UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
September 2, 2005
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Date of Report (Date of earliest event reported)
ELITE PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-45241 22-3542636
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
165 Ludlow Avenue, Northvale, New Jersey 07647
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(Address of principal executive offices)
(201) 750-2646
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
ITEM 3.02 UNREGISTERED SALES OF SECURITIES.
On September 2, 2005, the Registrant entered into an amended and
restated employment agreement with Bernard J. Berk (the "EMPLOYMENT AGREEMENT")
providing for Mr. Berk to continue to serve as the Registrant's Chief Executive
Officer through August 31, 2009. The Employment Agreement also provides for an
annual bonus as determined by the Compensation Committee of the Registrant's
Board of Directors.
Mr. Berk waived his rights to 75,000 of 300,000 options granted to him
on July 23, 2003. The Registrant determined that the remaining 225,000 options
are fully vested as a result of the occurrence of a Strategic Transaction (as
defined in the Employment Agreement, dated as of July 23, 2003, by and between
the Registrant and Mr. Berk (the "ORIGINAL EMPLOYMENT AGREEMENT")), pursuant to
the terms of the Original Employment Agreement. Additionally, Mr. Berk's salary
was increased to $330,140 as a result of the occurrence of a Strategic
Transaction pursuant to the terms of the Original Employment Agreement. It was
agreed that such increase would be effective May 1, 2005; provided, however that
such increase will accrue and not be payable until November 1, 2005.
Pursuant to the Employment Agreement, Registrant granted to Mr. Berk
under its 2004 Stock Option Plan (the "Plan") ten year options to purchase
600,000 shares of common stock at $2.69, the fair market value of the Common
Stock as of the time of the grant, of which 100,000 vest on September 2, 2006,
100,000 vest on September 2, 2007 and the remaining 400,000 vest as follows: (a)
50,000 shares upon the closing of each product license or product sale
transaction (on a product by product basis and only once for each product) in
which the Registrant receives an aggregate of at least $5,000,000 in net cash
proceeds (including royalties and signing, license and milestone payments) in
connection with such product transaction; (b) 10,000 shares upon the filing by
the Registrant (in the Registrant'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 an application filed with the FDA
under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.
Section 301 et seq.) (collectively, a "NDA"), for a product not covered by a
previous FDA application; and (c) 40,000 shares upon the approval by the FDA of
any ANDA or NDA (filed in the Registrant's name) for a product not previously
approved by the FDA.
In the event that options to purchase 400,000 shares of Common Stock
referenced in the above paragraph have fully vested, the Registrant also agreed
to grant under the Plan to Mr. Berk fully vested options to purchase at the fair
market value on the date of grant additional shares subject to the full vesting
of all the aforesaid options as follows: (a) 50,000 options upon the closing of
each product license or product sale transaction (on a product by product basis
and only once for each product) in which the Registrant receives an aggregate of
at least $5,000,000 in net cash proceeds (including royalties and signing,
license and milestone payments) in connection with such product transaction; (b)
10,000 options upon the filing by the Registrant (in the Registrant's name) with
the FDA of either an ANDA or NDA for a product not covered by a previous FDA
application; and (c) 40,000 options upon the approval by the FDA of any ANDA,
NDA or 505(b)(2) application of the Registrant (filed in the Registrant's name)
for a product not previously approved by the FDA.
The Employment Agreement provides that if the Registrant terminates Mr.
Berk's employment without cause or Mr. Berk terminates his employment for good
reason, Mr. Berk shall be entitled to the following severance: (i) any earned
but unpaid base salary plus any unpaid reimbursable expenses as of the effective
date of termination of his employment, (ii) the then-current base salary and
reimbursement of the cost to replace the life and disability insurance coverages
afforded to Mr. Berk under the Registrant's benefit plans with substantially
similar coverages, following the effective date of termination of his
employment, for a period equal to the greater of (x) the remainder of the
then-current term, or (y) two years following the effective date of termination
and (iii) payment of premiums for health insurance for the period during which
Mr. Berk is entitled to continued health insurance coverage as specified in the
Comprehensive Omnibus Budget Reconciliation Act. In the event that the
Registrant terminates Mr. Berk's employment pursuant to a permanent disability,
Mr. Berk shall be entitled to the severance specified above, less any amounts
actually received by Mr. Berk under any disability insurance coverage provided
for and paid by the Registrant. In the event that the Registrant terminates Mr.
Berk's employment for cause or Mr. Berk terminates his employment with the
Registrant without good reason, Mr. Berk shall be entitled to any earned but
unpaid base salary plus any unpaid reimbursable expenses as of the effective
date of termination of his employment.
In lieu of any severance that may otherwise be payable to Mr. Berk, in
the event of a change of control and Mr. Berk elects to terminate his employment
for any reason within 90 days following the consummation of such change of
control, Mr. Berk shall be entitled to the following: (i) any earned but unpaid
base salary plus any unpaid reimbursable expenses as of the effective date of
termination of his employment, (ii) $1,000,000, (iii) the then-current base
salary for a period of 12 months following the effective date of termination,
(iv) reimbursement of the cost, for a period equal to the 12 months following
the effective date of termination, of replacing the life and disability
insurance coverages afforded to Mr. Berk under the Registrant's benefit plans
with substantially similar coverages and (v) payment of premiums for health
insurance for the period during which Mr. Berk is entitled to continued health
insurance coverage as specified in the Comprehensive Omnibus Budget
Reconciliation Act.
In lieu of any severance that may otherwise be payable to Mr. Berk in
the event of a change of control and the Registrant terminates Mr. Berk's
employment as Chief Executive Officer of the Registrant in connection with, or
within 180 days following, the consummation of such change of control and other
than a termination for cause, Mr. Berk shall be entitled to the following: (i)
any earned but unpaid base salary plus any unpaid reimbursable expenses as of
the effective date of termination of his employment, (ii) $1,000,000, (iii) the
then- current base salary for a period of 12 months following the effective date
of termination, (iv) reimbursement of the cost, for a period equal to 12 months
following the effective date of termination, of replacing the life and
disability insurance coverages afforded to Mr. Berk under the Registrant's
benefit plans with substantially similar coverages and (v) payment of the
premiums for health insurance for the period during which Mr. Berk is entitled
to continued health insurance coverage as specified in the Comprehensive Omnibus
Budget Reconciliation Act.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
a) Not applicable.
b) Not applicable.
c) Exhibits
10.1 Amended and Restated Employment Agreement, dated as of
September 2, 2005, by and between the Registrant and
Bernard Berk.
10.2 Amendment, dated as of September 2, 2005, by and between
the Registrant and Bernard Berk, to the Stock Option
Agreement, dated as of July 23, 2003.
10.3 Stock Option Agreement, dated as of September 2, 2005, by
and between the Registrant and Bernard Berk.
10.4 Stock Option Agreement, dated as of September 2, 2005, by
and between the Registrant and Bernard Berk.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 7, 2005
ELITE PHARMACEUTICALS, INC.
By: /s/ Bernard Berk
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Name: Bernard Berk
Title: Chief Executive Officer