ex10_29.htm


    
      
        

      

    

    EXHIBIT
10.29

    


    FORM
OF

    GRANT OF
INDEPENDENT DIRECTOR’S STOCK OPTION

    


    Date:

    


    
      	
              Re:

            	
              Non-qualified Stock
      Option

            


    

    


    The Board, which administers The 2008
Equity Participation Plan of Caraco Pharmaceutical Laboratories, Ltd. (the
“Plan”), with respect to Directors, hereby grants you (the “Grantee”) a
non-qualified stock option (the “Option”), pursuant to the Plan, in
consideration for your rendering faithful and efficient service in your capacity
as Director of the Company.  Certain capitalized terms used in this
agreement (the “Agreement”) are defined herein.  Certain capitalized
terms used in this Agreement, which are not defined herein, have the meanings
indicated for such terms in Article I of the Plan. As used herein reference to
the “Company” refers to Caraco Pharmaceutical Laboratories, Ltd.

    


    
      	
               
      

            	
              1.

            	
              Stock
      Option. The
      Option entitles the Grantee (and such Grantee’s permitted transferee as
      described in paragraph 3(a) below)(each such person, a “Purchaser”) to
      purchase up to the number of shares of the Company’s Common Stock, no par
      value (the “Option Shares”), specified below opposite such Grantee’s name,
      at an option price of $____ per share, the
      Fair Market Value of the Company’s Common Stock at the close of business
      on the date prior to the grant (the “Option Price”), subject to the terms
      and conditions of this Agreement:

            


    

    


    
      	
              Grantee

            	
              Number of Option
  Shares

            


    

     

    
      	
               
      

            	
              2.

            	
              Additional
      Terms. The
      Option is also subject to the following
  provisions:

            


    

    


    
      	
               
      

            	
              (a)

            	
              Exercisability. The Option may be
      exercised and Option Shares may be purchased at any time and from time to
      time after the execution of this Agreement, subject to the vesting
      limitations imposed by paragraph 2(b) of this Agreement. The Option Price
      for Option Shares shall be paid in full (i) in cash or by check by the
      Purchaser of such Option Shares to the Secretary of the Company for the
      shares with respect to which the Option, or portion thereof, is exercised;
      (ii) in whole or in part, through the delivery of shares of Common Stock
      owned by the Purchaser, duly endorsed for transfer to the Company with a
      Fair Market Value on the date of delivery equal to the aggregate exercise
      price of the Option or exercised portion thereof; (iii) in whole or in
      part, through the surrender of shares of Common Stock then issuable upon
      exercise of the Option having a Fair Market Value on the date of Option
      exercise equal to the aggregate exercise price of the Option or exercised
      portion thereof; (iv) in whole or in part, through the delivery of a
      notice that the Purchaser has placed a market sell order with a broker
      with respect to shares of Common Stock then issuable upon exercise of the
      Option, and that the broker has been directed to pay a sufficient portion
      of the net proceeds of the sale to the Company in satisfaction of the
      Option exercise price (a “cashless exercise”); or (v) through any
      combination of the consideration provided in the foregoing subparagraphs
      (i), (ii), (iii) and (iv).  Option Shares acquired by Purchaser
      under this Agreement are hereinafter referred to as the “Exercise
      Shares.”

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              (b)

            	
              Vesting/Exercisability. (i) Grantee may only
      exercise the Option to purchase Option Shares to the extent that such
      Option has vested and become exercisable with respect to such Option
      Shares.  Except as otherwise provided in Paragraph 2(b)(ii)
      below, the Option Shares will vest and become exercisable in accordance
      with the following schedule, if, as of each such date, the Grantee is a
      member of the Board of Directors:

            


    

    


    
      	
              Date

            	 	
              Cumulative
      Percentage of Option Shares Vested and
      Exercisable

            
	 
      	 	 
      
	
              1st
      Anniversary

            	 	
              33
      1/3%

            
	
              2nd
      Anniversary

            	 	
              33
      1/3%

            
	
              3rd
      Anniversary

            	 	
              33
      1/3%

            


    

    


    Option
Shares, which have become vested and exercisable, are referred to herein as
“Vested Shares” and all other Option Shares are referred to herein as “Unvested
Shares.”

    


    (ii) Upon
the occurrence of a Change in Control of the Company, the Option shall vest and
all Unvested Shares shall become Vested Shares if, on the date of such
occurrence, the Grantee is a member of the Board of Directors.

    


    
      	
               
      

            	
              (c)

            	
              Procedure
      For Exercise.
      Subject to the vesting limitation of Paragraph 2(b) above, a
      Purchaser may exercise all or any portion of the Option, so long as it is
      valid and outstanding, at any time and from time to time prior to its
      termination by delivering written notice to the Company as provided in
      Section 5.2 of the Plan, and written acknowledgement substantially in the
      form of Exhibit “A” hereto that such Purchaser has read, and has been
      afforded an opportunity to ask questions of the Company’s management
      regarding all financial and other information provided to Purchaser
      concerning the Company, together with payment of the Option Price times
      the number of Option Shares
purchased.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              3.

            	
              Transferability
      Of The Option.

            


    

    


    
      	
               
      

            	
              (a)

            	
              The
      Grantee shall not sell, transfer, assign, pledge or otherwise dispose of
      (a “Transfer”) any interest in any Option with respect to any Unvested
      Shares. Any Option with respect to any Vested Shares of the Grantee shall
      not be Transferred other than as a result of the death of such Grantee,
      testate or intestate, and the restrictions herein shall apply to any
      Transfer by any such permitted
transferee.

            


    

    


    
      	
               
      

            	
              (b)

            	
              The
      Company may assign its rights and delegate its duties under this
      Agreement.

            


    

    


    
      	
               
      

            	
              4.

            	
              Transferability
      Of Exercise Shares. No holder of any
      Exercise Shares may Transfer any such shares (except pursuant to an
      effective registration statement and/or re-offer prospectus or Rule 144,
      as applicable, under the Securities Act) without first delivering to the
      Company an opinion of counsel (reasonably acceptable in form and substance
      to the Company) that neither registration nor qualification under the
      Securities Act and applicable state securities law is required in
      connection with such Transfer.

            


    

    


    
      	
               
      

            	
              5.

            	
              Conformity
      With Plan.
      The Option is intended to conform in all respects with, and is
      subject to all applicable provisions of, the Plan, which is incorporated
      herein by reference.  Inconsistencies between this Agreement and
      the Plan shall be resolved in accordance with the terms of the Plan,
      except as modified by Paragraph 2(b)(ii) of this Agreement. By executing
      this Agreement, the Grantee acknowledges receipt of the Plan and agrees to
      be bound by all of the other terms of the
Plan.

            


    

    


    
      	
               
      

            	
              6.

            	
              Adjustment. There shall be made
      appropriate and proportionate adjustments to the terms of the Option to
      reflect any stock dividend, stock split, combination or exchange of
      shares, merger, consolidation, other change in the capitalization of the
      Company which is similar, in its substantive effect upon the Plan or the
      Option, spin-off, spin-out or other distribution of assets to shareholders
      or any acquisition of the Company’s stock or assets similar in its
      substantive effect upon the Plan or Option. In the event of any
      adjustments described in the preceding sentence, any and all new,
      substituted, or additional securities or other property to which any
      Purchaser is entitled by reason of the Option shall be immediately subject
      to such Option and be included in the word “Option Shares” for all
      purposes of such Option with the same force and effect as the Option
      Shares presently subject to such Option. After each such event, the number
      of Option Shares and/or the Option Price shall be appropriately
      adjusted.

            


    

    


    
      	
               
      

            	
              7.

            	
              Share
      Legend.
      Unless the Exercise Shares are the subject of an effective registration
      statement and/or re-offer prospectus, as applicable, all certificates
      representing any Exercise Shares subject to the provisions of this
      Agreement shall have endorsed thereon the following
  legend:

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED AS OF
_______________, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN A
GRANT OF INDEPENDENT DIRECTOR’S STOCK OPTION BETWEEN THE COMPANY AND THE
DIRECTOR DATED _______________.  A COPY OF SUCH AGREEMENT MAY BE
OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS
WITHOUT CHARGE.”

    


    In
addition, all certificates representing any Exercise Shares of affiliates of the
Company (generally, directors, executive officers and holders of more than 10%
of the outstanding shares of the Company) shall have endorsed  thereon
the following legend:

    


    THE
REGISTERED HOLDER OF THE SHARES REPRESENTED BY THE CERTIFICATE MAY BE AN
AFFILIATE (AS SUCH TERM IS DEFINED BY RULE 144 (“RULE 144”) PROMULGATED UNDER
THE SECURITIES ACT OF 1933 AS AMENDED (THE “SECURITIES ACT”)) OF THE
COMPANY.  IF SUCH HOLDER IS AN AFFILIATE OF THE COMPANY, THESE SHARES
MAY ONLY BE SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR IN ACCORDANCE WITH THE TERMS OF RULE 144
OR ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

     

    
      	
               
      

            	
              8.

            	
              Investment
      Representations. Upon the purchase of
      Option Shares hereunder, the Purchaser thereof shall execute and deliver
      to the Company a letter, substantially in the form attached hereto as
      Exhibit “A”, confirming such Purchaser’s investment
      representation.

            


    

    


    
      	
               
      

            	
              9.

            	
              Expiration.  Grantee’s
      Option shall expire (a) with respect to Vested/Unvested Shares, at the
      earlier of (i) a determination by the Board that the Grantee has been
      grossly negligent in the performance of his duties to the Company; (ii)
      Grantee no longer is serving as a member of the Board, or (iii) at 5:00
      p.m., Detroit time, on the sixth Anniversary of the date
      hereof.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    Further,
notwithstanding the above, with respect to Vested Shares, if Grantee is no
longer a member of the Board due to Grantee’s death, resignation or end of term
of service (other than by Removal for Cause), then the Option shall expire on
the earlier of (i) the 90th day
following Grantee no longer serving as a member of the Board of the Company; or
(ii) until 5:00 p.m., Detroit time, on the sixth anniversary of the date
hereof.

    


    Further,
notwithstanding the above, with respect to Vested Shares, if, following
cessation of Grantee’s service to the Company for whatever reason, the Company
discovers that Grantee engaged in conduct that would have justified Removal for
Cause, Grantee’s Option shall expire immediately on the date of such discovery
and any proceeds, gains or other economic benefit actually or constructively
received by Grantee upon any exercise of the Option or upon the receipt or
resale of any Common Stock underlying the Option, must and shall be paid to the
Company.

    


    
      	
               
      

            	
              10.

            	
              Definitions.

            


    

    


    “Removal
for Cause” means removal by the Company of Grantee from membership on the
Board for cause as provided under Michigan law.

    


    
      	
               
      

            	
              11.

            	
              Further
      Actions.
      The Parties agree to execute such further instruments and to take
      such further actions as may reasonably be required to carry out the intent
      of this Agreement.

            


    

    


    
      	
               
      

            	
              12.

            	
              Severability. Whenever possible,
      each provision of this Agreement will be interpreted in such manner as to
      be effective and valid under applicable law, but if any provision of this
      Agreement is held to be prohibited by or invalid under applicable law,
      such provision will be ineffective only to the extent of such prohibition
      or invalidity, without invalidating the remainder of this
      Agreement.

            


    

    


    
      	
               
      

            	
              13.

            	
              Counterparts. This Agreement may be
      executed simultaneously in two or more counterparts, any one of which need
      not contain the signatures of more than one party, and all such
      counterparts taken together will constitute one and the same
      Agreement.

            


    

    


    
      	
               
      

            	
              14.

            	
              Notices. Any notices, consent,
      approval or other communications given pursuant to the provision of this
      Agreement shall be in writing and shall be (a) mailed by certified mail or
      registered mail, return receipt requested, postage prepaid, or (b)
      delivered by a nationally recognized overnight courier, U.S. Post Office
      Express Mail, or similar overnight courier, and addressed as
      follow:

            


    

    


    Grantor’s
Address

    


    Caraco
Pharmaceutical Laboratories, Ltd.

    1150
Elijah McCoy Drive

    Detroit,
Michigan 48202

    Attention:
Secretary or CEO of the Company

    


    Grantee’s
Address

    _____________________

    _____________________


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    The time
of giving of any notice shall be the time of delivery by the applicable
overnight courier or with respect to registered or certified mail, the time of
receipt thereof by the addressee or any agent of the addressee, except that in
the event the addressee or such agent of the addressee shall refuse to receive
any notice given by registered mail or certified mail as above provided or there
shall be no person available at the time of the delivery thereof to receive such
notice, the time of the giving of such notice shall be the time of such refusal
or the time of such delivery, as the case may be. Any party hereto may, giving
five (5) days written notice to the other party hereto, designate any other
address in substitution of the foregoing address to which notice shall be
given.

    


    
      	
               
      

            	
              15.

            	
              Successors
      And Assigns.
      This Agreement shall be binding upon and inure to the benefit of
      the successors and assigns of the Company and, subject to the restrictions
      on transfer herein set forth, be binding upon Grantee’s heirs, executors,
      administrators, successors and permitted
  assigns.

            


    

    


    
      	
               
      

            	
              16.

            	
              Governing
      Law. This
      Agreement and all documents contemplated hereby, and all remedies in
      connection therewith and all questions or transactions relating thereto,
      shall be construed in accordance with and governed by the laws of the
      state of Michigan, and jurisdiction and venue shall properly lie in the
      courts of the state of Michigan.

            


    

    


    
      	
               
      

            	
              17.

            	
              Entire
      Agreement.
      This Agreement and the Plan constitute the entire understanding between
      the Grantee and the Company with respect to the Option granted
      hereunder.

            


    

    


    Please
sign as Grantee in the space provided below and return the Agreement to the
Secretary or CEO of the Company to confirm your understanding and acceptance of
the agreements contained in this letter.

    


    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      	 
      
	 
      	
              CARACO
      PHARMACEUTICAL

            
	 
      	
              LABORATORIES,
      LTD.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Secretary
      or CEO of the Company

            
	 
      	
              Dated:

            


    

    


    THE UNDERSIGNED hereby
acknowledges having read this Agreement, and the other enclosures to this
Agreement, and hereby agrees to be bound by all provisions set forth herein and
in the Plan.

    


    
      	 
      	
              Grantee

            
	 
      	 
      
	 
      	 
      
	 
      	
            
	 
      	
              Dated: