EXHIBIT 10.26
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 30th day of
August, 2002, by and between CARACO PHARMACEUTICAL LABORATORIES LTD. (the
"Company") and XXXXXXXX X. XXXXX ("Employee").
W I T N E S S E T H
WHEREAS, the Company employs the Employee as its Chief Operating
Officer;
WHEREAS, the parties hereto are desirous of entering into a formal
agreement of employment.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties covenant and agree as follows:
1. Employment. The Employee is the Chief Operating Officer of the Company.
2. Duties. The Employee shall diligently and conscientiously devote on a
full-time basis, his best efforts to the discharge of his duties as
established from time to time by the Bylaws of the Company, the Board
of Directors of the Company, the Compensation Committee, and the Chief
Executive Officer of the Company, and shall be under the direct
supervision of the Chief Executive Officer. Such duties shall include,
but not be limited to, those set forth in Exhibit "A," a copy of which
is attached hereto and is herein incorporated by reference.
3. (a) Compensation. The Company shall pay the Employee a salary at a rate
of $130,000 annually, subject to all applicable withholdings, for
services rendered as the Chief Operating Officer. The Employee's base
salary shall be reviewed annually, and may be adjusted based upon
performance and other relevant factors deemed reasonable by the
Company.
(b) Other Benefits. The Employee shall be entitled to participate in
any plan or program of employee benefits maintained by the Company for
all employees as of the date hereof, and which may be hereafter adopted
or modified by the Company, and which is or shall be available to the
Employee as a result of his employment by the Company pursuant to this
Agreement, subject to the requirements of such plans or programs. A
list of specific benefits to which the Employee shall be entitled is
set forth in Exhibit "B," a copy of which is attached hereto and is
herein incorporated by reference.
(c) Vacations. The Employee shall be entitled to three (3) weeks paid
vacation each year.
4. Term. Unless terminated earlier in accordance with Section 6 hereof, or
renewed pursuant to Section 5 hereof, the term of this Agreement shall
be deemed to have commenced as of January 1, 2002, and shall continue
for a period of five (5) years thereafter, that is through December 31,
2006.
5. Renewal. This Agreement shall automatically renew for successive
one-year periods at the end of the five (5) year term, subject,
however, to ninety (90) days written notice of termination by either
party
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hereto prior to the commencement of any such renewal period. The terms
and conditions of this Agreement shall apply during any such renewal
period.
6. Termination. Notwithstanding any provision herein to the contrary,
during the term of this Agreement, or during any period following an
automatic renewal under Section 5 hereof, the Company's employment of
the Employee under this Agreement shall be terminated:
(a) Upon the Employee's death.
(b) Upon the Disability (as that term is defined herein) of the
Employee. For purposes of this Agreement, the Disability of Employee
shall mean an illness, injury, or physical or mental condition of the
Employee occurring for a period of any ninety (90) or more days out of
a one hundred and eighty (180) day period which results in the
Employee's inability during such period to perform substantially all of
his regular duties to the Company. In the event the Company and the
Employee do not agree on whether the Employee suffered a Disability
within the meaning of this Section 6, then the issue shall be settled
by binding arbitration under the rules and regulations of the American
Arbitration Association, and the decision or award of the arbitrator or
arbitrators in such arbitration shall be final, conclusive and binding
upon the parties thereto and judgment may be entered thereon in any
court of competent jurisdiction.
(c) By the Company for "just cause" (as that term is defined herein) or
without cause. For purposes of this Agreement, "just cause" shall mean
dishonesty, or refusal or failure to faithfully or diligently perform
the Employee's duties contemplated by this Agreement, including but not
limited to the failure by the Employee to adhere to the policies of the
Board.
(d) By the Employee for "cause" not attributable to the Employee, or
without cause. For purposes of this Agreement for "cause" not
attributable to Employee shall mean the Company failing to make any
payment of base salary to the Employee within thirty (30) days after
such payment is due.
(e) Employee shall receive the compensation described below in full
settlement of the termination of his employment with the Company:
(i) In the event of the death or Disability of Employee or if the
Company terminates the Employee for "just cause," the Employee
shall be entitled to the base salary and benefits earned by him
prior to the date of death, Disability or termination.
(ii) In the event that the Company terminates the Employee without
cause, the Employee shall receive a severance package as follows:
(1) The Employee shall receive monthly base salary
payments for six (6) months from the date of termination;
(2) The Company shall continue premium coverage payments
for health insurance for six (6) months from the date of
death, Disability or termination;
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(3) Any stock options that would become available for
exercise at the end of the year during which such death,
Disability or termination occurred shall vest;
(iii) In the event the Employee terminates this Agreement for
cause not attributable to the Employee, the Employee shall
receive a severance package as follows:
(1) The Employee shall receive monthly base salary
payments for six (6) months from the date of
termination;
(2) The Company shall continue premium coverage
payments for health insurance for six (6) months from
the date of termination;
(3) Any stock options that would become available for
exercise at the end of the year during which such
termination occurred shall vest.
(iv) In the event that the Employee terminates this Agreement
without cause, the Employee shall be entitled to the base
salary and benefits earned by him prior to the date of
termination.
7. Confidentiality. At all times, Employee shall keep secret and inviolate
and shall not divulge, communicate, use to the detriment of the Company
or for the benefit of any other person or persons or misuse in any way
any knowledge or secrets, tax records, personnel histories, sales
information, computer programs, assets, accounts, books, records,
customers, operations, personnel and contracts of the Company which
Employee may or hereafter come to know as a result of Employee's
association with or which is unique to the Company ("Confidential
Information"). Employee may disclose Confidential Information if
required by any judicial or governmental request, requirement or order;
provided that Employee will take reasonable steps to give the Company
sufficient prior notice to contest such request, requirement or order.
The provisions of this Paragraph 7 shall survive the termination of
this Agreement and Employee's employment with the Company.
8. Waiver. Failure by either party to insist upon strict compliance with
any of the terms, covenants, or conditions hereof shall not be deemed a
waiver by that party of any such term, covenant or condition, nor shall
any waiver or relinquishment of any right or power hereunder at any one
or more times be deemed a waiver or relinquishment of any such right or
power at any other time or times.
9. Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any
other provision.
10. Nontransferability. Neither the Employee, nor his heirs, assigns or
estate shall have the right to assign, encumber or dispose of any
payment or right hereunder, which payment and right is expressly
declared nonassignable and nontransferable except as otherwise
specifically provided herein.
11. Successors and Assigns. The Company and the Employee bind themselves,
and their respective partners, successors, permitted assigns, heirs and
legal representatives to all of the terms and conditions of this
Agreement.
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12. Assignment. This Agreement, and any or all rights hereunder, may not be
assigned, in whole or in part, by the Employee. The Company may assign
this Agreement, in whole or in part, and any or all of its rights
hereunder.
13. Notices.
(a) Every notice or other communication required or permitted to be
given under this Agreement ("Notice") shall be in writing and shall be
given by registered or certified mail, postage prepaid, return receipt
requested, or by delivery of such Notice personally or by causing such
Notice to be delivered next day delivery by reputable air courier. All
such Notices shall be mailed or delivered to the Parties at the
following addresses:
If to Company: CARACO PHARMACEUTICAL LABORATORIES LTD
Board of Directors
0000 Xxxxxx XxXxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
If to Employee: Xxxxxxxx X. Xxxxx
000 Xxx Xxxxx Xx. X.
Xxxxxxxxxx Xxxxx, XX 00000
or other such addresses as the Parties may from time to time designate
by written notice. Delivery under this Paragraph 13, when by mail,
shall be effective as of the date upon which the return receipt is
accepted or refused. A Notice personally delivered under this Section
13 shall be effective upon such delivery or, if delivery is refused,
upon such refusal. A Notice delivered next day delivery by reputable
air courier shall be effective upon the next business day after having
been sent.
14. Entire Agreement. The foregoing provisions contain the entire agreement
of the parties hereto, and no modification hereof shall be binding upon
the parties unless the same is in writing and signed by the respective
parties hereto.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Michigan.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but such counterparts together shall constitute one
instrument.
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IN WITNESS WHEREOF, the Employee and the Company have executed this
Agreement on the date first above written.
CARACO PHARMACEUTICAL LABORATORIES LTD.
a Michigan corporation
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxxx X. Xxxxxx
Chief Executive Officer
EMPLOYEE
By: /s/Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
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EXHIBIT "A"
1. Job Title: Chief Operating Officer
2. Major Goals and Responsibilities
- Assists in developing the basic objectives, policies and operating plans of
the Company's business under the direction of the Chief Executive Officer.
- Under the direction of the Chief Executive Officer, prepares adequate plans
for the future development and growth of the Company's business.
- Under the direction of the Chief Executive Officer, analyzes operating
results of the Company and its principal components relative to established
objectives and makes recommendations of appropriate steps to correct
unsatisfactory conditions.
- Under the direction of the Chief Executive Officer, assists in developing
working capital requirements, and determining financing needs of the
Company.
3. Reports to: Chief Executive Officer
4. People Managed: See the attached organizational chart
5. Position within the Organizational Structure: Member of management under
the Chief Executive Officer
6. Primary Contact: Chief Executive Officer
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EXHIBIT "B"
1. Health Insurance
Health insurance with family coverage consistent with the health
insurance provided other executives of the Company.
2. Car Allowance
A Company car will be provided to the Employee, the value of which
shall not exceed $380.00 per month.
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