Attached files
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EX-10.3 - EX-10.3 - SELLAS Life Sciences Group, Inc. | b85913exv10w3.htm |
EX-10.2 - EX-10.2 - SELLAS Life Sciences Group, Inc. | b85913exv10w2.htm |
EX-99.1 - EX-99.1 - SELLAS Life Sciences Group, Inc. | b85913exv99w1.htm |
EX-10.1 - EX-10.1 - SELLAS Life Sciences Group, Inc. | b85913exv10w1.htm |
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): March 30, 2011
RXi Pharmaceuticals Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
(State or other jurisdiction of incorporation)
20-8099512 | ||
001-33958 (Commission File Number) |
(IRS Employer Identification No.) |
60 Prescott Street, Worcester, MA 01605
(Address of principal executive offices and Zip Code)
(Address of principal executive offices and Zip Code)
(508) 767-3861
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K 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-14(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
On March 31, 2011, RXi Pharmaceuticals Corporation (the Company), Diamondback Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of the Company (Merger Sub), Apthera,
Inc., a Delaware corporation (Apthera), and Robert E. Kennedy, in his capacity as representative
of Aptheras stockholders (the Stockholder Representative), entered into an Agreement and Plan of
Merger (the Merger Agreement).
Subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and
into Apthera, with Apthera surviving as a wholly-owned subsidiary of the Company (the Merger).
Pursuant to the Merger Agreement, the aggregate merger consideration that the Company will pay to
Aptheras stockholders consists of (i) 19.9% of the number of shares of the Companys common stock
issued and outstanding as of the date of the Merger Agreement, or approximately 4.8 million shares
of common stock (the Aggregate Stock Consideration); and (ii) contingent payments of up to $32
million (the Contingent Consideration) based on the achievement of certain development and
commercial milestones relating to Aptheras NeuVax product candidate. The payment of the
Contingent Consideration will be subject to and in accordance with the terms of a Contingent Value
Rights Agreement to be entered into between the Company and the Stockholder Representative in
connection with the Merger (the CVR Agreement). Under the CVR Agreement, a form of which is
attached to the Merger Agreement as Exhibit A, the Contingent Consideration is payable, at the
election of the Company, in either cash or additional shares of common stock; provided, however,
that the Company may not issue any shares in satisfaction of any Contingent Consideration unless it
has first obtained approval of its stockholders in accordance with Rule 5635(a) of the NASDAQ
Listing Rules.
The Merger Agreement provides that the Company and the Stockholder Representative will also
enter into an escrow agreement (the Escrow Agreement), pursuant to which the Company shall
deposit with a third-party escrow agent certificates representing 10% of the Aggregate Stock
Consideration (the Escrow Shares). Pursuant to the terms of the Escrow Agreement, a form of
which is attached to the Merger Agreement as Exhibit B, the Escrow Shares will be available to
compensate the Company and related parties for certain indemnifiable losses as described in the
Merger Agreement.
The transaction is subject to customary closing conditions, including the approval of
Aptheras stockholders. Certain of Aptheras stockholders, holding an aggregate of approximately
62.6% of Aptheras common stock as of March 31, 2011, have entered into voting agreements with
Merger Sub, pursuant to which such stockholders have agreed, subject to the terms thereof, to vote
their shares in favor of adoption of the Merger Agreement and the Merger and against any
acquisition proposal by a third party.
Under the Merger Agreement, the Company has agreed to file, within 10 days of the closing date
of the Merger, a Registration Statement on Form S-3 with the Securities and Exchange Commission,
registering the resale of the shares representing the Aggregate Stock Consideration.
The foregoing summary of the material terms of the Merger Agreement is qualified in its
entirety by reference to the complete agreement (including Exhibits A and B thereto), a copy of
which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The
representations, warranties and covenants contained in the Merger Agreement were made only for the
purposes of that agreement and as of specified dates, were solely for the benefit of the parties to
such agreement, and may be subject to limitations and standards of materiality defined by the
contracting parties that differ from those applicable to investors. In addition, the statements in
the representations and warranties contained in the Merger Agreement are qualified by information
in a confidential disclosure schedule that the parties have
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exchanged, which has been omitted from Exhibit 10.1 pursuant to Item 601(b)(2) of Regulation S-K.
Accordingly, investors should not rely on the representations and warranties set forth in the
Merger Agreement as characterizations of the actual state of facts.
On March 31, 2011, the Company issued a press release announcing, among other things, its
entry into the Merger Agreement, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Item 2.05 | Costs Associated with Exit or Disposal Activities. |
The information set forth above under Item 1.01 regarding the Merger Agreement and the Merger
is incorporated by reference into this Item 2.05.
On March 31, 2011, following the announcement
of the Companys entry into the Merger Agreement, the Company committed to the implementation of a
reduction in force of approximately 20 employees in order to streamline the Companys operations
following the Merger.
The Company expects to have substantially completed the reduction in
force within the next 30 days. However, as of the date of this
report, the Company is unable to determine the charges it expects to
incur in accordance with generally accepted accounting principles as
a result of such action. The Company will amend this report following
such determination in order to disclose the information requested by
paragraphs (b), (c) and (d) Item 2.05 of Form 8-K.
Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth above under Item 1.01 regarding the Merger Agreement and the Merger
is incorporated by reference into this Item 3.02. Upon consummation of the Merger, the Aggregate
Stock Consideration will be issued in a private placement transaction exempt from registration
under the Securities Act of 1933, as amended (the Act) by reason of Section 4(2) thereof and/or
Regulation D promulgated under the Act.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignation of President and Chief Executive Officer
On March 30, 2011, the Company and Noah D. Beerman, the Companys President and Chief
Executive Officer, entered into an agreement and release (the Separation Agreement). Pursuant to
the Separation Agreement, the parties agreed that Mr. Beermans employment with the Company would
terminate on March 31, 2011 (the Separation Date). Mr. Beerman also resigned as a director of
the Company as of the Separation Date.
Under the Separation Agreement, and in lieu of any compensation that was otherwise payable to
Mr. Beerman pursuant to the employment agreement between the Company and Mr. Beerman dated November
5, 2009, the Company agreed to make a lump sum payment to Mr. Beerman in the amount of $122,500 and
to grant Mr. Beerman a stock award under the Plan consisting of 201,342 shares of common stock (the
Severance Shares), which was determined by dividing $300,000 by $1.49,
the closing price of the Companys common stock on April 1, 2011 (the Issue Price). The
Severance Shares shall be subject to certain lock-up restrictions for a period of 90 days following
the Separation Date with respect to one-third of the Severance Shares, and for a period of 180 days
following the Separation Date with respect to two-thirds of the Severance Shares (each such date on
which the lock-up restrictions expire, a Release Date). In the event the average closing price
of the Companys common
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stock for the five trading days preceding the applicable Release Date is lower than the Issue
Price, Mr. Beerman will be issued an additional number of Severance Shares or, at the Companys
election, a cash payment, or a combination of Severance Shares and a cash payment, such that Mr.
Beerman will receive the total value of $100,000 or $200,000, as applicable, with respect to the
tranche of Severance Shares being released from the lock-up restrictions as of the corresponding
Release Date.
Pursuant to the Separation Agreement, the Company also accelerated the vesting of the stock
option award granted to Mr. Beerman on November 5, 2009, relating to 350,000 shares of the
Companys common stock (the 2009 Award), such that the number of shares scheduled to vest during
the twelve-month period following the Separation Date vested in full and became immediately
exercisable as of the Separation Date. Accordingly, as of the Separation Date, the 2009 Award
represented the right to purchase 196,875 shares of the Companys common stock at an exercise price
of $2.19 per share, with the remaining 153,125 shares subject to the 2009 Award being forfeited.
The Separation Agreement provides that all vested stock options held by Mr. Beerman as of the
Separation Date will remain exercisable for a period of 90 days following the Separation Date.
The Separation Agreement also provides for a mutual release of claims that either party may
have against the other. The foregoing summary of the material terms of the Separation Agreement is
qualified in its entirety by reference to the complete agreement, a copy of which is attached
hereto as Exhibit 10.2 and incorporated herein by reference.
Appointment of President and Chief Executive Officer
On March 31, 2011 (the Effective Date), the Companys Board of Directors (the Board)
appointed Mark J. Ahn, Ph.D., currently a director of the Company, to serve as its President and
Chief Executive Officer. Dr. Ahn, 48, has over 20 years of experience in the biopharmaceutical
industry and has served as a director since 2007. Dr. Ahn has most recently served as a Principal
of Pukana Partners, Ltd., which provides strategic consulting to life science companies, and in
academic positions at the Atkinson Graduate School of Management, Willamette University, and Chair,
Science & Technology Management, at Victoria University at Wellington, New Zealand. Prior to that
he was founder, President and Chief Executive Officer and a member of the board of directors for
Hana Biosciences from 2003 to 2007. Prior to joining Hana, he served as Vice President, Hematology
and corporate officer at Genentech, Inc. where he was responsible for commercial and clinical
development of the Hematology franchise from 2001 through 2003. Dr. Ahn was also employed by Amgen
(1990 to 1997) and Bristol-Myers Squibb Company (1997 to 2001), holding a series of positions of
increasing responsibility in strategy, general management, sales and marketing, business
development, and finance. He also serves on the board of directors of Access Pharmaceuticals and
Mesynthes. Dr. Ahn received a BA and MBA from Chaminade University, where he currently serves on
the Board of Governors. He was a graduate fellow in Economics at Essex University, and has a Ph.D.
from the University of South Australia. Dr. Ahn is a Henry Crown Fellow at the Aspen Institute.
Dr. Ahn does not have a family relationship with any member of the Companys board of directors or
any executive officer of the Company.
The terms of Dr. Ahns employment with the Company are set forth in an Employment Agreement
dated as of the Effective Date (the Employment Agreement). The Employment Agreement provides for
a three-year term expiring on March 30, 2014 (the Term) and that Dr. Ahn will receive an initial
annual base salary of $400,000. However, Dr. Ahns base salary will be reduced to $350,000 if the
Company fails to complete a financing transaction with net proceeds of at least $5 million by
September 1, 2011 (the Minimum 2011 Financing), and will be increased to $425,000 if the Company
completes a financing transaction with net proceeds of at least $7.5 million by September 1, 2011.
Dr. Ahn will also be eligible to receive an annual performance bonus, the amount of which shall be
determined by the
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Board in its sole discretion upon the recommendation of the compensation committee thereof,
provided that the amount of such bonus shall in any event be not less than $100,000 for each year
of the Term.
Pursuant to the Employment Agreement, on the Effective Date, Dr. Ahn also received a signing
bonus of $100,000 and was granted a 10-year stock option (the Signing Option) to purchase 100,000
shares of the Companys common stock at an exercise price of $1.38 per share. The Signing Option
was awarded pursuant to the Companys Amended and Restated 2007 Stock Incentive Plan (the Plan)
and was fully-vested and immediately-exercisable upon the date of grant. Further, Dr. Ahn was
granted a 10-year stock option (the Regular Option, and together with the Signing Option, the
Stock Options) to purchase 525,000 shares of the Companys common stock at an exercise price of
$1.38 per share. The right to purchase the shares subject to the Regular Option vest and become
exercisable (i) as to 300,000 shares in eight equal quarterly installments beginning on June 30,
2011, (ii) as to 50,000 shares upon the Companys common stock trading at a minimum closing price
of $3.00 per share for 30 consecutive trading days, (iii) as to 75,000 shares upon the Companys
common stock trading at a minimum closing price of $4.00 per share for 30 consecutive trading days,
and (iv) as to 100,000 shares upon the Companys common stock trading at a minimum closing price of
$5.00 per share for 30 consecutive trading days; provided, in each case, that Dr. Ahn remains in
the continuous employ of the Company through such vesting date. The Regular Options shall vest in
full and become exercisable as to all 525,000 shares upon the occurrence of a Covered
Transaction, as such term is defined in the Plan.
The Employment Agreement provides that if the Company terminates Dr. Ahns employment without
cause (as defined in the Employment Agreement) during the Term or if he terminates his employment
for good reason (as defined in the Employment Agreement) then he is entitled to: (i) continue
receiving his then current annualized base salary and medical benefits for a period of six months
following such termination, which period increases to twelve months upon the completion of the
Minimum 2011 Financing (the Severance Period), and (ii) continued vesting under the Regular
Option for the duration of the Severance Period.
The foregoing summary of the material terms of the Employment Agreement is qualified in its
entirety by reference to the complete agreement, a copy of which is attached hereto as Exhibit 10.3
and incorporated herein by reference. On March 31, 2011, the Company issued a press release
announcing, among other things, the appointment of Dr. Ahn, a copy of which is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
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Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Description | |||
10.1 | Agreement and Plan of Merger by and among RXi Pharmaceuticals
Corporation, Diamondback Acquisition Corp., Apthera, Inc. and Robert E.
Kennedy, in his capacity as the Stockholder Representative, dated March 31, 2011.* |
|||
10.2 | Separation Agreement between RXi Pharmaceuticals Corporation and Noah D.
Beerman, dated March 30, 2011. |
|||
10.3 | Employment Agreement between RXi Pharmaceuticals Corporation and Mark J.
Ahn, Ph.D., dated March 31, 2011. |
|||
99.1 | Press Release issued by RXi Pharmaceuticals Corporation on March 31, 2011. |
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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.
Date: April 5, 2011 | RXi Pharmaceuticals Corporation |
|||
By: | /s/ Mark J. Ahn | |||
Mark J. Ahn | ||||
President & Chief Executive Officer | ||||
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EXHIBIT INDEX
Exhibit No. | Description | |||
10.1 | Agreement and Plan of Merger by and among RXi Pharmaceuticals
Corporation, Diamondback Acquisition Corp., Apthera, Inc. and Robert E.
Kennedy, in his capacity as the Stockholder Representative, dated March 31, 2011. |
|||
10.2 | Separation Agreement between RXi Pharmaceuticals Corporation and Noah D.
Beerman, dated March 30, 2011. |
|||
10.3 | Employment Agreement between RXi Pharmaceuticals Corporation and Mark J.
Ahn, Ph.D., dated March 31, 2011. |
|||
99.1 | Press Release issued by RXi Pharmaceuticals Corporation on March 31, 2011. |