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Filing
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
Date of
Report (Date of earliest event reported) May
24, 2005
ADVENTRX
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
001-32157
(Commission
File Number) |
84-1318182
(IRS
Employer Identification No.) |
6725
Mesa Ridge Road, Suite 100
San
Diego, California 92121
(Address
of principal executive offices) (Zip Code)
(858)
552-0866
(Company’s
telephone number, including area code)
Item
1.01. Entry into a Material Definitive Agreement.
On May
24, 2005, at the annual meeting of stockholders of the Company, the stockholders
of the Company approved the Company’s 2005
Equity Incentive Plan and the 2005 Employee Stock Purchase Plan. The
descriptions of the terms and conditions of the 2005 Equity Incentive Plan and
2005 Employee Stock Purchase Plan are incorporated by reference from the
sections captioned “Proposal 2 - Approval of 2005 Equity Incentive Plan” and
“Proposal 3 - Approval of 2005 Employee Stock Purchase Plan,” respectively, in
our Proxy Statement on Schedule 14A filed with the Securities and Exchange
Commission on May 20, 2005 and such sections are attached hereto as Exhibits
99.1 and 99.2, respectively.
On June
3, 2005 the Company entered into the First Amendment to the Standard
Multi-Tenant Office Lease - Gross, dated June 3, 2004 between the Company and
George V. & Ellen M. Casey, Trustees of the Casey Family Trust dated June
22, 1998 (the “Casey Trust”). Pursuant to the terms of the First Amendment, the
Casey Trust agreed to lease to the Company an additional 3,173 square feet of
office space at the Company’s current location at an initial annual rental rate
of approximately $59,000. The new space represents an approximate 35% increase
in the total amount of space leased by the Company at its headquarters. The
Company’s lease of this additional space is subject to all of the terms and
conditions of the original lease with the Casey Trust. The term of the Company’s
lease of this additional space will end on August 31, 2009.
Item
9.01. Financial Statements and Exhibits.
(c) The
exhibit list required by this item is incorporated by reference to the Exhibit
Index filed as part of this report.
SIGNATURES
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. | ||
|
|
|
By: |
/s/
Carrie E. Carlander | |
Name:
Carrie E. Carlander | ||
Title: Chief Financial Officer, Vice President, Finance, and Treasurer | ||
June
9, 2005 |
EXHIBIT
INDEX
Exhibit
|
Description
|
99.1
|
Proposal
2 - Approval of 2005 Equity Incentive Plan
|
99.2
|
Proposal
3 - Approval of 2005 Employee Stock Purchase Plan
|
Exhibit
99.1
PROPOSAL
2
APPROVAL
OF
2005
EQUITY INCENTIVE PLAN
Our board
of directors is asking our stockholders to approve our 2005 Equity Incentive
Plan (the “Incentive Plan”). Our Incentive Plan was adopted by our Board of
Directors in April 2005. The Incentive Plan would take effect upon the approval
of our stockholders. Set forth below is a description of the terms of the
Incentive Plan. Please
see Appendix B for a complete copy of the Incentive Plan.
General.
The
purposes of the Incentive Plan are to attract and retain the best available
personnel, provide additional incentive to our employees, consultants and
directors and promote the success of our business. The Incentive Plan provides
for the following types of awards:
· |
stock
options; |
· |
stock
appreciation rights; |
· |
restricted
stock and stock unit awards; |
· |
performance
shares; |
· |
stock
grants; and |
· |
performance-based
awards. |
Participants.
Any of
our employees, our non-employee directors, consultants and advisors to us, as
determined by the compensation committee, may be selected to participate in the
Incentive Plan. As of April 15, 2005, there were approximately 21 persons who
would be eligible to participate in the Incentive Plan. No participant may be
granted an award to acquire more than 1,500,000 shares of common stock in any
calendar year.
Automatic
Option Grants. The
Incentive Plan provides for the automatic grant, on an annual basis, to each
non-employee director of a nonstatutory stock option to purchase 50,000 shares
of our common stock. These automatic grants would be made at the first meeting
of our board of directors following the annual meeting of stockholders in each
year, commencing with the 2005 annual meeting of stockholders. To be eligible
for an automatic grant, the non-employee director must have served on our board
of directors for at least six months preceding the grant. Each automatic option
grant would have an exercise price per share equal to 105% of the closing price
of our common stock on the date of grant or if the date of grant is not a
trading day, then 105% of the closing price of our common stock on the next
trading day following the date of grant. Each of these option grants to
non-employee directors would vest with respect to one twelfth of the shares
subject to the option at the end of each calendar month after the date of
grant.
Administration.
The
Incentive Plan will be administered by the compensation committee of the board
of directors (the “Committee”), which is presently composed of three members,
all of whom are independent directors as defined by the regulations of the SEC
and the American Stock Exchange. Members of the Committee serve until the
appointment of their successors or their removal by the board of directors at
any time. The board of directors may at any time exercise any of the powers and
responsibilities assigned to the Committee under the Incentive Plan. Subject to
the provisions of the Incentive Plan, the Committee has complete authority to
make, or select the manner of making, all determinations with respect to awards
to be granted, including the form of award and the employee, consultant or
director to receive the award, by considering such factors as the Committee
shall deem relevant in its discretion. Subject to the provisions of the
Incentive Plan, the Committee also has complete authority to interpret the
Incentive Plan, to prescribe, amend and rescind rules and regulations relating
to the Incentive Plan, to determine the terms and provisions of any agreements
concerning the terms of an award, and to make all other determinations necessary
or advisable for the administration of the Incentive Plan. All decisions,
interpretations and other actions of the Committee shall be final and binding on
all holders of options or rights and on all persons deriving their rights
therefrom.
Stock
options. Stock
options may be granted under the Incentive Plan, including incentive stock
options, as defined under Section 422 of the Internal Revenue Code (the “Code”),
and nonqualified stock options. Any incentive stock option or any option
intended to qualify as performance-based compensation under Code Section 162(m)
would not be granted at a price that is less than 100.0% of the fair market
value of our common stock on the date of grant or, in the case of grants to
holders of at least 10.0% of the voting power of all classes of our stock,
110.0% of the fair market value. The term of options granted shall generally be
ten years, except that incentive stock options granted to 10.0% stockholders
shall have a term of five years. The option exercise price of all nonqualified
stock options would be determined by the administrator and is not limited by the
foregoing restrictions on price.
Upon the
exercise of a stock option, the purchase price must be paid in full in either
cash or its equivalent. The administrator may also allow payment by tendering
previously acquired shares of our common stock with a fair market value at the
time of exercise equal to the exercise price, provided such shares have been
held for at least six months prior to tender and broker-assisted cashless
exercises and may authorize loans for the purpose of exercise as permitted under
applicable law.
Stock
appreciation rights (SAR). A SAR
entitles a participant to receive a payment equal in value to the difference
between the fair market value of a share of stock on the date of exercise of the
SAR over the grant price of the SAR. The administrator may pay that amount cash,
in shares of our common stock, or a combination. The terms, methods of exercise,
methods of settlement, form of consideration payable in settlement, and any
other terms and conditions of any SAR would be determined by the administrator
at the time of the grant of award and would be reflected in the award agreement.
Restricted
stock and stock units. A
restricted stock award or restricted stock unit award is the grant of shares of
our common stock either currently (in the case of restricted stock) or at a
future date (in the case of restricted stock units), at a price determined by
the administrator (including zero), that is nontransferable and is subject to
substantial risk of forfeiture until specific conditions or goals are met.
Conditions may be based on continuing employment or achieving performance goals.
During the period of restriction, participants holding shares of restricted
stock may, if permitted by the administrator, have full voting and dividend
rights with respect to such shares. The restrictions would lapse in accordance
with a schedule or other conditions determined by the administrator.
Performance
units. A
performance unit award is a contingent right to receive a pre-determined number
of shares of our common stock if certain performance goals are met. The value of
performance units would depend on the degree to which the specified performance
goals are achieved but are generally based on the value of our common stock. The
administrator may, in its discretion, pay earned performance shares in cash, or
stock or a combination of both.
Stock
grants. A stock
grant is an award of shares of common stock without restriction. Stock grants
may only be made in limited circumstances, such as in lieu of other earned
compensation.
Performance-based
awards. Grants
of performance-based awards enable us to treat other awards granted under the
Incentive Plan as “performance-based compensation” under Section 162(m) of the
Code and preserve the deductibility of these awards for federal income tax
purposes. Because Section 162(m) of the Code only applies to those employees who
are “covered employees” as defined in Section 162(m) of the Code, only covered
employees and those likely to become covered employees are eligible to receive
performance-based awards.
Participants
are only entitled to receive payment for a performance-based award for any given
performance period to the extent that pre-established performance goals set by
the administrator for the period are satisfied. These pre-established
performance goals must be based on one or more of the following performance
criteria: pre- or after-tax net earnings, sales or revenue, operating earnings,
operating cash flow, return on net assets, return on stockholders’ equity,
return on assets, return on capital, stock price growth, stockholder returns,
gross or net profit margin, earnings per share, price per share, and market
share. These performance criteria may be measured in absolute terms or as
compared to any incremental increase or as compared to results of a peer group.
With regard to a particular performance period, the administrator would have the
discretion to select the length of the performance period, the type of
performance-based awards to be granted, and the goals that would be used to
measure the performance for the period. In determining the actual size of an
individual performance-based award for a performance period, the administrator
may reduce or eliminate (but not increase) the award. Generally, a participant
would have to be employed on the date the performance-based award is paid to be
eligible for a performance-based award for that period.
Shares
reserved for issuance. Subject
to certain adjustments, we would be able to issue a maximum of 6,000,000 shares
of our common stock, including shares of our common stock that may be issued
upon the exercise of options, under the Incentive Plan. In addition, on January
1 of each year, there would be an automatic increase in the number of shares
reserved for issuance under the Incentive Plan equal to the lesser of (i) one
percent of the number of outstanding shares of our common stock on such day,
(ii) 750,000 and (iii) such other amount as our board of directors may specify
prior to the date such annual increase is to take effect. The maximum aggregate
number of shares of our common stock which may be issued pursuant to or subject
to outstanding “incentive stock options” (within the meaning of Section 422 of
the Internal Revenue Code) granted under the Incentive Plan is
5,000,000.
Acceleration
of vesting. The
vesting of any awards granted under the Incentive Plan may be accelerated in
full in the event of a merger or sale of the company if the acquiring entity
does not assume or replace the awards with comparable awards.
Limitation
of Rights. Participants
in the Incentive Plan will not be deemed for any purpose to be a stockholder of
the Company with respect to any of the shares of stock subject to an award
unless and until a certificate has been issued for the shares and delivered to
the participant. Any stock issued pursuant to awards is subject to all
restrictions on transfer imposed by our certificate of incorporation and bylaws.
Transferability.
Except as
otherwise provided in the Incentive Plan, options and awards are not
transferable, and no options, awards or interests in them may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated other
than by will or the laws of descent and distribution. All of a participant’s
rights in any option or award may be exercised during the life of the
participant only by the participant or the participant’s legal representative.
However, the administrator may, at or after the grant of a nonstatutory option,
or shares of restricted stock, provide that such award may be transferred by the
recipient to a family member; provided, however, that any such transfer is
without payment of any consideration whatsoever and that no transfer will be
valid unless first approved by the administrator, acting in its sole discretion.
Amendment
and termination. The
administrator, with the approval of our board of directors, may terminate, amend
or modify the Incentive Plan at any time, however, stockholder approval would be
obtained for any amendment to the extent necessary and desirable to comply with
any applicable law, regulation or stock exchange rule. We may not make any
grants under the Incentive Plan after the tenth anniversary of the effective
date of the plan.
Tax
Effect for Us. We
generally will be entitled to a tax deduction in connection with an option or
award under the Incentive Plan in an amount equal to the ordinary income
realized by a participant and at the time the participant recognizes such income
(for example, the exercise of a nonstatutory stock option). Special rules limit
the deductibility of compensation paid to our chief executive officer and to
each of the named executive officers. Under Section 162(m) of the Code, the
annual compensation paid to any of these specified executives will be deductible
only to the extent that it does not exceed $1,000,000. However, we can preserve
the deductibility of certain compensation in excess of $1,000,000 if the
conditions of Section 162(m) are met with respect to awards. These conditions
include stockholder approval of the Incentive Plan and performance goals under
the Incentive Plan, setting individual annual limits on each type of award, and
certain other requirements. The Incentive Plan has been designed to permit the
Committee to grant awards that qualify as performance-based for purposes of
satisfying the conditions of Section 162(m), thereby permitting us to receive a
federal income tax deduction in connection with such awards if we should make
them.
Registration
with the SEC. Upon
approval of the Incentive Plan, we plan to file a Registration Statement on Form
S-8 with the SEC to register the issuance of the shares issuable under the
Incentive Plan.
Stockholder
Approval. Approval
of the Incentive Plan requires the affirmative vote of a majority of the shares
present and entitled to vote at the Annual Meeting.
Post-approval
Grants/Plan Benefits. We
currently anticipate that if the stockholders approve the Incentive Plan then
promptly after such approval we would recommend that the Committee authorize the
grant to 14 of our employees of non-statutory stock options to purchase an
aggregate of approximately 709,000 shares of our common stock representing the
options we would have granted such employees on the date of their hire or the
date we agreed to issue such options for those grants that were bonus grants;
each of these options would have an exercise price equal to the closing price on
the date we agreed to grant such option. The Committee may, however, determine
to increase the exercise price of each of these options to equal the current
market price or some other price that is higher than the closing price on the
date we agreed to issue these options. If the Committee does determine to
increase the exercise price of these options, we believe that the Committee
would also increase the number of shares subject to these options in order to
compensate for the higher exercise price. In addition, pursuant to the terms of
the Incentive Plan, an option to purchase 50,000 shares of our common stock
would be automatically granted to each of our four non-employee directors at the
first meeting of our board of directors following the Annual Meeting.
The table
below identifies with more specificity the allocation of these grants. Unless
otherwise indicated below, each
option listed below would (i) have an exercise price as indicated below, (ii)
vest with respect to 25% of the shares subject to the option on the first
anniversary of the vesting commencement date and with respect to 1/48 of the
shares subject to the option each month thereafter, (iii) expire ten years after
the vesting commencement date. The closing price of our Common Stock on April
15, 2005 was $____________.
Name
and Position |
Shares
Subject to Option |
Exercise
Price |
Vesting
Commencement Date |
Evan
Levine
Chief
Executive Officer, President,
Chief
Operating Officer and Secretary |
- |
- |
- |
Joan
M. Robbins
Chief
Technical Officer |
100,0001 |
$1.032 |
01-03-2005 |
Carrie
E. Carlander
Chief
Financial Officer, Vice President,
Finance,
and Treasurer |
200,0003 |
$0.852 |
11-17-2004 |
Cellia
Habita
Senior
Vice President, Clinical Operations |
100,0001 |
$1.032 |
01-03-2005 |
Brian
M. Culley
Vice
President, Business Development |
100,0003 |
$0.852 |
12-01-2004 |
Executive
Group |
500,0004 |
$0.925 |
see
above |
Non-Executive
Director Group |
200,000 |
(6) |
(6) |
Non-Executive
Officer Employee Group |
209,0004 |
$1.315 |
05-01-2004
to
03-21-2005 |
1 | The shares subject to this option represent the number of option shares we agreed to grant to this employee as a bonus on January 3, 2005. |
2 | The per share exercise price of this option represents the closing price of our common stock on the date we agreed to grant this option. |
3 | The shares subject to this option represent the number of option shares we agreed to grant to this employee on the date of their hire. |
4 | This share figure represents the aggregate number of shares we agreed to grant to this employee group on the date of their hire or, for bonus grants, on January 3, 2005, the effective date of these bonuses. |
5 | This exercise price represents the weighted-average closing price of our common stock on the dates we agreed to grant these option shares. |
6 | The options to be granted to non-executive directors will have an exercise price equal to 105% of the closing price of our common stock on the date of grant. We currently expect that our board of directors will meet promptly after the conclusion of our Annual Meeting. |
United
States Income Tax Considerations
The grant
of the above-listed nonqualified stock options will not result in taxable income
to the recipient. Except as described below, the recipient will realize ordinary
income at the time of exercise in an amount equal to the excess of the fair
market value of the shares acquired over the exercise price for those shares and
we will be entitled to a corresponding deduction. Gains or losses realized by
the participant upon disposition of such shares will generally be treated as
capital gains and losses, with the basis in such shares equal to the fair market
value of the shares at the time of exercise.
The
preceding discussion is based on U.S. tax laws and regulations presently in
effect, which are subject to change, and the discussion does not purport to be a
complete description of the U.S. income tax aspects of the Incentive Plan. A
participant may also be subject to state and local taxes in connection with the
grant of awards under the Incentive Plan. We suggest that participants consult
with their individual tax advisors to determine the applicability of the tax
rules to the awards granted to them in their personal
circumstances.
Exhibit
99.2
PROPOSAL
3
APPROVAL
OF
2005
EMPLOYEE STOCK PURCHASE PLAN
Our board
of directors is asking our stockholders to approve our 2005 Employee Stock
Purchase Plan (the “ESPP”). Our ESPP was adopted by our board of directors in
April 2005. The ESPP would take effect upon the approval of our stockholders and
would be administered by the board of directors or a committee named by the
board of directors would supervise and administer the ESPP. Set forth below is a
description of the terms of the ESPP. Please
see Appendix C for a complete copy of the ESPP.
General.
We may
issue a maximum of 1,000,000 shares of our Common Stock under the ESPP, subject
to an automatic increase on January 1 of each year in the number of shares
reserved for issuance equal to the lesser of (i) one percent of the number of
outstanding shares of Common Stock on such day, (ii) 750,000 and (iii) such
other amount as our board of directors may specify prior to the date such annual
increase is to take effect. The ESPP would terminate on the tenth year
anniversary of the adoption of the ESPP by our stockholders. Our board of
directors may amend or terminate the plan.
Purpose.
We
believe that employees participation in the ESPP will align more closely the
interests of the employees with the interests of the Company and our
stockholders.
Eligibility.
Any
employee of the Company who customarily works more than 20 hours per week and
more than five months in a calendar year, is eligible to participate in the
ESPP. Employees of any future subsidiary of the Company may also
participate.
Participation.
Eligible
employees may voluntarily elect to participate in the ESPP by completing a
payroll deduction authorization which is effective on the first day of the plan
year. Payroll deductions are limited to 10% of the participating employee’s base
pay for the plan year up to a maximum of $25,000 per year.
Purchase
Price. The
payroll deductions authorized by participating employees are used to purchase
newly issued shares of Common Stock from the Company at the end of each plan
year. The purchase price is the lower of 85% of the fair market value of the
shares on the first day or the last day of each offering period.
Exercise
and Withdrawal. Shares
are purchased for participating employees automatically on the last day of an
offering period, unless the participant elects in writing prior to such date not
to complete the purchase. A participant may at any time during an offering
period year give notice that he or she does not wish to continue to participate,
and all amounts withheld are then refunded with interest.
Income
Tax Consequences. The ESPP
is a “qualified” ESPP under Section 423 of the Internal Revenue Code. Under the
Internal Revenue Code, no income will result to a participant upon the purchase
of shares, and no deduction will be allowed by the Company. The gain, if any,
resulting from a disposition of the share received by a participant, is reported
according to the provisions of Section 423 of the Internal Revenue Code, and
will generally be taxed in part as ordinary income and in part as capital
gain.
Registration
with the SEC. Upon
approval of the ESPP, we plan to file a Registration Statement on Form S-8 with
the SEC to register the issuance of the shares issuable under the
ESPP.
Stockholder
Approval. Approval
of the ESPP requires the affirmative vote of a majority of the shares present
and entitled to vote at the Annual Meeting.