notice of Termination shall
specify the Date of Termination, which date shall not be earlier than thirty
(30) days after the Notice of Termination is given. Amounts payable to Executive
upon termination without cause are set forth in Section 3.3.2 below.
3.2.5. EXECUTIVE TERMINATION. Executive may, at
his option, terminate his employment by giving a Notice of Termination to the
Company. The Notice of Termination shall specify the Date of Termination, which
date shall not be earlier than sixty (60) days after the Notice of Termination
is given. Amounts payable to Executive upon Executive's voluntary termination
are set forth in Section 3.3.1 below. A termination by the Executive for "Good
Reason" shall not constitute a voluntary termination by the Executive pursuant
to this Section 3.2.5, but shall constitute a termination without Cause by the
Company pursuant to Section 3.2.4. Executive shall be deemed to have resigned
for "Good Reason" if (1) the Company fails to comply with the material terms of
this Agreement or any stock option or similar agreement with the Employee then
in effect, after receipt from the Executive of written notice of such failure
and, to the extent such failure is curable, a thirty (30) day period to cure
such failure; or (2) the Executive's principal business location is moved to a
location outside the States of New York or New Jersey.
3.3. OBLIGATIONS OF COMPANY FOLLOWING TERMINATION OF
THE TERM. Following termination of Executive's employment under the respective
circumstances described below, Company shall pay to Executive or his estate, as
the case may be, the following compensation and provide the following benefits
in full satisfaction and final settlement of any
11
and all claims and demands that Executive now has or hereafter may have
hereunder against Company. In connection with Executive's receipt of any or all
monies and benefits to be received pursuant to this Section 3.3, Executive shall
have no duty to seek subsequent employment during the period in which he is
receiving severance payments and any Severance Amount (as defined in Section
3.3.2 hereof) shall not be reduced solely as a result of Executive's subsequent
employment by an entity other than Company (other than as a result of any
violation of Sections 4 or 5 of this Agreement). Executive acknowledges that any
non-renewal or expiration of this Agreement shall not be deemed an event of
termination that would trigger any obligations of Company pursuant to this
Section 3.3.
3.3.1. TERMINATION FOR CAUSE BY THE COMPANY OR
TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. In the event that Executive's
employment is terminated by Company for Cause pursuant to Section 3.2.3 or
Executive terminates his employment with the Company pursuant to Section 3.2.5
for other than Good Reason, (i) all unvested stock options under this Agreement
terminate as of the Date of Termination, (ii) all vested and unexercised stock
options under this Agreement as of the Date of Termination granted by Company to
Executive shall be exercisable in accordance with the terms of the Plan and the
applicable stock option agreements, (iii) the Company shall pay to Executive,
payable in accordance with the Company's regular payroll practices, an amount
equal to any unpaid but earned Base Salary through the Date of Termination and
(iv) the Company shall reimburse Executive for any unpaid expenses pursuant to
Section 2.4.1 hereof.
3.3.2. TERMINATION WITHOUT CAUSE BY THE
COMPANY, TERMINATION BY EXECUTIVE FOR GOOD REASON OR TERMINATION DUE TO
DISABILITY OR DEATH. In the event that Executive's employment is terminated by
Company pursuant to Section 3.2.4 hereof or by reason of Executive's Disability
pursuant to Section 3.2.2 hereof or by reason of Executive's death pursuant to
Section 3.2.1 hereof, or by Executive for Good Reason, (i) all unvested stock
options under this Agreement shall remain outstanding but shall be unexercisable
for a period of ninety (90) days and shall thereafter at the end of such 90-day
period, subject to the last sentence of this Section 3.3.2 terminate, and all
vested and unexercised stock options shall be exercisable for a period of ninety
(90) days from the Date of Termination, (ii) the Company shall pay to Executive,
subject to Executive's continued compliance with the terms of Sections 4 and 5
hereof, the Severance Amount, (iii) the Company shall reimburse Executive for
any unpaid expenses pursuant to Section 2.4.1 hereof and (iv) the Company shall
pay the premiums for the Executive's Company provided health insurance for
twelve (12) months from the Date of Termination For purposes hereof, "SEVERANCE
AMOUNT" shall mean the Base Salary in effect for the greater of (a) the
remainder of the Initial Term and (b) the first anniversary of the Date of
Termination. Any payments made in accordance with this Section 3.3.2 shall be
made in accordance with Company's regular payroll practices and shall be subject
to Executive's compliance with Sections 4 and 5 of this Agreement. The breach by
Executive of any provision of Sections 4 or 5 shall result in a forfeiture of
any unpaid portion of the Severance Amount. Notwithstanding this Section 3.3.2,
if the first public disclosure of a Change of Control (as defined in Section
3.4.1 hereof) of the Company (or of an agreement to which the Company is a party
to effect a Change of Control of the Company) shall occur within ninety (90)
days of the date Executive is terminated without Cause, all unvested Opioid
Product Options and Milestone Options shall immediately vest and become
exercisable. Executive shall then have ninety (90)
12
days from the Date of Termination to exercise all vested stock options;
PROVIDED, that the relevant stock option plan remains in effect and such stock
options shall not have otherwise expired in accordance with the terms thereof.
3.3.3. TERMINATION UPON CHANGE OF CONTROL. In
the event that Executive's employment is terminated by Company without Cause
within ninety (90) days after a Change of Control, (i) all unvested Opioid
Product Options and Milestone Options under this Agreement shall immediately
vest and along with all vested and unexercised stock options shall be
exercisable in for a period of ninety (90) days from the Date of Termination,
(ii) the Company shall pay to Executive, subject to Executive's continued
compliance with the terms of Sections 4 and 5 hereof, the Severance Amount,
(iii) the Company shall reimburse Executive for any unpaid expenses pursuant to
Section 2.4.1 hereof, (iv) the Company shall pay the premiums for the
Executive's Company provided health insurance for twelve (12) months from the
Date of Termination and (v) an amount equal to Five Hundred Thousand Dollars
($500,000) payable in a single lump sum. Any payments made in accordance with
this Section 3.3.3 shall be made in place of any other payments under this
Agreement and shall be in accordance with Company's regular payroll practices
and shall be subject to Executive's compliance with Sections 4 and 5 of this
Agreement. The breach by Executive of any provision of Sections 4 or 5 shall
result in a forfeiture of any unpaid portion of the Severance Amount.
3.3.4. OTHER REMEDIES. Nothing in this Section
3.3 shall limit or restrict Company from pursuing or obtaining any other
remedies that may be available to it in law, contract or otherwise, in addition
to the remedies set forth herein, in response to any improper conduct of
Executive, or conduct in violation of the parties' agreements.
3.3.5. TERMINATION OF EMPLOYMENT. This
Agreement shall terminate simultaneously with the termination of Executive's
employment by the Company for any reason; provided, however, that the covenants
set forth in Section 4 and 5 of this Agreement shall survive the termination of
this Agreement to the extent provided in such Sections.
3.4. DEFINITIONS.
3.4.1. "CHANGE OF CONTROL" DEFINED. The term
"CHANGE OF CONTROL" shall mean (a) the acquisition of Company pursuant to a
consolidation of Company with, or merger of Company with or into, any other
Person with the result of which the holders of the Company's voting stock
immediately prior to such transaction hold less than fifty (50%) percent of the
combined voting power after giving effect to such transaction; (b) the sale of
all or substantially all of the assets or capital stock of Company to any other
Person; or (c) securities of Company representing greater than fifty (50%)
percent of the combined voting power of Company's then outstanding voting
securities are acquired by a Person, or group of related Persons, in a single
transaction or series of related transactions.
3.4.2. "NOTICE OF TERMINATION" DEFINED. "NOTICE
OF TERMINATION" means a written notice that indicates the specific termination
provision relied upon by Company or Executive and, in the case of a termination
pursuant to Sections 3.2.2 or 3.2.3 hereof, sets
13
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the termination provision
so indicated.
3.4.3. "DATE OF TERMINATION" DEFINED. "DATE OF
TERMINATION" means such date as Executive's employment expires in accordance
with Section 3.1 hereof or is terminated in accordance with Section 3.2 hereof.
4. PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE
SECRETS; NON-COMPETITION; NO SOLICITATION.
4.1. DEFINITIONS.
4.1.1. "CONFIDENTIAL INFORMATION" DEFINED.
"CONFIDENTIAL INFORMATION" means any and all information (oral or written)
relating to Elite or any entity controlling, controlled by, or under common
control with Elite, including information relating to: technology, Inventions,
intellectual property, research, test procedures and results; machinery and
equipment; manufacturing processes; financial information; products; identity
and description of materials and services used; purchasing; costs; pricing;
customers and prospects; advertising, promotion and marketing; and selling,
servicing and information pertaining to any governmental investigation, except
such information that becomes public, other than as a result of a breach of the
provisions of Section 4.2 hereof, or was lawfully known by Executive prior to
his employment by the Company. Without limiting the foregoing, Confidential
Information shall also include all information related to products targeted for
development by Elite, subjects of research and development, projected launch
dates, the FDA protocols, projected dates for regulatory filings, consumer
studies, market research, clinical research, business plans, planned
expenditures, profit margins, strategic evaluation plans and initiatives, and
those commissioned by Elite through outside vendors or consultants, and the
content of all business and strategic planning conducted with or through third
parties. Executive's obligation not to disclose Confidential Information shall
be as set forth in Section 4.2 of this Agreement.
4.1.2. "INVENTIONS" DEFINED. "INVENTIONS" means
any and all inventions, discoveries, improvements, patent, copyrights and/or
other property rights, whether or not patented or patentable made, conceived,
created, developed or contributed to by Executive during the Term which are (i)
directly or indirectly related to the business, operations or activities of the
Company or any of its subsidiaries or affiliates, (ii) directly or indirectly
related to Executive's employment by, or performance of other services
(including as a director, manager, officer, advisor, agent, representative,
consultant or other independent contractor) for, the Company or any of its
subsidiaries or affiliates, or (iii) based upon Confidential Information.
4.1.3. "REMAINING RIGHTS" DEFINED. "REMAINING
RIGHTS" means all of Executive's rights, titles and interests in and to the
following intellectual property as of the date of this Agreement: any and all
inventions, discoveries, improvements, sales approaches, sales material,
training material, computer software, documentation, and other copyrightable
works or any other intellectual property (including, but not limited to,
materials or services subject to trademark or service xxxx registration), made,
conceived, created, developed or contributed to by Executive during the Term or
the term of any prior employment or consulting
14
relationship between Executive and the Company which are (i) directly or
indirectly related to the business, operations or activities of the Company or
any of its subsidiaries or affiliates, (ii) directly or indirectly related to
Executive employment by, or performance of other services (including as a
director, manager, officer, advisor, agent, representative, consultant or other
independent contractor) for, the Company or any of its subsidiaries or
affiliates, or (iii) based upon confidential or proprietary information which is
or was owned by the Company or any of its subsidiaries or affiliates at the time
that such intellectual property was made, conceived, created, developed or
contributed to by Executive.
4.1.4. "WORK FOR HIRE" DEFINED. "WORK FOR HIRE"
means any and all sales approaches, sales material, training material, computer
software, documentation, other copyrightable works or any other intellectual
property (including, but not limited to, materials or services subject to
trademark or service xxxx registration, but excluding Inventions) made,
conceived, created, developed or contributed to by Executive during the Term and
which are (i) directly or indirectly related to the business, operations or
activities of the Company or any of its subsidiaries or affiliates, (ii)
directly or indirectly related to Executive's employment by, or performance of
other services (including as a director, manager, officer, advisor, agent,
representative, consultant or other independent contractor) for, the Company or
any of its subsidiaries or affiliates, or (iii) based upon Confidential
Information.
4.1.5. "TERM" DEFINED FOR PURPOSES OF SECTIONS
4 AND 5. "Term", as used solely in Sections 4 and 5 of this Agreement, means the
entire duration of the Executive's relationship with the Company, including,
without limitation, any prior or subsequent employment periods as well as the
term of any prior or subsequent consulting or independent contracting
arrangements with the Company; PROVIDED that the manner in which such term is
used in the remaining portions of this Agreement shall not be altered or
expanded by the definition of such term for purposes of Sections 4 and 5 hereof.
4.2. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
Executive agrees that he shall not use or disclose, either during the Term or at
any time thereafter for a period of five (5) years from termination of
Executive's employment with the Company (except to the extent necessary during
the Term in connection with the necessary and proper performance of Executive's
duties on behalf of Elite and in good faith, or as required by law or
governmental authority) any Confidential Information.
4.3. COVENANT NOT TO COMPETE AND NON-SOLICITATION. In
consideration of Elite's payment of compensation pursuant to Section 2 hereof,
the right to receive the Severance Amount (if applicable), and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
4.3.1. Executive shall not directly or
indirectly, prior to the first anniversary of the end of the Term, by ownership
of securities or otherwise (except as a holder of less than five (5%) percent of
any class of equity securities of any other Person (as defined below), which
class of securities shall have been registered under Section 12 of the
Securities and Exchange Act of 1934, as amended (the "EXCHANGE ACT")), manage,
control, finance, consult with, engage or participate in, or assist, in any
manner with or in respect of any drug products as
15
to which the Company (or any of its affiliates), or any co-development partner
of the Company (or any of its affiliates), shall have (x) substantially
developed during the Term, or (y) have filed (irrespective of whether accepted
for filing by the FDA) in good faith either an abbreviated new drug application
or a new drug application (including 505(b)(2) Applications) with the FDA, in
each case, with respect to any drug technology developed, co-developed,
supplied, distributed, sold, marketed or manufactured by the Company (or any of
its affiliates), either by itself or together with any other individual,
corporation, partnership, trust, limited liability company, unincorporated
organization, joint stock corporation, joint venture, association or other
entity, or any government, or any agency or political subdivision thereof or any
branch of any legal entity (each, a "Person") (including any product marketed
through any authorized generic product agreement), during the Term..
4.3.2. Prior to the second anniversary of the
end of the Term, Executive shall not directly or indirectly solicit, recruit,
hire, induce or engage, or attempt to solicit, recruit, hire, induce or engage
any (i) Persons employed or retained as consultants or other independent
contractors by Elite, (ii) exclusive customers, strategic partners, exclusive
vendors or exclusive suppliers of Elite, or (iii) other Persons with whom or
which Elite maintains an exclusive commercial relationship, or encourage any
such Persons described in clauses (i), (ii) or (iii) above to terminate or
adversely alter their relationship with Elite (including, without limitation,
soliciting or endeavoring to cause any such Person to use any products or
services offered or provided by a Person other than Elite which compete with the
business, products or services of Elite).
4.3.3. Prior to the fifth anniversary of the
end of the Term, Executive shall not directly or indirectly make or cause to be
made any oral or written statement which is, or is reasonably likely to be,
defamatory in any material respect to the business, operations, activities or
reputation of Elite, or their respective directors, managers or officers.
4.4. ASSIGNMENT OF INTELLECTUAL PROPERTY.
4.4.1. Executive shall promptly disclose to
Elite any and all Inventions. Executive shall promptly communicate to Elite all
information, details and data pertaining to any Inventions in such form as Elite
requests. Executive agrees that Inventions, patents and patent applications are
the property of Elite, and any and all rights, titles or interests in and to
Inventions, patents or patent applications which Executive may have in any and
every jurisdiction are hereby assigned in full. Whenever Executive is requested
to do so by Elite, during or after the Term, Executive shall, at the Company's
sole cost and expense, promptly execute and deliver any and all applications,
assignments or other documents or instruments reasonably deemed necessary or
advisable by Elite to apply for and obtain Letters Patent of the United States
or any foreign country or to otherwise protect, confirm or establish Elite's
full and exclusive interests in any Inventions. The obligations set forth in
this Section 4.4.1 shall be binding upon the successors, assigns, executors,
administrators and other legal representatives of Executive.
4.4.2. Any and all Works for Hire shall be
considered "works made for hire" under the copyright laws of the United States
or property of Elite under applicable
16
federal, state, local and foreign trademark laws (as appropriate). Executive
shall promptly communicate to Elite any and all Works for Hire, and any and all
information, details and data pertaining to any Works for Hire, in such form as
Elite requests. To the extent that Works for Hire fail to qualify as (A) "works
made for hire" under the copyright laws of the United States or any other
jurisdiction or (B) property of Elite under applicable federal, state, local or
foreign trademark laws, Executive hereby assigns each Work for Hire and all
right, title and interest therein in any and every jurisdiction to Elite.
Whenever Executive is requested to do so by Elite, during or after the Term,
Executive shall, at the Company's sole cost and expense, promptly execute and
deliver any and all applications, assignments or other documents or instruments
reasonably deemed necessary or advisable by Elite to apply for and confirm and
effectuate full and exclusive ownership of Works for Hire in Elite, including,
but not limited to, ownership of any moral rights under the copyright law of any
nation, or any other rights under the intellectual property laws of any nation.
The obligations set forth in this Section 4.4.2 shall be binding upon the
successors, assigns, executors, administrators and other legal representatives
of Executive.
4.5. If a court declares that any term or provision
of this Section 4 is invalid or unenforceable, the parties to this Agreement
agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration or area of the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.
4.6. Executive hereby transfers, assigns, conveys,
grants and sets over to Elite and its successors and assigns forever, and Elite
hereby accepts, assumes and acquires from Executive for itself and its
successors and assigns forever, all of Executive's right, title and interest in
and to the Remaining Rights in any and every jurisdiction. Executive hereby
covenants and agrees that, at any time and from time to time after the date
hereof, at the request of Elite or its successors or assigns, he will (i)
promptly and duly execute and deliver, or cause to be executed and delivered to
Elite, all such further documents and instruments, and (ii) promptly take all
such other and further action, as may be requested by Elite to more effectively
transfer, assign, convey, grant, set over, vest, protect, confirm and establish
full and exclusive right, title and interest in and to all of the Remaining
Rights in and to Elite and its successors and assigns forever in any and every
jurisdiction, including, without limitation, any and all applications,
assignments or other documents or instruments deemed necessary or advisable by
Elite to apply for and obtain Letters Patent of the United States or any foreign
jurisdiction. The obligations set forth in this Section 4.6 shall be binding
upon the successors, assigns, executors, administrators and other legal
representatives of Executive. Executive hereby represents and warrants to Elite
that Executive has not transferred any right, title or interest in or to the
Remaining Rights to any other Person as of the date of the execution of this
Agreement and, as of the date of the execution of this Agreement, has not
entered into any agreement to do so.
4.7. Executive acknowledges and admits that a breach
of any of the covenants contained in this Section 4 will cause Elite irreparable
harm. Executive further acknowledges and admits that the damages resulting from
such a breach will be difficult or impossible to ascertain, and will be of the
sort that cannot be compensated by money or other
17
damages, and that Elite in addition to all other remedies available at law or
equity, shall be entitled to equitable relief, including specific performance
and injunctive relief as remedies for any such breach and that Executive further
agree to waive any requirement for securing or posting of any bond in connection
with such remedy. Executive therefore waives (and is estopped from asserting in
a court of law or equity) any argument that the breach, or threatened breach, of
any of the covenants contained in this Section 4 does not constitute irreparable
harm for which an adequate remedy at law is unavailable. Nothing contained in
this Section 4 or elsewhere in this Agreement shall be construed as prohibiting
Elite from pursuing any other remedies available at law or in equity for a
breach, or threatened breach, by the Employee of any of the covenants contained
in this Section 4.
4.8. "ELITE" DEFINED. For purposes of Section 4
hereof, "Elite" shall mean and include the Company, the Subsidiaries and any
affiliates and joint ventures.
5. CONTINUED COOPERATION; RETURN OF DOCUMENTS AND PROPERTY;
INJUNCTIVE RELIEF; NON-EXCLUSIVITY AND SURVIVAL.
5.1. CONTINUED COOPERATION. Executive shall, during
and after the expiration or termination of this Agreement for any reason, at
Company's sole expense, provide such reasonable cooperation as is requested by
Company with respect to any internal or external agency or legal investigation
(whether conducted by the FDA, the SEC or otherwise), lawsuits, financial
reports, or with respect to other matters within his knowledge, responsibilities
or purview, upon reasonable notice. Executive shall execute all lawful documents
reasonably necessary for Company to secure or maintain any Confidential
Information.
5.2. RETURN OF DOCUMENTS AND PROPERTY. Upon the end
of the Term, or upon the earlier request of the Company, Executive and his legal
or personal representatives will promptly return to the Company any and all
information, documents or other materials relating to or containing Confidential
Information which are, and any and all other property of the Company which is,
in Executive's possession, care or control, regardless of whether such materials
were created or prepared by Executive and regardless of the form of, or medium
containing, such information, documents, including without limitation, all
Company computers and hard drives, all computer files (whether or not such files
are stored on the Executive's personal computer), employee identification cards,
Company credit cards, keys and any other physical property of Company.
5.3. INJUNCTIVE RELIEF. The parties hereby
acknowledge and agree that (a) Company will be irreparably injured in the event
of a breach by Executive of any of his obligations under Sections 4 and 5
hereof; (b) monetary damages will not be an adequate remedy for any such breach;
(c) Company will be entitled to injunctive relief, in addition to any other
remedies that it may have, in the event of any such breach and Executives
further agree to waive any requirement for securing or posting of any bond in
connection with such remedy, and waives (and is estopped from asserting in a
court of law or equity) any argument that the breach, or threatened breach, of
any of the covenants contained in Sections 4 or 5 does not constitute
irreparable harm for which an adequate remedy at law is unavailable. Nothing
contained in this Section 5 or elsewhere in this Agreement shall be construed as
prohibiting the Company from
18
pursuing any other remedies available at law or in equity for a breach, or
threatened breach, by the Employee of any of the covenants contained in this
Section 5; and (d) the existence of any claims that Executive may have against
Company, whether under this Agreement or otherwise, will not be a defense to the
enforcement by Company of any of its rights under Sections 4 and 5 hereof. All
of the parties' covenants and Company's rights to specific enforcement,
injunctive relief and other remedies as set forth herein shall apply in the
event of any breach or threatened breach by Executive of any of the provisions
of Sections 4 and/or 5 hereof. The parties further agree that any action
concerning any alleged breach(es) of Sections 4 and/or 5 hereof shall not be
brought or addressed in arbitration, and the existence of any demand for
arbitration or pendency of any dispute in arbitration under this Agreement shall
not be a basis to delay or defer adjudication by a court of any demand for
specific performance, injunctive relief or other remedies in relation to any
alleged breach(es) of Sections 4 and/or 5 hereof.
5.4. NON-EXCLUSIVITY AND SURVIVAL. The covenants of
Executive contained in Sections 4 and 5 hereof are in addition to, and not in
lieu of, any obligations that Executive may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise, and such
covenants and their enforceability shall survive any expiration or termination
of the Term by either party and any investigation made with respect to the
breach thereof by Company at any time.
6. MISCELLANEOUS PROVISIONS.
6.1. SECTION 409A. Notwithstanding any provision of
this Agreement to the contrary, if Executive is a "specified employee" as
defined in Section 409A of the Internal Revenue Code of 1986, as amended, and
the regulations issued or to be issued by the Department of the Treasury
thereunder ("SECTION 409A"), Executive shall not be entitled to any payments
upon a termination of employment until the earlier of (i) the date which is six
months after the termination of employment for any reason other than death or
(ii) the date of the Executive's death and the first such payment shall equal
the sum of all payments that would have been made from the date of termination
to the date of such first payment were it not for the delay in payment for
Section 409A purposes.
6.2. SEVERABILITY. If, in any jurisdiction, any term
or provision hereof is determined to be invalid or unenforceable, (a) the
remaining terms and provisions hereof shall be unimpaired; (b) any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such term or provision in any other jurisdiction; and (c)
the invalid or unenforceable term or provision shall, for purposes of such
jurisdiction, be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
6.3. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, and by the two parties hereto in separate
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
19
6.4. NOTICES. All notices, requests, demands and
other communications hereunder shall be in writing and shall be deemed duly
given upon receipt when delivered by hand, overnight delivery or facsimile (with
confirmed delivery), or three (3) business days after posting, when delivered by
registered or certified mail or private courier service, postage prepaid, return
receipt requested, as follows:
If to Company, to:
Elite Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx
Facsimile No.: (000) 000-0000
Attn: Chief Executive Officer
With a copy (which shall not constitute notice) to:
Reitler Xxxxx & Xxxxxxxxxx LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
If to Executive, to:
Xxxxx Xxxx
0000 Xxxxxxx Xxxx
Xxx Xxxx, XX 00000
or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto.
6.5. AMENDMENT. No provision of this Agreement may be
modified, amended, waived or discharged in any manner except by a written
instrument executed by both Company and Executive.
6.6. ENTIRE AGREEMENT. Except as specifically
provided herein, this Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof, and supersedes all prior
agreements and understandings of the parties hereto, oral or written. Company
and Executive shall execute and deliver all such further documents as may be
necessary to carry out the intent of the preceding sentence.
20
6.7. APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be wholly performed therein.
6.8. HEADINGS. The headings contained herein are for
the sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.
6.9. BINDING EFFECT; SUCCESSORS AND ASSIGNS.
Executive may not delegate any of his duties or assign any of his rights
hereunder. This Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their respective heirs, legal representatives and
beneficiaries, successors and permitted assigns. Company shall require any
successor (whether direct or indirect and whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Company, by an agreement in form and substance reasonably satisfactory
to Executive, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Company would be required to perform if
no such succession had taken place.
6.10. WAIVER. The failure of either of the parties
hereto to at any time enforce any of the provisions of this Agreement shall not
be deemed or construed to be a waiver of any such provision, nor to in any way
affect the validity of this Agreement or any provision hereof or the right of
either of the parties hereto thereafter to enforce each and every provision of
this Agreement. No waiver of any breach of any of the provisions of this
Agreement shall be construed or deemed to be a waiver of any other or subsequent
breach.
6.11. CAPACITY, ETC. Each of Executive and Company
hereby represents and warrants to the other that, as the case may be: (a) he or
it has full power, authority and capacity to execute and deliver this Agreement
and to perform his or its obligations hereunder; (b) such execution, delivery
and performance shall not (and with the giving of notice or lapse of time or
both would not) result in the breach of any agreements or other obligations to
which he or it is a party or he or it is otherwise bound or violate any law; and
(c) this Agreement is his or its valid and binding obligation enforceable in
accordance with its terms.
6.12. ENFORCEMENT; JURISDICTION. If any party
institutes legal action to enforce or interpret the terms and conditions of this
Agreement, the prevailing party shall be awarded reasonable attorneys' fees at
all trial and appellate levels and the expenses and costs incurred by such
prevailing party in connection therewith. Any legal action, suit or proceeding,
in equity or at law, arising out of or relating to this Agreement shall be
instituted exclusively in the State or Federal courts located in the State and
County of New York and each party agrees not to assert, by way of motion, as a
defense or otherwise, in any such action, suit or proceeding, any claim that
such party is not subject personally to the jurisdiction of any such court, that
the action, suit or proceeding is brought in an inconvenient forum, that the
venue of the action, suit or proceeding is improper or should be transferred, or
that this Agreement or the subject matter hereof may not be enforced in or by
any such court. Each party further irrevocably submits to the jurisdiction of
any such court in any such action, suit or proceeding. Any and all service of
process and any other notice in any such action, suit or proceeding shall be
effective against any
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party if given personally or by registered or certified mail, return receipt
requested or by any other means of mail that requires a signed receipt, postage
prepaid, mailed to such party as herein provided. Nothing herein contained shall
be deemed to affect or limit the right of any party to serve process in any
other manner permitted by applicable law.
6.13. WITHHOLDING. The payment of any amount pursuant
to this Agreement, including, without limitation, pursuant to Sections 2 and 3,
shall be subject to any applicable withholding and payroll taxes, which may be
deducted by the Company in its sole discretion.
6.14. ADVICE OF COUNSEL. Executive represents and
warrants that he has had full opportunity to seek advice and representation by
independent counsel of his or her own choosing in connection with the
interpretation, negotiation and execution of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the date first above written.
Elite Pharmaceuticals, Inc.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
/s/ Xxxxx Xxxx
----------------------------------------
Xxxxx Xxxx
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