EXHIBIT 10.27
AGREEMENT
This Agreement ("Agreement") is made between Caraco Pharmaceutical
Laboratories, Ltd. (the "Company") and Xxxxxxxx X. Xxxxxx ("Xxxxxx") as of the
date set forth above the parties' signatures below.
RECITALS
Xxxxxx has been employed as the Chief Executive Officer, President and
Treasurer of the Company. Xxxxxx and the Company entered into that certain
Employment Agreement dated September 22, 1998 (the "Employment Agreement"). The
Employment Agreement provides for a term of five years and then automatically
renews for successive one year periods unless notice is provided 90 days prior
to any renewal. The Employment Agreement automatically renewed for the period
September 22, 2003 to September 21, 2004. Among other things, in the event
Xxxxxx terminates without cause, the Employment Agreement provides Xxxxxx with
no severance package and includes extensive non-compete restrictions.
Xxxxxx wishes to retire effective the close of business on September
30, 2003 (the "Retirement Date"). The parties recognize Xx. Xxxxxx'x
contributions to the success of the Company and wish to accommodate Xx. Xxxxxx'x
desire to retire on the Retirement Date pursuant to the agreements set forth
below.
ACCORDINGLY, IT IS AGREED as follows:
1. RESIGNATION. Xxxxxx voluntarily resigns employment with the
Company effective the close of business on the Retirement Date.
Xxxxxx'x resignation includes without limitation his resignation from
all officer positions with the Company, including his positions as
Chief Executive Officer, President and Treasurer of the Company as set
forth in the written and signed letter of resignation included as
Exhibit A hereto. Xxxxxx also agrees to resign as a director of the
Company if he, directly or indirectly (and whether or not for
compensation), works for, is employed by, owns, manages, operates,
controls, finances, participates or engages in, or has any interest in,
any person, firm, entity, partnership, limited partnership, limited
liability company, corporation or business which engages in the
Business as defined in the Employment Agreement whether as an employee,
owner, sole proprietor, partner, adventurer, member, shareholder,
officer, director, agent, creditor, consultant or in any capacity which
calls for the rendering of personal services, advice, acts of
management, operation or control (except with respect to Sun
Pharmaceutical Industries Limited and its affiliates).
2. RETIREMENT PAYMENT. The Company shall pay to Xxxxxx, as a
retirement payment, his base salary at the annual rate of $156,000,
less applicable deductions and withholding, payable bi-weekly
commencing October 1, 2003 through March 31, 2004, in accordance with
the Company's regular payroll procedures and prorated accordingly
("Retirement Payment"). The Company shall report such payments as
income to Xxxxxx with the filing of W-2 forms. Except as set forth in
this Agreement, Xxxxxx shall not receive any other compensation from
the Company including, without limitation, Xxxxxx shall not be paid any
bonus or incentives for 2003. Xxxxxx'x compliance with this Agreement
is a condition to the Company's obligations to pay the Retirement
Payment or any installments thereof and to provide the benefit
continuation under Section 3 and the benefits under Section 4.
3. CONTINUATION OF CERTAIN BENEFITS. All benefits to Xxxxxx from
the Company shall terminate as of the Retirement Date, except as
provided in Sections 2 and 4 and as follows:
(d) Health and life insurance will be continued at
Company cost through March 31, 2004.
(e) Xxxxxx shall be paid for accrued but unused vacation
through the Retirement Date.
(f) Xxxxxx shall receive a monthly car allowance of $380
through March 31, 2004.
(g) Xxxxxx shall receive a contribution of $5,400 for his
retirement account in January 2004.
(h) Xxxxxx shall receive two weeks "vacation" pay to be
paid for the two week period ending April 14, 2004.
4. VESTING OF OPTIONS. The Company agrees that Xxxxxx'x option
for 40,000 shares of its Common Stock which was part of the grant of
options to purchase 200,000 shares of Common Stock under the Company's
1999 Equity Participation Plan (the "1999 Plan"), and which under the
current terms of Xxxxxx'x Option Agreement become exercisable on June
2, 2004, is hereby accelerated and shall become exercisable commencing
October 2, 2003. The Company further agrees that Xxxxxx'x options under
the 1999 Plan which are currently exercisable (and the option for
40,000 shares made exercisable pursuant to this Section 4) shall not
expire within 90 days following the termination of Xxxxxx'x employment
(i.e., 90 days from the Retirement Date), but, rather, shall expire 90
days from the date Xxxxxx ceases to be a director of the Company.
5. RETURN OF COMPANY PROPERTY. Except as otherwise set forth in
this Agreement, Xxxxxx agrees on the Retirement Date to return all
property of the Company including, without limitation, all keys, access
passes, parking sticker, credit cards, computers, equipment, software
and all Company records and documents (without retaining any copies
thereof).
6. DUTIES AS TO CONFIDENTIAL INFORMATION AND NONINTERFERENCE.
Xxxxxx agrees that Section 7 of the Employment Agreement will remain in
full force and effect until the Retirement Date. After the Retirement
Date, Xxxxxx agrees that (i) he will keep confidential and not disclose
any and all Confidential Information of the Company as defined in and
pursuant to the terms and conditions of Section 7 of the Employment
Agreement, and (ii) also pursuant to the terms and conditions of
Section 7 of the Employment Agreement, he will not, directly or
indirectly, during the thirty-six (36) month period following the
Retirement Date, induce or attempt to induce, any person who is an
employee or consultant of the Company to leave the employ or consulting
relationship with the Company. For purposes of clarification, on and
after the Retirement Date, except with respect to the surviving
provisions of Section 7 of the Employment Agreement relating to
confidentiality and the prohibition on Xxxxxx'x inducing employees or
consultants to leave the employ or consulting relationship with the
Company, the other non-compete provisions of Section 7 of the
Employment Agreement will not be in effect or applicable to Xxxxxx.
This Section 6 shall not apply to any such Confidential Information
which is or becomes in the public domain and/or in the generic drug
industry through no action on the part of Xxxxxx, was available to
Xxxxxx on a non-confidential basis from sources other than the Company
or its representatives or advisors, is known, through no action on the
part of Xxxxxx, to a generic drug company which employs Xxxxxx, is
generally disclosed to third parties by the Company without restriction
on such third parties, or is approved for release by written
authorization of the Company.
7. REPRESENTATIONS. Xxxxxx represents that he has been advised by
the Company that he should consult with an attorney before executing
this Agreement.
8. Miscellaneous.
(a) This Agreement constitutes the entire agreement
between Xxxxxx and the Company and supersedes any
prior or contemporaneous promises, agreements or
representations except as otherwise set forth in this
Agreement. This Agreement cannot be modified orally
but only in a written document signed by Xxxxxx and
an authorized representative of the Company.
(b) This Agreement shall be governed by the laws of the
State of Michigan.
(c) The captions and headings of the Sections of this
Agreement are for convenience of reference
only and are not to be considered in construing this
Agreement. This Agreement accurately sets forth the
intent and understanding of each party. This
Agreement shall not be construed for or against
either party as a result of the drafting hereof if
there is any dispute over the meaning or intent of
any of its provisions.
(d) If any provision of this Agreement, in whole or in
part, is determined to be unlawful or unenforceable,
the parties agree that such provision shall be deemed
modified, if possible, to the extent necessary to
render such provision valid and enforceable to the
maximum extent permitted by law and, if not possible,
it shall be severed from the Agreement. In either
event all remaining provisions of this Agreement
shall remain in full force and effect.
(e) This Agreement may be executed in counterparts, which
together shall be considered as if one Agreement. A
photocopy of this Agreement is effective as an
original.
(f) The parties acknowledge that as of the Retirement
Date, they have no claims and/or causes of action of
any nature against each other except that any claims
and/or causes of action prior to the Retirement Date
regarding fraud, breach of fiduciary duty,
dishonesty, reckless or willful misconduct, gross
negligence, embezzlement, conversion, self dealing or
criminal conduct are expressly preserved. In
addition, the parties retain all rights against each
other with respect to their obligations and
responsibilities under this Agreement.
Executed effective as of 2nd day of October, 2003.
READ BEFORE SIGNING
Witness:
------------------------------- /s/ Xxxxxxxx X. Xxxxxx
----------------------
Xxxxxxxx X. Xxxxxx
Caraco Pharmaceutical Laboratories, Ltd.
------------------------------- By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Its: Chief Operating Officer
EXHIBIT A
I resign as Chief Executive Officer, President and Treasurer of Caraco
Pharmaceutical Laboratories, Ltd. effective September 30, 2003. A photocopy of
this resignation is effective as an original.
Date: 2nd day of October, 2003 /s/ Xxxxxxxx X. Xxxxxx
----------------------
Xxxxxxxx X. Xxxxxx
