Exhibit 10.10
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STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT made as of this 23rd day of July, 2003
(this "Agreement"), by and between Elite Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Bernard Berk (the "Executive").
WITNESSETH THAT:
WHEREAS, on June 3, 2003 (the "Grant Date"), the Board of Directors of
the Company granted to the Executive an option (the "Option") to purchase
300,000 shares (the "Option Shares") of the Company's Common Stock, par value
$.01 per share (the "Common Stock"); and
WHEREAS, the Company and the Executive desire to memorialize the terms
and conditions of the grant of the Option to the Executive;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Option Grant. The Company granted to the Executive an Option to purchase
from the Company all or any portion of the Option Shares, on the terms and
conditions herein set forth. It is intended that the grant of the Option
shall, to the maximum extent permitted by law, qualify as an incentive
stock option, as defined in Section 422 of the Internal Revenue Code of
1986, as amended. However, notwithstanding such designation, the Executive
acknowledges that, since he will becomes eligible in 2003 to exercise
Option Shares having a fair market value (as determined as of the Grant
Date) in excess of $100,000, those Option Shares representing the excess
shall be treated as nonstatutory stock options. The portion of the Option
that qualifies as an incentive stock shall be subject to the terms and
conditions of the Company's 1997 Incentive Stock Plan (the "Plan"). In the
event of any conflict between the terms and conditions of this Agreement
and the Plan, this Agreement shall control.
2. Exercise Price; Time of Exercise.
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(a) The exercise price for the Option Shares shall be $2.01 per share (the
"Option Price"), the closing price of a share of Common Stock, as
listed on the American Stock Exchange, on the Grant Date. The exercise
price shall be paid by check of the Executive.
(b) The Option shall be one hundred percent (100%) exercisable on the
Grant Date.
3. Term of Option. The term of the Option shall be for a period of ten (10)
years from the Grant Date (the "Termination Date"), subject to earlier
termination as hereinafter provided.
4. Termination Period. This Option may be exercised for three (3) months after
the Executive ceases to be employed by the Company (but in no event later
than the Termination Date); provided, however, in the event the Executive
ceases to be employed by the Company due to his death or Permanent
Disability (as defined in the Employment Agreement, dated as of July 23,
2003 (the "Employment Agreement"), by and between the Company and the
Executive), this Option may be exercised by the Executive (or, in the case
of the Executive's death, by the Executive's estate or by any person who
acquires the right to exercise the Option by bequest or inheritance) for
six (6) months after the Executive ceases to be employed by the Company
(but in no event later than the Termination Date). Notwithstanding the
foregoing, in the event the Company terminates the Executive's employment
pursuant to a Termination for Cause (as defined in the Employment
Agreement) or the Executive voluntarily terminates his employment with the
Company (other than as a result of a Termination for Good Reason (as
defined in the Employment Agreement) or the death or Permanent Disability
of the Executive), the Option shall immediately terminate upon the date the
Executive ceases to be employed by the Company and the Executive shall no
longer have the right to exercise the Option and purchase the Option
Shares.
5. Non-Transferability. The Option shall not be transferable otherwise than by
will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Executive, only by the Executive.
6. Not a Contract of Employment. Nothing in this Agreement shall confer upon
the Executive any right to continue in the employ of the Company or of any
of its subsidiaries or interfere in any way with the right of the Company
or any such subsidiary to terminate the employment of the Executive at any
time.
7. Reservation of Shares. The Company shall at all times during the term of
the Option reserve and keep available such number of shares of Common Stock
as will be sufficient to satisfy the requirements of this Agreement.
8. Investment Certificate. Prior to the receipt of stock certificates pursuant
to the exercise of the Option granted hereunder, the Executive shall, if
required in the Company's discretion, demonstrate an intent to hold the
shares acquired by exercise of the Option for investment and not with a
view to resale or distribution thereof to the public by delivering to the
Company an investment certificate or letter in such form as the Company may
require.
9. Status. Neither the Executive nor the Executive 's executor, administrator,
heirs or legatees shall have any rights as a holder of shares of Common
Stock subject to this Option until exercise of the Option, payment of the
Option Price, and the issuance of a stock certificate evidencing the Option
Shares issuable upon exercise of the Option.
10. Certain Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, other change in corporate
structure affecting the Common Stock, or spin-off or other distribution of
assets to stockholders, an appropriate adjustment shall be made to the
number of Option Shares, the Option Price
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and the number of shares of Common Stock reserved for issuance under this
Agreement.
11. Tax Withholding. The exercise of any Option Shares is subject to the
condition that, if at any time the Company shall determine, in its
discretion, that the satisfaction of withholding tax or other withholding
liabilities under any state or Federal law is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery of
Option Shares pursuant thereto, then, in such event, the exercise of the
Option or any portion thereof shall not be effective unless and until such
withholding tax or other withholding liabilities shall have been satisfied
in a manner acceptable to the Company.
12. Miscellaneous.
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(a) All notices, demands, requests, or other communications that may be or
are required to be given, served, or sent by a party pursuant to this
Agreement shall be in writing and shall be (i) personally delivered,
(ii) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (iii) sent by overnight
delivery carrier, addressed as follows:
(A) If to the Company:
Elite Pharmaceuticals, Inc.
165 Ludlow Ave
Northvale, New Jersey 07647
Attention: Chairman of the Board
(B) If to the Executive:
Bernard Berk
[_______________]
Each party may designate by notice in writing, in the manner described
above, a new address to which any notice, demand, request, or
communication required or permitted by this Agreement may be sent. Any
notice, demand, request, or communication that shall be delivered,
mailed or transmitted in the manner described above shall be deemed
given, served, sent or received for all purposes when it is delivered
to the addressee. An affidavit of personal delivery, the return
receipt, or the delivery receipt shall be deemed conclusive, but not
exclusive, evidence of such delivery.
(b) The invalidity of any one or more provisions hereof shall not affect
the remaining portions of this Agreement; and if one or more of the
provisions contained herein should be invalid, or should operate to
render this Agreement invalid, this Agreement shall be construed as if
such invalid provisions had not been inserted.
(c) It is the express intention and agreement of the parties hereof that
all covenants and agreements made in this Agreement shall survive the
execution and delivery of this Agreement and the exercise (if any) of
the Option.
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(d) Neither the waiver by a party of a breach of or a default under any of
the provisions of this Agreement, nor the failure of a party, on one
or more occasions, to enforce any of the provisions of this Agreement
or to exercise any right, remedy, or privilege hereunder shall
thereafter be construed as a waiver of any subsequent breach or
default of a similar nature, or as a waiver of any such provisions,
rights, remedies, or privileges hereunder.
(e) Subject to any provisions hereof restricting transfer, encumbrance and
assignment, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors, and assigns.
(f) It is the explicit intention of the parties hereto that no person or
entity other than the parties hereof is or shall be entitled to bring
any action to enforce any provisions of this Agreement against any
parties hereto, and that the covenants, undertakings, and agreements
set forth in the Agreement shall be solely for the benefit of, and
shall be enforceable only by, the parties hereto and their respective
heirs, personal representatives, successors and assigns as permitted
hereunder.
(g) This Agreement contains the entire agreement among the parties with
respect to subject matter hereof, and supersedes all prior oral or
written agreements, commitments, or understandings with respect to the
matters provided for herein.
(h) Article, section and subsection headings contained in this Agreement
are inserted for convenience of reference only, shall not be deemed to
be part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the
provisions hereof.
(i) This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and
construed in accordance with the internal laws of the State of
Delaware without giving effect to the choice of law principles
thereof. Each of the parties hereto irrevocably submits and consents
to the exclusive jurisdiction of and laying of venue in the courts of
the State of New Jersey and the United States District Court for the
District of New Jersey for the purpose of any suit, action, proceeding
or judgment relating to or arising, directly or indirectly, out of
this Agreement and the transactions contemplated hereby. Each party
hereto irrevocably waives any objection to the exclusive laying of
venue of any suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
(j) THE EXECUTIVE REPRESENTS THAT HE AND/OR HIS OTHER PROFESSIONAL
ADVISORS HAVE HAD THE OPPORTUNITY TO REVIEW THIS AGREEMENT.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an officer hereunto duly authorized, and the Executive has hereunto
set his hand, all as of the day and year first above written.
ELITE PHARMACEUTICALS, INC.
By:
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Name: John A. Moore
Title: Chairman of the Board
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Bernard Berk