UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 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): March 18,
2009
PEREGRINE PHARMACEUTICALS,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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0-17085
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95-3698422
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(State
of other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Company
Identification
No.)
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14282
Franklin Avenue, Tustin, California 92780
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(Address
of Principal Executive Offices)
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Registrant’s
telephone number, including area code: (714)
508-6000
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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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 (see General Instruction A.2 below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
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o
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Soliciting
material pursuant to Rule 14A-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02 Departure Of Directors Or Principal Officers; Election Of
Directors; Appointment Of Principal Officers.
Steven
W. King
Mr.
King’s employment agreement is for an initial term of two years (the “Initial
Term”), and automatically renews for successive one-year periods thereafter
unless either party gives the other party notice of its intent not to renew at
least ninety days prior to the expiration of the current term. Because Mr.
King’s base salary had not been increased since May 7, 2006, pursuant to the
employment agreement Mr. King’s annual base salary of $353,750 was retroactively
increased by an additional five percent on each of May 1, 2007 and May 1,
2008. In accordance with the foregoing, Mr. King’s current
annual base salary is $390,009, however, under the terms of the employment
agreement, Mr. King will continue to receive only his previous annual base
salary of $353,750. The payment of the aggregate 2007 and 2008
retroactive increases to Mr. King’s annual base salary will not be paid
currently but will be deferred until the sooner of (i) a change in control event
(as defined below), (ii) termination of employment (iii) or the approval of such
payment by the Compensation Committee of the Board of Directors. Mr.
King also may be eligible to receive a discretionary annual bonus of up to one
hundred percent of his then effective annual base salary, as determined by the
Compensation Committee of the Board of Directors in its sole discretion. At this
time the Compensation Committee has not currently approved a bonus program for
Mr. King or other Principal Officers of the Company. Mr. King
is eligible to participate in all benefits plans or arrangements which may be
offered by the Company from time to time to its executive management
employees. During the employment period Mr. King shall also accrue
paid-time-off (“PTO”) covering vacation and sick time benefits at the rate of
twenty (20) days per year for employment periods of up to five years of
service. The accrual shall increase automatically by five additional
days for each additional five years of service, up to a maximum of thirty days
per year.
The
Company has the right, under the employment agreement, to terminate Mr. King’s
employment for “cause” if Mr. King (a) breaches in any material respect or
fails to fulfill in any material respect fiduciary duty owed to Company;
(b) breaches in any material respect his employment agreement or any other
confidentiality or non-solicitation, non-competition agreement between Company
and him; (c) pleads guilty to or is convicted of a felony; (d) is
found to have engaged in any reckless, fraudulent, dishonest or grossly
negligent misconduct, (e) fails to perform his duties to the Company,
provided that he fails to cure any such failure within thirty (30) days after
written notice from Company of such failure, provided further, however, that
such right to cure shall not apply to any repetition of the same failure
previously cured hereunder; or (f) violates any material rule, regulation
or policy of the Company that may be established and made known to Company's
employees from time to time, including without limitation, the Company Employee
Handbook. If terminated for “cause”, Mr. King shall have no right to
receive any compensation or benefit hereunder after such termination other than
base salary and PTO earned or accrued but unpaid as of the date of termination
(“Standard Entitlements”).
In the
event of the termination of Mr. King’s employment without cause, the Company
shall continue to pay his base salary then in effect as of the date of such
termination for a period of twelve months or the remainder of the Initial Term
(if terminated during the Initial Term), whichever time period is greater
(“Severance”), provided only if Mr. King signs a general
release. Such severance shall include the continuation of group
insurance benefits, including health and dental insurance during the severance
period and the payment of the proration of any target bonus established by the
Compensation Committee of the Board of Directors. In addition, Mr.
King shall have up to two years from the date of termination to exercise any
vested and outstanding stock options. In the event that Mr. King’s
employment is terminated by reason of death or total disability, he generally
will receive all amounts accrued but unpaid at the date of termination and, in
the case of total disability, continued group insurance benefits for a period of
twelve months following the date of termination.
In the
event Mr. King’s employment is terminated within three months prior or twelve
months following a change-of-control” (as defined below), or if Mr. King’s new
position is not substantially similar to his current position or such new
position is not satisfactory to Mr. King, or if his then current annual base
salary and related benefits are reduced or negatively impacted in any material
respect, or if Company relocates his principal place of work to a location more
than fifty (50) miles from the original location, without his prior written
approval, then, if Mr. King elects to resign within twelve months following such
change-in-control, he shall be paid a lump sum amount equivalent to thirty six
months of his annual base salary then in effect plus 100% of his target bonus
upon the execution of a general release and the continuation of group insurance
benefits for thirty-six months. In addition, any and all of Mr.
King’s unvested stock options shall become fully vested and exercisable and the
exercise period shall be extended for two (2) additional years from the date of
the change-of-control. A change-of-control shall mean any merger,
acquisition or consolidation of the Company where the Company is not the
surviving or resulting corporation, or transfer of all or substantially all of
the assets of the Company.
2
In the
event that Mr. King voluntarily resigns, and in connection therewith he provides
ninety (90) days advance written notice (the “Extended Notice Period”) to
Company, Company shall pay Mr. King his base salary then in effect and shall
continue to provide other contractual benefits including group insurance
benefits during the Extended Notice Period and for a period of nine (9) months
after the Extended Notice Period provided Mr. King makes himself telephonically
available to the Board of Directors and the executive team for up to 2 hours per
week. In the event of Mr. King’s resignation with Good Reason (as
defined below), Mr. King will be entitled to receive the Standard Entitlements
to the date of resignation plus the Company shall continue to pay Mr. King’s
base salary then in effect for a period of twelve months or the remainder of the
Initial Term, whichever time period is greater, provided only if Mr. King signs
a general release. Such severance shall include the continuation of
group insurance benefits, including health and dental insurance during the
severance period and the payment of the proration of any target
bonus. In addition, Mr. King shall have up to two years from the date
of termination to exercise any vested and outstanding stock
options. Mr. King will be deemed to have resigned with “Good Reason”
in the following circumstances: (a) Company relocates his
principal place of work to a location more than fifty (50) miles from the
original location, without Mr. King’s prior written approval; (b) Mr.
King’s position and/or duties are modified so that his duties are no longer
consistent with the position of Chief Executive Officer; (c) Mr. King’s annual
base salary and related benefits, as adjusted from time to time, are reduced
without Mr. King’s written authorization.
The
employment agreement also contains certain restrictive covenants, including a
covenant not to compete with the Company during employment and covenants not to
solicit employees or customers for a period of one year following termination of
employment.
Paul J. Lytle
Mr.
Lytle’s employment agreement is for a term of two years (the “Initial Term”),
and automatically renews for successive one-year periods thereafter unless
either party gives the other party notice of its intent not to renew at least
ninety days prior to the expiration of the current term. Because Mr. Lytle’s
base salary had not been increased since May 7, 2006, pursuant to the employment
agreement Mr. Lytle’s annual base salary of $276,188 was retroactively increased
by an additional five percent effective on each of May 1, 2007 and May 1,
2008. In accordance with the foregoing, Mr. Lytle’s current
annual base salary is $304,497, however, under the terms of the employment
agreement, Mr. Lytle will continue to receive only his previous annual base
salary of $276,188. The payment of the aggregate 2007 and 2008
retroactive increases to Mr. Lytle’s annual base salary will not be paid
currently but will be deferred until the sooner of (i) a change in control event
(as defined above), (ii) termination of employment (iii) or the approval of such
payment by the Compensation Committee of the Board of Directors. Mr.
Lytle also may be eligible to receive a discretionary annual bonus of up to
fifty percent of his then effective annual base salary, as determined by the
Compensation Committee of the Board of Directors in its sole
discretion. At this time the Compensation Committee has not currently
approved a bonus program for Mr. Lytle or other Principal Officers of the
Company. Mr. Lytle is eligible to participate in all benefits
plans or arrangements which may be offered by the Company from time to time to
its executive management employees. During the employment period Mr.
Lytle shall also accrue PTO covering vacation and sick time benefits at the rate
of twenty (20) days per year for employment periods of up to five years of
service. The accrual shall increase automatically by five additional
days for each additional five years of service, up to a maximum of thirty days
per year.
The
Company has the right, under the employment agreement, to terminate Mr. Lytle’s
employment for “cause” as defined above. If terminated for “cause”,
Mr. Lytle shall have no right to receive any compensation or benefit hereunder
after such termination other than base salary and PTO earned or accrued but
unpaid as of the date of termination (“Standard Entitlements”).
In the
event of the termination of Mr. Lytle’s employment without cause, the Company
shall continue to pay his base salary then in effect as of the date of such
termination for a period of twelve months or the remainder of the Initial Term
(if terminated during such Initial Term), whichever time period is greater
(“Severance”), provided only if Mr. Lytle signs a general
release. Such severance shall include the continuation of group
insurance benefits, including health and dental insurance during the severance
period and the payment of the proration of any target bonus established by the
Compensation Committee of the Board of Directors. In addition, Mr.
Lytle shall have up to two years from the date of termination to exercise any
vested and outstanding stock options. In the event that Mr. Lytle’s
employment is terminated by reason of death or total disability, he generally
will receive all amounts accrued but unpaid at the date of termination and, in
the case of total disability, continued group insurance benefits for a period of
twelve months following the date of termination.
3
In the
event Mr. Lytle’s employment is terminated within three months prior or twelve
months following a “change-of-control” (as defined above), or if Mr. Lytle’s new
position is not substantially similar to his current position or such new
position is not satisfactory to Mr. Lytle or if his then current annual base
salary and related benefits are reduced or negatively impacted in any material
respect, or if Company relocates his principal place of work to a location more
than fifty (50) miles from the original location, without his prior written
approval, then, if Mr. Lytle elects to resign within twelve months following
such change-in-control, he shall be paid a lump sum amount equivalent to
twenty-four months of his annual base salary then in effect plus 100% of his
target bonus upon the execution of a general release and the continuation of
group insurance benefits for twenty-four months. In addition, any and
all of Mr. Lytle’s unvested stock options shall become fully vested and
exercisable and the exercise period shall be extended for two (2) additional
years from the date of the change-of-control.
In the
event that Mr. Lytle voluntarily resigns, and in connection therewith he
provides ninety (90) days advance written notice (the “Extended Notice Period”)
to Company, Company shall pay Mr. Lytle his base salary then in effect and shall
continue to provide other contractual benefits including group insurance
benefits during the Extended Notice Period and for a period of six (6) months
after the Extended Notice Period provided Mr. Lytle makes himself telephonically
available to the Board of Directors and the executive team for up to 2 hours per
week. In the event of Mr. Lytle’s resignation with Good Reason (as
defined below) Mr. Lytle will be entitled to receive the Standard Entitlements
to the date of resignation plus the Company shall continue to pay Mr. Lytle’s
base salary then in effect for a period of twelve months or the remainder of the
Initial Term, whichever time period is greater, provided only if Mr. Lytle signs
a general release. Such severance shall include the continuation of
group insurance benefits, including health and dental insurance during the
severance period and the payment of the proration of any target
bonus. In addition, Mr. Lytle shall have up to two years from the
date of termination to exercise any vested and outstanding stock
options. Mr. Lytle will be deemed to have resigned with “Good Reason”
in the following circumstances: (a) Company relocates his
principal place of work to a location more than fifty (50) miles from the
original location, without Mr. Lytle’s prior written approval; (b) Mr.
Lytle’s position and/or duties are modified so that his duties are no longer
consistent with the position of Chief Financial Officer; (c) Mr. Lytle’s annual
base salary and related benefits, as adjusted from time to time, are reduced
without Mr. Lytle’s written authorization.
The
employment agreement also contains certain restrictive covenants, including a
covenant not to compete with the Company during employment and covenants not to
solicit employees or customers for a period of one year following termination of
employment.
Joseph Shan
Mr.
Shan’s employment agreement is for an initial term of one year (the “Initial
Term”), and automatically renews for successive one-year periods thereafter
unless either party gives the other party notice of its intent not to renew at
least ninety days prior to the expiration of the current
term. Pursuant to the employment agreement, Mr. Shan’s annual base
salary was retroactively increased to $203,490 effective as of March 2, 2008, an
increase of five percent over his most recent annual base salary, with payment
of such increase to commence immediately with the Company’s next pay period
(including a one-time adjustment equal to the unpaid portion of such increase
from March 2, 2008). Mr. Shan also may be eligible to receive a
discretionary annual bonus of up to thirty percent of his then effective annual
base salary, as determined by the Compensation Committee of the Board of
Directors in its sole discretion. Mr. Shan is eligible to participate
in all benefits plans or arrangements which may be offered by the Company from
time to time to its executive management employees. During the
employment period Mr. Shan shall also accrue PTO covering vacation and sick time
benefits at the rate of twenty (20) days per year for employment periods of up
to five years of service. The accrual shall increase automatically by
five additional days for each additional five years of service, up to a maximum
of thirty days per year.
The
Company has the right, under the employment agreement, to terminate Mr. Shan’s
employment for “cause” as defined above. If terminated for “cause”,
Mr. Shan shall have no right to receive any compensation or benefit hereunder
after such termination other than base salary and PTO earned or accrued but
unpaid as of the date of termination (“Standard Entitlements”).
In the
event of the termination of Mr. Shan’s employment without cause, the Company
shall continue to pay his base salary then in effect as of the date of such
termination for a period of nine months or the remainder of the current one-year
term, whichever time period is greater (“Severance”), provided only if Mr. Shan
signs a general release. Such severance shall include the
continuation of group insurance benefits, including health and dental insurance
during the severance period and the payment of the proration of any target bonus
established by the Compensation Committee of the Board of
Directors. In addition, Mr. Shan shall have up to twelve months from
the date of termination to exercise any vested and outstanding stock
options. In the event that Mr. Shan’s employment is terminated by
reason of death or total disability, he generally will receive all amounts
accrued but unpaid at the date of termination and, in the case of total
disability, continued group insurance benefits for a period of nine months
following the date of termination.
4
In the
event Mr. Shan’s employment is terminated within three months prior or twelve
months following a “change-of-control” (as defined above), or if Mr. Shan’s new
position is not substantially similar to his current position or such new
position is not satisfactory to Mr. Shan or if his then current annual base
salary and related benefits are reduced or negatively impacted in any material
respect, or if Company relocates his principal place of work to a location more
than fifty (50) miles from the original location, without his prior written
approval, then, if Mr. Shan elects to resign within twelve months following such
change-in-control, he shall be paid a lump sum amount equivalent to twelve
months of his annual base salary then in effect plus 100% of his target bonus
upon the execution of a general release and the continuation of group insurance
benefits for twelve months. In addition, any and all of Mr. Shan’s
unvested stock options shall become fully vested and exercisable and the
exercise period shall be extended for an additional twelve months from the date
of the change-of-control.
In the
event that Mr. Shan voluntarily resigns, and in connection therewith he provides
sixty (60) days advance written notice (the “Extended Notice Period”) to
Company, Company shall pay Mr. Shan his base salary then in effect and shall
continue to provide other contractual benefits including group insurance
benefits during the Extended Notice Period and for a period of two (2) months
after the Extended Notice Period provided Mr. Shan makes himself telephonically
available to the Board of Directors and the executive team for up to 2 hours per
week. In the event of Mr. Shan’s resignation with Good Reason (as
defined below) he will be entitled to receive the Standard Entitlements to the
date of resignation plus the Company shall continue to pay Mr. Shan’s base
salary then in effect for a period of nine months or the remainder of the then
current one-year term, whichever time period is greater, provided only if Mr.
Shan signs a general release. Such severance shall include the
continuation of group insurance benefits, including health and dental insurance
during the severance period and the payment of the proration of any target
bonus. In addition, Mr. Shan shall have up to twelve months from the
date of termination to exercise any vested and outstanding stock
options. Mr. Shan will be deemed to have resigned with “Good Reason”
in the following circumstances: (a) Company relocates his
principal place of work to a location more than fifty (50) miles from the
original location, without Mr. Shan’s prior written approval; (b) Mr.
Shan’s position and/or duties are modified so that his duties are no longer
consistent with the position of Vice President, Clinical and Regulatory Affairs;
(c) Mr. Shan’s annual base salary and related benefits, as adjusted from time to
time, are reduced without Mr. Shan’s written authorization.
The
employment agreement also contains certain restrictive covenants, including a
covenant not to compete with the Company during employment and covenants not to
solicit employees or customers for a period of one year following termination of
employment.
Shelley
P.M. Fussey, Ph.D
Dr.
Fussey’s employment agreement is for a term of one year (the “Initial Term”),
and automatically renews for successive one-year periods thereafter unless
either party gives the other party notice of its intent not to renew at least
ninety days prior to the expiration of the current term. Pursuant to
the employment agreement, Dr. Fussey’s annual base salary was retroactively
increased to $275,000 effective as of April 7, 2008, an increase of ten percent
over her most recent annual base salary, with payment of such increase to
commence immediately with the Company’s next pay period (including a one-time
adjustment equal to the unpaid portion of such increase from April 7,
2008). Dr. Fussey also may be eligible to receive a discretionary
annual bonus of up to thirty percent of her then effective annual base salary,
as determined by the Compensation Committee of the Board of Directors in its
sole discretion. Dr. Fussey is eligible to participate in all
benefits plans or arrangements which may be offered by the Company from time to
time to its executive management employees. During the employment
period Dr. Fussey shall also accrue PTO covering vacation and sick time benefits
at the rate of twenty (20) days per year for employment periods of up to five
years of service. The accrual shall increase automatically by five
additional days for each additional five years of service, up to a maximum of
thirty days per year.
The
Company has the right, under the employment agreement, to terminate Dr. Fussey’s
employment for “cause” as defined above. If terminated for “cause”,
Dr. Fussey shall have no right to receive any compensation or benefit hereunder
after such termination other than base salary and PTO earned or accrued but
unpaid as of the date of termination (“Standard Entitlements”).
In the
event of the termination of Dr. Fussey’s employment without cause, the Company
shall continue to pay her base salary then in effect as of the date of such
termination for a period of nine months or the remainder of the current
one-term, whichever time period is greater (“Severance”), provided only if Dr.
Fussey signs a general release. Such severance shall include the
continuation of group insurance benefits, including health and dental insurance
during the severance period and the payment of the proration of any target bonus
established by the Compensation Committee of the Board of
Directors. In addition, Dr. Fussey shall have up to twelve months
from the date of termination to exercise any vested and outstanding stock
options. In the event that Dr. Fussey’s employment is terminated by
reason of death or total disability, she generally will receive all amounts
accrued but unpaid at the date of termination and, in the case of total
disability, continued group insurance benefits for a period of nine months
following the date of termination.
5
In the
event Dr. Fussey’s employment is terminated within three months prior or twelve
months following a “change-of-control” (as defined above), or if Dr. Fussey’s
new position is not substantially similar to her current position or such new
position is not satisfactory to Dr. Fussey or if her then current annual base
salary and related benefits are reduced or negatively impacted in any material
respect, or if Company relocates her principal place of work to a location more
than fifty (50) miles from the original location, without her prior written
approval, then, if Dr. Fussey elects to resign within twelve months following
such change-in-control, she shall be paid a lump sum amount equivalent to twelve
months of her annual base salary then in effect plus 100% of her target bonus
upon the execution of a general release and the continuation of group insurance
benefits for twelve months. In addition, any and all of Dr. Fussey’s
unvested stock options shall become fully vested and exercisable and the
exercise period shall be extended for an additional twelve months from the date
of the change-of-control.
In the
event that Dr. Fussey voluntarily resigns, and in connection therewith she
provides sixty (60) days advance written notice (the “Extended Notice Period”)
to Company, Company shall pay Dr. Fussey her base salary then in effect and
shall continue to provide other contractual benefits including group insurance
benefits during the Extended Notice Period and for a period of two (2) months
after the Extended Notice Period provided she makes herself telephonically
available to the Board of Director and the executive team for up to 2 hours per
week. In the event of Dr. Fussey’s resignation with Good Reason (as
defined below) she will be entitled to receive the Standard Entitlements to the
date of resignation plus the Company shall continue to pay Dr. Fussey’s base
salary then in effect for a period of nine months or the remainder of the then
current one-year term, whichever time period is greater, provided only if Dr.
Fussey signs a general release. Such severance shall include the
continuation of group insurance benefits, including health and dental insurance
during the severance period and the payment of the proration of any target
bonus. In addition, Dr. Fussey shall have up to twelve months from
the date of termination to exercise any vested and outstanding stock
options. Dr. Fussey will be deemed to have resigned with “Good
Reason” in the following circumstances: (a) Company relocates
her principal place of work to a location more than fifty (50) miles from the
original location, without Dr. Fussey’s prior written approval; (b) Dr.
Fussey’s position and/or duties are modified so that her duties are no longer
consistent with the position of Vice President, Intellectual Property; (c) Dr.
Fussey’s annual base salary and related benefits, as adjusted from time to time,
are reduced without Dr. Fussey’s written authorization.
The
employment agreement also contains certain restrictive covenants, including a
covenant not to compete with the Company during employment and covenants not to
solicit employees or customers for a period of one year following termination of
employment.
6
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.
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PEREGRINE
PHARMACEUTICALS, INC.
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Date:
March 18, 2009
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By: /s/
Steven W.
King
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Steven
W. King
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President
and Chief Executive
Officer
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7