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):  February 17, 2014
 
Pharma-Bio Serv, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
(State or Other Jurisdiction of Incorporation)
 
0-50956
20-0653570
(Commission File Number)
(I.R.S. Employer Identification No.)

6 Road 696, Dorado, Puerto Rico
00646
(Address of Principal Executive Offices)
(Zip Code)

(787) 278-2709
(Registrant’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 registrant under any of the following provisions (see General Instruction A.2. below):
 
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 February 17, 2014, Pharma-Bio Serv, Inc. (the “Company”) amended the Employment Agreement of N é lida Plaza, the Chief Operating Officer and Secretary of the Company, dated December 31, 2009 (the “Plaza Amendment”).  The Plaza Amendment, effective January 1, 2014, sets forth Ms. Plaza’s new position as Chief Operating Officer of the Company and Ms. Plaza’s annual salary of $225,000.

On February 17, 2014, the Company amended the Employment Agreement of Pedro Lasanta, the Chief Financial Officer of the Company, dated November 5, 2007 (the “Lasanta Amendment” and together with the Plaza Amendment, the “Amendments”).  The Lasanta Amendment, effective January 1, 2014, increase Mr. Lasanta’s salary to $160,000.

Also, pursuant to the Amendments, if the Company terminates the employment agreement of Ms. Plaza or Mr. Lasanta other than for death, disability or cause, the Company shall (1) pay to the executive within 30 days after the date of termination (a) a  lump-sum severance payment in an amount equivalent to one (1) year of 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; (b) any bonuses that the executive may have earned up to the date of her termination, and (c) the value of any unused accrued vacation days, (2) provide executive one (1) year health coverage for the executive and dependents, and (3) provide that any restricted stock units, options or other similar granted awards held by the executive will become vested and exercisable for a three   month period following the termination.  Also, pursuant to the Amendments, in the event of a change of control of the Company in connection with a sale, merger or acquisition of the Company or the Company ceases to be a public company, and is no longer subject to the reporting obligations of the Securities Exchange Act of 1934, as amended, any restricted stock units, options or other similar granted awards held by Ms. Plaza or Mr. Lasanta will become vested and exercisable immediately prior to such event.

A copy of the Amendments are attached as Exhibits 10.1 and 10.2 to this report and are incorporated herein by this reference.

Item 9.01.  Financial Statements and Exhibits.
(d)

Exhibit No.                        Exhibit Description
10.1
Employment Agreement Amendment among Pharma-Bio Serv, Inc., Pharma-Bio Serv PR, Inc. and N é lida Plaza.
10.2
Employment Agreement Amendment between Pharma-Bio Serv, Inc. and Pedro Lasanta.
 
 
 
2
 
 
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:  February 21, 2014 
By:
/s/ Pedro J. Lasanta  
    Pedro J. Lasanta  
   
Chief Financial Officer
 
       


 
3
 
 
EXHIBIT INDEX
 

Exhibit No.                        Exhibit Description
10.1
Employment Agreement Amendment among Pharma-Bio Serv, Inc., Pharma-Bio Serv PR, Inc. and N é lida Plaza.
10.2
Employment Agreement Amendment between Pharma-Bio Serv, Inc. and Pedro Lasanta.

4

 
EMPLOYMENT AGREEMENT AMENDMENT
 
EMPLOYMENT AGREEMENT AMENDMENT (this "Amendment"), effective as of January 1, 2014 (the "Effective Date"), by and among Pharma-Bio Serv, Inc. with its principal office at 6 Road 696, Dorado, Puerto Rico 00646 (the “Company”), Pharma-Bio Serv PR, Inc., a wholly-owned subsidiary of the Company ("Pharma-PR"), and Nélida Plaza (“Executive”) (hereinafter “the Parties”).
 
W I T N E S S E T H:
 
WHEREAS , Pharma-PR and Executive have entered into that certain Employment Agreement, dated December 31, 2009, as such Employment Agreement has been and may be amended, restated or otherwise modified from time to time (the "Employment Agreement").  Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Employment Agreement; and
 
WHEREAS , the Company desires to modify the Employment Agreement.
 
NOW THEREFORE ,  for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
 
1.  
Section 1 of the Employment Agreement is amended and restated in its entirety as follows:
 
Subject to the terms and conditions hereinafter set forth, the Company hereby employs Executive as Chief Operating Officer and Secretary.  Executive shall have the duties and responsibilities associated with the chief operating officer and secretary of a public company.  Executive shall report to the Board.  Executive shall also perform such other duties and responsibilities as may be determined by the Board, as long as such duties are consistent with the Bylaws of the Company and applicable law.
 
2.  
Section 3(a) of the Employment Agreement is amended and restated in its entirety as follows:
 
 
(a)
For her services, the Company shall pay Executive a salary (“Salary”) at the annual rate of $225,000.  Salary shall be paid in such installments as the regularly pays its executive officers, but not less frequently than semi-monthly.  Executive’s salary will be revised annually based upon performance evaluations following the Company’s performance review process and subject to the financial status of the Company.
 

 
 
 
 

 
3.  
Section 5(e) of the Employment Agreement is amended and restated in its entirety as
follows:
 
 
(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):
 
i.  
The Company shall (1) pay to the Executive within 30 days after the date of her termination (a) a  lump-sum severance payment in an amount equivalent to one (1) year of her 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; (b) any bonuses that the Executive may have earned up to the date of her termination, and (c) any unused accrued vacation days, (2) provide Executive one (1) year health coverage for the Executive and dependents, and (3) provide that any restricted stock units, options or other similar granted awards held by the Executive will become vested and exercisable for a three   month period following the termination; and
 
ii.  
The restrictions set forth in Section 7(a) of this Agreement shall terminate immediately.
 
4.  
A new Section 5(f) shall be added to the Employment Agreement as follows:
 
 
(f)
In the event there is a change in control of the Company in connection with a sale, merger or acquisition of the Company or the Company ceases to be a public company, and is no longer subject to the reporting obligations of the Securities Exchange Act of 1934, as amended, any restricted stock units, options or other similar granted awards held by the Executive will become vested and exercisable immediately prior to such event.
 
5.  
The terms of this Amendment regarding the vesting of awards in connection with a termination or change of control of Company shall supersede any such terms in the award agreements between the Company and Executive.
 
6.  
Except as expressly amended by the terms of this Amendment and all prior amendments to the Employment Agreement, the terms of the Employment Agreement shall remain in effect and are unchanged by this Amendment.
 
[Signatures on Following Page]
 
 
 
 
 

 
IN WITNESS WHEREOF , the parties have executed this Amendment in Dorado, Puerto Rico, this 17 th day of February, 2014.
 
PHARMA-BIO SERV, INC.
By:   /s/ Elizabeth Plaza                       
 
EXECUTIVE:
/s/ Nélida Plaza
Name: Elizabeth Plaza
 
Name: Nélida Plaza
Title: Chairman
 
 
Title: Chief Operating Officer and Secretary
 
PHARMA-BIO SERV PR, INC.
By:   /s/ Pedro Lasanta
Name: Pedro Lasanta
Title:  Chief Financial Officer and Vice-President – Finance and Administration


 
EMPLOYMENT AGREEMENT AMENDMENT
 
EMPLOYMENT AGREEMENT AMENDMENT (this "Amendment"), effective as of January 1, 2014, by and among Pharma-Bio Serv, Inc. with its principal office at 6 Road 696, Dorado, Puerto Rico 00646 (the “Company”), and Pedro J.  Lasanta (“Executive”) (both hereinafter “the Parties”).
 
W I T N E S S E T H:
 
WHEREAS , the Company and Executive have entered into that certain Employment Agreement, dated November 5, 2007, as such Employment Agreement has been and may be amended, restated or otherwise modified from time to time (the "Employment Agreement").  Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Employment Agreement; and
 
WHEREAS , the Company desires to modify the Employment Agreement.
 
NOW THEREFORE , for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
 
1.  
Section 3(a) of the Employment Agreement is amended and restated in its entirety as follows:

 
(a)
For his services, the Company shall pay Executive a salary (“Salary”) at the annual rate of $160,000.  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 evaluations following the Company’s performance review process and subject to the financial status of the Company.

2.  
Section 5(e) of the Employment Agreement is amended and restated in its entirety as follows:

 
 
(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):
 
i.  
The Company shall (1) pay to the Executive within 30 days after the date of his termination (a) a  lump-sum severance payment in an amount equivalent to one (1) year 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; (b) any bonuses that the Executive may have earned up to the date of his termination, and (c) any unused accrued vacation days, (2) provide Executive one (1) year health coverage for the Executive and dependents, and (3) provide that any restricted stock units, options or other similar granted awards held by the Executive will become vested and exercisable for a three month period following the termination; and
 
 
 
 
 
 
ii.  
The restrictions set forth in Section 7(a) of this Agreement shall terminate immediately.
 
3.  
A new Section 5(f) shall be added to the Employment Agreement as follows:
 
 
(f)
In the event there is a change in control of the Company in connection with a sale, merger or acquisition of the Company or the Company ceases to be a public company, and is no longer subject to the reporting obligations of the Securities Exchange Act of 1934, as amended, any restricted stock units, options or other similar granted awards held by the Executive will become vested and exercisable immediately prior to such event.
 
4.  
The terms of this Amendment regarding the vesting of awards in connection with a termination or change of control of Company shall supersede any such terms in the award agreements between the Company and Executive.
 
5.  
Except as expressly amended by the terms of this Amendment and all prior amendments to the Employment Agreement, the terms of the Employment Agreement shall remain in effect and are unchanged by this Amendment.
 

 
IN WITNESS WHEREOF , the parties have executed this Amendment in Dorado, Puerto Rico, this 17 th day of February, 2014.
 
PHARMA-BIO SERV, INC.
By:   /s/ Elizabeth Plaza
 
EXECUTIVE:
/s/ Pedro Lasanta
Name: Elizabeth Plaza
 
Name: Pedro Lasanta
Title: Chairman
 
Title: Chief Financial Officer