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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 8, 2006
ADVENTRX Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware | 1-15803 | 84-1318182 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File No.) | (IRS Employer Identification No.) |
6725 Mesa Ridge Road, Suite 100
San Diego, CA 92121
(Address of Principal Executive Offices and Zip Code)
San Diego, CA 92121
(Address of Principal Executive Offices and Zip Code)
N/A
(Former name or former address if changed since last report)
(Former name or former address if changed since last report)
Registrants telephone number, including area code: (858) 552-0866
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:
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o
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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)) |
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Item 1.01. Entry into a Material Definitive Agreement.
On September 8, 2006, ADVENTRX Pharmaceuticals, Inc. (the Company) announced that James A.
Merritt, M.D., age 55, has been appointed President, a position previously held by Evan M. Levine,
who will continue to serve as Chief Executive Officer. Dr. Merritt will also serve as Chief Medical
Officer, a newly created position, and will report in both capacities to Mr. Levine. In connection
with his employment, the Company and Dr. Merritt entered into a letter agreement (the Offer
Letter) that had attached to it a form of Stock Option Agreement (the Option Agreement). Dr.
Merritt has more than 20 years experience in drug development and has held senior positions at
Imagine Pharmaceuticals, Introgen Therapeutics, Viagene and IDEC Pharmaceuticals. From July 14,
2005 through September 7, 2006, Dr. Merritt consulted for the Company acting as chief medical
advisor on various clinical matters. From 2003 to the present, Dr. Merritt has been Chief
Executive Officer and a member of the Board of Directors of Imagine Pharmaceuticals, a
privately-held venture-backed biotechnology company focused on the development of small molecules
that enable the delivery of cancer therapeutics to metastatic and primary brain tumors that is
currently in the process of dissolving. From February 1996 to 2003, Dr. Merritt held various
positions at Introgen Therapeutics, a biopharmaceutical company focused on the discovery,
development and commercialization of targeted molecular therapies for the treatment of cancer and
other diseases, most recently as its Chief Medical Officer. Dr. Merritt holds an M.D. from the
University of Vermont and a B.A. from Johns Hopkins University. Dr. Merritt completed a research
fellowship in viral oncology and a clinical fellowship at the University of Wisconsin, Madison,
Department of Human Oncology, and holds board certifications in Internal Medicine and Medical
Oncology.
As set forth in the Offer Letter, Dr. Merritts current annual base salary is $325,000. Dr.
Merritts employment with the Company is at-will but, in the event of Dr. Merritts involuntary
termination (as defined in the Option Agreement), subject to Dr. Merritts execution of a mutual
release, Dr. Merritt will receive an amount equal to his base salary for the 6-month period
immediately prior to the effective date of such involuntary termination, payable in 6 substantially
equal installments over the 6-month period following such effective date, and the Company will pay
all costs the Company would otherwise have incurred to maintain Dr. Merritts health, welfare and
retirement benefits if Dr. Merritt had continued to render services to the Company for 6 months
after such effective date. Dr. Merritt is entitled to 30 vacation days per year.
As set forth in the Offer Letter and Stock Option Agreement, the Company will recommend to its
Board of Directors (the Board) that Dr. Merritt be issued under the Companys 2005 Equity
Incentive Plan (the Plan) an incentive stock option (within the meaning of the Plan) to purchase
up to 300,000 shares of the Companys common stock. The grant date, vesting commencement date
and exercise price (as such terms are defined in the Option Agreement) will be determined by the
Board, or a committee of the Board, pursuant to its standard practices. The shares underlying this
option will vest and become exercisable monthly over 4 years beginning on Dr. Merritts vesting
commencement date. Despite the foregoing vesting schedule, in the event of Dr. Merritts
involuntary termination, and subject to Dr. Merritts execution of a mutual release, that number of
shares underlying this option will vest and become exercisable, effective immediately prior to the
effective date of such involuntary termination, that would have vested and become exercisable had
Dr. Merritt remained in continuous service (as defined in the Plan) for 6 months
following such effective date, and Dr. Merritt will have 180 days
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following
the effective date of such involuntary termination to exercise this option. In addition, despite
the foregoing vesting schedule, in the event of an acquisition constituting a change-in-control
(as such terms are defined in the Option Agreement), 50% of any unvested shares underlying this
option will vest and become exercisable as of the closing date of such acquisition and the
remaining unvested shares underlying this option will vest ratably by month over the 12-month
period beginning on the closing of such acquisition, subject to Dr. Merritts continuous service.
In addition, in the event of Dr. Merritts involuntary termination within 24 months of an
acquisition constituting a change-in-control, that number of unvested shares underlying this option
will vest and become exercisable, as of the effective date of such involuntary termination, that
would have vested and become exercisable had Dr. Merritt remained in continuous service for 24
months following such effective date.
In connection with Dr. Merritts consulting services, through June 30, 2006 the Company paid Dr.
Merritt a total of $286,625, and anticipates paying Dr. Merritt approximately an additional $65,000
for services through September 7, 2006. Also in connection with Dr. Merritts consulting services,
the Company and Dr. Merritt entered into a Restricted Share Award Agreement, dated April 5, 2006,
under which Dr. Merritt was issued 5,000 shares of the Companys common stock, all of which shares
were subject to a risk of forfeiture (as defined in such agreement). At the end of each calendar
month after January 1, 2006, subject to Dr. Merritts continuous service, such risk of forfeiture
will lapse with respect to 1/12th of such shares and such portion of such shares will
vest and become free of any restriction under such agreement.
A complete copy of the Offer Letter (including the Option Agreement attached thereto) is filed
herewith as Exhibit 10.1 and incorporated herein by reference.
Also, on September 8, 2006, the Company announced that Carrie Carlander has resigned from her
positions as the Companys Chief Financial Officer, Vice President of Finance, Treasurer and
Secretary. In connection with Ms. Carlanders resignation, she and the Company entered into a
Severance Agreement and Release of All Claims, dated September 7, 2006 (the Severance Agreement),
and a Consulting Agreement, dated September 7, 2006 (the Consulting Agreement).
As set forth in the Severance Agreement, in exchange for a release and the termination of options
held by Ms. Carlander to purchase shares of the Companys common stock, the Company issued to Ms.
Carlander under the Plan 93,611 fully-vested shares of the Companys common stock, less applicable
withholding taxes. As set forth in the Consulting Agreement, in consideration of $16,666.67 per
calendar month plus the actual amount paid by Ms. Carlander for COBRA continuation coverage, Ms.
Carlander will consult for the Company on an as-needed basis. The Company may terminate the
Consulting Agreement at any time upon notice as set forth in the Consulting Agreement. A complete
copy of the Severance Agreement is filed herewith as Exhibit 10.2 and incorporated herein by
reference. A complete copy of the Consulting Agreement is filed herewith as Exhibit 10.3 and
incorporated herein by reference.
On September 8, 2006, the Company issues a press release announcing the appointment of Dr. Merritt
as President and Chief Medical Officer and Ms. Carlanders resignation, which press release is
filed herewith as Exhibit 99.1.
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Item 1.02. Termination of a Material Definitive Agreement.
In connection with Dr. Merritts appointment as the Companys President and Chief Medical Officer,
the consulting agreement between the Company and Dr. Merritt was terminated. For additional
details regarding Dr. Merritts employment, please see the disclosures under Item 1.01 above.
In connection with Ms. Carlanders resignation from her positions with the Company, the letter,
dated November 17, 2004, issued by the Company to Ms. Carlander offering her employment was deemed
satisfied in all respects and terminated. In addition, as set forth in the Severance Agreement, a
Stock Option Agreement, with a grant date of July 14, 2005, between the Company and Ms. Carlander
pursuant to which Ms. Carlander had the right to acquire up to 200,000 shares of the Companys
common stock, was terminated, and a Stock Option Agreement, with a grant date of January 31, 2006,
between the Company and Ms. Carlander pursuant to which Ms. Carlander had the right to acquire up
to 80,000 shares of the Companys common stock, was terminated. For additional details regarding
Ms. Carlanders resignation, please see the disclosures under Item 1.01 above.
On September 8, 2006, the Company issues a press release announcing the appointment of Dr. Merritt
as President and Chief Medical Officer and Ms. Carlanders resignation, which press release is
filed herewith as Exhibit 99.1.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
On September 8, 2006, the Company announced that Dr. Merritt has been appointed President, a
position previously held by Mr. Levine, who will continue to serve as Chief Executive Officer. Dr.
Merritt will also serve as Chief Medical Officer, a newly created position, and will report in both
capacities to Mr. Levine. For additional details regarding Dr. Merritts employment, please see
the disclosures under Item 1.01 above.
On September 8, 2006, the Company announced that Carrie Carlander has resigned from her positions
as the Companys Chief Financial Officer, Vice President of Finance, Treasurer and Secretary. For
additional details regarding Ms. Carlanders resignation, please see the disclosures under Item
1.01 above.
On September 8, 2006, the Company announced that Robert Daniel, age 41, previously the Companys
controller, has been appointed acting Chief Financial Officer. Prior to joining the Company as
controller in May 2005 and beginning in October 2003, Mr. Daniel was controller at Nuvasive, Inc.,
a publicly-traded medical device company focused on developing products for minimally disruptive
surgical treatments for the spine. Beginning in October 1999, Mr. Daniel was controller at
Websense, Inc., a publicly-traded company providing web security and web filtering productivity
software. Mr. Daniel holds a B.S. from San Diego State University and is a certified public
accountant. Mr. Daniel will continue to act as the Companys controller, with support from outside consultants. Mr. Daniels employment with the Company is at-will and, in the
event his employment with the Company is terminated, the Company is not contractually obligated to
provide him severance or other benefits.
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On September 8, 2006, the Company issues a press release announcing the appointment of Dr. Merritt
as President and Chief Medical Officer and Mr. Daniel as acting Chief Financial Officer, and Ms.
Carlanders resignation, which press release is filed herewith as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The list of exhibits called for by this Item is incorporated by reference to the Index to
Exhibits filed with this report.
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SIGNATURE
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.
ADVENTRX Pharmaceuticals, Inc. |
||||
Dated: September 8, 2006 | By: | /s/ Evan M. Levine | ||
Name: | Evan M. Levine | |||
Title: | Chief Executive Officer |
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INDEX TO EXHIBITS
10.1
|
Letter Agreement, dated September 7, 2006 | |
10.2
|
Severance Agreement and Release of All Claims, dated September 7, 2006 | |
10.3
|
Consulting Agreement, dated September 7, 2006 | |
99.1
|
Press release, dated September 8, 2006 |
EXHIBIT 10.1
September 7, 2006
James Merritt, M.D.
5285 Toscana Way, Apt. 8311
San Diego, California 92122
5285 Toscana Way, Apt. 8311
San Diego, California 92122
Dear James:
ADVENTRX Pharmaceuticals, Inc. is pleased to offer you full-time employment on the terms and
conditions stated in this letter agreement. We would employ you as President and Chief Medical
Officer reporting to Evan Levine, Chief Executive Officer. Your responsibilities would include the
following:
1. Position Responsibilities:
| Develops goals, operating plans, policies, and short and long-range objectives for the company. |
| Directs, monitors, and leads the staff in the development and implementation of strategies, business plan, budget, and work plans to achieve companys vision and mission. |
| Responsible for overseeing all aspects of staff administration, including hiring, terminations, salary administration, job descriptions, regular staff meetings, performance evaluations, office policy and procedures and a timely form of communication with support staff. |
| Coordinates with the companys Scientific Advisory Board. |
| Represents the company on scientific and technical matters at internal and external functions, to the financial community, partners, stakeholders, major customers, government agencies, and the general public. |
| Manages the companys portfolio of products and facilitates go/no decisions at each stage of product development. |
| Develops the companys research and development team through training and headcount growth, as appropriate. |
| Supports the business development team on the technical due diligence associated with investor relations, in-licensing, acquisitions, and co-development agreements. |
| Works closely with legal advisors on enriching and optimizing the companys intellectual property portfolio. |
| Works closely with the clinical and regulatory team to ensure appropriate preparation and submission of regulatory documents. |
| Responsible for the overall functions of Clinical, Research & Development, Regulatory, Business Development, Sales & Marketing, Facility & Operations, Administration and Human Resources. |
| Perform other duties consistent with your positions as requested by the Chief Executive Officer. |
2. General Responsibilities:
| Operate to the highest ethical and moral standards. |
| Comply with our policies and procedures. |
| Adhere to quality standards set by regulations, and our policies, procedures and mission. |
James Merritt, M.D.
September 7, 2006
Page 2 of 7
September 7, 2006
Page 2 of 7
| Communicate effectively with supervisors, colleagues and subordinates. Be committed to team effort and be willing to assist in unrelated job areas when called upon. |
| Provide administrative leadership for us and provide knowledge-based expertise in related areas that can be applied to meeting the strategic goals. |
| Travel as needed. |
3. We would initially compensate you at the rate of $325,000 per year, less payroll deductions and
withholding, payable in accordance with our payroll policies. We will review your base salary from
time to time (but no less frequently than annually) in accordance with our procedures for
increasing salaries of similarly situated executives.
4. We would recommend that our Board of Directors grant you an incentive stock option to purchase
up to 300,000 shares of our common stock under our 2005 Equity Incentive Plan pursuant to a Stock
Option Agreement in substantially the form attached hereto as Exhibit A (the Stock Option
Agreement). Please note that the grant date, vesting commencement date and exercise price of this
option will be determined by our Board of Directors, or a committee thereof. There would also be
the possibility of receiving additional stock options in the future based upon your performance and
our overall success.
5. In addition and subject to the remainder of this section 5 and section 6, in the event of your
Involuntary Termination (as defined in the Stock Option Agreement) (a) you will receive an amount
equal to your base salary for the 6-month period immediately prior to the effective date of such
Involuntary Termination, payable in 6 substantially equal installments over the 6-month period
following such effective date and (b) we will pay all costs that we would otherwise have incurred
to maintain your health, welfare and retirement benefits if you had continued to render services to
us for 6 continuous months after such effective date. Prior to your receipt of any payment or
benefit provided by this section 5, you must execute a mutual release in substantially the form
attached hereto as Exhibit B, as such may be revised by the Company, acting reasonably, to
reflect changes in legal requirements, or such other form as may be mutually agreed to by you and
the Company. Such release will specifically relate to all of your rights and claims and the
Companys rights and claims in existence at the time of such execution and will confirm your
obligations under the Company Confidentiality Agreement (as defined in Section 9 below). It is
understood that you will have a certain period to consider whether to execute such release, and you
may revoke such release within 7 business days after execution. In the event you do not execute
such release within the applicable period, or if you revoke such release within the subsequent
7-business-day period, you will not be entitled to the payments and benefits described in this
section 5.
6. You acknowledge and agree that any payment to be made or benefit to be provided to you pursuant
to section 5 will be delayed to the extent necessary for this letter agreement and such payment or
benefit to comply with Section 409A of the Internal Revenue Code (Section 409A); provided that,
if any payment to be made or benefit to be provided to you is delayed as a result of this section 6, such payment or benefit will be paid to you in a lump-sum as soon as
permitted under Section 409A. In addition, if we reasonably determine that a change in applicable
law following the date set forth above causes the payments to be made or benefits to be provided to
be payable to you without delay but in another manner that complies with Section 409A, you and we
agree to amend this letter agreement to reform the payment provisions set forth in section 5 to
provide to you economic benefits that are as close as reasonably possible to
James Merritt, M.D.
September 7, 2006
Page 3 of 7
September 7, 2006
Page 3 of 7
those contemplated by section 5 but that still comply with Section 409A. Subject to the
foregoing, this letter agreement will be interpreted, construed and administered in a manner that
satisfies the requirements of Section 409A. Any provision of this letter agreement to the contrary
notwithstanding, we may adopt such amendments to this letter agreement or adopt other policies and
procedures (including amendments, policies and procedures with retroactive effect), or take any
other actions, that we determine are necessary to comply with the requirements of Section 409A;
provided, that, prior to taking any such action, we will confer with you and take your input into
account in good faith.
7. As an our employee, you would be entitled to participate in our medical, dental, life insurance
and 401(k) programs on the same terms as our other full-time employees. These programs as well as
other employee benefits and policies are described in further detail in our Policies and Procedures
Manual. We reserve the right to modify or amend at our sole discretion the terms of any and all
employee benefit programs from time to time without advance notice to our employees.
Notwithstanding our employee vacation policy set forth in the Policies and Procedures Manual, you
would be entitled to 30 vacation days per year which would accrue in accordance with our general
vacation accrual policy.
8. Your employment with us would be at will and not for a specified term. We make no express or
implied commitment that your employment will have a minimum or fixed term, that we may take adverse
employment action only for cause or that your employment is terminable only for cause. We may
terminate your employment with or without cause and with or without advance notice at any time and
for any reason. Any contrary representations or agreements that may have been made to you are
superseded by this letter agreement. The at-will nature of your employment described by this
letter agreement shall constitute the entire agreement between you and ADVENTRX concerning the
nature and duration of your employment. Although your job duties, title and compensation and
benefits may change over time, the at-will nature of your employment with us can only be changed in
a written agreement signed by you and our CEO.
9. Our proprietary rights and confidential information are among our most important assets. In
addition to signing this letter agreement as a condition to your employment, you must also sign the
Companys current Confidential Information, Non-Solicitation and Invention Assignment Agreement
(the Company Confidentiality Agreement).
10. We require that in the course of your employment with us that you not use or disclose to us any
confidential information, including trade secrets, of any former employer or other person to whom you have had an obligation of confidentiality. Rather, you will be expected to use only
that information which is generally known and used by persons with training and experience
comparable to your own, which is common knowledge in the industry or otherwise legally in the
public domain, or which is otherwise provided or developed by us. During our discussions about
your proposed job duties, you assured us that you would be able to perform those duties within the
guidelines just described. Accordingly, you further agree that you will not bring on to our
premises any unpublished documents or property belonging to any former employer or other person to
whom you have an obligation of confidentiality.
11. As an employee, we require that you comply with all of our policies and procedures, including,
without limitation, our Code of Business Conduct and Ethics, a copy of which will, at
James Merritt, M.D.
September 7, 2006
Page 4 of 7
September 7, 2006
Page 4 of 7
your request, be provided to you prior to your beginning work with us. You may be required to
sign certain documents acknowledging your receipt and understanding of our policies and procedures.
Violation of any or our policies or procedures would be cause for disciplinary action including
termination.
12. Your employment with us is also conditioned upon your ability to provide adequate documentation
of your legal right to work in the United States, as well as educational credentials, and
successful completion of our reference checking process. If you make any misrepresentations to us
or omit to state a material fact necessary in order to make another statement made not misleading,
we may void this letter agreement or, if you are already employed, terminate your employment.
13. Any controversy, claim or dispute between you and the company concerning this letter agreement
or documents attached hereto, your employment or the severance of your employment shall be finally
settled by arbitration held in San Diego, California by one (1) arbitrator in accordance with the
rules of employment arbitration then followed by the American Arbitration Association or any
successor to the functions thereof. The arbitrator shall apply California law (as applied to
agreements between California residents entered into and to be performed entirely within
California) in the resolution of all controversies, claims and disputes and shall have the right
and authority to determine how his or her decision or determination as to each issue or matter in
dispute may be implemented or enforced. Any decision or award of the arbitrator shall be final and
conclusive on the parties. The parties shall bear equally all costs of the arbitrator in any
action brought under this section 13 unless otherwise required by law (in which case such costs
will be borne as required by law).
14. In the event of any dispute related to or based upon this letter agreement or documents
attached hereto, the arbitrator has the right to allocate between the parties, as the arbitrator
may determine, the costs of the arbitrator (unless the allocation of the costs of the arbitration
are otherwise mandated by law) and the reasonable costs and expenses (including reasonable
attorneys fees and costs) of each party incurred in connection with such arbitration.
15. This letter agreement and documents attached hereto shall be governed pursuant to the laws of
the State of California as applied to agreements between California residents entered into and to
be performed entirely within California.
16. If any portion of this letter agreement shall, for any reason, be held invalid or
unenforceable, or contrary to public policy or any law, the remainder of this letter agreement
shall not be affected by such invalidity or unenforceability, but shall remain in full force and
effect, as if the invalid or unenforceable term or portion thereof had not existed within this
letter agreement.
James Merritt, M.D.
September 7, 2006
Page 5 of 7
September 7, 2006
Page 5 of 7
17. If you accept the terms and conditions set forth in this letter agreement, we would like
you to begin full time work with us on September 7, 2006, and this letter agreement will be
effective as of such date. I look forward to you joining us and being an integral and important
part of our team. Please sign below to accept this offer and return the fully executed letter to
me within five business days. You should keep one copy of this letter for your own records.
Sincerely,
ADVENTRX Pharmaceuticals, Inc.
|
ACCEPTED AND AGREED: | |
/s/ Evan Levine
|
||
Evan Levine
|
/s/ James Merritt | |
Chief Executive Officer
|
James Merritt, M.D. | |
Date: September 7, 2006 |
James Merritt, M.D.
September 7, 2006
Page 6 of 7
September 7, 2006
Page 6 of 7
Exhibit A
STOCK OPTION AGREEMENT
James Merritt, M.D.
September 7, 2006
Page 7 of 7
September 7, 2006
Page 7 of 7
Exhibit B
RELEASE
EXHIBIT A
Stock Option Agreement
ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the Company), and the undersigned
person (Optionee) have entered into this Stock Option Agreement (this Agreement) effective as
of the Grant Date set forth below. The Company has granted to Optionee the option (the Option) to
purchase the number of shares (the Shares) of common stock, par value $0.001 per share, of the
Company (Common Stock) set forth below at the per Share purchase price (the Exercise Price) set
forth below, pursuant to the terms of this Agreement. The Option was granted under the Companys
2005 Equity Incentive Plan (the Plan).
Optionee Name: |
James Merritt | |
Grant Date: |
MM/DD/YYYY | |
Vesting Commencement Date: |
MM/DD/YYYY | |
Shares: |
300,000 | |
Exercise Price: |
$X.XX |
1. Terms of Plan. All capitalized terms used in this Agreement and not otherwise defined shall
have the meanings ascribed thereto in the Plan. Optionee confirms and acknowledges that Optionee
has received and reviewed copies of the Plan and the Information Statement, dated July 13, 2005,
with respect to the Plan. Optionee and the Company agree that the terms and conditions of the Plan
are incorporated in this Agreement by this reference.
2. Nature of the Option. The Option has been granted as an incentive to Optionees Continuous
Service, and is in all respects subject to such Continuous Service and all other terms and
conditions of this Agreement. The Option is intended to be an Incentive Option within the meaning
of the Plan.
3. Vesting and Exercise of Option. The Option shall vest and become exercisable during its term in
accordance with the following provisions:
(a) Vesting and Right of Exercise.
(i) The Option shall vest and become exercisable with respect to one forty-eighth
of the Shares on each successive monthly anniversary of the Vesting Commencement
Date until all of the Shares have vested, subject to Optionees Continuous Service;
provided, however, that, in the event of an Involuntary Termination (as
defined in Section 10 below) but subject to Optionees timely execution of the
release (the Release) referred to in that certain letter agreement, dated
September 7, 2006, by and between the Company and Optionee offering employment to
Optionee (the Offer Letter) and Optionees not revoking the Release as described
in the Offer Letter, the Option shall vest and become exercisable, effective
immediately prior to the effective date of such Involuntary Termination,
with respect to that number of the Shares that would have vested and become
exercisable had Optionee remained in Continuous Service for 6 months following the
effective date of such Involuntary Termination.
(ii) In the event of Optionees death, disability or other termination of
Optionees Continuous Service, the Option shall be exercisable in the manner and to
the extent provided in Section 6.3 of the Plan; provided, however, that,
anything in Section 6.3(a)(i) to the contrary notwithstanding but subject to
Optionees timely execution of the Release and Optionees not revoking the Release
as described in the Offer Letter, in the event of an Involuntary Termination, the
Option shall remain exercisable for 180 days following the effective date of such
Involuntary Termination.
(iii) No fraction of a Share shall be purchasable or deliverable upon exercise of
the Option, but in the event any adjustment hereunder of the number of Shares shall
cause such number to include a fraction of a Share, such number of Shares shall be
rounded down to the nearest smaller whole number of Shares.
(b) Method of Exercise. In order to exercise any portion of the Option which has vested,
Optionee shall notify the Company in writing of the election to exercise such vested portion of the
Option and the number of Shares in respect of which the Option is being exercised, by executing and
delivering the Notice of Exercise of Stock Option in the form attached hereto as Exhibit A (the
"Exercise Notice). The certificate or certificates representing Shares as to which the Option has
been exercised shall be registered in the name of Optionee.
(c) Restrictions on Exercise.
(i) Optionee may exercise the Option only with respect to Shares that have vested
in accordance with Section 3(a) of this Agreement.
(ii) Optionee may not exercise the Option if the issuance of the Shares upon such
exercise or the method of payment of consideration for such Shares would constitute
a violation of any applicable federal or state securities law or other law or
regulation.
(iii) The method and manner of payment of the Exercise Price will be subject to the
rules under Part 221 of Title 12 of the Code of Federal Regulations as promulgated
by the Federal Reserve Board if such rules apply to the Company at the date of
exercise.
(iv) As a condition to the exercise of the Option, the Company may require Optionee
to make any representation or warranty to the Company at the time of exercise of
the Option as in the opinion of legal counsel for
the Company may be required by any applicable law or regulation, including the
execution and delivery of an appropriate representation statement. Accordingly, the
stock certificate(s) for the Shares issued upon exercise of the Option may bear
appropriate legends restricting transfer.
(v) Optionee may only exercise the Option upon, and the obligations of the Company
under this Agreement to issue Shares to Optionee upon any exercise of the Option is
conditioned on, satisfaction of all federal, state, local or other withholding tax
obligations associated with such exercise (whether so required to secure for the
Company an otherwise available tax deduction or otherwise) (Withholding
Obligations). The Company reserves the right to require Optionee to remit to the
Company an amount sufficient to satisfy all Withholding Obligations prior to the
issuance of any Shares upon any exercise of the Option. Optionee authorizes the
Company to withhold in accordance with applicable law from any compensation payable
to Optionee any amounts necessary to meet any Withholding Obligations.
4. Non-Transferability of Option. The Option may not be transferred in any manner other than by
will or by the laws of descent and distribution. The terms of this Agreement shall bind the
executors, administrators, heirs and successors of Optionee.
5. Method of Payment.
(a) Upon exercise, Optionee shall pay the aggregate Exercise Price of the Shares purchased by
any of the following methods, or a combination thereof, at the election of Optionee:
(i) by cash;
(ii) by certified or bank cashiers check;
(iii) if shares of Common Stock are traded on an established stock market or
exchange on the date of exercise, by surrender of whole shares of Common Stock
having a Market Value equal to the portion of the Exercise Price to be paid by such
surrender, provided that if such shares of Common Stock to be surrendered were
acquired upon exercise of an Incentive Option, Optionee must have first satisfied
the holding period requirements under Section 422(a)(1) of the Code; or
(iv) if shares of Common Stock are traded on an established stock market or
exchange on the date of exercise, pursuant to and under the terms and conditions of
any formal cashless exercise program authorized by the Company entailing the sale
of the Stock subject to an Option in a brokered transaction (other than to the
Company).
(b) If Optionee shall pay all or a portion of the aggregate Exercise Price due upon an
exercise of the Option by surrendering shares of Common Stock pursuant to Section 5(a)(iii), then
Optionee:
(i) shall accompany the Exercise Notice with a duly endorsed blank stock power with
respect to the number of shares of Common Stock to be surrendered and shall deliver
the certificate(s) representing such surrendered shares to the Company at its
principal offices within two business days after the date of the Exercise Notice;
(ii) authorizes and directs the Secretary of the Company to transfer so many of the shares of Common
Stock represented by such certificate(s) as are necessary to pay
the aggregate Exercise Price in accordance with this Agreement;
(iii) agrees that Optionee may not surrender any fractional share as payment of any
portion of the Exercise Price; and
(iv) agrees that, notwithstanding any other provision in this Agreement, Optionee
may only surrender shares of Common Stock owned by Optionee as of the date of the
Exercise Notice in the manner and within the time periods allowed under Rule 16b-3
promulgated under the Exchange Act.
6. Adjustments to Option. Subject to any required action by the stockholders of the Company, the
number of Shares covered by the Option, and the Exercise Price, shall be proportionately adjusted
in accordance with and pursuant to Section 8.1 of the Plan. Such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and conclusive. Except as
expressly provided in this Agreement, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares or the Exercise Price.
7. Term of Option. The Option may not be exercised more than 10 years after the Grant Date, and
may be exercised during such term only in accordance with the terms of this Agreement.
8. Not Employment Contract. Nothing in this Agreement shall confer upon Optionee any right to
continue in the employ of the Company or shall interfere with or restrict in any way the rights of
the Company, which are hereby expressly reserved, to terminate Optionees Continuous Service at any
time for any reason whatsoever, with or without cause, subject to the provisions of applicable law.
9. Tax Consequences Generally. Optionee acknowledges that Optionee may suffer adverse tax
consequences as a result of Optionees exercise of the Option. Optionee acknowledges that the
Company advises that Optionee consult with Optionees tax
advisers in connection with any exercise of the Option or disposition of the Shares receivable upon
exercise of the Option. Optionee agrees that Optionee is not relying on the Company for any tax
advice with respect to the acceptance or exercise of the Option, the disposition of any Shares
Optionee may acquire upon exercise of the Option or otherwise. Any adverse consequences incurred by
an Optionee with respect to the use of shares of Common Stock to pay any part of the aggregate
Exercise Price or of any tax in connection with the exercise of an Option, including, without
limitation, any adverse tax consequences arising as a result of a disqualifying disposition within
the meaning of Section 422 of the Code shall be the sole responsibility of Optionee.
10. Adjustments in Acquisitions.
In accordance with the provisions of Section 8.2(a) of the Plan, the Option will Accelerate in full
in the event of an Acquisition constituting a Change of Control if Optionee remains employed by the
Company or one of its Affiliates as of the closing date of such Acquisition, and the Option is not
assumed or replaced by the successor or acquiring entity or the entity in control of such successor
or acquiring entity in accordance with Section 8.2 (referred to for purposes of this section as the
Acquirer); provided, however, that, even if the Option is assumed or replaced by the
Acquirer, 50% of any unvested portion of the Option shall be deemed to have vested as of the
closing date of such Acquisition and the remaining unvested portion of the Option (after taking
into account the foregoing) shall vest ratably by month over the 12-month period beginning on the
closing of such Acquisition, subject to Optionees Continuous Service. Otherwise, the Option will
not Accelerate in the event of an Acquisition. In this regard, if Optionee is offered employment or
some other continuing role by or on behalf of the Acquirer, including but not limited to,
continuing employment with the Company, and in connection therewith, the Acquirer offers to assume
or replace the Option, the Option will not Accelerate if Optionee does not accept the offer. For
clarification, the Option will Accelerate in full in the event of an Acquisition constituting a
Change of Control even if Optionee does not remain employed by the Company or one of its Affiliates
as of the closing date of such Acquisition if Optionee is the subject of an Involuntary Termination
prior to such Acquisition and such Involuntary Termination is directly connected with or the result
of such Acquisition.
If, following a Change of Control in which the Option has been assumed by the successor or
acquiring entity as of the closing date of such Change of Control, in the event of Optionees
Involuntary Termination of employment within 24 months after the closing date of such Change of
Control the vesting of the assumed Option shall be accelerated such that the Option will so vest as
of the effective date of such Involuntary Termination with respect to all Shares that would have
become vested during such 24-month period but for the Change of Control and Involuntary Termination
(assuming Optionees Continuous Service). An Involuntary Termination is one that occurs by reason
of dismissal for any reason other than Misconduct or of voluntary resignation following: (i) a
change in position that materially reduces the level of Optionees responsibility, (ii) a material
reduction in Optionees base salary, or (iii) relocation by more than 50 miles; provided that (ii)
and (iii) will apply only if Optionee has not consented to the change or
relocation. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty
by Optionee, any unauthorized use or disclosure by such person of confidential information or trade
secrets of the Company (or any Parent or Subsidiary), or any other intentional misconduct by such
person adversely affecting the business affairs of the Company (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Company (or any Parent or Subsidiary) may consider as grounds for the dismissal
or discharge of Optionee.
11. Consent of Spouse/Domestic Partner. Optionee agrees that Optionees spouses or domestic
partners interest in the Option is subject to this Agreement and such spouse or domestic partner
is irrevocably bound by the terms and conditions of this Agreement. Optionee agrees that all
community property interests of Optionee and Optionees spouse or domestic partner in the Option,
if any, shall similarly be bound by this Agreement. Optionee agrees that this Agreement is binding
upon Optionees and Optionees spouses or domestic partners executors, administrators, heirs and
assigns. Optionee represents and warrants to the Company that Optionee has the authority to bind
Optionees spouse/domestic partner with respect to the Option. Optionee agrees to execute and
deliver such documents as may be necessary to carry out the intent of this Section 11 and the
consent of Optionees spouse/domestic partner.
IN WITNESS WHEREOF, Optionee and the Company have entered into this Agreement as of the Grant
Date.
ADVENTRX Pharmaceuticals, Inc. | |||||
James Merritt | |||||
By: | |||||
Name: | |||||
Title: | |||||
Exhibit A
Notice of Exercise of Stock Option
I (please print legibly) hereby elect to exercise the stock options(s)
identified below (the Option(s)) granted to me by ADVENTRX Pharmaceuticals, Inc. (the
Company) under its 2005 Equity Incentive Plan (the Plan) with respect to the
number of shares of Common Stock of the Company set forth below (the Shares). I represent
that each Share is fully vested and exercisable and subject to the Option(s). I acknowledge and
agree that my exercise of the Option(s) is subject to the terms and conditions of the Plan and the
Stock Option Agreement(s) governing the Option(s).
1. Shares at $ per share (Grant date):
2. Shares at $ per share (Grant date):
3. Shares at $ per share (Grant date):
4. Shares at $ per share (Grant date):
I choose to pay for the exercise of the above option(s) as follows (please
circle applicable item numbers):
1. Cash: $
2. Check: $ (please make checks payable to ADVENTRX
Pharmaceuticals, Inc.)
3. Surrender of Shares:
Please deliver the stock certificate(s) representing the Shares to (please print legibly):
Name:
|
||
(please print legibly) |
Signature:
|
Date:
|
Phone No:
|
EXHIBIT B
RELEASE
Pursuant to that certain letter agreement, dated September 7, 2006, by and between ADVENTRX
Pharmaceuticals, Inc., a Delaware corporation (the Company), and the undersigned (Executive
and, together with the Company, each, a Party and, collectively, the Parties) offering
employment to Executive (the Offer Letter) and that certain Stock Option Agreement issued in
connection with the Offer Letter (the Option Agreement), and in consideration of and as a
condition precedent to the payments and benefits provided under Section 5 of the Offer Letter and
other benefits provided under Sections 5(a)(i) and 5(a)(ii) of the Option Agreement, Executive and
the Company each hereby furnish the other with this Release.
Executive hereby confirms his/her obligations under the Companys Confidential Information,
Non-Solicitation and Invention Assignment Agreement.
On Executives own behalf and on behalf of Executives heirs, estate and beneficiaries, Executive
hereby waives, releases, acquits and forever discharges the Company, and each of its parents,
subsidiaries and affiliates, and each of their respective past or present officers, directors,
agents, servants, employees, shareholders, predecessors, successors and assigns, and all persons
acting by, through, under, or in concert with them, or any of them, of and from any and all suits,
debts, liens, contracts, agreements, promises, claims, liabilities, demands, causes of action,
costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in
law, equity, or otherwise, known and unknown, fixed or contingent, suspected and unsuspected,
disclosed and undisclosed (Claims), from the beginning of time to the date hereof, including
without limitation, Claims that arose as a consequence of Executives employment with the Company,
or arising out of the termination of such employment relationship, or arising out of any act
committed or omitted during or after the existence of such employment relationship, all up through
and including the date on which this Release is executed, including, but not limited to, Claims
which were, could have been, or could be the subject of an administrative or judicial proceeding
filed by Executive or on Executives behalf under federal, state or local law, whether by statute,
regulation, in contract or tort. This Release includes, but is not limited to: (1) Claims for
intentional and negligent infliction of emotional distress; (2) tort Claims for personal injury;
(3) Claims or demands related to salary, bonuses, commissions, stock, stock options, or any other
ownership interest in the Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, front pay, back pay or any other form of compensation; (4) Claims for breach of contract; (5)
Claims for any form of retaliation, harassment, or discrimination; (6) Claims pursuant to any
federal, state or local law or cause of action including, but not limited to, the federal Civil
Rights Act of 1964, as amended, the federal Age Discrimination in Employment Act of 1967, as
amended (ADEA), the federal Employee Retirement Income Security Act of 1974, as amended, the
federal Americans with Disabilities Act of 1990, the California Fair Employment and Housing Act, as
amended, and the California Labor Code; and (7) all other Claims based on tort law, contract law,
statutory law, common law, wrongful discharge, constructive discharge, fraud, defamation, emotional
distress, pain and suffering, breach of the implied covenant of good faith and fair dealing,
compensatory or punitive damages, interest, attorneys fees, and reinstatement or re-employment. If
any court rules that Executives waiver of the right to file any administrative or judicial charges
or complaints is ineffective, Executive agrees not to seek or accept any money damages or any other
relief upon the filing of any such administrative or judicial charges or complaints.
The Company, for itself and each of its parents subsidiaries and affiliates and each of their
respective predecessors successors and assigns over which the Company has control and the right to
release Executive as set forth herein, hereby waives, releases, acquits and forever discharges
Executive and Executives heirs, estate and beneficiaries, and all persons acting by, through,
under, or in concert with them, or any of them, of and from any and all Claims, from the beginning
of time to the date hereof, including without limitation, Claims that arose as a consequence of
Executives employment with the Company, or arising out of the termination of such employment
relationship, or arising out of any act committed or omitted during or after the existence of such
employment relationship, all up through and including the date on which this Release is executed,
including, but not limited to, Claims which were, could have been, or could be the subject of an
administrative or judicial proceeding filed by the Company or on the Companys behalf under
federal, state or local law, whether by statute, regulation, in contract or tort. This Release
includes, but is not limited to: (1) Claims for intentional and negligent infliction of emotional
distress; (2) tort Claims for personal injury; (3) Claims or demands related to salary, bonuses,
commissions, stock, stock options, or any other ownership interest in the Company, vacation pay,
fringe benefits, expense reimbursements, severance pay, front pay, back pay or any other form of
compensation; (4) Claims for breach of contract; (5) Claims for any form of retaliation,
harassment, or discrimination; (6) Claims pursuant to any federal, state or local law or cause of
action including, but not limited to, the federal Civil Rights Act of 1964, as amended, the ADEA,
the federal Employee Retirement Income Security Act of 1974, as amended, the federal Americans with
Disabilities Act of 1990, the California Fair Employment and Housing Act, as amended, and the
California Labor Code; and (7) all other Claims based on tort law, contract law, statutory law,
common law, wrongful discharge, constructive discharge, fraud, defamation, emotional distress, pain
and suffering, breach of the implied covenant of good faith and fair dealing, compensatory or
punitive damages, interest, attorneys fees, and reinstatement or re-employment. If any court rules
that the Companys waiver of the right to file any administrative or judicial charges or complaints
is ineffective, the Company agrees not to seek or accept any money damages or any other relief upon
the filing of any such administrative or judicial charges or complaints.
The Parties acknowledge that each has read and understands Section 1542 of the California Civil
Code which reads as follows: A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with the debtor. The
Parties hereby expressly waive and relinquish all rights and benefits under that section and any
law of any jurisdiction of similar effect with respect to the release by each Party of any unknown
Claims either Party may have against the other Party.
Notwithstanding the foregoing, nothing in this Release shall constitute a release by Executive of
any claims or damages based on any right Executive may have to enforce the Companys executory
obligations under the Offer Letter and the Stock Option Agreement, any right Executive may have to
vested or earned compensation and benefits, or Executives eligibility for indemnification under
applicable law, Company governance documents, Executives indemnification agreement with the
Company or under any applicable insurance policy with respect to Executives liability as an
employee or officer of the Company.
If Executive is 40 years of age or older at the time of the termination, Executive acknowledges
that he/she is knowingly and voluntarily waiving and releasing any rights he/she may have under
ADEA. Executive also acknowledges that the consideration given under the Offer Letter and Option
Agreement for the release set forth herein is in addition to anything of value to which he/she was
already entitled. Executive further acknowledges that he/she has been advised by this writing, as
required by the ADEA, that: (A) his/her waiver and release do not apply to any rights or claims
that may arise on or after the date he/she executes this Release; (B) Executive has the right to
consult with an attorney prior to executing this Release; (C) Executive has [21]1
[45]2
days to consider this Release (although he/she may choose to voluntarily execute this Release
earlier); (D) Executive has 7 days following the execution of this Release to revoke the Release;
[and]1 (E) this Release shall not be effective until the date upon which the revocation
period has expired, which shall be the 8th day after this Release is executed by Executive, without
Executives having given notice of revocation[; and (F) Executed has received with this Release a
detailed list of job titles and ages of all employees who were terminated in the group termination
of which Executives termination is a part and the ages of all employees of the Company in the same
job classification or organizational unit who were not so terminated]2.
Each Party further acknowledges that such Party has carefully read this Release, and knows and
understands its contents and its binding legal effect. Each Party acknowledges that by signing this
Release, such Party does so of such Partys own free will, and that it is such Partys intention
that such Party be legally bound by its terms.
James A. Merritt | ||||||
Date:
|
||||||
ADVENTRX PHARMACEUTICALS, INC. | ||||||
By:
|
||||||
Name:
|
||||||
Title:
|
||||||
Date:
|
1 | Include only if an individual termination | |
2 | Include only if a group termination. |
EXHIBIT 10.2
SEVERANCE AGREEMENT
AND RELEASE OF ALL CLAIMS
AND RELEASE OF ALL CLAIMS
This Severance Agreement and Release of All Claims (this Agreement), effective as of
September 7, 2006 (the Effective Date), is made and entered into by and between Carrie Carlander
(Employee) and ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (the Company).
WHEREAS, the Company and Employee have mutually determined that it is in their respective best
interests to terminate Employees employment with the Company and to transition Employees
responsibilities and duties to the Company in a considered and professional manner;
WHEREAS, the Company and Employee desire to settle fully and finally any existing or potential
differences between them including, without limitation, all tort, contractual, discrimination,
statutory and common law claims;
NOW, THEREFORE, BE IT RESOLVED, in consideration of the mutual covenants and promises herein
contained and other good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, and to avoid unnecessary litigation, it is hereby agreed by and between the parties
as follows:
1. Termination Date. Employees employment with the Company will terminate effective
as of the Effective Date.
2. Consulting Relationship. Effective concurrent with the effectiveness of this
Agreement, Employee and the Company will enter into that certain Consulting Agreement in
substantially the form of Exhibit A, attached hereto (the Consulting Agreement)
(including the Companys current Confidential Information and Inventions Assignment Agreement
referenced in the Consulting Agreement).
3. Press Release and Form 8-K. On the Effective Date (or, at the Companys election,
by the fourth business day following the Effective Date), the Company will issue a press release
mutually agreed upon by the Company and Employee and file with or furnish to the Securities and
Exchange Commission a Current Report on Form 8-K mutually agreed upon by the Company and Employee.
4. Consideration.
(a) On the Effective Date, the Company will make available to Employee Employees final
paycheck for wages and all earned and unused vacation. This payment is not dependent upon Employee
signing this Agreement. In addition, in consideration of Employees executing this Agreement and
performing Employees obligations hereunder (including, without limitation, granting the release
set forth in Section 7), and immediately following Employees resignation from her positions with the Company (including as an officer, as defined in
Section 16 of the Securities Exchange Act of 1934) the Company will issue to Employee 93,611 fully-
1
vested shares of the Companys common stock, $0.001 par value per share, less applicable
withholding taxes (the Severance Benefit).
(b) Effective as of the Effective Date, any and all options or other rights to purchase shares
of the Companys securities (including under the Companys 2005 Equity Incentive Plan and pursuant
to the Initial Grant and that certain Stock Option Agreement, with a Grant Date of January 31,
2006) hereby terminate and are of no further force or effect, and Employee will execute such
documents as the Company reasonably requests to reflect the foregoing. In addition, Employee will
promptly (but in any event within 10 calendar days of the Effective Date) return to the Company the
original copy of all documents evidencing any option or other right to purchase shares of the
Companys securities, which documents will be marked CANCELLED or with other similar marking.
For clarification, in no way will Employees consulting relationship with the Company (as described
in Section 2) be construed in any way as Employee providing Continuous Service (as defined in the
Companys 2005 Equity Incentive Plan) to the Company.
5. Acknowledgement. Employee hereby acknowledges and agrees that, upon Employees
receipt of the final paycheck described in Section 4, the Company has paid all salary, wages,
bonuses, commissions, vacation pay, floating holiday pay and other benefits or compensation due
Employee from the Company.
6. Failure to Perform. Employee acknowledges and agrees that, but for this Agreement,
Employee is not entitled to the Severance Benefit and that, in the event Employee fails to fully
perform under this Agreement, the Company has no obligation to provide Employee the Severance
Benefit.
7. Releases and Related Provisions.
(a) Employees General Release. Employee, for Employee, Employees heirs, executors,
administrators, representatives, assigns and successors, fully and forever releases and discharges
the Company and each of its current, former and future parents, subsidiaries, related entities,
employee benefit plans and their respective fiduciaries, predecessors, successors, officers,
directors, stockholders, agents, employees, consultants, attorneys and assigns (collectively, the
Discharged Parties) with respect to any and all claims, liabilities and causes of action, of
every nature, kind and description, in law, equity or otherwise, which have arisen, occurred or
existed at any time prior to the Effective Date, including (without limitation) any and all claims,
liabilities and causes of action arising out of or relating in any way to Employees employment
with the Company, including (but not limited to) the offer and termination of Employees employment
as well as the terms and conditions of Employees employment. The foregoing release will not apply
to rights arising under California Labor Code Section 2802.
(b) The Companys General Release. The Company, for itself and each of its current,
former and future parents, subsidiaries, related entities, employee benefit plans, predecessors,
successors and assigns over which it has control and the right to release Employee as set forth
herein, fully and forever releases and discharges Employee and Employees heirs,
2
executors, administrators, representatives, attorneys and assigns (collectively the Releasees)
with respect to any and all claims, liabilities and causes of action, of every nature, kind and
description, in law, equity or otherwise, which have arisen, occurred or existed at any time prior
to the Effective Date, including (without limitation) any and all claims, liabilities and causes of
action arising out of or relating in any way to Employees employment with the Company.
(c) Knowing Waiver of Employment-Related Claims. Employee hereby waives and releases
any and all rights Employee may have had, how have, or in the future may have, to pursue against
any of the Discharged Parties any and all remedies available to Employee under any
employment-related causes of action, including (without limitation) claims of wrongful discharge,
breach of contract, breach of the covenant of good faith and fair dealing, fraud, violation of
public policy, defamation, discrimination, personal injury, physical injury, emotional distress,
claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Federal
Rehabilitation Act, the Family and Medical Leave Act, the California Fair Employment and Housing
Act, the California Family Rights Act, the Equal Pay Act of 1963, the provisions of the California
Labor Code and any other federal, state or local law or regulation relating to employment,
conditions of employment (including wage and hour laws), perquisites of employment (including, but
not limited to, stock, stock options and incentive compensation) and/or employment discrimination.
Claims not covered by this Section 7 are claims for unemployment insurance benefits and workers
compensation. Employee represents that Employee has not suffered any work-related injury or
illness.
(d) Waiver of Civil Code Section 1542. Employee and the Company (the Parties)
acknowledge that the Parties may discover facts different from or in addition to those which the
Parties now know or believe to be true and that this Agreement (including, specifically, the
provisions of this Section 7) will be and remain in full force and effect in all respects even if
the Parties discover new or additional facts after the Effective Date. The Parties expressly waive
any and all rights and benefits conferred upon them by Section 1542 of the Civil Code of the State
of California, which states:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
The Parties expressly agree and understand that the general release given in this Section 7
applies to all unknown, unsuspected and unanticipated claims, liabilities and causes of action
which the Parties may have against any of the Discharged Parties and/or Releasees.
(d) No Admission. This Agreement and performance of the acts required by it does not
constitute an admission of liability, culpability, negligence or wrongdoing on the part of anyone
and will not be construed for any purposes as an admission of liability, culpability,
3
negligence or wrongdoing on the part of the Company, or Employee, or any of the other Discharged
Parties or Releasees.
(e) Suit and Administrative Proceedings. The Parties represent that they have not
instituted, filed or participated in any legal or administrative proceedings against each other, or
any of the Discharged Parties or Releasees. The Parties promise and agree that they will never sue
one another, or any of the Discharged Parties or Releasees, or otherwise institute or participate
in any legal or administrative proceedings against one another or any of the Discharged Parties or
Releasees with respect to any claim covered by this Section 7. The Parties represent that each of
them is the sole owner of all claims relating to Employees employment with the Company and that
neither of them has assigned or transferred any claims covered by this Section 7 or otherwise
relating to Employees employment to any other person or entity.
(f) Period to Consider Terms. Employee acknowledges that Employee is entitled to time
during which to consider the terms of this Agreement. Employee understands and acknowledges that
the Company advises Employee to obtain advice concerning this Agreement, including the provisions
of this Section 7. Employee acknowledges that Employee has obtained sufficient information to
intelligently exercise Employees own judgment regarding the terms of this Agreement before
executing it. In addition, Employee acknowledges that Employee has had ample opportunity to obtain
the advice and counsel from an attorney of Employees choice and that Employee executes this
Agreement having had sufficient time during which to consider its terms.
8. Proprietary Information; Continuing Obligations. Employee represents that Employee
has returned to the Company all Company documents, information and property, including (without
limitation) files, records, computer access codes and instruction manuals, as well as any of the
Companys assets or equipment that Employee has in Employees possession or are under Employees
control. Employee further agrees not to keep any copies of any Company documents or information.
Employee acknowledges and agrees that Employee will continue to be bound by (a) the Confidential
Information, Non-Solicitation and Invention Assignment Agreement for Employees entered into between
the Company and Employee (the Company Agreement), (b) the Code of Business Conduct and Ethics for
Employees, Executive Officers and Directors executed by Employee (the Code of Ethics) and (c) the
Policies and Procedure Manual executed by Employee (the Manual), copies of all of which have been
provided to Employee.
9. Confidentiality. Employee agrees to keep this Agreement confidential and not to
reveal its contents to anyone except Employees lawyer, spouse and/or financial consultant.
10. Non-disparagement. The Parties agree that they will not at any time disparage one
another, including the Discharged Parties and the Releasees in any manner likely to be harmful to
them or their respective businesses or reputations (whether personal or professional);
provided, however, that the Parties may respond accurately and fully to any questions,
inquiry or request for information when required to do so by legal process.
4
10. Successors and Assigns. This Agreement will be binding upon Employee and
Employees heirs, executors, administrators, representatives, assigns and successors.
11. Severability. Should any provision of this Agreement be declared or be determined
by any court of competent jurisdiction to be wholly or partially illegal, invalid or unenforceable,
the legality, validity and enforceability of the remaining parts, terms, or provisions will not be
affected thereby, and the illegal, invalid or unenforceable, part, term, or provision will be
amended or removed to the minimum extent necessary so that the remainder of this Agreement is
legal, valid and enforceable.
12. Governing Law. This Agreement will be interpreted and construed in accordance
with and be governed by the laws of the State of California as applied to agreement among
California residents entered into and to be performed entirely within California.
13. Entire Agreement. Employee represents and acknowledges that, in executing this
Agreement, Employee is not relying and has not relied upon any representation or statement made by
any of the Discharged Parties or by any their respective agents, attorneys, or representatives with
regard to the subject matter, basis, or effect of this Agreement, or otherwise, other than those
specifically stated in this Agreement. This Agreement contains the entire agreement between the
Company and Employee with respect to any matters referred to herein and supersedes any previous
oral or written agreements, except the Consulting Agreement (including the Confidential Information
and Inventions Agreement), the Company Agreement, the Code of Ethics and the Manual, each of which
will remain in full force and effect until it terminates or expires pursuant to its terms or as set
forth herein.
IN WITNESS WHEREOF, the Parties hereto have signed this Severance Agreement and Release of All
Claims as of the Effective Date.
COMPANY: | ADVENTRX PHARMACEUTICALS, INC. |
|||
By: | /s/ Evan M. Levine | |||
Evan M. Levine, Chief Executive Officer | ||||
EMPLOYEE: | By: | /s/ Carrie Carlander | ||
Carrie Carlander | ||||
5
Exhibit A
CONSULTING AGREEMENT
[See Exhibit 10.3]
6
EXHIBIT 10.3
ADVENTRX PHARMACEUTICALS, INC.
CONSULTING AGREEMENT
This Consulting Agreement (this Agreement) is entered into effective as of September
7, 2006 (the Effective Date) by and between ADVENTRX Pharmaceuticals, Inc., a Delaware
corporation (the Company), and Carrie Carlander, an individual resident of the State of
California (Consultant).
1. Consulting Relationship. During the term of this Agreement, Consultant will
provide consulting services (the Services) to the Company as described on Exhibit
A attached to this Agreement. Consultant represents that Consultant is duly licensed (as
applicable) and has the qualifications, the experience and the ability to properly perform the
Services. Consultant shall use Consultants best efforts to perform the Services such that the
results are satisfactory to the Company. Consultant shall provide Services only as requested by
the Company.
2. Fees. As consideration for the Services to be provided by Consultant and other
obligations, the Company shall pay to Consultant the amounts specified in Exhibit B
attached to this Agreement at the times specified therein.
3. Expenses. Consultant shall not be authorized to incur on behalf of the Company any
expenses.
4. Term and Termination. Consultant shall serve as a consultant to the Company for a
period commencing on the Effective Date and terminating upon notice of termination from the Company
to Consultant or from Consultant to the Company.
5. Independent Contractor. Consultants relationship with the Company will be that of
an independent contractor and not that of an employee.
(a) Method of Provision of Services. Consultant shall be solely responsible for
determining the method, details and means of performing the Services. Consultant may not employ or
engage the service of any third parties to perform the Services required by this Agreement.
(b) No Authority to Bind Company. Neither Consultant, nor any partner, agent or
employee of Consultant, has authority to enter into contracts that bind the Company or create
obligations on the part of the Company without the prior written authorization of the Company.
(c) No Benefits. Consultant acknowledges and agrees that Consultant (or Consultants
employees, if Consultant is an entity) will not be eligible for any Company employee benefits and,
to the extent Consultant (or Consultants employees, if Consultant is an entity) otherwise would be eligible for any Company employee benefits but for the express
terms of this Agreement, Consultant (on behalf of itself and its employees) hereby expressly
declines to participate in such Company employee benefits.
(d) Withholding; Indemnification. Consultant shall have full responsibility for
applicable withholding taxes for all compensation paid to Consultant, its partners, agents or its
employees under this Agreement, and for compliance with all applicable labor and employment
requirements with respect to Consultants self-employment, sole proprietorship or other form of
business organization, and Consultants partners, agents and employees, including state workers
compensation insurance coverage requirements and any US immigration visa requirements. Consultant
agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of,
any claims or penalties with respect to such withholding taxes, labor or employment requirements,
including any liability for, or assessment of, withholding taxes imposed on the Company by the
relevant taxing authorities with respect to any compensation paid to Consultant or Consultants
partners, agents or its employees.
6. Supervision of Consultants Services. All of the Services to be performed by
Consultant, including but not limited to the Services, will be as agreed between Consultant and
Robert Daniel. Consultant will be required to report to Mr. Daniel concerning the Services
performed under this Agreement. The nature and frequency of these reports will be left to the
discretion of Mr. Daniel.
7. Confidentiality Agreement. Consultant shall sign, or has signed, the Companys
current Confidential Information and Invention Assignment Agreement (the Confidentiality
Agreement) on or before the Effective Date.
8. Conflicts with this Agreement. Consultant represents and warrants that neither
Consultant nor any of Consultants partners, employees or agents is under any pre-existing
obligation in conflict or in any way inconsistent with the provisions of this Agreement. Consultant
represents and warrants that Consultants performance of all the terms of this Agreement will not
breach any agreement to keep in confidence proprietary information acquired by Consultant in
confidence or in trust prior to commencement of this Agreement. Consultant warrants that Consultant
has the right to disclose and/or or use all ideas, processes, techniques and other information, if
any, which Consultant has gained from third parties, and which Consultant discloses to the Company
or uses in the course of performance of this Agreement, without liability to such third parties.
Notwithstanding the foregoing, Consultant agrees that Consultant shall not bundle with or
incorporate into any deliveries provided to the Company herewith any third party products, ideas,
processes, or other techniques, without the express, written prior approval of the Company.
Consultant represents and warrants that Consultant has not granted and will not grant any rights or
licenses to any intellectual property or technology that would conflict with Consultants
obligations under this Agreement. Consultant will not knowingly infringe upon any copyright,
patent, trade secret or other property right of any former client, employer or third party in the
performance of the Services required by this Agreement.
9. Miscellaneous.
(a) Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the parties.
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(b) Sole Agreement. This Agreement, including the Exhibits hereto, constitutes the
sole agreement of the parties and supersedes all oral negotiations and prior writings with respect
to the subject matter hereof. The foregoing notwithstanding, the Company and Consultant
acknowledge that this Agreement is entered into in connection with that certain Severance Agreement
and Release of All Claims, dated of even date herewith (the Severance Agreement), and that this
Agreement has no effect on the Severance Agreement or any of the documents or other agreements
referenced therein or executed in connection therewith.
(c) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice
is addressed to the party to be notified at such partys address or facsimile number as set forth
below, or as subsequently modified by written notice.
(d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within California.
(e) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.
(f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
(g) Arbitration. Any dispute or claim arising out of or in connection with any
provision of this Agreement will be finally settled by binding arbitration in San Diego County,
California, in accordance with the rules of the American Arbitration Association by one arbitrator
appointed in accordance with said rules. The arbitrator shall apply California law, as applied to
agreements among California residents entered into and to be performed entirely within California,
to the resolution of any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to
any court of competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this arbitration provision. This
Section 10(g) shall not apply to the Confidentiality Agreement.
(h) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT,
SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS
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AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION
HEREOF.
[Signature Page Follows]
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The parties have executed this Agreement on the respective dates set forth below.
ADVENTRX PHARMACEUTICALS, INC. |
||||
By: | /s/ Evan M. Levine | |||
Title: | Chief Executive Officer |
Address:
|
6725 Mesa Ridge Road, Suite 100 San Diego, CA 92121 |
CARRIE CARLANDER |
||||
/s/ Carrie Carlander | ||||
Signature |
Address:
|
13140 Avenida Granada Poway, CA 92064 |
EXHIBIT A
DESCRIPTION OF CONSULTING SERVICES
Description of Services | Schedule/Deadline | |
1. Respond to inquiries of the Companys personnel
regarding financial and accounting matters, and
such other matters related to the Company
regarding which Consultant has knowledge.
|
Not applicable |
EXHIBIT B
COMPENSATION
Check applicable payment terms: | ||
o
|
For Services rendered by Consultant under this Agreement, the Company shall pay Consultant at the rate of $ per hour, payable . Unless otherwise agreed upon in writing by Company, Companys maximum liability for all Services performed during the term of this Agreement shall not exceed $ . | |
o
|
Consultant shall be paid $ upon the execution of this Agreement and $ upon completion of the Services specified on Exhibit A to this Agreement. | |
o
|
The Company will recommend that the Board grant a non-qualified option to purchase shares of the Companys Common Stock, at an exercise price equal to the fair market value (as determined by the Companys Board of Directors) on the date of grant, and which will vest and become exercisable as follows: | |
o
|
Consultant is authorized to incur the following expenses: | |
þ
|
Other: |
The Company will compensate Consultant at the rate of $16,666.67 per calendar month plus the
actual amount paid by Consultant for COBRA continuation coverage following employment with the
Company (pro-rated for any portion of a calendar month during which this Agreement is effective
based on a 30-day month) beginning on the Effective Date and ending when this Agreement
terminates. Payment by the Company is due within 15 days of the end of each calendar month;
provided, however, that, the first payment will be due within 15 days of the end of October.
EXHIBIT 99.1
ADVENTRX ANNOUNCES SENIOR
MANAGEMENT CHANGES
MANAGEMENT CHANGES
San Diego, CA September 8, 2006 ADVENTRX Pharmaceuticals, Inc. (AMEX: ANX), a
biopharmaceutical research and development company focused on introducing new treatments for cancer
and infectious disease, announced today several key management changes. James A. Merritt, M.D., a
board-certified oncologist, has been appointed president, a position previously held by Evan M.
Levine, who will continue to serve as chief executive officer and a member of the Companys board
of directors. Dr. Merritt will also serve as chief medical officer, a newly created position, and
will report in both capacities to Mr. Levine. Dr. Merritt has consulted with the Company since July
2005 acting as chief medical advisor.
The Company also announced that Carrie Carlander has resigned from her positions as the Companys
chief financial officer, vice president of finance, treasurer and secretary. Robert Daniel, C.P.A.,
currently the Companys controller, has been appointed acting chief financial officer and treasurer
and Patrick Keran, the Companys general counsel, has been appointed secretary. Ms. Carlander will
provide on-going consulting services to the Company on an as-needed basis. Ms. Carlander intends
to pursue other opportunities and spend more time with her family. The Company is conducting a
search for a new chief financial officer.
We are delighted to have Dr. Merritt lead our research and development efforts, said Evan Levine,
the Companys chief executive officer. Jays experience, passion for science and innovative
therapies for the oncology market, and his impressive track record in the biotechnology sector, are
valued additions to our organization as we embark on multiple late-stage clinical projects. In
addition, on behalf of our board of directors and the entire management team, we thank Carrie for
her important contributions to the Company, and wish her well.
ADVENTRX is a great company, with an exceptional staff, that I have enjoyed advising for the last
year. I look forward to continuing to attract top talent, advancing our pipeline and establishing
ourselves as a commercially successful biotechnology company, Dr. Merritt commented.
Dr. Merritt joins the Company from Imagine Pharmaceuticals, Inc., a venture stage company where he
served as founding chief executive officer since 2003. He was chief medical officer at Introgen
Therapeutics, Inc. and vice president, medical affairs at Viagene, Inc. both development stage
companies engaged in targeted molecular therapies for cancer and infectious diseases. Viagene was
acquired by Chiron Corporation during his tenure. Earlier, Dr. Merritt held clinical management
positions at IDEC Pharmaceuticals, Inc. (now Biogen-IDEC) and The Upjohn Company (now Pfizer). Dr.
Merritt holds an M.D. from the University of Vermont and a B.A. from Johns Hopkins University. Dr.
Merritt completed a research fellowship in viral oncology and a clinical fellowship at the
University of Wisconsin, Madison, department of human oncology, and holds board certifications in internal
medicine and medical oncology.
About ADVENTRX
ADVENTRX Pharmaceuticals is a biopharmaceutical research and development company focused on
introducing treatments for cancer and infectious disease that surpass the performance and safety of
existing drugs, by addressing significant problems such as drug metabolism, toxicity,
bioavailability and resistance. More information can be found on the Companys Web site at
www.adventrx.com.
Forward Looking Statement
This press release contains forward-looking statements, within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, regarding ADVENTRX. Such
statements are made based on managements current expectations and beliefs. Actual results may vary
from those currently anticipated based upon a number of factors, including the successful retention
and integration of future and recent hires, uncertainties inherent in the drug development process,
the timing and success of clinical trials, the validity of research results, and the receipt of
necessary approvals from the FDA and other regulatory agencies. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those contained in the
forward-looking statements regarding ADVENTRX, see the section titled Risk Factors in ADVENTRXs
last annual report on Form 10-K and its Quarterly Reports on Form 10-Q, as well as other reports
that ADVENTRX files from time to time with the Securities and Exchange Commission. All
forward-looking statements regarding ADVENTRX are qualified in their entirety by this cautionary
statement. ADVENTRX undertakes no obligation to release publicly any revisions to forward-looking
statements to reflect events or circumstances that occur after the date hereof.
Contact:
ADVENTRX Pharmaceuticals
Andrea Lynn
858-552-0866
ADVENTRX Pharmaceuticals
Andrea Lynn
858-552-0866
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