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

December 1, 2008
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Date of Report (Date of earliest event reported)

ELITE PHARMACEUTICALS, INC.
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(Exact name of Company as specified in its charter)

Delaware   001-15697     22-3542636
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(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)

165 Ludlow Avenue, Northvale, New Jersey 07647
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(Address of principal executive offices)

(201) 750-2646
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(Company’s telephone number, including area code)

(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 Company under any of the following provisions:

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

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

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

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

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

      In a Form 8-K filed with the United States Securities and Exchange Commission on November 6, 2008 by Elite Pharmaceuticals, Inc., a Delaware corporation (the “Registrant”), the Registrant disclosed that Jerry I. Treppel, a member of the Registrant’s Board of Directors (the “Board”), was appointed as the Chairman of the Board. On December 1, 2008, the Registrant entered into a compensation agreement with Mr. Treppel (the “Compensation Agreement”) providing for the terms under which Mr. Treppel will serve as the non-executive Chairman of the Board. Pursuant to the Compensation Agreement, Mr. Treppel will serve as the non-executive Chairman of the Board until immediately prior to the next annual meeting of the Company’s stockholders; provided, however, that following such annual meeting, and each subsequent annual meeting of the Company’s stockholders, if the Board elects Mr. Treppel as the non-executive Chairman of the Board, the term of the Compensation Agreement will be extended through the earlier of (a) the date of the next subsequent annual meeting of the Company’s stockholders and (b) the date upon which Mr. Treppel no longer serves as the non-executive Chairman.

      During the term of the Compensation Agreement, including any applicable extensions thereof, Mr. Treppel is entitled to cash compensation of $2,083.33 on a monthly basis in lieu of, and not in addition to, any cash directors’ fees and other compensation paid to other non-employee members of the Board. Mr. Treppel is also entitled to reimbursement of any expenses reasonably incurred in the performance of his duties under the Compensation Agreement upon presentation of proper written evidence of such expenditures.

      In addition, pursuant to the terms of the Compensation Agreement, the Registrant granted to Mr. Treppel under its 2004 Stock Option Plan non-qualified stock options to purchase 180,000 shares of common stock of the Registrant, par value $0.01 per share, exercisable for a period of 10 years at an exercise price per share of $0.06, subject to the terms and conditions of the related option agreement.

      Under the Compensation Agreement, the Registrant has also agreed to indemnify Mr. Treppel to the fullest extent permitted by law in accordance with the By-Laws of the Registrant against (a) reasonable expenses, including attorneys’ fees, incurred by him in connection with any threatened, pending, or completed civil, criminal, administrative, investigative, or arbitrative action, suit, or proceeding (and any appeal therein) seeking to hold him liable for actions taken in his capacity as Chairman of the Board, and (b) reasonable payments made by him in satisfaction of any judgment, money decree, fine (including assessment of excise tax with respect to an employee benefit plan), penalty or settlement for which he may have become liable in any such action, suit or proceeding, provided that any such expenses or payments are not the result of Mr. Treppel’s gross negligence, willful misconduct or reckless actions.

      Either party may terminate the Compensation Agreement, effective immediately upon the giving of written notice to the other party.

      A copy of the Compensation Agreement is attached as an exhibit to this Current Report.

Item 8.01 Other Events.

      The Registrant issued a press release on December 4, 2008 as a reminder to the Registrant’s stockholders of the Special Meeting of the Stockholders to be held on Friday, December 19, 2008, at the offices of its legal counsel, Reitler Brown & Rosenblatt LLC, at 800 Third Ave., 21 st Floor, New York, NY 10022, and the proposals to be voted upon at the Special Meeting.

      A copy of the press release is attached as an exhibit to this Current Report.

Item 9.01   Financial Statements and Exhibits.
     
a)   Not applicable.

b)       Not applicable.
 
c)       Not applicable.
 
d)       Exhibits.
 
Exhibit No Exhibit  
     
10.1         Form of Compensation Agreement, dated as of December 1, 2008, by and between the Registrant and Jerry Treppel.
 
99.1         Press Release, dated as of December 4, 2008.
 

SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: December 4, 2008

  ELITE PHARMACEUTICALS, INC.  
       
       
  By: /s/ Chris Dick  
    Chris Dick  
    Acting Chief Executive Officer and  
    Chief Operating Officer  


 

COMPENSATION AGREEMENT (the “ Agreement ”), dated as of December 1, 2008, by and between ELITE PHARMACEUTICALS, INC., a Delaware corporation (the “ Comp any”), and Jerry I. Treppel (the “ Director ”).

 

INTRODUCTION

           WHEREAS, the Director currently serves as a director on the Board of Directors of the Company (the “ Board ”); and

           WHEREAS, the Board has elected the Director as the non-executive Chairman of the Board and the Director is willing to serve in such capacity for the compensation and upon the terms set forth in this Agreement.

           NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

           1.      Term . The term of the Director’s service as non-executive Chairman of the Board under this Agreement shall commence on the date hereof and end immediately prior to the next annual meeting of the Company’s stockholders (the “ Term ”); provided, however , that following such annual meeting, and each subsequent annual meeting of the Company’s stockholders, if the Board elects the Director to continue as the non-executive Chairman of the Board, then the Term shall be extended through the earlier of (a) the date of the next subsequent annual meeting of the Company’s stockholders and (ii) the date upon which the Director shall no longer serve as the non-executive Chairman of the Board (such additional extension(s), the “ Extended Term ”); references in this Agreement to the Term shall include the Extended Term. Either party hereto may terminate this agreement, effective immediately upon the giving of written notice.

           2.      Duties . During the Term, the Director shall serve as the non-executive Chairman of the Board and shall be neither an employee nor officer of the Company and shall not serve in any other capacity with the Company or any of its affiliates. The Director shall perform his duties as the non-executive Chairman of the Board in a manner consistent with applicable legal and corporate governance standards: (a) regularly attend and preside at Board meetings, (b) chair the annual meeting of the Company’s stockholders, (c) be eligible to serve on such committees of the Board, and (d) perform such other duties commensurate with his position as a non-executive Chairman of the Board. The Director may serve on one or more committees of the Board consistent with this Section 2.

           3.      Commitment. During and throughout the Term, the Director will devote such reasonable time, attention, skill and efforts to the business and affairs of the Company as is necessary to discharge the duties and responsibilities assigned to the Director hereunder in his capacity as the non-executive Chairman of the Board and shall serve the Company faithfully and to the best of his ability.

           4.      Compensation; Expenses .

                     (a)      Cash Compensation . During the Term, the Director shall be entitled to receive monthly compensation at a rate of $2,083.33 (the “ Cash Compensation ”),

 


which amount shall be in lieu of and not in addition to any cash directors’ fees and other compensation paid to other non-employee members of the Board. Payments to the Director of the Cash Compensation set forth in this Section 4(a) shall be made within ten (10) business days of the end of each calendar month and in accordance with the Company’s customary pay practices for its employees. Notwithstanding the foregoing, if during the Term or any Extended Term, the Director is not re-elected to the Board at any annual meeting of the Company’s stockholders, the Company shall only be obligated to pay the Director his pro rata portion of the Cash Compensation through the date of such annual meeting. The Cash Compensation shall be subject to review by the Board from time to time.

                     (b)      Special Compensation . The Company shall grant to the Director under its 2004 Stock Option Plan (the “ Plan ”), non-qualified stock options to purchase 180,000 shares of common stock of the Company (“ Common Stock ”) at an exercise price per share of $0.06 (the “ Options ”). The Options will have a term of ten (10) years and shall be subject to the terms and conditions set forth in an option agreement in the form attached hereto as Exhibit A (the “ Option Agreement ”).

                     (c)      Expenses . The Company shall promptly reimburse the Director for expenses he reasonably incurs in connection with the performance of the services hereunder (including business travel and entertainment expenses), against receipts or other appropriate written evidence of such expenditures as required by the appropriate Internal Revenue Service regulations and/or the expense reimbursement policies of the Company.

           5.      Indemnity Obligations . Company agrees to indemnify the Director to the fullest extent permitted by law in accordance with the By-Laws of the Company against (a) reasonable expenses, including attorneys’ fees, incurred by him in connection with any threatened, pending, or completed civil, criminal, administrative, investigative, or arbitrative action, suit, or proceeding (and any appeal therein), whether or not brought by or on behalf of the Company, seeking to hold him liable by reason of the fact that he is or was acting in such capacity, and (b) reasonable payments made by him in satisfaction of any judgment, money decree, fine (including an excise tax assessed with respect to an employee benefit plan), penalty, or settlement for which he may have become liable in any such action, suit, or proceeding. The Director agrees to indemnify and hold the Company harmless from and against any and all claims, demands, liabilities, damages, costs, and expenses (including, without limitation, reasonable attorneys’ fees) made against the Company resulting from the Director’s gross negligence, willful misconduct or reckless actions.

           6.      Independent Contactor . The Director’s status under this Agreement is that of an independent contractor and not an employee of the Company. The Director shall be responsible for, and agrees to comply with, obligations under federal and state tax laws for payment of income and, if applicable, self-employment tax.

           7.      Miscellaneous .

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                     (a)      Assignment . The rights and obligations of the Director under this Agreement may not be assigned or delegated by the Director without the prior written consent of the Company.

                     (b)      Binding Effect . This Agreement shall extend to and be binding upon the Director, his successors, permitted assigns, heirs and legal representatives, and shall inure to the benefit of the Company, its successors and assigns.

                     (c)      Notices . All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

            If to the Director, to:   As listed in the records of the Company.
 
  If to the Company to:   Elite Pharmaceuticals, Inc.
      165 Ludlow Avenue
      Northvale, NJ 07647
      Attn: Board of Directors

                     (d)      Waiver . A waiver by a party hereto of a breach of any term, covenant or condition of this Agreement by the other party hereto shall not operate or be construed as a waiver of any other or subsequent breach by such party of the same or any other term, covenant or condition hereof.

                     (e)      Entire Agreement . This Agreement sets forth the entire agreement between the parties with respect to the subject matter hereof and no waiver, modification, change or amendment of any of its provisions shall be valid unless in writing and signed by the party against whom such claimed waiver, modification, change or amendment is sought to be enforced. This Agreement supersedes all prior understandings, whether oral or written, between the Director and the Company.

                     (f)      Authority . The parties each represent and warrant that they have the power, authority and right to enter into this Agreement and to carry out and perform the terms, covenants and conditions hereof.

                     (g)      Applicable Law; Choice of Forum . This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New Jersey without giving effect to principles relating to conflicts of law. Any legal action or proceeding filed in connection with this Agreement shall be filed in a forum in the State of New Jersey. The parties hereby consent to the sole and exclusive jurisdiction of the courts in the State of New Jersey and agree not to raise any defense or make any argument that the pendency of any legal action or proceeding in such courts is inconvenient.

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                     (h)      Severability . In the event that any of the provisions of this Agreement, or any portion thereof, shall be held to be invalid or unenforceable, the validity and enforceability of the remaining provisions hereof shall not be affected or impaired but shall remain in full force and effect.

                     (i)      Descriptive Headings . Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any term or provision of this Agreement.

                     (j)      Counterparts; Delivery by Facsimile or Email . This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one agreement. This Agreement and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or email, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or email as a defense to the formation of a contract and each such party forever waives any such defense.


[ Signature Page Follows ]

 

 

 

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           IN WITNESS WHEREOF, the parties hereto have executed this Compensation Agreement as of the day and year first above written.

  ELITE PHARMACEUTICALS, INC.
     
     
  By:      
   
Chris Dick, Chief Operating Officer
 
     
     
       
    JERRY I. TREPPEL  

 

 

5


Elite Pharmaceuticals, Inc. Special Stockholders Meeting to be Held on
Friday, December 19, 2008

Northvale, NJ – December 4, 2008: A special meeting of the stockholders of Elite Pharmaceuticals, Inc. (AMEX: ELI) is scheduled for Friday, December 19 th at 10:00 AM. This meeting will be held at the offices of Reitler Brown & Rosenblatt, LLC, 800 Third Avenue, 21 st Floor, New York, New York 10022.

At this meeting, Elite’s stockholders will be asked to (i) approve and ratify the private placement of Elite’s Series D 8% Convertible Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”), convertible into shares of common stock, par value $0.01 per share (the “Common Stock”), the exchange of certain shares of Elite’s Series B 8% Convertible Preferred Stock, par value $0.01 per share, and Elite’s Series C 8% Convertible Preferred Stock, par value $0.01 per share, for shares of Series D Preferred Stock, and related warrants to purchase additional shares of Elite’s Common Stock and (ii) approve and ratify the amendment to Elite’s Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 to 210,000,000.

Access to the related proxy materials for the special meeting can be found on the Company’s website at: http://elitepharma.com/sec_filings.asp

About Elite Pharmaceuticals, Inc.
Elite Pharmaceuticals, Inc. develops oral sustained and controlled release products. The Company's strategy includes assisting partner companies in the life cycle management of products to improve off-patent drug products and developing generic versions of controlled release drug products with high barriers to entry. Two of the company’s products, Lodrane 24® and Lodrane 24D®, are marketed by a partner, ECR Pharmaceuticals, for allergy treatment. The company’s lead pipeline products are novel sustained release oral formulations of oxycodone for the treatment of chronic pain, which address two of the limitations of existing oral opioids: the provision of consistent relief of baseline pain levels and deterrence of potential abuse . Both products, ELI-216, a once-daily abuse resistant oxycodone, and ELI-154, a once-daily oxycodone, are in late-stage development. Elite, with partners, also has an ANDA filed with the FDA for a generic equivalent of a narcotic analgesic drug product and a generic gastrointestinal drug product in clinical development. Elite operates a GMP and DEA registered facility for research, development, and manufacturing located in Northvale, NJ.  

This news release contains forward-looking statements, including those related to the preliminary nature of the clinical program results and the potential for further product development, that involve known and unknown risks, delays, uncertainties and other factors not under the control of the Company, which may cause actual results, performance or achievements of the companies to be materially different from the results, performance or other expectations implied by these forward-looking statements. In particular, because substantial future testing will be required prior to approval, the results described above may not be supported by additional data or by the results of subsequent trials. These risks and other factors, including the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities, and intellectual property protections and defenses, are discussed in Elite's filings with the Securities and Exchange Commission such as the 10K, 10Q and 8K reports. The Company undertakes no obligation to update any forward-looking statements.

Contact:
For Elite Pharmaceuticals, Inc.
Dianne Will, Investor Relations, 518-398-6222
Dianne@elitepharma.com
www.elitepharma.com