Exhibit 10.6

 

AMENDMENT NO. 1

 

TO EMPLOYMENT AGREEMENT

 

AMENDMENT NO. 1, dated August 9, 2013, to that certain Employment Agreement,
dated as of November 10, 2010 (the employment agreement as amended hereinafter
referred to as the “Employment Agreement”), by and between Hi-Tech Pharmacal
Co., Inc. (the “Corporation”) and Reuben Seltzer (the “Executive”).

 

WHEREAS, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto have agreed to amend the
Employment Agreement as hereinafter set forth.

 

NOW, THEREFORE, the parties hereto mutually agree as follows:

 

1.           All capitalized terms used herein but not defined herein shall have
the meaning ascribed to them in the Employment Agreement.

 

2.           Executive’s title shall be changed from “Vice Chairman – Business
Development” to “Executive Vice Chairman.” Executive shall also be named the
“Executive Chairman of ECR Pharmaceuticals Co., Inc.,” the Corporation’s wholly
owned subsidiary. In each instance where Executive’s title is referenced, it
shall be deemed to read “Executive Vice Chairman of the Corporation and
Executive Chairman of ECR Pharmaceuticals Co., Inc.” In furtherance of the
foregoing, Section 2 of the Employment Agreement is hereby deleted and replaced
in its entirety with the following:

 

“Section 2. Duties. Executive shall serve as Executive Vice Chairman of the
Corporation and Executive Chairman of ECR Pharmaceuticals Co., Inc., the
Corporation’s wholly owned subsidiary, and shall properly perform such duties as
may be assigned to him from time to time by the Chief Executive Officer and/or
Board of Directors of the Corporation. If requested by the Corporation,
Executive shall serve on any committee of the Board of Directors without
additional compensation. During the term of this Agreement, Executive shall
devote substantially all of his available business time to the performance of
his duties hereunder at the Corporation’s facility at Amityville, New York
unless otherwise authorized by the Board of Directors.”

 

3.           Section 3 of the Employment Agreement is hereby deleted and
replaced in its entirety with the following:

 

“Section 3. Term of Employment. The term of this Employment Agreement shall
continue until April 30, 2016 and shall automatically renew for successive one
year terms unless terminated by the Corporation upon six (6) months’ advance
written notice to Executive of the Corporation’s decision not to renew the
Agreement, or by Executive, upon thirty (30) days advance written notice to the
Corporation, or unless earlier terminated pursuant to the provisions of Section
5 hereof.”

 

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4.           Section 4.1 of the Employment Agreement is hereby deleted and
replaced in its entirety with the following:

 

“4.1. Compensation. As compensation for his services hereunder the Corporation
shall pay Executive an annual base salary (“Base Salary”) equal to $500,000
($9,615.38 per week) for the period May 1, 2013 through April 30, 2014. The Base
Salary shall be payable weekly less such deductions as shall be required to be
withheld by applicable law and regulations. Commencing on May 1, 2014 and for
each fiscal year thereafter during the term of this Agreement, Executive shall
be paid a Base Salary equal to the sum of (a) the Base Salary for the
immediately preceding year and (b) an amount determined by multiplying the Base
Salary in effect for the immediately preceding year by five (5%) percent. The
increased Base Salary thereby established shall continue in effect and for all
purposes of this Agreement be defined as Base Salary during the term of this
Agreement until again adjusted as hereinabove provided.”

 

5.           A new Section 12.9 is hereby added to the Employment Agreement as
follows:

 

“12.9    Section 409A. The parties intend for the payments and benefits under
this Agreement to be exempt from Section 409A of the Internal Revenue Code
(“Section 409A”) or, if not so exempt, to be paid or provided in a manner which
complies with the requirements of such section, and intend that this Agreement
shall be construed and administered in accordance with such intention. Any
payments that qualify for the “short-term deferral” exception or another
exception under Section 409A shall be paid under the applicable exception. For
purposes of the limitations on nonqualified deferred compensation under Section
409A, each payment of compensation under this Agreement shall be treated as a
separate payment of compensation. All in-kind benefits, reimbursements, and
tax-gross-ups (if any) to be provided under this Agreement shall be made or
provided in accordance with the requirements of Section 409A of the Internal
Revenue Code, including, where applicable, the requirements that (x) the amount
of expenses eligible for reimbursement, or in kind benefits provided, during a
calendar year may not affect the expenses eligible for reimbursement, or in kind
benefits to be provided, in any other calendar year, (y) the reimbursement of an
eligible expense or payment of a tax gross-up will be made no later than the
last day of the calendar year following the year in which the expense is
incurred or the tax is remitted to the taxing authority, and (z) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit. Notwithstanding anything contained herein to the contrary, to
the extent required in order to avoid accelerated taxation and/or tax penalties
under Section 409A, (i) no amounts payable under this Agreement to the Executive
on termination of employment shall be paid until the Executive would be
considered to have incurred a separation from service from the Corporation
within the meaning of Section 409A and (ii) amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to this Agreement
during the Applicable Period (as defined below) shall instead be paid on the
first business day after the expiration of the Applicable Period, with interest
from the date such amounts would otherwise have been paid at the short-term
applicable federal rate, compounded semi-annually, as determined under Section
1274 of the Internal Revenue Code of 1986, as amended, for the month in which
payment would have been made but for the delay in payment required to avoid the
imposition of an additional rate of tax on the Executive under Section 409A. The
“Applicable Period” shall be the period commencing on the Executive's separation
from service and ending on the date that is six months following the Executive's
separation from service.”

 

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6.           Except as modified by this Amendment No. 1, in all other respects
the Employment Agreement remains unchanged and in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to the
Employment Agreement as of the date set forth above.

 

  HI-TECH PHARMACAL CO., INC.       By: /s/ David Seltzer     David Seltzer,
President     Dated:  August 9, 2013

 

  /s/ Reuben Seltzer   REUBEN SELTZER   Dated: August 9, 2013

 

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