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Filing
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 20, 2006
ADVENTRX Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware | 001-32157 | 84-1318182 | ||
(State or Other Jurisdiction of | (Commission File No.) | (IRS Employer Identification No.) | ||
Incorporation) |
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 | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
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Item 5.02. | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers. |
On December 20, 2006, ADVENTRX Pharmaceuticals, Inc. (the Company) announced that Gregory P.
Hanson has been appointed Senior Vice President, Chief Financial Officer and Treasurer, effective
immediately. In connection with Mr. Hansons appointment, Robert Daniel will no longer serve as
the Companys Acting Chief Financial Officer; he will continue to serve as the Companys
Controller.
Prior to this appointment, Mr. Hanson, age 60, served as Vice President and Chief Accounting
Officer of Avanir Pharmaceuticals, Inc., a publicly traded drug discovery and development company,
from May 2006 to December 2006 and as Vice President and Chief Financial Officer of Avanir from
July 1998 to May 2006. Also during Mr. Hansons tenure at Avanir, he simultaneously served in
other executive capacities, including Corporate Compliance Officer since 2002 and Corporate
Secretary since July 1998. From September 1995 to July 1998, Mr. Hanson served as Chief Financial
Officer of XXsys Technologies, Inc., a publicly-traded company focused on the commercialization of
advanced composite technologies; and from May 1993 to September 1995, he held a number of financial
positions with The Titan Corporation, a diversified telecommunications and information systems
company, including acting Chief Financial Officer and acting Controller for its subsidiary, Titan
Information Systems. Earlier in his career, Mr. Hanson held various management positions with Ford
Motor Company over a 14-year span and Solar Turbines Incorporated, a subsidiary of Caterpillar
Inc., over a 3-year span. Mr. Hanson received a B.S. in Mechanical Engineering from Kansas State
University and an M.B.A. with honors from the University of Michigan. He is a Certified Management
Accountant and has passed the examination for Certified Public Accountants. Mr. Hanson has been a
member of the Financial Accounting Standards Boards Small Business Advisory Committee since April
2004 and serves on its Agenda Committee.
In connection with his employment, the Company and Mr. Hanson entered into a letter agreement
(the Offer Letter) effective December 20, 2006. As set forth in the Offer Letter, Mr. Hansons
annual base salary is $250,000. His employment with the Company is at-will, but in the event of
Mr. Hansons involuntary termination (as defined in his Stock Option Agreement described below),
and subject to his execution of a general release of claims, Mr. Hanson will receive an amount
equal to his base salary for the six-month period immediately prior to the effective date of such
involuntary termination (the Termination Date), payable in six substantially equal installments
over the six-month period following the Termination Date. The Company will also pay in cash all
costs it would have otherwise incurred to maintain Mr. Hansons health, welfare and retirement
benefits if he had continued to render services to the Company during the six-month period
following the Termination Date. A copy of the Offer Letter is filed herewith as Exhibit 10.1 and
incorporated herein by reference.
Additionally, the Companys Board of Directors granted Mr. Hanson a stock option (the
Option) under the Companys 2005 Equity Incentive Plan (the Plan) to purchase up to 250,000
shares of the Companys common stock at an exercise price equal to the closing sales price per
share of the Companys common stock as reported on the American Stock Exchange on December 20,
2006, which was the grant date and the date of commencement of Mr. Hansons
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employment with the Company. The Option is subject to the terms and conditions of the Stock
Option Agreement approved by the Board (the Option Agreement), a copy of which is filed herewith
as Exhibit 10.2 and incorporated herein by reference. As set forth in the Option Agreement, the
Option shall vest and become exercisable as to one-fourth of the shares subject to the Option on
December 20, 2007, and as to one forty-eighth of the shares subject to the Option at the end of
each successive month thereafter until all of the shares subject to the Option have vested and
become exercisable, subject to Mr. Hansons continuous service (as defined in the Plan) to the
Company; provided, however, that the vesting and exercisability of the Option shall
accelerate under certain circumstances, including Mr. Hansons involuntary termination (as defined
in the Option Agreement) and a change in control (as defined in the Plan) of the Company.
On December 20, 2006, the Company issued a press release announcing the appointment of Mr.
Hanson as Senior Vice President, Chief Financial Officer and Treasurer, which press release is
attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
10.1
|
Letter Agreement, dated December 13, 2006, between ADVENTRX Pharmaceuticals, Inc. and Gregory P. Hanson | |
10.2
|
Stock Option Agreement, effective December 20, 2006, between ADVENTRX Pharmaceuticals, Inc. and Gregory P. Hanson | |
99.1
|
Press release, dated December 20, 2006 |
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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: December 20, 2006 | By: | /s/ Evan M. Levine | ||
Name: | Evan M. Levine | |||
Title: | Chief Executive Officer | |||
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INDEX TO EXHIBITS
Exhibit No. | Description | |
10.1
|
Letter Agreement, dated December 13, 2006, between ADVENTRX Pharmaceuticals, Inc. and Gregory P. Hanson | |
10.2
|
Stock Option Agreement, effective December 20, 2006, between ADVENTRX Pharmaceuticals, Inc. and Gregory P. Hanson | |
99.1
|
Press release, dated December 20, 2006 |
EXHIBIT 10.1
December 13, 2006
Gregory P. Hanson, CMA
P.O. Box 571
Del Mar, CA 92014
P.O. Box 571
Del Mar, CA 92014
Dear Greg:
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 Senior Vice President, Chief
Financial Officer and Treasurer reporting to Evan M. Levine, Chief Executive Officer. Your
responsibilities would include the following:
1. Position Responsibilities:
| Financial analysis and planning. | |
| Financial modeling and projections, including cost-benefit analysis, pro-forma P&Ls, balance sheet and cash flows. | |
| Month-end closing activities and general ledger entries within the accounting function, including all general ledger account reconciliations. | |
| Maintenance and refinement of all accounting functions and processes for the Company (e.g., financial statements, budgets, and analyses). | |
| Preparation of operating plan and annual budget and on-going (monthly, quarterly) reconciliation, re-forecasts and projections. | |
| Preparation and submission of various reports and tax filings. | |
| SEC, statutory, governmental and compliance reporting, including Sarbanes-Oxley compliance. | |
| Board and stockholder relations, including developing Board materials and answering questions regarding financial statements. | |
| Creation and delivery of presentations to the Board and potential and existing corporate investors, venture capitalists, and strategic partners. | |
| Assessment of accounting and operational systems/policies to safeguard assets and ensure accurate financial information. | |
| Coordination with outside auditors. | |
| Preparation and issuance of annual report. | |
| Lead position regarding financing efforts and due diligence. | |
| Establishment and maintenance of contacts with stockholders, financial institutions and the investment community. | |
| Other duties consistent with your position. |
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. | |
| Communicate effectively with supervisors, colleagues and subordinates. Be committed to team effort and be willing to assist in unrelated job areas when called upon. |
Gregory P. Hanson
December 13, 2006
Page 2 of 7
December 13, 2006
Page 2 of 7
| Provide administrative leadership for us and provide knowledge-based expertise in related areas that can be applied to meeting our strategic goals. | |
| Travel as needed. |
3. We would initially compensate you at the rate of $250,000 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. Our Board of Directors has approved a grant to you of an incentive stock option (to the maximum
extent permitted by law and a nonstatutory stock option with respect to any remaining shares) to
purchase up to 250,000 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), subject to and conditioned on (a) our not rescinding this offer of employment
to you, or terminating an accepted offer, prior to the Start Date (as defined below) and (b) your
acceptance of our offer of employment and commencement of employment with us on the Start Date.
The grant date and vesting commencement date of this option will be the Start Date, and the
exercise price of this option will be equal to the closing price, as reported on the American Stock
Exchange, of one share of our common stock on the Start Date, or, if the Start Date is a day on
which the American Stock Exchange is closed, the next day on which the American Stock Exchange is
open for trading. Subject to the discretion of our Board of Directors, you may receive 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
in cash 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 in cash 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 general release of claims and
agreement 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
Gregory P. Hanson
December 13, 2006
Page 3 of 7
December 13, 2006
Page 3 of 7
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 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 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 20 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 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
Gregory P. Hanson
December 13, 2006
Page 4 of 7
December 13, 2006
Page 4 of 7
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 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 us 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.
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 December 20, 2006 (the Start Date), and this letter
Gregory P. Hanson
December 13, 2006
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December 13, 2006
Page 5 of 7
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 by Friday, December 15, 2006. You should keep one copy of this letter
for your own records.
Sincerely,
ADVENTRX Pharmaceuticals, Inc.
|
ACCEPTED AND AGREED: | |||
/s/ Evan M. Levine
|
/s/ Gregory P. Hanson
|
|||
Chief Executive Officer |
||||
Date: December 15, 2006 |
Gregory P. Hanson
December 13, 2006
Page 6 of 7
December 13, 2006
Page 6 of 7
Exhibit A
STOCK OPTION AGREEMENT
[See Exhibit 10.2]
Gregory P. Hanson
December 13, 2006
Page 7 of 7
December 13, 2006
Page 7 of 7
Exhibit B
GENERAL RELEASE OF CLAIMS AND AGREEMENT
GENERAL RELEASE OF CLAIMS AND AGREEMENT
Pursuant to that certain letter agreement, dated December 13, 2006, by and between ADVENTRX
Pharmaceuticals, Inc., a Delaware corporation (the Company), and the undersigned (Executive)
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
hereby furnishes the Company with this General Release of Claims and Agreement (this Release).
1. Ongoing Obligations. Executive hereby confirms Executives obligations under the
Companys Confidential Information, Non-Solicitation and Invention Assignment Agreement.
2. Release. 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 (the
Released Parties), of and from any and all suits, debts, liens, contracts, agreements, promises,
claims, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations,
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.
3. Covenant Not to Sue. On Executives own behalf and on behalf of Executives heirs,
estate and beneficiaries, Executive promises and agrees that Executive will never sue any of the
Released Parties with respect to any Claims covered by the provisions of this Release.
4. Waiver of Civil Code Section 1542. Executive acknowledges that Executive 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. Executive hereby expressly waives and relinquishes all
rights and benefits under that section and any law of any jurisdiction of similar effect with
respect to the release of any unknown Claims Executive may have against the Company.
5. Claims Not Covered By Release. Notwithstanding the foregoing, nothing in this Release
shall extend to claims which as a matter of law cannot be waived, such as a right to
indemnification under applicable state law. In addition, 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 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.
6. Non-Disparagement. On Executives own behalf and on behalf of Executives heirs, estate
and beneficiaries, Executive agrees that Executive will not make any voluntary statements, written
or verbal, or cause or encourage others to make any such statements, that defame, disparage or in
any way criticize the Companys business reputation, practices or conduct.
7. ADEA Waiver. If Executive is 40 years of age or older at the time of the termination,
Executive acknowledges that Executive is knowingly and voluntarily waiving and releasing any rights
Executive 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 Executive was already entitled. Executive further acknowledges that Executive 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 Executive executes this Release;
(B) Executive has the right to consult with an attorney prior to executing this Release; (C)
Executive has 21 days to consider this Release (although Executive may choose to voluntarily
execute this Release earlier); (D) Executive has 7 days following the execution of this Release to
revoke the Release; and (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. To be effective, such revocation
must be in writing and received by the Companys General Counsel no later than 5:00 p.m. Pacific
time on the 7th calendar day after this Release is signed by Executive. Executive acknowledges
that no benefits or payments will be due Executive under this Release agreement until after the
revocation period has expired.
8. Miscellaneous. This Release and its terms shall be construed under the laws of the
State of California as applied to agreements between California residents entered into and to be
fully performed within California. To the extent any provision of this Release shall be held
invalid or unenforceable by a court of competent jurisdiction, it shall be considered deleted from
this Release and the remainder of such provision and of this Release shall be unaffected and shall
continue in full force and effect.
Executive further acknowledges that Executive has carefully read this Release, and knows and
understands its contents and its binding legal effect. Executive acknowledges that by signing this
Release, Executive does so of Executives own free will, and that it is Executives intention that
Executive be legally bound by its terms.
ADVENTRX PHARMACEUTICALS, INC. | ||||||||
By: | ||||||||
Title: | ||||||||
Date: | ||||||||
EXHIBIT 10.2
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:
|
Gregory P. Hanson | |
Grant Date:
|
12/20/2006 | |
Vesting Commencement Date:
|
12/20/2006 | |
Shares:
|
250,000 | |
Exercise Price:
|
$2.57 |
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-fourth of the
Shares at the first anniversary of the Vesting Commencement Date set forth in the
preamble of this Agreement and as to one forty-eighth of the Shares at the end of
each successive month thereafter 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 general release of claims and agreement (the Release)
referred to in that certain letter agreement, dated December 13, 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) of the Plan 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 12 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 12-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.
/s/ Gregory P. Hanson | ADVENTRX Pharmaceuticals, Inc. | |||||||
By: Name: |
/s/ Evan M. Levine
|
|||||||
Title: | Chief Executive Officer |
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 99.1
ADVENTRX ANNOUNCES APPOINTMENT OF VETERAN FINANCE AND BIOTECH
INDUSTRY EXECUTIVE GREGORY P. HANSON AS CHIEF FINANCIAL OFFICER
INDUSTRY EXECUTIVE GREGORY P. HANSON AS CHIEF FINANCIAL OFFICER
San
Diego, CA December 20, 2006 ADVENTRX Pharmaceuticals, Inc. (AMEX: ANX), a
biopharmaceutical research and development company focused on commercializing low development risk
pharmaceuticals, announced today the appointment of veteran financial executive, Gregory P. Hanson,
MBA, CMA, as Chief Financial Officer, Senior Vice President and Treasurer. In connection with Mr.
Hansons appointment, Robert A. Daniel, previously the Companys Acting Chief Financial Officer and
Treasurer, will resume his prior role as the Companys Controller.
We are pleased to have recruited Greg to our team, said Evan Levine, ADVENTRX chief executive
officer. His achievements as well as expertise in the financial management of public and private
biotech and high tech companies will make a significant contribution to the financial and strategic
development of our company. In addition, I would like to thank Bob for taking on the role of Acting
Chief Financial Officer.
Mr. Hanson joins the Company from Avanir Pharmaceuticals, a publicly traded drug discovery and
development company, where he served as Vice President and Chief Accounting Officer from May 2006
to December 2006, and as Vice President and Chief Financial Officer from July 1998 to May 2006.
During Mr. Hansons tenure at Avanir, he simultaneously served in other executive capacities,
including Corporate Compliance Officer since 2002 and Corporate Secretary since July 1998. From
September 1995 to July 1998, Mr. Hanson served as Chief Financial Officer of XXsys Technologies,
Inc., a publicly-traded company focused on the commercialization of advanced composite
technologies; and from May 1993 to September 1995, he held a number of financial positions with The
Titan Corporation, a diversified telecommunications and information systems company, including
acting Chief Financial Officer and acting Controller for its subsidiary, Titan Information Systems.
Earlier in his career, Mr. Hanson held various management positions with Ford Motor Company over a
14-year span and Solar Turbines Incorporated, a subsidiary of Caterpillar Inc., over a 3-year span.
Mr. Hanson received a B.S. in Mechanical Engineering from Kansas State University and an M.B.A.
with honors from the University of Michigan. He is a Certified Management Accountant and has
passed the examination for Certified Public Accountants. Mr. Hanson has been a member of the
Financial Accounting Standards Boards Small Business Advisory Committee since April 2004 and
serves on its Agenda Committee.
As the Companys Chief Financial Officer, Mr. Hanson will be responsible for managing the Companys
financial affairs, including its accounting, tax and financial reporting obligations.
About ADVENTRX Pharmaceuticals
ADVENTRX Pharmaceuticals is a biopharmaceutical research and development company focused on
commercializing low development risk pharmaceuticals for cancer and infectious disease that enhance
the efficacy and/or safety of existing therapies. More information can be found on ADVENTRXs web
site at www.adventrx.com.
Forward Looking Statement
ADVENTRX cautions you that statements included in this press release that are not a description of
historical facts are forward-looking statements that involve risks,
uncertainties, assumptions and other factors that, if they do not materialize or prove to be
accurate, could cause ADVENTRXs results to differ materially from historical results or those
expressed or implied by such forward-looking statements. Such forward-looking statements are made
based on managements current expectations and beliefs and should not be regarded as a statement or
representation by ADVENTRX that any of its plans, including its anticipated milestones, will be
achieved on time or at
all. The potential risks and uncertainties that could cause actual results
to differ materially include, but are not limited to: successfully educating new executives and
integrating new executives with existing executives and management; and other risks and
uncertainties more fully described in ADVENTRXs press releases and periodic filings with the
Securities and Exchange Commission. ADVENTRXs public filings with the Securities and Exchange
Commission are available at http://www.sec.gov.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date when made. All forward-looking statements are qualified in their entirety by this
cautionary statement and ADVENTRX assumes no obligation to revise or update any forward-looking
statement, including as set forth in this press release, to reflect events or circumstances arising
after the date on which it was made.
Contact:
ADVENTRX Pharmaceuticals
Ioana C. Hone
858-552-0866
ADVENTRX Pharmaceuticals
Ioana C. Hone
858-552-0866
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