Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment
of Chief Financial Officer
On
May 5, 2022, Elite Pharmaceuticals, Inc., a Nevada corporation (the “Registrant”), entered into an employment agreement with
Robert Chen to serve as the Registrants’ Chief Financial Officer, replacing Marc Bregman, who served as the Registrant’s
Chief Financial Officer effective May 16, 2022.
In
connection with the appointment of Mr. Chen as Chief Financial Officer of the Registrant, Mr. Chen and the Registrant entered into a
letter agreement (the “Employment Letter”). A copy of the Employment Letter is attached to this Current Report on Form 8-K
as Exhibit 10.1, and the summary of the material terms of the Employment Letter set forth in this Current Report on Form 8-K is qualified
in its entirety by reference to such exhibit.
Pursuant
to the terms of the Employment Letter, commencing on May 16, 2022, Mr. Chen became an at-will employee of the Registrant as its Chief
Financial Officer. Mr. Chen will fulfill his responsibilities as Chief Financial Officer, and he will receive an annual base salary of
$250,000, payable in accordance with the Registrant’s payroll practices. Pursuant to the Employment Letter, Mr. Chen agrees to
not knowingly undertake or engage in any employment, occupation, or business enterprise that is, directly or indirectly, adverse to the
interest of the Registrant.
Upon
approval by the Board of Directors of Elite, Mr. Chen will be granted stock options to purchase 900,000 ELTP Shares. The options will
vest over a three-year period, commencing one year from the date of issuance. The strike price will be equal to the closing price of
the Company’s stock as traded on the OTC Bulletin Board (symbol ELTP) on the first day of employment.
In
addition, pursuant to the Employment Letter, Mr. Chen may become eligible for cash and/or equity-based awards that may be granted by
the Registrant in the future, with any such awards to be granted at the discretion of the Registrant and its Chief Executive Officer.
Mr. Chen will be entitled generally to the same benefits offered to other employees of Elite, subject to applicable eligibility requirements.
The
Registrant and Mr. Chen also entered into the Registrant’s standard Employee Proprietary Information and Non-Solicitation Agreement
that the Registrant requires its employees to execute in connection with their employment with the Registrant.
Mr.
Chen joins Elite with broad experience in financial and operational leadership for life science companies, both private and public, ranging
from preclinical development to commercial operations. Before joining the Registrant, from December 2020 to February 2022, Mr. Chen served
as Vice President for KBP Biosciences. From July 2019 to October 2020, Mr. Chen was the Chief Financial Officer at Victory Commercial
Management. Mr. Chen held various other financial positions in the life sciences sector with increasing responsibilities. Mr. Chen is
a certified public accountant and began his career with Price Waterhouse and served as an Industrial Financial Analyst. Mr. Chen brings
with him extensive and diversified financial leadership background in the areas of financial reporting, including manufacturing, financial
and cost accounting, SEC, GAAP and IFRS, as well as financial planning and analysis.
Mr.
Chen has a Bachelor
of Science in Business Administration, Accounting, and a Master of Professional Accountancy degree from the University of Southern
Mississippi. He is a Certified Public Accountant (CPA).
Effective
as of May 16, 2022, Mr. Chen replaced Mr. Bregman as the Registrant’s Chief Financial Officer, and Mr. Bregman, who also served
as the Registrant’s Secretary and Treasurer, ceased providing services to the Registrant in such capacities as of April 29, 2022.
On
May 11, 2022, the Registrant issued a press release announcing the appointment of Mr. Chen as its Chief Financial Officer, effective
as of May 16, 2022. A copy of such press release is attached hereto as Exhibit 99.1.