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0000950156-09-000104.txt : 20090529 0000950156-09-000104.hdr.sgml : 20090529 20090529172236 ACCESSION NUMBER: 0000950156-09-000104 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20090528 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090529 DATE AS OF CHANGE: 20090529 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IGI INC CENTRAL INDEX KEY: 0000352998 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 010355758 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08568 FILM NUMBER: 09862792 BUSINESS ADDRESS: STREET 1: WHEAT RD AND LINCOCN AVE STREET 2: P O BOX 687 CITY: BUENA STATE: NJ ZIP: 08310 BUSINESS PHONE: 6096971441 MAIL ADDRESS: STREET 1: WHEAT ROAD AND LINCOCN AVE STREET 2: P O BOX 687 CITY: BUENA STATE: NJ ZIP: 08310 FORMER COMPANY: FORMER CONFORMED NAME: IMMUNOGENETICS INC DATE OF NAME CHANGE: 19870814 8-K 1 d72240_igi8k.htm BODY OF FORM 8-K Converted by EDGARwiz

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

DATE OF REPORT (Date of earliest event reported): May 28, 2009

IGI LABORATORIES, INC.
(Exact name of registrant as specified in charter)


DELAWARE	001-08568	01-0355758
(State or Other Jurisdiction of Incorporation)	(Commission file number)	(I.R.S. Employer Identification Number)

105 Lincoln Avenue
Buena, New Jersey 08310
(Address of principal executive offices)(Zip Code)

(856) 697-1441
(Registrant’s telephone number, including area code)

Not Applicable

(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:


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 5.02.	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 29, 2009, IGI Laboratories, Inc. (the “Company”) announced that it has named Hemanshu Pandya its new President and Chief Executive Officer, effective June 29, 2009. On May 28, 2009, Rajiv Mathur, the Company’s President and Chief Executive Officer announced his resignation as an employee of the Company. Mr. Mathur also resigned from the Company’s board of directors and the board appointed Mr. Pandya to fill the vacant seat created by Mr. Mathur’s resignation, effective upon commencement of his employment on June 29, 2009. Joyce Erony, the Company’s Chairwoman of the Board, will act as Interim President and Interim CEO until Mr. Pandya begins employment. In addition, the Company announced that Phillip S. Forte had been appointed to serve as the Company’s Controller.

Mr. Pandya, age 37, is currently employed as the Vice President and Chief Operating Officer of NexMed Inc., and has served in that position since October 2007. Prior to that, Mr. Pandya served as Chief Commercial Officer for Putney, Inc., a start-up veterinary pharmaceutical company, from March 2007 to July 2007. From August 2005 to December 2006, and prior to its merger with Watson Pharmaceuticals, Inc., Mr. Pandya was Senior Vice President of Business Development and Strategic Alliances for Andrx Pharmaceuticals, Inc., where he managed the licensing and co-development opportunities with strategic global partners. From August 2002 to August 2005, Mr. Pandya served as Vice President of Corporate Development and Commercial Operations for Able Laboratories, Inc. Prior to August 2002, Mr. Pandya served in various senior management positions with Ivax Pharmaceuticals, Inc. and Faulding/Purepac Pharmaceutical Company (subsequently Alpharma, Inc.). He received his Bachelor’s Degree from Rutgers University.

Joyce Erony, age 49, has served as the Chairwoman of the Company’s Board of Directors since March 2009. Ms. Erony currently serves as the Managing Director of Signet Healthcare Partners. Prior to joining Signet, Ms. Erony spent 14 years (1991-2004) at Salomon Brothers Inc., Salomon Smith Barney, Inc. and ultimately Citigroup, which acquired the former companies, most recently as Managing Director responsible for Citigroup’s activities in Specialty Pharmaceuticals. Prior to joining Citigroup, Ms. Erony worked as an economist (1983-1991), primarily at the World Bank and International Finance Corporation advising various international development agencies and multilateral organizations.

Mr. Forte, age 57, previously served as the Senior Director of Finance at Teva Specialty Pharmaceuticals Industries, Ltd., in Horsham Pennsylvania, a generic pharmaceutical company. At Teva Specialty Pharmaceuticals, Mr. Forte was responsible for the business financial operations including its strategic business plan and all business development initiatives. Prior to Teva Specialty Pharmaceuticals, Mr. Forte has held various financial roles in corporate and public accounting including Bristol Myers Squibb and Aventis. Phil received his BBA in Accounting from Bernard M Baruch and his MBA in accounting and finance from Fairleigh Dickinson University.

Under the terms of his employment agreement, Mr. Pandya will receive an annual salary of $260,000. Mr. Pandya will also receive a grant of (i) 975,000 shares of restricted stock and (ii) an option to purchase that number of shares of the Company’s common stock such that the value of the option on the date of grant is equivalent to the value of 325,000 shares of the Company’s

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common stock on the date of grant, the vesting terms of which are explained below. In addition, Mr. Pandya will be entitled to participate in certain of the Company’s benefit programs on the same terms and conditions generally provided by the Company to its executive employees. Mr. Pandya will also be eligible to receive an annual performance bonus for each calendar year during the term of his employment, which may be payable in either cash, stock options and/or restricted stock. For the remainder of 2009, Mr. Pandya’s target bonus will be $65,000. For subsequent years, Mr. Pandya’s target bonus will be equal to 60% of his base salary for the applicable fiscal year. All performance targets pursuant to such plan shall be determined by the Company’s Compensation Committee, except with respect to the remainder of 2009, pursuant to which the performance targets shall be mutually agreed upon by Mr. Pandya and the Chairwoman of the Board of Directors of the Company. Mr. Pandya is also subject to certain restrictive covenants as set forth in his employment agreement, including confidentiality, non-solicitation and non-competition. Mr. Pandya’s employment agreement further provides for payments upon certain types of employment termination events as further set forth in the Employment Agreement.

Under the terms of his employment agreement, Mr. Forte will receive an annual salary of $155,000. Mr. Forte will also receive a grant of (i) 80,000 shares of restricted stock and (ii) an option to purchase 110,000 shares of the Company’s common stock, the vesting terms of which are explained below. In addition, Mr. Forte will be entitled to participate in certain of the Company’s benefit programs on the same terms and conditions generally provided by the Company to its executive employees. Mr. Forte will also be eligible to receive an annual performance bonus for each calendar year during the term of his employment, which may be payable in either cash, stock options and/or restricted stock. For the remainder of 2009, Mr. Forte’s target bonus will be $22,605. For subsequent years, Mr. Forte’s target bonus will be equal to 25% of his base salary for the applicable fiscal year. All performance targets pursuant to such plan shall be determined by the Company’s Compensation Committee, except with respect to the remainder of 2009, pursuant to which the performance targets shall be mutually agreed upon by Mr. Forte and the Chairwoman of the Board of Directors of the Company. Mr. Forte is also subject to certain restrictive covenants as set forth in his employment agreement, including confidentiality, non-solicitation and non-competition. Mr. Forte’s employment agreement further provides for payments upon certain types of employment termination events as further set forth in his employment agreement.

The above equity grants to Mr. Pandya and Mr. Forte will become fully vested over a period of three years as follows: (i) one-twelfth of the shares subject to the equity grants will vest on June 29, 2009, in the case of Mr. Pandya, and June 1, 2009, in the case of Mr. Forte; (ii) one-twelfth of the shares subject to the equity grants will vest on each of the following dates: (A) September 30, 2009, (B) December 31, 2009 and (C) March 31, 2010; (iii) one-third of the shares subject to the equity grants will vest on June 29, 2011 in the case of Mr. Pandya and June 1, 2011 in the case of Mr. Forte; and (iv) one-third of the shares subject to the equity grants will vest on June 29, 2012 in the case of Mr. Pandya and June 1, 2012 in the case of Mr. Forte. In addition, any shares that remain unvested immediately prior to a change in control will become vested, provided that the executive remains in continuous service with the Company through the consummation of the change in control. The above option grants will have an exercise price equal to the closing price of the Company’s common stock on the date of grant. The above equity grants will be granted as an employment inducement award pursuant to the executive’s employment agreement and will be issued without stockholder approval pursuant to Rule 711 of the NYSE Amex Company Guide.

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The foregoing descriptions of the employment agreements for each of Mr. Pandya and Mr. Forte is qualified in its entirety by reference to the full text of each of the employment Agreements, a copy of which is attached as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference. The Option Award Agreement dated, May 29, 2009, between the Company and Mr. Forte, is filed as Exhibits 10.3 and incorporated herein by reference.

In connection with his resignation, Mr. Mathur and the Company entered into a Separation of Employment Agreement and General Release dated May 28, 2009 (the “Separation Agreement”). The Separation Agreement provides that the Company shall pay Mr. Mathur severance in the amount of $312,798, such amount to be paid ratably over a twelve month period with equal portions on each regular payroll payment date during such period. The Company has also agreed to provide Mr. Mathur with continued participation in the medical insurance coverage plans of the Company during such one year period. Mr. Mathur agreed to provide the Company with a general release, and Mr. Mathur agreed to certain restrictive covenants, including confidentiality, non-competition and non-disparagement.

The description of the material terms of the Separation Agreement above is subject to the full terms and conditions of the Separation Agreement, a copy of which is filed herewith as Exhibit 10.4 and is incorporated herein by reference.

For a discussion of the related party transactions between Signet Healhcare Partners, of which Ms. Erony serves as Managing Director, and the Company, please see “Certain Relationships and Related Transactions” in the Company’s Definitive Proxy Statement as filed with the Securities and Exchange Commission on April 17, 2009.

Item 9.01. Financial Statements and Exhibits.

(d) The following exhibits are furnished with this Form 8-K:


Exhibit No.		Description

10.1		Employment Agreement dated May 29, 2009 between IGI Laboratories, Inc. and Hem Pandya

10.2		Employment Agreement dated May 18, 2009 between IGI Laboratories, Inc. and Phillip S. Forte

10.3		Option Award Agreement dated May 29, 2009 between IGI Laboratories, Inc. and Phillip S. Forte

10.4		Separation of Employment Agreement and General Release between IGI Laboratories, Inc. and Rajiv Mathur dated May 28, 2009

99.1		Press Release of IGI Laboratories, Inc. dated May 29, 2009

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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.


	IGI LABORATORIES, INC.

Date: May 29, 2009	By:/s/ Philip Forte
	Name: Philip Forte Title: Controller

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EXHIBIT INDEX


Exhibit Number		Description of Exhibits

10.1		Employment Agreement dated May 29, 2009 between IGI Laboratories, Inc. and Hem Pandya

10.2		Employment Agreement dated May 18, 2009 between IGI Laboratories, Inc. and Phillip S. Forte

10.3		Option Award Agreement dated May 29, 2009 between IGI Laboratories, Inc. and Phillip S. Forte

10.4		Separation of Employment Agreement and General Release between IGI Laboratories, Inc. and Rajiv Mathur dated May 28, 2009

99.1		Press Release of IGI Laboratories, Inc. dated May 29, 2009

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EX-10 2 ex101.htm EXHIBIT 10.1 Converted by EDGARwiz

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made on this 29th day of May 2009, by and between IGI Laboratories, Inc., having an address at 105 Lincoln Avenue, Buena, New Jersey 08310 (the “Company”) and Hemanshu Pandya, having an address at 7 Nottinghill Court, Manalapan, NJ 07726 (the “Executive”). The Company and the Executive are collectively referred to hereinafter as the “Parties”.

R E C I T A L S:

WHEREAS, the Company desires to employ the Executive on the terms and subject to the conditions set forth herein, and Executive is willing to accept such employment on such terms and conditions; and

WHEREAS, by virtue of such employment, Executive will have access to Proprietary Information of the Company and its subsidiaries (the “IGI Companies”); and

WHEREAS, Executive acknowledges and agrees that the Company (on behalf of itself and the IGI Companies) has a reasonable, necessary and legitimate business interest in protecting its own and the IGI Companies’ Proprietary Information, client accounts, relationships with prospective clients, Goodwill and ongoing business, and that the terms and conditions set forth below are reasonable and, necessary in order to protect these legitimate business interests.

NOW THEREFORE, in consideration of the representations, warranties, covenants, and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are conclusively acknowledged, the Parties, intending to become legally bound, agree as follows:

A G R E E M E N T:

DEFINITIONS

1.1.

Specific Definitions. Capitalized terms not defined elsewhere herein shall have the following meanings ascribed to them:

“Change in Control” shall mean the occurrence of any of the following events:

(a)

any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other (i) than an individual or entity holding securities of the Company as of the date hereof which represent 3% or more of the outstanding voting power of the all securities on matters to be generally voted upon by the Company’s stockholders, (ii) Jane Hager, Edward Hager, Steve Morris, Frank Gerardi or any of their respective affiliates, any entity of which any of the foregoing are trustees, or trusts established for their benefit, (iii) the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, (iv) Signet Healthcare Partners, its affiliates or any of its affiliated funds, or (v) any corporation owned directly or indirectly by the

stockholders of the Company in substantially the same proportion as their ownership of stock of the Company) is or becomes the owner, directly or indirectly, of outstanding securities of the Company representing 60% or more of the combined voting power of the Company’s then outstanding securities;

(b)

the consummation of a merger or consolidation of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 40% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) or a reincorporation of the Company into another jurisdiction; or

(c)

a sale of all or substantially all of the assets of the Company;

“Goodwill” means the expectation of continued patronage from client accounts and new patronage from prospective clients.

“Person” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a limited liability company, or a governmental entity (or any department, agency, or political subdivision thereof).

“IGI Business” means the businesses provided by any of the IGI Companies.

“IGI Companies” or “IGI Company” means the Company, its subsidiaries (including the Company), and any entity under the control (as defined in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended, without regard to whether any party is a “registrant” under such Act) of IGI, and any of their successors or assigns.

POSITION, RESPONSIBILITIES AND TERM

2.1.

Executive’s Position. On the terms and subject to the conditions set forth in this Agreement, the Company shall employ Executive to serve as an officer of the Company and as the President and Chief Executive Officer of the Company. The Executive shall report directly to the Board of Directors of the Company (the “Board”), through the Chairwoman of the Board. Executive shall perform such services in the Company’s offices in Buena, New Jersey or such other location or locations as the Executive and the Chairwoman shall agree; provided, however, that Executive will be required to travel from time to time for business purposes.

2.2.

Executive’s Responsibilities. The Executive shall perform all duties customarily attendant to the position and shall perform such services and duties commensurate with such position as may from time to time be reasonably prescribed by the Board.

2.3.

No Conflicts of Interest. Executive further agrees that throughout the period of his employment hereunder, he will not perform any activities or services, or accept such other employment which would be inconsistent with this Agreement, the employment relationship

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between the Parties, or would interfere with or present a conflict of interest concerning Executive’s employment with the Company; provided, that Executive shall be permitted to serve on the boards of directors of such other companies as the Board shall approve, and that Executive may make personal investments and may act as a director and engage in other activities for any charitable, educational, or other nonprofit institution, as long as such investments and activities do not materially interfere with the performance of Executive’s duties hereunder. Executive agrees to adhere to and comply with any and all business practices and requirements of ethical conduct set forth in writing from time to time by the Company in its employee manual or similar publication.

2.4.

Term. This Agreement shall become effective on June 29, 2009 (the “Effective Date”) and will govern Executive’s employment by the Company until that employment ceases (such period of Executive’s employment is herein referred to as the “Term”).

ACCEPTANCE

Executive hereby accepts such employment and agrees that throughout the Term, Executive will devote his full business time, attention, knowledge and skills faithfully, diligently and to the best of his ability, in the furtherance of the business of the IGI Companies.

COMPENSATION

4.1.

Base Salary. The Executive shall receive an initial annual salary of Two Hundred Sixty Thousand Dollars ($260,000) (the “Base Salary”), which shall increase on January 1, 2010 to Two Hundred Seventy Five Thousand Dollars ($275,000), paid in accordance with the Company’s payroll practices, as in effect from time to time. The Base Salary shall be reviewed on an annual basis by the Company and may be adjusted from time to time by the Company.

4.2.

Benefits. In addition to such compensation, Executive shall be entitled to the benefits which are afforded generally, from time to time to similarly situated executive employees of the IGI Companies. Notwithstanding the foregoing, nothing contained in this Agreement shall require the IGI Companies to establish, maintain or continue any of the group benefits plans already in existence or hereafter adopted for the employees of the IGI Companies, or restrict the right of the IGI Companies to amend, modify or terminate such group benefit plans in a manner which does not discriminate against Executive as compared to other executive employees of IGI Companies.

4.3.

Paid Time Off. Executive shall be entitled to 20 business days of paid time off (consisting of vacation and personal days) and sick days and holidays as are provided in general to similarly situated employees of the IGI Companies, in accordance with usual practices and procedures. Without limiting the foregoing, unless otherwise required by law, Executive shall not be entitled to any additional compensation for any unused paid time off. Paid time off shall stop accruing once Executive has accumulated and not used the number of days to which he is entitled to in a year.

4.4.

Annual Performance Bonus. The Executive shall be eligible to receive an annual performance bonus (the “Annual Bonus”) for each calendar year during the Term (each a “Fiscal Year”), which may be payable, in the discretion of the Board or the Compensation

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Committee of the Board (the “Committee”), in the form of cash, stock options and/or restricted equity not later than 75 days after the end of such Fiscal Year; provided, however, that the Executive must be employed by the Company on December 31 of a Fiscal Year in order to be eligible for an Annual Bonus under this Section 4.4 for such Fiscal Year.

The Executive’s target Annual Bonus will be $65,000 with respect to the remainder of the 2009 calendar year and will be 60% of Executive’s Base Salary then in effect for each subsequent Fiscal Year. The actual amount of the Annual Bonus with respect to the 2009 calendar year, and any subsequent Fiscal Years, will be determined by the Board or the Committee, in their discretion, with reference to the Executive’s and the Employer’s fulfillment of performance goals established by the Committee with respect to the applicable Fiscal Year. The Committee shall establish such performance goals within one (1) month of the Effective Date of this Agreement with respect to the remainder of the 2009 calendar year (the “2009 Performance Goals”). The 2009 Performance Goals shall be mutually agreed upon by the Executive and the Chairwoman of the Board.

4.5.

Grant of Equity Awards.

(a)

Equity Awards. As soon as practicable following the Effective Date of this agreement and subject to the approval of the Board, Executive will receive a grant of: (i) 975,000 shares of restricted stock, as memorialized in (and subject to the terms of) a restricted stock award agreement, attached hereto as Exhibit A (the “Restricted Stock Agreement”) and (ii) an option to purchase, at the closing price of the Company’s Common Stock on the date of grant, that number of shares of the Company’s Common Stock such that the value of the option on the date of grant is equivalent to the value of 325,000 shares of the Company’s Common Stock on the date of grant, as memorialized in (and subject to the terms of) an option award agreement, attached hereto as Exhibit B (the “Option Agreement”) (collectively the “Equity Award Agreements”).

(b)

Vesting. Except as otherwise set forth in Section 8 hereof, the shares subject to the Equity Award Agreements shall become fully vested over a period of three years as follows: (i) one-twelfth of the shares subject to the Equity Award Agreements shall vest as of the Effective Date; (ii) one-twelfth of the shares subject to the Equity Award Agreements shall vest on each of the following dates: (A) September 30, 2009, (B) December 31, 2009 and (C) March 31, 2010; (iii) one-third of the shares subject to the Equity Award Agreements shall vest on the second anniversary of the Effective Date and (iv) one-third of the shares subject to the Equity Award Agreements shall vest on the third anniversary of the Effective Date.

(c)

Accelerated Vesting. Immediately prior to a Change in Control (as defined in Section 1.1 above), any shares that then remain unvested will become vested, provided the Executive remains in continuous service with the Company through the consummation of that Change in Control.

EXPENSES

The Company shall reimburse Executive, in accordance with Company policy, for all expenses reasonably and properly incurred by Executive in connection with the performance

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of Executive’s duties hereunder and the conduct of the business of the Company, upon the submission to the Company (or its designee) of appropriate vouchers therefor.

CONFIDENTIAL INFORMATION AND PROPERTY

6.1.

Confidentiality. The Executive recognizes and acknowledges that the Proprietary Information (as defined below) is a valuable, special and unique asset of the business of the Company and its affiliates. As a result, both during the Term and thereafter, the Executive will not, without the prior written consent of the Company, for any reason divulge to any third-party or use for his own benefit, or for any purpose other than the exclusive benefit of the Company and its affiliates, any Proprietary Information. Notwithstanding the foregoing, if the Executive is compelled to disclose Proprietary Information by court order or other legal or regulatory process, to the extent permitted by applicable law, he shall promptly so notify the Company so that it may seek a protective order or other assurance that confidential treatment of such Proprietary Information shall be afforded, and the Executive shall reasonably coopera te with the Company and its affiliates in connection therewith. If the Executive is so obligated by court order or other legal process to disclose Proprietary Information it will disclose only the minimum amount of such Proprietary Information as is necessary for the Executive to comply with such court order or other legal process.

6.2.

Property of the Company.

(a)

Proprietary Information. All right, title and interest in and to Proprietary Information will be and remain the sole and exclusive property of the Company and its affiliates. The Executive will not remove from the Company’s or its affiliates’ offices or premises any documents, records, notebooks, files, correspondence, reports, memoranda or similar materials of or containing Proprietary Information, or other materials or property of any kind belonging to the Company or its affiliates unless necessary or appropriate in the performance of his duties to the Company and its affiliates. If the Executive removes such materials or property in the performance of his duties, he will return such materials or property promptly after the removal has served its purpose. The Executive will not make, retain, remove and/or distribute any copies of any such materials or property, or divulge to any third person the na ture of and/or contents of such materials or property, except to the extent necessary to satisfy contractual obligations of the Company or its affiliates or to perform his duties on behalf of the Company and its affiliates. Upon termination of the Executive’s employment with the Company, he will leave with the Company and its affiliates or promptly return to the Company and its affiliates all originals and copies of such materials or property then in his possession.

(b)

Intellectual Property. The Executive agrees that all the Intellectual Property (as defined below) will be considered “works made for hire” as that term is defined in Section 101 of the Copyright Act (17 U.S.C. § 101) and that all right, title and interest in such Intellectual Property will be the sole and exclusive property of the Company and its affiliates. To the extent that any of the Intellectual Property may not by law be considered a work made for hire, or to the extent that, notwithstanding the foregoing, the Executive retains any interest in the Intellectual Property, the Executive hereby irrevocably assigns and transfers to the Company and its affiliates any and all right, title, or interest that the Executive may now or in the future have in the Intellectual Property under patent, copyright, trade secret, trademark or other law, in

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perpetuity or for the longest period otherwise permitted by law, without the necessity of further consideration. The Company and its affiliates will be entitled to obtain and hold in its own name all copyrights, patents, trade secrets, trademarks and other similar registrations with respect to such Intellectual Property. The Executive further agrees to execute any and all documents and provide any further cooperation or assistance reasonably required by the Company, at the Company’s expense, to perfect, maintain or otherwise protect its rights in the Intellectual Property. If the Company or its affiliates, as applicable, are unable after reasonable efforts to secure the Executive’s signature, cooperation or assistance in accordance with the preceding sentence, whether because of the Executive’s incapacity or any other reason whatsoever, the Executive hereby designates and appoints the Company, the appropriate affil iate, or their respective designee as the Executive’s agent and attorney-in-fact, to act on his behalf, to execute and file documents and to do all other lawfully permitted acts necessary or desirable to perfect, maintain or otherwise protect the Company’s or its affiliates’ rights in the Intellectual Property. The Executive acknowledges and agrees that such appointment is coupled with an interest and is therefore irrevocable.

For purposes of this Agreement, “Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents and patent applications claiming such inventions, (b) all trademarks, service marks, trade dress, logos, trade names, fictitious names, brand names, brand marks and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets (including research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, methodologies, technical data, designs, drawings and specifications), (f) all computer software (including data, source and object codes and related documentation), (g) all other proprietary rights, (h) all copies and tangible embodiments thereof (in whatever form or medium), or (i) similar intangible personal property which have been or are developed or created in whole or in part by the Executive (1) at any time and at any place while the Executive is employed by Company and which, in the case of any or all of the foregoing, are related to and used in connection with the business of the Company or its affiliates, or (2) as a result of tasks assigned to the Executive by the Company or its affiliates.

For purposes of this Agreement, “Proprietary Information” means any and all proprietary information developed or acquired by the Company or any of its subsidiaries or affiliates that has not been specifically authorized to be disclosed. Such Proprietary Information shall include, but shall not be limited to, the following items and information relating to the following items: (a) all intellectual property and confidential or proprietary knowledge, information or rights of the Company (including, without limitation, the Intellectual Property, trade secrets, books and records, know-how, inventions, discoveries, processes and systems, as well as any data and records pertaining thereto), (b) computer codes and instructions, processing systems and techniques, inputs and outputs (regardless of the media on which stored or located) and hardware and software configurations, designs, architecture and interfaces, (c) business res earch, studies, procedures and costs, (d) financial data, (e) distribution methods, (f) marketing data, methods, plans and efforts, (g) the identities of actual and prospective customers and

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suppliers, (h) the terms of contracts and agreements with, the needs and requirements of, and the Company’s or its affiliates’ course of dealing with, actual or prospective customers and suppliers, (i) personnel information, (j) customer and vendor credit information, and (k) information received from third parties subject to obligations of non-disclosure or non-use. Failure by the Company or its affiliates to mark any of the Proprietary Information as confidential or proprietary shall not affect its status as Proprietary Information.

NON-SOLICITATION, NON-COMPETITION AND CONFLICTS OF INTEREST

7.1.

Non-Solicitation.

(a)

Except in the normal course of business on behalf of any IGI Company, Executive agrees that during the Term he will not, directly or indirectly, (i) solicit, sell, provide services to, consult for, or accept any request to provide, or induce the termination, cancellation or non-renewal of, any IGI Business from or by any person, corporation, firm or other entity which was a client of an IGI Company or which was contacted by an IGI Company as a prospective client at anytime, or (b) solicit, offer, negotiate or otherwise seek to acquire any interest in any prospective acquisition of an IGI Company, which was a prospective acquisition of an IGI Company at any time.

(b)

Except in the normal course of business on behalf of any IGI Company, Executive agrees that after the Term he will not, directly or indirectly, (i) solicit, sell, provide services to, consult for, or accept any request to provide, or induce the termination, cancellation or non-renewal of, any IGI Business from or by any person, corporation, firm or other entity which was a client of an IGI Company or which was contacted by an IGI Company for the purposes of becoming a client at anytime within twelve months prior to the end of the Term, or (ii) solicit, offer, negotiate or otherwise seek to acquire any interest in any entity of business which was contacted by an IGI Company as a prospective acquisition within twelve (12) months prior to the end of the Term. The restrictions contained in this Section 7.1(b) shall apply for twelve (12) months following the end of the Term.

7.2.

No Hiring. Executive further agrees that he will not, directly or indirectly, solicit the employment, consulting or other services of, or hire, any other employee of any IGI Company or otherwise induce any of such employees to leave such IGI Company’s employment or to breach an employment or independent contractor agreement therewith. The restrictions contained in this Section 7.2 shall apply throughout the Term hereof and thereafter until twenty-four (24) months following the date on which Executive is no longer employed by any IGI Company.

7.3.

Miscellaneous. Without limiting the provisions of Section 18, in the event of any assignment by the Company permitted under such section, the restrictive periods contained in this Section 7 shall be determined by reference to the termination of Executive’s employment with any permitted assignee of the Company.

TERMINATION

Either party may terminate the Executive’s employment at any time for any reason, provided that the Executive shall provide thirty (30) days advance written notice of any

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such termination. Upon cessation of his employment with the IGI Companies, the Executive will be entitled only to such compensation and benefits as described in this Section 8.

8.1.

Termination by the IGI Companies Without Cause. IGI Companies shall have the right to terminate Executive’s employment hereunder “without Cause” by giving Executive written notice to that effect. Any such termination of employment shall be effective on the date specified in such notice. In the event of such termination, the IGI Companies shall (i) pay Executive his unpaid Base Salary through the effective date of termination and any business expenses remaining unpaid on the effective date of the termination for which Executive is entitled to be reimbursed under Section 5 of this Agreement; (ii) pay Executive an amount per month equal to one-twelfth of his then adjusted Base Salary for the period commencing on the date following the date of termination and ending on the date which is (A) six months following the effective date of such termination if such termination occurs during the 2009 calendar year, or (B) twelve months following the effective date of such termination if such termination occurs following the 2009 calendar year; (iii) pay Executive an amount equal to a pro-rata portion of the Annual Bonus that would otherwise have been payable to Executive for the Fiscal Year in which the termination occurs, determined in the same manner and payable at the same time as such Annual Bonus would otherwise have been payable had Executive’s employment not terminated, with such pro-ration to be determined based on the number of months (and any fraction thereof) Executive is employed during the Fiscal Year in which termination occurs, relative to 12 months; and (iv) cause to become vested a portion of the awards granted Executive under Section 4.5 that would otherwise have vested during the calendar year in which Executive’s employment terminates had such termination not occurred during such calendar year; provided, however, that without limiting any other remedy available hereunder, all obliga tions described in this Section 8.1 shall immediately terminate upon a judge’s determination that Executive has breached the provisions of Section 6 or 7 hereof.

Notwithstanding any other provision of this Agreement, if a Change in Control occurs during the period beginning on the date of this Agreement and ending on December 31, 2009 and Executive’s employment is terminated by the Company without Cause following the consummation of such Change in Control and on or before December 31, 2009, the reference in Section 8.1(ii)(A) to “six months” will be replaced with a reference to “twelve months.”

Except as specifically set forth above, the IGI Companies shall have no further obligations to Executive under this Agreement following his termination of employment by the Company “without Cause.”

8.2.

Termination by the IGI Companies for Cause - The IGI Companies may, for Cause, terminate Executive's employment hereunder at any time by written notice to Executive. For the purpose of this Agreement, “Cause” shall mean (i) commission of a willful and material act of dishonesty in the course of Executive’s duties hereunder, (ii) conviction by a court of competent jurisdiction of a crime constituting a felony or conviction in respect of any act involving fraud, dishonesty or moral turpitude, (iii) Executive’s performance under the influence of controlled substances, or continued habitual intoxication, during working hours, after the IGI Companies shall have provided written notice to Executive and given Executive 30 days within which to commence rehabilitation with respect thereto, and Executive shall have failed to commence such rehabilitation or continued to perform under the influence after such

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rehabilitation, (iv) frequent or extended, and unjustifiable (not as a result of incapacity or disability) absenteeism which shall not have been cured within 30 days after the IGI Companies shall have advised Executive in writing of its intention to terminate Executive’s employment in accordance with the provisions of this Section 8.1, in the event such condition shall not have been cured, (v) Executive’s personal, willful and continuing misconduct or refusal to perform duties and responsibilities described in Section 2 above, or to carry out directives of the Board, which, if capable of being cured, shall not have been cured within 60 days after the IGI Companies shall have advised Executive in writing of its intention to terminate Executive’s employment in accordance with the provision of this Section 8.2 or (vi) material non-compliance with the terms of this Agreement, including but not limited to any breach of Section 6 or Section 7 o f this Agreement.

In the event of the termination of Executive's employment under this Section 8.2 for Cause, the Employment Term shall end on the day of such termination and the IGI Companies shall pay Executive his unpaid Base Salary through the effective date of termination and any business expenses remaining unpaid on the effective date of the termination for which Executive is entitled to be reimbursed under Section 5 of this Agreement.

Except as specifically set above, the IGI Companies shall have no further obligations to Executive under this Agreement following his termination of employment by the Company for Cause.

8.3.

Termination for Disability or Death - If Executive should suffer a Disability, the IGI Companies may terminate Executive's employment hereunder upon ten (10) or more days' prior written notice to Executive. If Executive should pass away during the term of this Agreement, Executive’s employment shall be deemed terminated on his date of death. For the purpose of this Agreement, a “Disability” shall be deemed to have occurred (i) when Executive has become eligible for disability benefits under the IGI Companies’ long-term group disability policy, if any, or, if no policy is then in effect, (ii) when such incapacity or disability, as defined below, shall have existed for either (A) one continuous period of six months or (B) a total of seven months out of any twelve consecutive months. In the event of the termination of Executive's employment hereunder by reason of Disability or death, the Employment T erm shall end on the day of such termination and the IGI Companies shall pay Executive (or Executive's legal representative in the event of termination due to Disability, or any beneficiary or beneficiaries designated by Executive to the IGI Companies in writing, or to Executive's estate if no such beneficiary has been so designated in the event of Executive's death): (i) his unpaid Base Salary through the effective date of termination and any business expenses remaining unpaid on the effective date of the termination for which Executive is entitled to be reimbursed under Section 5 of this Agreement; and (ii) an amount equal to a pro-rata portion of the Annual Bonus that would otherwise have been payable to Executive for the Fiscal Year in which the termination occurs, determined in the same manner and payable at the same time as such Annual Bonus would otherwise have been payable had Executive’s employment not terminated, with such pro-ration to be determined based on the number of months (and any frac tion thereof) Executive is employed during the Fiscal Year in which termination occurs, relative to 12 months.

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Except as specifically set forth above, the IGI Companies shall have no further obligations to Executive under this Agreement following his termination of employment as a result of his death or Disability.

8.4.

By Executive for Good Reason . If any of the events described below occurs during the Employment Term, Executive may terminate Executive's employment hereunder for Good Reason by written notice to the IGI Companies. Executive's termination for Good Reason pursuant to this Section 8.4 shall be treated for all purposes as a termination without Cause pursuant to Section 8.1 and the provisions of Section 8.1 shall apply to such termination. The occurrence of any of the following events without Executive's consent shall permit Executive to terminate Executive's employment for “Good Reason” pursuant to this Section 8.4:

(a)

the failure by the IGI Companies to observe or comply in any material respect with any of the material provisions of this Agreement;

(b)

a material diminution in Executive's duties; and

(c)

the assignment to Executive of duties that are materially and adversely inconsistent with Executive’s duties or that materially impair Executive’s ability to function as the President and Chief Executive Officer of the IGI Companies.

Notwithstanding the above, none of the foregoing events or conditions will constitute Good Reason unless: (x) Executive provides the Company with written objection to the event or condition within 30 days following the occurrence thereof, (y) the Company does not reverse or otherwise cure the event or condition within 30 days of receiving that written objection, and (z) Executive resigns his employment within 30 days following the expiration of that cure period.

8.5.

By Executive without Good Reason. Executive may terminate the Employment Term and Executive's employment hereunder at any time without Good Reason upon thirty (30) days advance written notice to the IGI Companies. In the event Executive's employment is terminated pursuant to this Section 8.5, the IGI Companies shall pay Executive his unpaid Base Salary through the effective date of termination and any business expenses remaining unpaid on the effective date of the termination for which Executive is entitled to be reimbursed under Section 5 of this Agreement.

8.6.

By Executive After a Change in Control. After the three (3) month anniversary of the consummation of a Change in Control, Executive may terminate Executive's employment hereunder by written notice to the IGI Companies, in which case the IGI Companies shall pay Executive his unpaid Base Salary through the effective date of termination and any business

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expenses remaining unpaid on the effective date of the termination for which Executive is entitled to be reimbursed under Section 5 of this Agreement and an amount per month equal to one-twelfth of his then adjusted Base Salary for the period commencing on the date following the date of termination and ending on the date which is six (6) months following the effective date of such termination.

8.7.

Miscellaneous Termination Provisions. Executive, upon termination or expiration of employment for any reason, hereby irrevocably promises to:

(a)

Return all property of the IGI Companies in his possession or within his custody and control wherever located immediately upon such termination.

(b)

Participate in an exit interview with a designated person or persons of IGI Companies if requested by IGI Companies.

(c)

Subject to obligations under applicable laws and regulations, not publicly make any statements or comments that disparage the reputation of any of the IGI Companies or their senior officers or directors.

8.8.

Release. Notwithstanding any other provision of this Agreement, the payments and benefits described in Section 8.1 are conditioned on Executive’s execution and delivery to the IGI Companies, within 60 days following his cessation of employment, of a general release of claims against the IGI Companies and its affiliates in such form as the IGI Companies may reasonably require in a manner consistent with the requirements of the Older Workers Benefit Protection Act (the “Release”). The severance benefits described in Section 8.1 will begin to be paid or provided as soon as the Release becomes irrevocable.

8.9.

Compliance with Section 409A. If the termination giving rise to the payments described in Section 8.1, 8.3, 8.4 and 8.6 is not a “Separation from Service” within the meaning of Treas. Reg. § 1.409A-1(h)(1) (or any successor provision), then the amounts otherwise payable pursuant to that section will instead be deferred without interest and will not be paid until Executive experiences a Separation from Service. In addition, to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Code to payments due to Executive upon or following his Separation from Service, then notwithstanding any other provision of this Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following Executive&# 146;s Separation from Service (taking into account the preceding sentence of this paragraph) will be deferred without interest and paid to Executive in a lump sum on the first business day of the seventh month immediately following such Separation from Service. For purposes of the application of Treas. Reg. § 1.409A-1(b)(4) (or any successor provision), each payment in a series of payments will be deemed a separate payment.

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REMEDIES

Executive acknowledges that the services to be rendered by him are of a special, unique and extraordinary character and that it would be extremely difficult or impracticable to replace such services, that the material provisions of this Agreement are of crucial importance to the Company and that any damage caused by the breach of Sections 6 or 7 of this Agreement would result in irreparable harm to the business of the Company for which money damages alone would not be adequate compensation. Accordingly, Executive agrees that if he violates Sections 6 or 7 of this Agreement, the Company shall, in addition to any other rights or remedies of the Company available at law, be entitled to equitable relief in any court of competent jurisdiction, including, without limitation, temporary injunction and permanent injunction.

10.

WITHHOLDING

Each payment to Executive under this Agreement shall be reduced by any amounts required to be withheld by the Company from time to time under applicable laws and regulations then in effect.

If any payment due under this Agreement, together with all other payments and benefits that Executive receives or is entitled to receive from the Company or any of its subsidiaries, affiliates or related entities, would (if paid or provided) constitute an excess parachute payment (within the meaning of Section 280G(b)(1) of the Internal Revenue Code (the “Code”)), then, if the total of all “parachute payments” (as that term is defined in Section 280G(b)(2) of the Code) made to Executive or for Executive benefit (whether made hereunder or otherwise), after reduction for all applicable federal taxes (including, without limitation, any excise tax) would be increased by the limitation of any amount payable under this Agreement, then the amounts payable under this Agreement will be reduced to the extent necessary to maximize Executive’s total after-tax payments. The determination of whether and to what extent payments under this provision are required to be reduced in accordance with the preceding sentence will be made at the Company’s expense by an accounting firm selected by the Company.

Anything to the contrary herein notwithstanding, all benefits or payments provided by the Company to Executive that would be deemed to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code are intended to comply with Section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, distributions may only be made under this Agreement upon an event and in a manner permitted by Section 409A of the Code or an applicable exemption.

11.

EXECUTIVE’S REPRESENTATIONS AND WARRANTIES

11.1.

General. Executive represents and warrants to the Company that the execution of this Agreement and the performance of his duties as contemplated hereunder do not conflict with any other agreement, law, rule, regulation, or court order by which he is bound.

11.2.

No Impairment. Executive represents and warrants that he is not subject to any agreement or contract that would preclude or impair, in any way, his ability to carry out his duties under this Agreement for the Company.

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11.3.

No Confidential Information. Executive has not removed from any prior employer any confidential information.

11.4.

No Restrictive Agreements. Executive represents and warrants that, Executive has not heretofore entered into, has not been and is currently not subject to the provisions of, any employment contract, sales and purchase agreement or other agreement (whether oral or written) of any nature whatsoever with any other organization, individual or business entity, which prevents or restricts Executive from competing with, or soliciting the clients, customers, business or employees (including, without limitation for the purposes of hiring such employees) of, such other organization, individual or business entity or any other entity for any period of time or within any geographical area, whether heretofore expired or not (“Pre-existing Agreements”), other than such contracts or agreements as Executive has heretofore disclosed to Company in writing.

12.

INTELLECTUAL PROPERTY AND OWNERSHIP OF BUSINESS

12.1.

Ownership of Records. Executive agrees that all papers, documents, records, business accounts, generated by Executive during the conduct of such business or given to Executive during and in the course of his employment with Company is the exclusive property of the Company and shall remain with the Company upon Executive’s termination.

12.2.

Intellectual Property. Executive further agrees to assign without further consideration all intellectual property, including but not limited to inventions, discoveries or any material produced by him during the course of his. employment hereunder (including modifications or refinements of such materials) to the Company in their entirety. Such assignment and transfer is a complete and total assignment and transfer of any right Executive may have in such intellectual property and includes any patent, copyright, trade or service mark or the right to obtain any such patent, copyright, trade or service mark, and any trade secret rights in such material. This provision does not entitle Executive to any additional compensation, with such compensation, if any, being entirely within the discretion of Company.

13.

INDEMNIFICATION

In connection with his service as a member of the Board of Directors of the Company, Executive shall execute an indemnification agreement in the form attached hereto as Exhibit C.

14.

ENTIRE AGREEMENT; NO AMENDMENT

No agreements or representations, oral or otherwise, express or implied, have been made by either Party, with respect to Executive’s employment by any IGI Company, that are not set forth expressly in this Employment Agreement. This Agreement supersedes and cancels any other prior agreement relating to Executive’s employment by any IGI Company, except that Executive shall remain liable for any breaches of any provisions relating to restrictive covenants (including non-solicitation, non-compete, non-hire) and confidentiality contained in any such prior agreements. No amendment or modification of this Agreement shall be valid or binding unless made in writing and signed by the Party against whom enforcement thereof is sought.

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15.

NOTICES

All notices, demands and requests of any kind which either Party may be required or may desire to serve upon the other Party hereto in connection with this Agreement shall be delivered only by courier or other means of personal service, which provides written verification of receipt, or by registered or certified mail return receipt requested (each, a “Notice”). Any such Notice delivered by registered or certified mail shall be deposited in the United States mail with postage thereon fully prepaid or if by courier then deposited with the courier. All Notices shall be addressed to the Parties to be served as follows:

(a)

If to the Company, at the Company’s address set forth on the first page hereof. Copy to:

Brian M. Katz
Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799

(b)

If to Executive, at Executive’s address set forth on the first page hereof.

Either of the Parties hereto may at any time and from time to time change the address to which notice shall be sent hereunder by notice to the other Party given under this Section. All such notices, requests, demands, and other communications shall be effective when received at the respective address set forth above or as then in effect pursuant to any such change.

16.

WAIVERS

No waiver of any default or breach of this Agreement shall be deemed a continuing waiver or a waiver of any other breach or default.

17.

GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

18.

SEVERABILITY

The provisions of this Agreement are intended to be interpreted in a manner which makes them valid, legal, and enforceable. in the event any provision of this Agreement is found to be partially or wholly invalid, illegal or unenforceable, such provision shall be modified or restricted to the extent and in the manner necessary to render it valid, legal, and enforceable. it is expressly understood and agreed between Executive and the Company that such modification or restriction may be accomplished by mutual accord between the Parties or, alternatively, by disposition of a court of law. If such provision cannot under any circumstances be so modified

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or restricted, it shall be excised from this Agreement without affecting the validity, legality or enforceability of any of the remaining provisions.

19.

ASSIGNMENT

Executive may not assign any rights (other than the right to receive income hereunder) under this Agreement without the prior written consent of the Company. This Agreement may be assigned without the consent of Executive, and the provisions of this Agreement shall be binding upon and shall inure to the benefit of the assignee hereof.

20.

MISCELLANEOUS

For the avoidance of doubt, the provisions of sections 6, 7, and any other ongoing duties of the parties hereto shall survive termination or expiration of this Agreement.

21.

COUNTERPARTS

This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.

22.

HEADINGS

The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

23.

CONSTRUCTION OF AGREEMENT

All Parties agree that this Agreement shall be construed in such a manner so as not to favor one party or the other regardless of which party has drafted this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

IGI, LABORATORIES, INC.

By:/s/ Joyce Erony

Name: Joyce Erony

Title: Interim Chief Executive Officer and President

Date: May 29, 2009

/s/ Hemanshu Pandya

EXECUTIVE

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EX-10 3 ex102.htm EXHIBIT 10.2 Converted by EDGARwiz

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made on this 18^th day of May 2009, by and between IGI Laboratories, Inc., having an address at 105 Lincoln Avenue, Buena, New Jersey 08310 (the “Company”) and Phillip S. Forte, having an address at 151 North Congress Street, Newtown, PA 18940 (the “Executive”). The Company and the Executive are collectively referred to hereinafter as the “Parties”.

R E C I T A L S:

WHEREAS, the Company desires to employ the Executive on the terms and subject to the conditions set forth herein, and Executive is willing to accept such employment on such terms and conditions; and

WHEREAS, by virtue of such employment, Executive will have access to Proprietary Information of the Company and its subsidiaries (the “IGI Companies”); and

A G R E E M E N T :

DEFINITIONS

1.1.

Specific Definitions. Capitalized terms not defined elsewhere herein shall have the following meanings ascribed to them:

“Change in Control” shall mean the occurrence of any of the following events:

(a)

(b)

(c)

a sale of all or substantially all of the assets of the Company;

“Goodwill” means the expectation of continued patronage from client accounts and new patronage from prospective clients.

“IGI Business” means the businesses provided by any of the IGI Companies.

POSITION, RESPONSIBILITIES AND TERM

2.1.

Executive’s Position. On the terms and subject to the conditions set forth in this Agreement, the Company shall employ Executive to serve as an officer of the Company and as the Controller of the Company. The Executive shall report directly to the President of the Company. Executive shall perform such services in the Company’s offices in Buena, New Jersey or such other location or locations as the Executive and the President shall agree; provided, however, that Executive will be required to travel from time to time for business purposes.

2.2.

2.3.

No Conflicts of Interest. Executive further agrees that throughout the period of his employment hereunder, he will not perform any activities or services, or accept such other

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employment which would be inconsistent with this Agreement, the employment relationship between the Parties, or would interfere with or present a conflict of interest concerning Executive’s employment with the Company; provided, that Executive shall be permitted to serve on the boards of directors of such other companies as the Board shall approve, and that Executive may make personal investments and may act as a director and engage in other activities for any charitable, educational, or other nonprofit institution, as long as such investments and activities do not materially interfere with the performance of Executive’s duties hereunder. Executive agrees to adhere to and comply with any and all business practices and requirements of ethical conduct set forth in writing from time to time by the Company in its employee manual or similar publication.

2.4.

Term. This Agreement shall become effective on May 26, 2009 (the “Effective Date”) and will govern Executive’s employment by the Company until that employment ceases (such period of Executive’s employment is herein referred to as the “Term”).

ACCEPTANCE

COMPENSATION

4.1.

Base Salary. The Executive shall receive an initial annual salary of One Hundred and Fifty-Five Thousand ($155,000) Dollars (the “Base Salary”) paid in accordance with the Company’s payroll practices, as in effect from time to time. The Base Salary shall be reviewed on an annual basis by the Company and may be adjusted from time to time by the Company.

4.2.

4.3.

4.4.

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The Executive’s target Annual Bonus will be $22,605¹ with respect to the remainder of the 2009 calendar year and will be 25% of Executive’s Base Salary then in effect for each subsequent Fiscal Year. The actual amount of the Annual Bonus with respect to the 2009 calendar year, and any subsequent Fiscal Years, will be determined by the Board or the Committee, in their discretion, with reference to the Executive’s and the Employer’s fulfillment of performance goals established by the Committee with respect to the applicable Fiscal Year. The Committee shall establish such performance goals within one (1) month of the Effective Date of this Agreement with respect to the remainder of the 2009 calendar year (the “2009 Performance Goals”). The 2009 Performance Goals shall be mutually agreed upon b y the Executive and the Chairwoman of the Board.

4.5.

Grant of Equity Awards.

(a)

Equity Awards. As soon as practicable following the Effective Date of this agreement and subject to the approval of the Board, Executive will receive a grant of: (i) 80,000 shares of restricted stock, as memorialized in (and subject to the terms of) a restricted stock award agreement, attached hereto as Exhibit A (the “Restricted Stock Agreement”) and (ii) an option to purchase 110,000 shares of the Company’s Common Stock, as memorialized in (and subject to the terms of) an option award agreement, attached hereto as Exhibit B (the “Option Agreement”) (collectively the “Equity Award Agreements”).

(b)

(c)

EXPENSES

The Company shall reimburse Executive, in accordance with Company policy, for all expenses reasonably and properly incurred by Executive in connection with the performance

_________________

¹ Pro-rata portion of $38,750 (i.e. 25% of $155k), with pro-ration based on start/effective date.

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of Executive’s duties hereunder and the conduct of the business of the Company, upon the submission to the Company (or its designee) of appropriate vouchers therefor.

CONFIDENTIAL INFORMATION AND PROPERTY

6.1.

6.2.

Property of the Company.

(a)

(b)

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NON-SOLICITATION, NON-COMPETITION AND CONFLICTS OF INTEREST

7.1.

Non-Solicitation.

(a)

(b)

7.2.

7.3.

TERMINATION

Either party may terminate the Executive’s employment at any time for any reason, provided that the Executive shall provide thirty (30) days advance written notice of any

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such termination. Upon cessation of his employment with the Company, the Executive will be entitled only to such compensation and benefits as described in this Section 8.

8.1.

Termination by the Company Without Cause. Company shall have the right to terminate Executive’s employment hereunder “without cause” by giving Executive written notice to that effect. Any such termination of employment shall be effective on the date specified in such notice. In the event of such termination, the Company shall (i) pay Executive his unpaid Base Salary through the effective date of termination and any business expenses remaining unpaid on the effective date of the termination for which Executive is entitled to be reimbursed under Section 5 of this Agreement; (ii) pay Executive an amount per month equal to one-twelfth of his then adjusted Base Salary for the period commencing on the date following the date of termination and ending on the date which is six (6) months following the effective date of termination; (iii) pay Executive an amount equal to a pro-rata portion of the Annual B onus that would otherwise have been payable to Executive for the Fiscal Year in which the termination occurs, determined in the same manner and payable at the same time as such Annual Bonus would otherwise have been payable had Executive’s employment not terminated, with such pro-ration to be determined based on the number of months (and any fraction thereof) Executive is employed during the Fiscal Year in which termination occurs, relative to 12 months; and (iv) cause to become vested a pro-rata portion of the awards granted to Executive under Section 4.5, equal to the quotient of (i) the number of full months that have transpired between the Effective Date and the date of termination, divided by (ii) 36; provided, however, that without limiting any other remedy available hereunder, all obligations described in this Section 8.1 shall immediately terminate upon a judge’s determination that Executive has breached the provisions of Section 6 or 7 hereof.

Notwithstanding any other provision of this Agreement, for a cessation of employment described in Section 8.1 that occurs during the 2009 calendar year, the reference in Section 8.1(ii) to “six (6) months” will be replaced with a reference to “three (3) months.”

For the purpose of this Agreement, “Cause” shall mean (i) commission of a willful and material act of dishonesty in the course of Executive’s duties hereunder, (ii) conviction by a court of competent jurisdiction of a crime constituting a felony or conviction in respect of any act involving fraud, dishonesty or moral turpitude, (iii) Executive’s performance under the influence of controlled substances, or continued habitual intoxication, during working hours, after the Company shall have provided written notice to Executive and given Executive 30 days within which to commence rehabilitation with respect thereto, and Executive shall have failed to commence such rehabilitation or continued to perform under the influence after such rehabilitation, (iv) frequent or extended, and unjustifiable (not as a result of incapacity or disability) absenteeism which shall not have been cured within 30 days after the Company shall have advised Executive in writing of its intention to terminate Executive’s employment in accordance with the provisions of this Section 8.1, in the event such condition shall not have been cured, (v) Executive’s personal, willful and continuing misconduct or refusal to perform duties and responsibilities described in Section 2 above, or to carry out directives of the President and/or the Board, which, if capable of being cured, shall not have been cured within 60 days after the Company shall have advised Executive in writing of its intention to terminate Executive’s employment in accordance with the provision of this Section 8.1 or (vi) material non-compliance

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with the terms of this Agreement, including but not limited to any breach of Section 6 or Section 7 of this Agreement.

8.2.

Other Terminations. If the Executive’s employment with the Company ceases for any reason other than as described in Section 8.1 above (including but not limited to termination (a) by the Company for Cause, (b) as a result of the Executive’s death, (c) as a result of the Executive’s Disability, or (d) as a result of resignation by the Executive), then the Company’s obligation to the Executive will be limited solely to the payment of unpaid Base Salary through the date of such termination. All compensation and benefits will cease at the time of such termination and, except as otherwise required by COBRA, the Company will have no further liability or obligation by reason of such termination. The foregoing will not be construed to limit the Executive’s right to payment or reimbursement for claims incurred prior to the date of such termination under any insurance contract funding an employee benefit plan, policy or arrangement of the Company in accordance with the terms of such insurance contract.

For the purpose of this Agreement, a “Disability” shall be deemed to have occurred (i) when Executive has become eligible for disability benefits under the Company’s long-term group disability policy, if any, or, if no policy is then in effect, (ii) when such incapacity or disability, as defined below, shall have existed for either (A) one continuous period of six months or (B) a total of seven months out of any twelve consecutive months.

8.3.

Miscellaneous Termination Provisions. Executive, upon termination or expiration of employment for any reason, hereby irrevocably promises to:

(a)

Return all property of the IGI Companies in his possession or within his custody and control wherever located immediately upon such termination.

(b)

Participate in an exit interview with a designated person or persons of Company if requested by Company.

(c)

8.4.

Release. Notwithstanding any other provision of this Agreement, the payments and benefits described in Section 8.1 are conditioned on Executive’s execution and delivery to the Company, within 60 days following his cessation of employment, of a general release of claims against the Company and its affiliates in such form as the Company may reasonably require in a manner consistent with the requirements of the Older Workers Benefit Protection Act (the “Release”). The severance benefits described in Section 8.1 will begin to be paid or provided as soon as the Release becomes irrevocable.

REMEDIES

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would result in irreparable harm to the business of the Company for which money damages alone would not be adequate compensation. Accordingly, Executive agrees that if he violates Sections 6 or 7 of this Agreement, the Company shall, in addition to any other rights or remedies of the Company available at law, be entitled to equitable relief in any court of competent jurisdiction, including, without limitation, temporary injunction and permanent injunction.

10.

WITHHOLDING

Each payment to Executive under this Agreement shall be reduced by any amounts required to be withheld by the Company from time to time under applicable laws and regulations then in effect.

11.

EXECUTIVE’S REPRESENTATIONS AND WARRANTIES

11.1.

11.2.

11.3.

No Confidential Information. Executive has not removed from any prior employer any confidential information.

11.4.

12.

INTELLECTUAL PROPERTY AND OWNERSHIP OF BUSINESS

12.1.

12.2.

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may have in such intellectual property and includes any patent, copyright, trade or service mark or the right to obtain any such patent, copyright, trade or service mark, and any trade secret rights in such material. This provision does not entitle Executive to any additional compensation, with such compensation, if any, being entirely within the discretion of Company.

13.

ENTIRE AGREEMENT; NO AMENDMENT

14.

NOTICES

(a)

If to the Company, at the Company’s address set forth on the first page hereof. Copy to:

Brian M. Katz
Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799

(b)

If to Executive, at Executive’s address set forth on the first page hereof.

15.

WAIVERS

No waiver of any default or breach of this Agreement shall be deemed a continuing waiver or a waiver of any other breach or default.

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16.

GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

17.

SEVERABILITY

18.

ASSIGNMENT

19.

MISCELLANEOUS

For the avoidance of doubt, the provisions of sections 6, 7, and any other ongoing duties of the parties hereto shall survive termination or expiration of this Agreement.

20.

COUNTERPARTS

21.

HEADINGS

22.

CONSTRUCTION OF AGREEMENT

All Parties agree that this Agreement shall be construed in such a manner so as not to favor one party or the other regardless of which party has drafted this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

IGI, LABORATORIES, INC.

By: /s/ Rajiv Mathur

Name:

Rajiv Mathur

Title:

President & CEO

Philip S. Forte

EXECUTIVE

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EX-10 4 ex103.htm EXHIBIT 10.3 Converted by EDGARwiz

Exhibit 10.3

IGI LABORATORIES, INC.

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made as of May 29, 2009 (the “Effective Date”), between IGI Laboratories, Inc. (the “Company”) and Phillip S. Forte (the “Optionee”).

WHEREAS, to compensate the Optionee for his future service to the Company and to further align the Optionee’s personal financial interests with those of the Company’s stockholders, the Company wishes to award the Optionee a stock option to purchase shares of the Company’s Common Stock, par value $.01 per share (the “Common Stock”), subject to the restrictions and on the terms and conditions contained in this Agreement; and

WHEREAS, in consideration of the granting of that stock option the Optionee intends to remain in the employ of the Company.

NOW, THEREFORE, in consideration of these premises and the agreements set forth herein, the parties, intending to be legally bound hereby, agree as follows:

Nature of the Option. This Option is intended to be a non-statutory stock option and is not intended to be an Incentive Stock Option within the meaning of Section 422 of the Code, or to otherwise qualify for any special tax benefits to the Optionee.

Date of Grant; Term of Option. This Option was granted on May 29, 2009 and it may not be exercised later than May 29, 2019.

Award of Option. This Agreement evidences the grant to the Optionee of an option (the “Option”) to purchase 110,000 shares of the Company’s common stock, par value of $.01 per share (the “Shares”). The Option is subject to the terms set forth herein.

Option Exercise Price. The Option exercise price is $1.01 per Share, the Fair Market Value (as defined below) on the Effective Date.

Exercise of Option.

(a)

Right to Exercise. The Option will become vested and exercisable if the Optionee remains in continuous service to the Company (whether as an employee, consultant, independent contractor or any other capacity in which he provides services to the Company) through the applicable vesting date according to the following schedule:


Percentage of Shares	Vesting Date:
8.33%	June 1, 2009
8.33%	September 30, 2009
8.33%	December 31, 2009
8.34%	March 31, 2010
33.33%	June 1, 2011
33.34%	June 1, 2012

Notwithstanding the foregoing, immediately prior to but contingent upon the occurrence of a Change in Control (as defined below), the entire Option will become vested and exercisable, provided that the Optionee remains in continuous service to the Company through the date of that Change in Control.

(b)

All Unvested Option Shares Forfeited Upon Cessation of Service. Except for as provided in Section 5(c) below, upon cessation of Optionee’s service with the Company for any reason or for no reason (and whether such cessation is initiated by the Company, the Optionee or otherwise), any portion of the Option that has not, on or prior to the effective date of such cessation, become vested will immediately and automatically, without any action on the part of the Company, be forfeited and the Optionee will have no further rights with respect to those Shares.

(c)

Termination by the Company Without Cause. Notwithstanding anything contained in this Section 5, if the Optionee’s service with the Company ceases due to a termination by the Company without Cause (as defined below), a pro-rata portion of the Option shall become vested, with such pro-rata portion being equal to the quotient of (i) the number of full months that have transpired between the Effective Date and the date of such termination, divided by (ii) 36. For avoidance of doubt, any portion of the Option that has previously become vested in accordance with Section 5(a) above shall be included in the number of Options that become vested in accordance with this Section 5(c).

(d)

Method of Exercise. This Option shall be exercisable by written notice which shall state the election to exercise this Option, the number of Shares in respect to which the Option is being exercised and such other representations of agreements as to the Optionee’s investment intent with respect to such Shares as may be required by the Company hereunder. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company or such other person as may be designated by the Company. The written notice shall be accompanied by payment of the purchase price and the amount of any tax withholding arising in connection with the exercise of the Option. Payment of the purchase price and tax withholding shall be by check, by means of a “broker-assisted cashless exercise” conducted in accordance with procedures permitted by rules or regulations of the Federal Reserve Board or by such other method of payment authorized by the Company. The certificate or certificates for the Shares as to which the Option shall be exercised shall be registered in the name of the Optionee and shall be legended as required under applicable law.

(e)

Partial Exercise. The Option may be exercised in whole or in part; provided, however, that any exercise may apply only with respect to a whole number of Shares.

(f)

Restrictions on Exercise. The obligation of the Company to deliver Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Company, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Optionee (or other person exercising the Option after the Optionee’s death) represent that the Optionee is purchasing Shares for the Optionee's own account and not with a view to or for sale in

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connection with any distribution of the Shares, or such other representation as the Company deems appropriate. All obligations of the Company under this Agreement shall be subject to the rights of the Company to withhold amounts required to be withheld for any taxes, if applicable.

Share Legends. The following legend will be placed on any certificate evidencing an Option Share, in addition to any other legend that may be required pursuant to applicable law, or otherwise:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A NON-QUALIFIED STOCK OPTION AGREEMENT ENTERED INTO BETWEEN PHILLIP S. FORTE AND IGI LABORATORIES, INC. (WHICH TERMS AND CONDITIONS MAY INCLUDE, WITHOUT LIMITATION, CERTAIN TRANSFER RESTRICTIONS). A COPY OF THAT AGREEMENT IS ON FILE IN THE PRINCIPAL OFFICES OF IGI LABORATORIES, INC. AND WILL BE MADE AVAILABLE TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF IGI LABORATORIES, INC.

Change in Control. Notwithstanding anything to the contrary set forth in this Agreement, upon or in anticipation of any Change in Control of the Company or any of its affiliates, the Board of Directors of the Company (the “Board”) may, in its sole and absolute discretion and without the need for the consent of the Optionee, take one or more of the following actions contingent upon the occurrence of that Change in Control:

(a)

after providing reasonable advance notice of the Change in Control, cancel in whole or in part, the Option upon consummation of the Change in Control to the extent not exercised prior to the consummation of the Change in Control;

(b)

cancel in whole or in part, the Option in exchange for a substitute award in a manner consistent with the principles of Treas. Reg. §1.424-1(a) or any successor rule or regulation (notwithstanding the fact that the Option was not intended to satisfy the requirements for treatment as an incentive stock option); and/or

(c)

cancel the Option in exchange for fair value (as determined in the sole discretion of the Company) which, in the case of the Shares subject to the Option, may equal the excess, if any, of the value of the consideration to be paid in the Change in Control transaction to holders of the same number of Shares (or, if no consideration is paid in any such transaction, the Fair Market Value per Share of the Shares subject to the Option) over the aggregate exercise price of such Shares.

In the discretion of the Board, any cash or substitute consideration payable upon cancellation of the Option may be subjected to (i) vesting terms substantially identical to those that applied to the cancelled Option immediately prior to the Change in Control, or (ii) earn-out, escrow, holdback or similar arrangements, to the extent such arrangements are applicable to any consideration paid in connection with the Company.

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Termination of Service. Unless otherwise specified by the Company with respect to the Option, any portion of the Option that is not exercisable upon termination of service will expire immediately and automatically upon such termination and any portion of the Option that is exercisable upon termination of service will expire on the date it ceases to be exercisable in accordance with this Section 8.

(a)

Termination by Reason of Death. If the Optionee’s service with the Company or any affiliate terminates by reason of death, the Option held by such Optionee may thereafter be exercised, to the extent it was exercisable at the time of his death, by the legal representative of the estate or by the legatee of the Optionee under the will of the Optionee, for a period ending 12 months following the date of death (or, if sooner, on the last day of the stated term of such Option).

(b)

Termination by Reason of Disability. If the Optionee’s service with the Company or any affiliate terminates by reason of Disability (as defined below), the Option held by such Optionee may thereafter be exercised by the Optionee or his personal representative, to the extent it was exercisable at the time of termination, for a period ending 12 months following the date of termination (or, if sooner, on the last day of the stated term of such Option).

(c)

Cause. If the Optionee’s service with the Company or any affiliate is terminated for Cause: (i) the Option held by the Optionee will immediately and automatically expire as of the date of such termination, and (ii) any Shares for which the Company has not yet delivered share certificates will be immediately and automatically forfeited and the Company will refund to the Optionee the Option exercise price paid for such Shares, if any.

(d)

Other Termination. If the Optionee’s service with the Company or any affiliate terminates for any reason other than death, Disability or Cause, any Option held by the Optionee may thereafter be exercised by the Optionee, to the extent it was exercisable at the time of such termination (including by virtue of Section 5(c) above), for a period ending 90 days following the date of such termination (or, if sooner, on the last day of the stated term of such Option).

Nontransferability of Option. This Option may not be sold, pledged, assigned, hypothecated, gifted, transferred or disposed or in any manner either voluntarily or involuntarily by the operation of law, other than by the will or by the laws of descent or distribution, and may be exercised during the lifetime of the Optionee only by such Optionee. Subject to the foregoing, the terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

10.

Continuation of Service. This Option shall not confer upon the Optionee any right to continue in the service of the Company or any of its subsidiaries or limit in any respect the right of the Company to discharge the Optionee at any time, with or without Cause and with or without notice.

11.

Withholding. The Company may withhold from any consideration payable to Optionee any taxes required to be withheld by federal, state or local law as a result of the grant or exercise of this Option or the sale or other disposition of the Shares issued upon exercise of this Option. If the amount of any consideration payable to the Optionee is insufficient to pay such

-4-

taxes or if no consideration is payable to the Optionee, upon request of the Company, the Optionee shall pay to the Company an amount sufficient for the Company to satisfy any federal, state or local tax withholding requirements it may incur, as a result of the grant or exercise of this Option or the sale of or other disposition of the Shares issued upon exercise of this Option.

12.

Definitions.

(a)

“Cause” shall have the same meaning as set forth in the Optionee’s Employment Agreement with the Company dated May 25, 2009 (the “Employment Agreement”).

(b)

“Change in Control” shall have the same meaning as set forth in the Employment Agreement.

(c)

“Disability” shall have the same meaning as set forth in the Employment Agreement.

(d)

“Fair Market Value” means, as of any date: (i) if the Shares are not then publicly traded, the value of such Shares on that date, as determined by the Board in its sole and absolute discretion; or (ii) if the Shares are publicly traded, the closing price for a Share on the principal national securities exchange on which the Shares are listed or admitted to trading or, if the Shares are not listed or admitted to trading on any national securities exchange, but are traded in the over-the-counter market, the closing sale price of a Share or, if no sale is publicly reported, the average of the closing bid and asked quotations for a Share, as reported by The Nasdaq Stock Market, Inc. (“Nasdaq”) or any comparable system or, if the Common Stock is not listed on Nasdaq or a comparable system, the closing sale price of a Share or, if no sale is publicly reported, the average of the closing bid and as ked prices, as furnished by two members of the National Association of Securities Dealers, Inc. who make a market in the Common Stock selected from time to time by the Company for that purpose.

13.

Entire Agreement. This Agreement represents the entire agreement between the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature.

14.

Governing Law. This Agreement will be construed in accordance with the laws of the State of Delaware, without regard to the application of the principles of conflicts of laws.

15.

Amendment. This Agreement may only be amended by a writing signed by each of the parties hereto.

16.

Execution. This Agreement may be executed, including execution by facsimile signature, in one or more counterparts, each of which will be deemed an original, and all of which together shall be deemed to be one and the same instrument.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties have duly executed this Award Agreement on the Effective Date first indicated above.

IGI LABORATORIES, INC.

By:

/s/ Joyce Erony

Title:

Interim President and CEO

OPTIONEE

/s/ Phillip S. Forte

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EX-10 5 ex104.htm EXHIBIT 10.4 Converted by EDGARwiz

Exhibit 10.4

SEPARATION OF EMPLOYMENT AGREEMENT

AND GENERAL RELEASE

THIS SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made as of the date set forth below immediately above the signatures hereto, by and between IGI Laboratories, Inc., having an address at 105 Lincoln Avenue, Buena, New Jersey 08310 (the “Company”) and Rajiv Mathur, having an address at 35 Milestone Drive, Ringoes, New Jersey 08551 (“Mathur”).

WHEREAS, Mathur’s employment with the Company will terminate as of the date hereof; and

WHEREAS, the Company has agreed to provide Mathur with a separation package, subject to the execution and non-revocation of this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED by and between Mathur and the Company as follows:

Resignation. Mathur hereby resigns all employment, Board of Director and other positions with the Company, effective as of May 28, 2009 (“Termination Date”).

Separation Payments.

The Company shall pay to Mathur his accrued but unpaid cash compensation which shall consist of: (i) Mathur’s base salary through the date his employment with the Company terminated that has not yet been paid, (ii) any accrued but unpaid vacation pay, and (iii) any unreimbursed employee business expenses incurred prior to the date hereof to the extent Mathur has submitted a valid claim for such expenses.

(1)

In consideration for Mathur’s obligations as set forth herein (including, without limitation, the execution and non-revocation of this Agreement and agreeing to be bound by the terms of Paragraph 3 below), subject to the Mathur conducting himself in accordance with and not violating the terms of this Agreement and in full satisfaction of any and all obligations of the Company including, without limitation, under any severance policy or program maintained by the Company or the terms of the Employment Agreement, the Company hereby agrees to pay Mathur Three Hundred Twelve Thousand Seven Hundred Ninety Eight Dollars ($312,798), less any applicable withholding taxes, such amount to be paid ratably over a twelve month period with equal portions, less applicable withholding taxes, to be paid to Mr. Mathur on each regular payroll payment date during such period. The first installment of such amount will be made on the first regula r payroll date that occurs after the Termination Date.

Benefits.

Continuation of Health/Group Life Insurance Benefits. Following the Termination Date, in addition to the severance pay described above, subject to the non-revocation of this Agreement, Mathur is entitled to receive the group health benefits coverage in effect on the Termination Date (or generally comparable coverage) for himself and, where

applicable, his spouse and eligible dependents (to the extent they were receiving such coverage as of the Termination Date), at the same premium rates as may be charged from time to time for employees of IGI generally, which coverage will be provided until the earlier of (i) twelve months from the date hereof and (ii) the date Mathur is or becomes eligible for coverage under group health plan(s) of any other employer. Such continued coverage will run concurrently with COBRA.

401(k) Plan. If available, Mathur will be entitled to receive benefits under the IGI Laboratories, Inc. 401(k) Plan in accordance with the terms and conditions of the plan.

Mutual Release.

Mathur Release.

(1)

Mathur, for and in consideration of the commitments of the Company as set forth in this Agreement, and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates, subsidiaries and parents, and its officers, directors, employees, and agents, and its and their respective successors and assigns, heirs, executors, and administrators (each, a “Company Releasee” and collectively, “Company Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which Mathur ever had, now has, or hereafter may have, whether known or unknown, or which Mathur’s heirs, executors, or administrators may have, by reason of any matter, cause or thing whatsoever, from the beginning of Mathur’s employment to the date of this Agreement, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Mathur’s employment relationship with the Company and/or its predecessors, subsidiaries or affiliates, the terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act (“OWBPA”), Title VII of The Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, and any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs. This Agreement is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.

(2)

To the fullest extent permitted by law, Mathur represents and affirms that (i) Mathur has not filed or caused to be filed on Mathur’s behalf any claim for relief against the Company or any Company Releasee and, to the best of Mathur’s knowledge and belief, no outstanding claims for relief have been filed or asserted against the Company or any Company Releasee on Mathur’s behalf; (ii) Mathur has not reported any improper, unethical or illegal conduct or activities to any supervisor, manager, department head, human resources representative, agent or other representative of the Company, to any member of the Company’s legal or compliance departments, or to the ethics hotline, and has no knowledge of any such improper, unethical or illegal conduct or activities; and (iii) Mathur will not file, commence, prosecute or participate in any judicial or arbitral action or proceeding against the Company or

any Company Releasee based upon or arising out of any act, omission, transaction, occurrence, contract, claim or event existing or occurring on or before the date of this Agreement.

Company Release. The Company, for and in consideration of the commitments of Mathur set forth in this Agreement, and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE Mathur, its his dependents, heirs, executors, and administrators (each, a “Mathur Releasee” and collectively, “Mathur Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which the Company ever had, now has, or hereafter may have, whether known or unknown, by reason of any matter, cause or thing whatsoever, from the beginning of Mathur’s employment to the date of this Agreement, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Mathur’s employment relationship with the Company and/or its predecessors, subsidiaries or affiliates, the terms and conditions of that employme nt relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs. This Agreement is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.

Confirmation of Non-Compete and Non-Solicitation Provisions. In consideration of the commitments of the Company set forth herein, Mathur acknowledges and reconfirms his agreement to be subject to and to abide by the terms of Sections 6 and 7 of that certain employment agreement by and between the Company and Mathur dated as of January 1, 2007 (the “Employment Agreement”). Failure to abide by such terms shall void any obligation of the Company to pay any sums or further consideration due or which may become due under this Agreement in addition to all other legal remedies available to the Company.

Cooperation. Mathur agrees to cooperate, in good faith, with the Company at such times and in such manner as it may reasonably request with respect to matters that were within Mathur 's area of responsibility, or in which Mathur was otherwise engaged, in the course of Mathur 's employment by the Company. With respect to litigation affecting the Company that arises out of events with respect to which Mathur has or may have knowledge, Mathur 's cooperation shall include, without limitation, interviews and conferences with the Company's attorneys and testifying at trials. The Company shall pay any expenses reasonably incurred by Mathur in connection with cooperating with the Company as provided above. In the event that Mathur is named personally in any legal proceeding relating to his activities on behalf of the Company, he will be eligible for indemnification to the extent permitted by the Company 46;s by-laws and other governance documents, as well as any applicable liability insurance policies, as in effect at the time he makes a claim for indemnification.

Non-Disparagment. Mathur further agrees that Mathur will not disparage or subvert the Company, or make any statement reflecting negatively on the Company, its affiliated corporations or entities, or any of their officers, directors, employees, agents, stockholders or representatives, including, but not limited to, any matters relating to the operation or management of the Company, Mathur’s employment and the termination of Mathur’s employment, irrespective of the truthfulness or falsity of such statement. Mathur will

continue to conduct his activities in a professional manner and to cooperate with the Company in all reasonable ways to achieve a smooth transition and resolution to any open items on which he was working and not intentionally injure the Company in any way relating to Company property or personnel.

Satisfaction of Other Obligations. Mathur acknowledges and agrees that the Company previously has satisfied or pursuant to this Agreement hereby does satisfy any and all obligations owed to Mathur under any severance policy or program maintained by the Company, any bonus or compensation related arrangement or understanding with the Company and any employment-related agreement or offer letter Mathur has with the Company (including, without limitation, the Employment Agreement), and further, that, except as set forth expressly herein, no promises or representations have been made to Mathur in connection with the termination of Mathur’s employment, or the terms of this Agreement. Mathur understands and agrees that the payments, benefits and agreements provided in this Agreement are being provided to Mathur in consideration for Mathur’s acceptance and execution of, and in reliance upon Mathur’s representa tions in, this Agreement. Mathur further acknowledges that, in the absence of his execution of this Agreement, the payments specified herein would not otherwise be due to him. The severance payments, rights and benefits described in this Agreement will be the only such payments, rights and benefits Mathur is to receive as a result of his termination of employment and Mathur agrees he is not entitled to any additional payments, rights or benefits not otherwise described in this Agreement. Mathur hereby acknowledges and agrees that he is not eligible to be a participant in any severance or retention plan of the Company.

Non-Disclosure. Mathur agrees not to disclose the terms of this Agreement to anyone, except Mathur’s spouse, attorney and, as necessary, tax/financial advisor. It is expressly understood that any violation of the confidentiality obligation imposed hereunder constitutes a material breach of this Agreement.

10.

Return of Company Property. Mathur represents that Mathur does not presently have in Mathur’s possession any records and business documents, whether on computer or hard copy, and other materials (including but not limited to computer disks and tapes, computer programs and software, office keys, correspondence, files, customer lists, technical information, customer information, pricing information, business strategies and plans, sales records and all copies thereof) (collectively, the “Corporate Records”) provided by the Company and/or its predecessors, subsidiaries or affiliates or obtained as a result of Mathur’s prior employment with the Company and/or its predecessors, subsidiaries or affiliates, or created by Mathur while employed by or rendering services to the Company and/or its predecessors, subsidiaries or affiliates. Mathur acknowledges that all such Corporate Records are the property of the Company. In addition, Mathur shall promptly return in good condition any and all beepers, credit cards, cellular telephone equipment, business cards and computers.

11.

Limitation of Claims.

This Agreement will not prevent Mathur from filing a charge with the Equal Employment Opportunity Commission (or similar state agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state agency); provided, however, that any claims by Mathur for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred.

The parties agree and acknowledge that the agreement by the parties described herein, and the settlement and termination of any asserted or unasserted claims against the Company Releasees or the Mathur Releasees, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Company Releasees or the Mathur Releasees.

12.

Consequences of Breach. Mathur agrees and recognizes that should Mathur breach or otherwise fail to comply with any of the obligations or covenants set forth in this Agreement, the Company will have no further obligation to provide Mathur with the consideration set forth herein, and will have the right to seek repayment of all consideration paid up to the time of any such breach. Further, the parties acknowledge that in the event of a breach of or other failure to comply with this Agreement by either party, the non-breaching party (and in the case of the Company, the Company Releasees) may seek any and all appropriate relief for any such breach, including equitable relief and/or money damages, attorney’s fees and costs.

13.

Deduction; Withholding; Set-Off. Notwithstanding any other provision of this Agreement, any payments or benefits hereunder will be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company reasonably determines it should withhold pursuant to any applicable law or regulation. The amounts due and payable under this Agreement will at all times be subject to the right of set-off of the Company for any amounts or debts incurred and owed by Mathur to the Company whether during his employment or after the Termination Date.

14.

Equitable Remedies. The parties acknowledge and agree that if either party should breach any of the covenants, restrictions and agreements contained herein, irreparable loss and injury would result to the non-breaching party, and that damages arising out of such a breach may be difficult to ascertain. The parties therefore agree that in addition to all other remedies provided at law or at equity, the non-breaching party may petition and obtain from a court of law or equity all necessary temporary, preliminary and permanent injunctive relief, without the necessity of proving actual damages, to prevent a breach by the other party of any covenant contained in this Agreement. The parties agree further that if it is determined by a court that the breaching party has breached the terms of this Agreement, the non-breaching party shall be entitled to recover from the breaching party all costs, attorneys’ f ees, and expenses incurred as a result of its attempts to redress such a breach or to enforce its rights and protect its legitimate interests.

15.

Waiver. Mathur agrees that if the Company fails to take action to remedy any breach by Mathur of this Agreement or any portion of the Agreement, conduct or inaction by the Company shall not operate or be construed as a waiver of any subsequent breach by Mathur of the same or any other provision, agreement or covenant.

16.

Severable Nature of the Agreement. Mathur agrees that each covenant, paragraph and division of this Agreement is intended to be severable and distinct, and that if any paragraph, subparagraph, provision or term of this Agreement is deemed to be unlawful or unenforceable, such a determination will not impair the legitimacy or enforceability of any other aspect of the Agreement.

17.

Assignment. Mathur agrees that the Company may assign this Agreement to any of its successors by merger or otherwise; provided, that the Company will remain obligated to satisfy its obligations under the terms of this Agreement in the event that its successors or assigns fail to fulfill such obligations.

18.

Entire Agreement. This Agreement shall supersede any prior agreement between Mathur and the Company relating to the subject matter hereof.

19.

Amendments. No amendments or modifications to the document shall be binding or valid unless mutually agreed upon, reduced to writing and signed by the parties.

20.

Governing Law. This Agreement and the obligations of the parties hereunder shall be construed, interpreted and enforced in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws.

21.

Confirmation. Mathur certifies and acknowledges as follows:

That Mathur has read the terms of this Agreement, and that Mathur understands its terms and effects, including the fact that Mathur has agreed to RELEASE AND FOREVER DISCHARGE the Company and each and everyone of its affiliated entities from any legal action arising out of Mathur’s employment relationship with the Company and the termination of that employment relationship;

That Mathur has signed this Agreement voluntarily and knowingly in exchange for the consideration described herein, which Mathur acknowledges is adequate and satisfactory to Mathur;

That Mathur has been and is hereby advised in writing to consult with an attorney prior to signing this Agreement;

That Mathur does not waive rights or claims that may arise after the date this Agreement is executed;

That the Company has provided Mathur with a period of twenty-one (21) days within which to consider this Agreement, and that Mathur has signed on the date indicated below after concluding that this Agreement is satisfactory to him; and

Mathur acknowledges that this Agreement may be revoked by Mathur within seven (7) days after execution, and it shall not become effective until the expiration of such seven day revocation period. In the event of a timely revocation by Mathur, other than Paragraph 1 herein, this Agreement will be deemed null and void and the Company will have no obligations hereunder.

Intending to be legally bound hereby, Mathur and the Company executed the foregoing Separation of Employment Agreement and General Release this 28^th day of May, 2009.


/s/ Rajiv Mathur Rajiv Mathur

IGI LABORATORIES, INC. By: _________________________________ Name: _________________________________ Title: _________________________________

EX-99 6 ex991.htm EXHIBIT 99.1 Converted by EDGARwiz

Exhibit 99.1

News From

[ex991003.jpg]

Buena, NJ 08310

Release Date: May 29, 2009


Contact:	Philip S. Forte IGI Laboratories, Inc. (609) 856-697-1441 ext. 363 www.askigi.com

IGI LABORATORIES, INC. APPOINTS NEW CEO AND CONTROLLER

BUENA, NJ - May 29, 2009 - IGI Laboratories, Inc. (NYSE AMEX: IG), a premier provider of topical formulation development , analytical, manufacturing and packaging services today announced that it has named Hem Pandya its new President and Chief Executive Officer, effective June 29, 2009. Joyce Erony, the Company’s Chairwoman of the Board, will act as Interim President and Interim CEO until such date. In addition, Philip S. Forte will assume the role of Corporate Controller. Effective immediately, Rajiv Mathur has resigned as Chief Executive Officer and President and as a member of the Board of Directors. Mr. Pandya was appointed to the Board of Directors to fill the position vacated by Mr. Mathur’s resignation.

Ms. Erony said, "The Board of Directors has accepted Mr. Mathur's resignation and we wish to thank him for his leadership and commitment to IGI.”

Hem Pandya is an experienced pharmaceutical executive with a broad spectrum of operational and business development experience and strong leadership skills. Mr. Pandya is currently employed as Chief Operating Officer of NexMed Inc. Previously, Mr. Pandya was Senior Vice President of Business Development and Strategic Alliances for Andrx Pharmaceuticals, Inc. Mr. Pandya served as Vice President of Corporate Development and Commercial Operations for Able Laboratories, Inc. He also served in various senior management roles with Ivax Pharmaceuticals, Inc. and Faulding/Purepac Pharmaceutical Company (subsequently Alpharma, Inc.). He received his Bachelor's Degree from Rutgers University.

Philip S. Forte is a financial professional with a 20 year proven track record of creating value in both the financial and operational side of various Pharmaceutical businesses. Prior to IGI, Mr. Forte was the Senior Director of Finance at Teva Specialty Pharmaceuticals Industries, Ltd., in Horsham Pennsylvania. At Teva Specialty Pharmaceuticals, Mr. Forte was responsible for the business financial operations including its strategic business plan and business development initiatives. Prior to Teva Specialty Pharmaceuticals, Mr. Forte has held various financial roles in corporate and public accounting including Bristol Myers Squibb and Aventis. Phil received his BBA in Accounting from Bernard M. Baruch and his MBA in finance from Fairleigh Dickinson University.

Joyce Erony, Chairwoman of the Board of Directors, stated, "On behalf of the Board, I want to welcome Hem Pandya and Philip S. Forte to IGI Laboratories. Bringing Hem and Phil to the IGI team is an

important milestone for the company as we build a strong foundation to emerge as a leader in the growing specialty pharmaceutical market.”

Commenting on his new role, Mr. Pandya said, "I am very excited about this opportunity and look forward to working with the Board of Directors in building shareholder value at IGI. With the addition of Phil, our management team is poised to grow IGI and enter the Pharmaceutical market. The depth of our OTC product pipeline and product development plan for the prescription business as well as our key partnership activities provide near and long term growth opportunities for our business."

Pursuant to the terms of his employment agreement, Mr. Pandya will receive a grant of (i) 975,000 shares shares of restricted stock and (ii) an option to purchase that number of shares of the Company’s common stock such that the value of the option on the date of grant is equivalent to the value of 325,000 shares of the Company’s common stock on the date of grant. Pursuant to the terms of his employment agreement, Mr. Forte will receive a grant of (i) 80,000 shares of restricted stock and (ii) an option to purchase 110,000 shares of the Company’s common stock. These equity grants will become fully vested over a period of three years as follows: (i) one-twelfth of the shares subject to the equity grants will vest on June 29, 2009, in the case of Mr. Pandya, and June 1, 2009, in the case of Mr. Forte; (ii) one-twelfth of the shares subject to the equity grants will vest on each of the following dates: (A) Septemb er 30, 2009, (B) December 31, 2009 and (C) March 31, 2010; (iii) one-third of the shares subject to the equity grants will vest on June 1, 2011; and (iv) one-third of the shares subject to the equity grants will vest on June 1, 2012. In addition, any shares that remain unvested immediately prior to a change in control will become vested, provided that the executive remains in continuous service with IGI through the consummation of the change in control. The above option grants will have an exercise price equal to the closing price of IGI’s common stock on the date of grant. The above equity grants will be granted as an employment inducement award pursuant to the executive’s employment agreement and will be issued without stockholder approval pursuant to Rule 711 of the NYSE Amex Company Guide.

About IGI Laboratories, Inc.

IGI Laboratories, Inc. engages in the development, manufacturing, filling, and packaging of topical, semi solid, and liquid products for pharmaceutical and cosmeceutical companies. The Company offers the patented Novasome® encapsulation technology which contributes value-added qualities to pharmaceutical and cosmeceutical products, providing improved dermal absorption and sustained release of the active molecule.

IGI Laboratories, Inc. “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions, and other statements contained in this press release that are not historical facts and statements identified by words such as " will," "possible," "one time," "provides an opportunity," "continue" or words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those set forth under the caption "Risk Factors" in IGI Laboratories, Inc.’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q as filed w ith the Securities and Exchange Commission. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors or IGI Laboratories, Inc.’s ability to implement business strategies. IGI Laboratories, Inc. does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

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