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):  December 17, 2008
 
PHARMA-BIO SERV, INC.
(Exact name of registrant as specified in its charter)

Delaware
0-50956
20-0653570
(State or other jurisdiction
(Commission
(IRS Employer
of Incorporation)
File Number)
Identification No.)

Pharma-Bio Serv Building
Industrial Zone Lot 14,
Barrio Higuillar, Dorado, Puerto Rico
00646
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code:   (787) 278-2709
 
NONE
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
 
¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 17, 2008, Pharma-Bio Serv, Inc. (the "Company") amended the Employment Agreement of Pedro Lasanta, the Company's Chief Financial Officer, dated November 5, 2007. The amendment provides for an indefinite term of the contract, an increase in base salary to $110,000 per year and an annual bonus in cash or Company stock options to be granted based on performance metrics to be established. Pursuant to the Agreement, Mr. Lasanta will be granted options to purchase 30,000 shares of Company common stock having an exercise price equal to fair market value on the date of grant and vesting three equal annual installments beginning one year from November 1, 2008. In addition, upon termination of Mr. Lasanta's employment for reasons other than those set forth in his Employment Agreement, Mr. Lasanta shall receive a lump-sum severance payment in an amount equivalent to six months of his salary at the time of the termination, less legal withholdings, or the severance established by PR labor law No. 80 of May 30, 1976, known as the “Wrongful Discharge Act” (“Ley de Despido Injustificado”), whichever amount is higher. All other terms and conditions of Mr. Lasanta's employment agreement remain the same.
 
A copy of the Amendment is attached as Exhibit 10.1 to this report and is incorporated herein by this reference.
 
Item 9.01   Financial Statements and Exhibits.
 
10.1
Amendment dated December 17, 2008 to Employment Agreement dated November 5, 2007, between Pedro Lasanta and the Company. 
 
 
 
SIGNATURES
 
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.
 
     
  PHARMA-BIO SERV, INC.
 
  		 
  		 
 
Date: December 23, 2008 By:   /s/ Elizabeth Plaza
 
Elizabeth Plaza, Chief Executive Officer
 

EXHIBIT INDEX

10.1
Amendment dated December 17, 2008 to Employment Agreement dated November 5, 2007, between Pedro Lasanta and the Company. 
   
 
 

AMENDMENT TO EMPLOYMENT AGREEMENT


      Amendment to Employment Agreement dated November 5, 2007 between Pharma-Bio Serv, Inc., hereinafter ("Company") and Pedro J. Lasanta ("Executive").

      WHEREAS, Company and Executive wish to continue Executive's employment with the Company; and

      WHEREAS, in consideration for Executive's continued employment, the parties wish to modify certain provisions of the Employment Agreement,

      NOW THEREFORE, the parties hereby agree as follows:

1.
That pursuant to paragraph 1(b) of that certain Employment Agreement dated November 5, 2007, is hereby modified and amended so as to extend the “Term” for an “Indefinite amount of time” (“Employment Term” or “Term”).

2.
That Executive's compensation pursuant to paragraph 3(a) of that certain Employment Agreement dated November 5, 2007, is hereby modified and amended so as to increase Executi ve's annual salary, as of November 1, 2008, from $100,000 to $110,000 per annum.   Salary shall be paid in such installments as the Company regularly pays its executive officers, but not less frequently than semi-monthly.  Executive’s salary will be revised annually based upon performance evaluation following Company’s performance review process and subject to the financial situation of the Company.”

3.
That pursuant to paragraph 3 of that certain Employment Agreement dated November 5, 2007, is hereby modified and amended so it reads as follows:

“3. (vii)  Annual bonus, either in cash or in the form of stock options, shall be granted to the Executive based on performance metrics established and agreed upon by the Company’s senior management.  Benefit is based on a successful achievement of Executive’s performance goals and the recommendation of the CEO. For this purpose, performance appraisal will take place once a year.”
 
4.
That pursuant to paragraph 3 of that certain Employment Agreement dated November 5, 2007, is hereby modified and amended so as to add clause 3.(viii) as follows:

“3. (viii)   F or his services during the Employment Term, the Company shall issue to Executive incentive stock options (“Stock Options”) to purchase 30,000 shares of PBSV common stock, at fair market value on the date of grant, as determined by PBSV’s Compensation Committee, pursuant to PBSV’s 2005 Long-Term Incentive Plan.   However, such stock options shall vest in accordance to the following schedule:  33.3% as of the end of one (1) year after the Grant Date; 66.7% as of the end of two (2) years after the Grant Date; and 100% as of the end of three (3) years after the Grant Date.  For the purpose of the vesting schedule only, Grant Date shall be November 1 st , 2008.  In the event that the Company terminates this Agreement and Executive’s employment other than for reasons set forth in Sections 5(a), 5(b) or 5(c) of this Agreement, including termination due to an acquisition, all unvested Stock Options will be considered to be immediately exercisable and vested.”
 

5. 
That pursuant to paragraph 5.(e) and 5.(e)(i) of that certain Employment Agreement dated November 5, 2007, is hereby modified and amended so as to read as follows:

“5. (e)  In the event that the Company terminates this Agreement and Executive’s employment other than for reasons set forth in Sections 5(a), 5(b) or 5(c), including termination due to an acquisition:

(i)  The Company shall pay to Executive within 30 days after the date of his termination a lump-sum severance payment in an amount equivalent to six months of his salary at the time of the termination, less legal withholdings, or the severance established by PR labor law No. 80 of May 30, 1976, known as the “Wrongful Discharge Act” (“Ley de Despido Injustificado”), whichever amount is higher.  Also, the company shall pay to the Executive any bonuses that the Executive may have earned up to the date of his termination, and any unused accrued vacation days.”

      In all other respects the Employment Agreement dated November 5, 2007, shall remain in full force and effect and unaltered.

IN WITNESS WHEREOF , the parties have executed this Agreement in Dorado, Puerto Rico, this 17th day of December, 2008.


PHARMA-BIO SERV, INC.


By:              /s/ Elizabeth Plaza                        
Name:         Elizabeth Plaza
Title:           President & CEO


EXECUTIVE:  /s/ Pedro J. Lasanta               
                          Pedro J. Lasanta, CFO