CASC Cascadian Therapeutics, Inc. (delisted)

 

 

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): January 9, 2016

 

 

ONCOTHYREON INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-33882		26-0868560
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

2601 Fourth Avenue, Suite 500

Seattle, Washington 98121

(Address of principal executive offices, including zip code)

(206) 801-2100

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

 

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):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01

Entry into a Material Definitive Agreement

On January 11, 2016, Oncothyreon Inc. (the “Company”) entered into a letter agreement (the “Letter Agreement”) with each of BVF Partners L.P. (“BVF Partners”), Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., BVF Partners OS Ltd. and BVF Inc. (collectively, “BVF”), which have combined voting power over approximately 19.8% of the outstanding shares of the Company’s common stock. Under the Letter Agreement, the Company agreed that the Corporate Governance and Nominating Committee of the Company’s Board of Directors (the “Board”) will recommend for election and the Board agreed to nominate for election up to two (2) individuals designated by BVF for nomination to the Board (each individual, a “Designee”).

Under the Letter Agreement, the Company agreed to appoint one Designee to fill an existing vacancy on the Board, as a Class I director with a term expiring at the 2017 annual meeting of the Company’s stockholders (the “2017 Annual Meeting”). On January 9, 2016, the Board approved such appointment, appointing Mark Lampert, President of BVF Partners to the Board, effective upon execution of the Letter Agreement.

Under the Letter Agreement, the Company also agreed to appoint Dr. Gwen Fyfe, M.D., to fill a newly created vacancy on the Board, as a Class III Director with a term expiring at the 2016 annual meeting of the Company’s stockholders (the “2016 Annual Meeting”). In the event that Dr. Fyfe is unwilling or unable to serve on the Board, the Company agreed to appoint an additional BVF Designee to fill such vacancy, with a term expiring at the 2016 Annual Meeting. On January 9, 2016, the Board approved such appointment, appointing Dr. Fyfe to the Board, effective upon execution of the Letter Agreement.

Under the Letter Agreement, BVF has agreed to certain standstill restrictions until the expiration of the Letter Agreement. These standstill restrictions include not (i) initiating or publicly supporting any proposal or indication of interest for, or offer with respect to the recapitalization, reorganization or liquidation of the Company; (ii) seeking or proposing to influence, advise, change or control the management, the Board, governing instruments or policies or affairs of the Company; (iii) submitting any stockholder proposal (pursuant to Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”)) or any notice of nomination or other business for consideration, or nominating any candidate for election to the Board, except as permitted under the Letter Agreement; (iv) publicly seeking election of or publicly seeking to place a director on the Board, or publicly seeking the removal of any director of the Company; (v) forming or joining a “partnership, limited partnership, syndicate or other group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the common stock of the Company; or (vi) acquiring, or offering to acquire securities of the Company that would result in BVF beneficially owning more than 19.9% of the outstanding common stock of the Company.

The foregoing description of the terms and conditions of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Increase of Board Size and Election of Directors

In addition to the appointments described in Item 1.01 above, which disclosure is incorporated into this Item 5.02 by reference, on January 11, 2016 the Board decreased the size of the Board from seven (7) to six (6) members in order to eliminate an existing Class II vacancy on the Board. The Board then subsequently increased the size of the Board from six (6) to seven (7) members, adding one Class I vacancy to the Board.

The Board appointed Mr. Lampert as a member of the Board as a Class I director, for a term expiring at the 2017 Annual Meeting and Dr. Fyfe as a member of the Board as a Class III director, for a term expiring at the 2016 Annual Meeting, each effective upon execution of the Letter Agreement. Mr. Lampert is an affiliate of BVF Partners and its related affiliates, and such entities have combined voting power over approximately 19.8% of the outstanding shares of the Company’s common stock. On February 6, 2015, affiliates of BVF Partners purchased 1,333 shares of Series B Convertible Preferred Stock of the Company at a price of $1,500.00 per share.

 

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In accordance with the Company’s existing compensation policy with respect to annual cash fees for non-employee directors, Dr. Fyfe will receive an annual cash fee of $50,000, which will be prorated during 2016. Mr. Lampert has waived his annual cash fee of $50,000. The Company also intends to enter into its standard form of indemnification agreement with Mr. Lampert and Dr. Fyfe. A form of the indemnification agreement was previously filed by the Company as Exhibit 10.1 to the Company’s Registration Statement on Form S-4 (File No. 333-145995), originally filed with the Securities and Exchange Commission on September 12, 2007, as subsequently amended.

A copy of a press release, dated January 11, 2016, announcing the appointment of Mr. Lampert and Dr. Fyfe to the Board is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.

Departure of Chief Executive Officer

On January 11, 2016, Dr. Robert Kirkman, M.D., President and Chief Executive Officer of the Company and member of the Board, informed the Board of his intention to resign from his roles at the Company, effective as of January 11, 2016 (the “Effective Date”), and the independent members of the Board approved Dr. Christopher Henney, Ph.D., as Interim Chief Executive Officer and President of the Company. The Company has begun a search for a replacement for Dr. Kirkman and the Board has established a new committee to oversee a search to identify a new President and Chief Executive Officer of the Company, which Committee consists of Dr. Ted Love, M.D., Steven James and Mark Lampert.

In connection with the resignation, Dr. Kirkman and the Company entered into a Retirement and Separation Agreement (the “Separation Agreement”), effective as of January 11, 2016. Under the terms of the Amendment and Separation Agreement, Dr. Kirkman is entitled to receive the following severance and benefits:

 

•

accrued compensation, including (i) earned salary, (ii) any earned bonus that would have been paid to Dr. Kirkman with respect to fiscal year 2015, (iii) any accrued, but unused vacation, and (iv) reimbursement of outstanding expenses;

 

•

a cash payment equal to $1,620,000, payable in one lump sum following the Effective Date;

 

•

full acceleration of all of the shares of our common stock underlying any then-outstanding unvested stock options held by Dr. Kirkman; and

 

•

100% of the COBRA premium which would otherwise be due under the Company’s group health plan through December 31, 2016.

The foregoing description of the terms and conditions of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.2 and incorporated herein by reference. A copy of a press release, dated January 11, 2016, announcing Dr. Kirkman’s resignation is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.

Appointment of Dr. Christopher Henney as Interim President and Chief Executive Officer

In connection with Dr. Kirkman’s resignation, the Board appointed Dr. Christopher Henney, Ph.D. as the Company’s Interim President and Chief Executive Officer effective January 11, 2016. Dr. Henney, who is 74 years old, has served as the chairman of the Board since September 2006 and as a member of the Board since March 2005. Dr. Henney is also a member of the Company’s Compensation Committee and Corporate Governance and Nominating Committees. Dr. Henney currently serves as vice-chairman of the board of directors of Cyclacel Pharmaceuticals, Inc., a development-stage biopharmaceuticals company, chairman of the board of directors of Anthera Pharmaceuticals, Inc., a biopharmaceutical company and as a member of the board of directors of Prothena Corporation plc, a biotechnology company. Dr. Henney has extensive experience working with biotechnology companies from founding until late stage clinical development of their product candidates. There are no family relationships between Dr. Henney and any director or executive officer of the Company. There is no arrangement or

 

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understanding between Dr. Henney and any other person pursuant to which Dr. Henney was selected as President and Chief Executive Officer. There are no transactions involving Dr. Henney requiring disclosure under Item 404(a) of Regulation S-K.

A copy of a press release, dated January 11, 2016, announcing the appointment of Dr. Henney as Interim President and Chief Executive Officer of the Company is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.

Retention Payment Plan

On January 9, 2016, the Company adopted a Retention Payment Plan, effective as of January 11, 2016 (the “Retention Plan”), to provide cash retention payments to certain employees of the Company in order to induce such employees to remain employed by the Company through January 10, 2017 (the “Retention Date”). Any employee who participates in the Retention Plan and (i) remains continuously employed by the Company through the Retention Date or (ii) has been terminated by the Company other than for cause prior to the Retention Date, shall be paid a lump-sum cash payment as determined on an individual basis. If such employee terminates service for any reason other than termination of employment by the Company without cause prior to the Retention Date, no such payments shall be made.

For purposes of the Retention Plan, “cause” means (i) failure or refusal by such employee to substantially perform his or her duties with the Company (except where the failure results from incapacity due to disability); or (ii) severe misconduct or activity deemed detrimental to the interests of the Company, as further described in the Retention Plan.

The foregoing description of the terms and conditions of the Retention Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Retention Plan, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.3 and incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits.

 

Exhibit Number		Description
10.1		Letter Agreement, by and among Oncothyreon Inc., BVF Partners L.P., Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., BVF Partners OS Ltd. and BVF Inc., dated January 11, 2016.
10.2		Retirement and Separation Agreement, by and between Oncothyreon Inc. and Robert Kirkman, effective as of January 11, 2016.
10.3		Oncothyreon Inc. Retention Payment Plan
99.1		Press Release issued by Oncothyreon Inc. dated January 11, 2016, announcing the election of Mr. Lampert and Dr. Fyfe to the Board, the retirement of Dr. Kirkman and appointment of Dr. Henney as Interim President and Chief Executive Officer.

 

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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.

 

Date: January 11, 2016

 

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EXHIBIT INDEX

 

Exhibit Number		Description
10.1		Letter Agreement, by and among Oncothyreon Inc., BVF Partners L.P., Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., BVF Partners OS Ltd. and BVF Inc., dated January 11, 2016.
10.2		Retirement and Separation Agreement, by and between Oncothyreon Inc. and Robert Kirkman, effective as of January 11, 2016.
10.3		Oncothyreon Inc. Retention Payment Plan
99.1		Press Release issued by Oncothyreon Inc. dated January 11, 2016, announcing the election of Mr. Lampert and Dr. Fyfe to the Board, the retirement of Dr. Kirkman and appointment of Dr. Henney as Interim President and Chief Executive Officer.

 

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Exhibit 10.1

 

January 11, 2016

BVF Partners L.P.

Biotechnology Value Fund, L.P.

Biotechnology Value Fund II, L.P.

BVF Inc.

One Sansome Street, 30th Floor

San Francisco, CA 94104

Biotechnology Value Trading Fund OS, L.P.

BVF Partners OS Ltd.

PO Box 309

Ugland House

Grand Cayman KY1-1104

Cayman Islands

Ladies and Gentlemen:

In exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Oncothyreon Inc., a Delaware corporation (the “Company”), and each of BVF Partners L.P. (“BVF”), Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., BVF Partners OS Ltd. and BVF Inc. (each, individually, a “Stockholder” and, collectively, the “Stockholders”), agree as follows:

 

1.

Board Nomination Rights.

a. Effective as of the date hereof, and solely to the extent the below named persons wish to stand for election or serve as directors, the Company agrees that the Corporate Governance and Nominating Committee (or a duly constituted subcommittee thereof) (the “Nominating Committee”) of the Board of Directors of the Company (the “Board”) shall recommend for election and the Board agrees to nominate for election up to two (2) individuals in the aggregate, pursuant to Sections 1(b) and 1(c) below, to be confidentially designated by BVF for nomination by the Board (the “Designation Right”) to serve as directors of the Board in accordance with this Section 1, subject to the consent of the Nominating Committee and the Board with respect to each such designee, which consent is not to be unreasonably withheld, and which consent shall be deemed automatically given with respect to a designee if that designee is either Mark Lampert or Matthew Perry unless such individual is or subsequently becomes a “bad actor” within the meaning of Rule 506 of Regulation D under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (it being understood that if the Nominating Committee and the Board does not approve a given BVF designee, then BVF shall be entitled to confidentially designate one or more additional candidates until such time as such designees have actually been appointed to the Board pursuant to Sections 1(b) and 1(c)). Each individual designated confidentially by BVF to serve as a director of the Board pursuant to the Designation Right and who is appointed and/or nominated to the Board is referred to herein as a “Designee”. For the avoidance of doubt, other than the persons appointed to the Board pursuant to the Designation Right and pursuant to Section 1(d), the nomination of any other individual for election to the Board remains at the sole discretion of the Board and the Nominating Committee. If a Designee resigns or is unable to serve for any reason, the Stockholders may select a replacement Designee who shall be nominated pursuant to the terms of this Section 1.

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b. One Designee (the “Class I Designee”) shall initially be recommended by the Nominating Committee and appointed by the Board concurrent with the execution of this Letter Agreement to fill a vacancy on the Board and serve as a Class I director (as described in Article VI of the Company’s current Amended and Restated Certificate of Incorporation (the “Current Charter”), whose term will expire at the 2017 annual meeting of the Company’s stockholders. At each subsequent election at which the Class I directors are to be elected to the Board, the Class I Designee (or his or her successor designated pursuant to Section 1(a) or Section 1(e)) shall be nominated by the Board for election to the Board as a Class I director. In the event that the Company’s stockholders do not elect the Class I Designee to the Board at any meeting of stockholders at which such Class I Designee stands for election, then the Designation Right shall automatically terminate with respect to such Class I Designee.

c. Solely in the event that Dr. Fyfe is unwilling or unable to serve on the Board pursuant to Section 1(d) below, the Stockholders shall be entitled to designate one Designee (the “Class III Designee”) who shall initially be recommended by the Nominating Committee and appointed by the Board and serve as a Class III director (as described in Article VI of the Current Charter) whose term will expire at the 2016 annual meeting of the Company’s stockholders (the “2016 Annual Meeting”). At the 2016 Annual Meeting and at each subsequent election at which the Class III directors are to be elected to the Board, the Class III Designee (or his or her successor designated pursuant to Section 1(a) or Section 1(e)) shall be nominated by the Board for election to the Board as a Class III director. In the event that the Company’s stockholders do not elect the Class III Designee to the Board at any meeting of stockholders at which such Class III Designee stands for election, then, the Designation Right shall automatically terminate with respect to the Class III Designee.

d. Concurrent with the execution of this Agreement, the Board shall appoint Dr. Gwen Fyfe (the “New Director”) to serve as a Class III director to the Board and at the 2016 Annual Meeting Dr. Fyfe shall be nominated by the Board for election to the Board as a Class III director, subject to compliance with the Company’s customary requirements for all directors. At the 2016 Annual Meeting, the Company shall: (i) include the New Director in its slate of nominees for election to the Board, (ii) recommend that stockholders vote in favor of the election of such New Director and (iii) support such New Director for election to the Board in a manner no less favorable than how the Company supports other Board-nominated nominees for election to the Board.

e. As a condition to the appointment of the Class I Designee and Class III Designee to the Board, and any subsequent nomination of each Designee for election as a director at an applicable annual or special meeting or in respect of any solicitation of written consents of stockholders at which directors are to be elected to serve on the Board in the class in which such Designee serves, each Designee will provide such information the Company reasonably requires from all directors and nominees to the Board, including information required to be disclosed in a proxy statement or other filing under applicable law, stock exchange rules or listing standards, information in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal obligations, and will consent to appropriate background checks. If, following the completion of the Company’s review process, the Board learns that a Designee is a “bad actor” within the meaning of Rule 506 of Regulation D under the Exchange Act or has committed, been indicted or charged with, or made a plea of nolo contendre to a felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, then, consistent with its treatment of all other directors on the Board, the Board may request that the Designee submit his or her resignation and, in such case, BVF will cause such Designee to resign from the Board and may select a replacement designee reasonably acceptable to the Board.

f. Each Stockholder agrees, and any Designee that serves as a director will agree, to be bound by the Company’s insider trading policy and other applicable corporate governance policies governing the

 

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obligations of directors and executive officers of the Company. At all times while serving as a member of the Board, each Designee shall comply with all policies, procedures, processes, codes, rules, standards and legally permissible guidelines applicable to all of the Company’s directors. In addition, as a condition to being appointed to the Board, each Designee will execute an agreement whereby the Designee will automatically (and without the need for further action) resign from the Board as set forth in Section 1(e) or Section 5(a).

g. Except as otherwise set forth herein, until the Expiration Date (as defined below), the Company shall: (i) include each Designee in its slate of nominees for election to the Board at each applicable annual or special meeting or in respect of any solicitation of written consents of stockholders at which directors are to be elected to serve on the Board in the class in which the Designee serve, (ii) recommend that stockholders vote in favor of the election of each such Designee and (iii) support each such Designee for election to the Board in a manner no less favorable than how the Company supports other Board-nominated nominees for election to the Board.

h. As a result of the actions contemplated by this Letter Agreement, the Board will consist of seven directors, of which two directors will be Class I Directors, two directors will be Class II Directors and three directors will be Class III Directors.

i. The Company acknowledges receipt of the identity of the Class I Designee, the Class III Designee and the New Director and any information required from such persons and the Nominating Committee has approved and recommended to the Board the appointment of such individuals and the Board has approved of such appointment.

j. If the continuation of the Designation Right would cause any violation of the applicable listing rules of NASDAQ, in which case the Designation Right shall be amended by the parties solely as necessary to ensure compliance with such listing rules and the parties shall work in good faith to document and approve such necessary modification(s); provided, however, the Company shall first use its reasonable best efforts to make any necessary adjustments with respect to the remaining directors on the Board to comply with such listing rules of NASDAQ prior to modifying the Designation Right or any terms of this Letter Agreement.

 

2.

Stockholder Meetings.

a. At each annual or special meeting of stockholders held after the date of this Letter Agreement but prior to the Expiration Date, each Stockholder agrees to appear in person or by proxy and vote all shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), beneficially owned by such Stockholder in favor of (i) the election of each director nominated by the Board and (ii) otherwise in accordance with the Board’s recommendation on all other matters, except, notwithstanding anything in Section 4, with respect to any Acquisition Transaction; provided, however, that to the extent that the recommendation of Institutional Shareholder Services (“ISS”) with respect to any other matter contemplated by clause (ii) above differs from the Board’s recommendation, the Stockholders shall have the right to vote any or all shares held by them on such matters in accordance with the recommendation of ISS.

b. Each Stockholder agrees to execute and deliver to the Company, or cause to be executed and delivered to the Company no later than ten (10) business days prior to each annual or special meeting of stockholders held after the date of this Letter Agreement but prior to the Expiration Date, the proxy card sent to such Stockholder by the Company in connection with such meeting, to the extent applicable (and any other legal proxies required to vote any shares held in “street name”) directing that the shares of Common Stock beneficially owned by such Stockholder, as of the applicable record date, be voted in accordance with Section 2(a).

 

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3.

Board Committees.

 

a.

The Board shall immediately establish a committee of the Board (the “CEO Search Committee”) to oversee a search to identify a new President and Chief Executive Officer (“CEO”) of the Company and recommend to the Board that such individual be hired as the new CEO. The Company agrees that it will not offer employment to any person to serve as CEO, or any person performing services typically performed by a CEO, without the unanimous approval of each member of the CEO Search Committee, other than Dr. Christopher Henney’s preexisting appointment as interim CEO.

 

b.

The CEO Search Committee shall consist of three (3) members. Its members shall include Mark N. Lampert, or if Mr. Lampert is not a member of the Board, the Class I Designee.

 

c.

The Company hereby represents that there is currently no executive committee of the Board, and that if prior to the Expiration Date the Board determines to form an executive committee of the Board, then Mark Lampert, or if he is not currently on the Board, then the Designee that replaced him, if applicable, shall be appointed to serve on such executive committee.

 

4.

Standstill.

a. For purposes of this Letter Agreement:

 

i.

“Representatives” shall mean each Stockholder’s officers, directors, employees, accountants, counsel, investment banks, consultants, general partners, managing members, agents and other representatives;

 

ii.

“Acquisition Transaction” shall mean any transaction (whether merger, stock purchase, tender offer, asset purchase or otherwise) or possible transaction involving the acquisition of debt of the Company or greater than 50% of the Company’s voting securities, or substantially all of the Company’s assets;

 

iii.

“Expiration Date” shall mean the date the Designation Right terminates in accordance with Section 5(a) of this Letter Agreement; and

b. Each Stockholder hereby represents and warrants that, except as expressly contemplated by this Letter Agreement, neither it nor any of its Representatives under its control or affiliates, has entered into, directly or indirectly, any agreements or understandings with any person with respect to any Acquisition Transaction.

c. From the date of this Letter Agreement until the Expiration Date, unless expressly invited in advance by the Board or any authorized committee thereof, each Stockholder agrees that it shall not, and that it shall cause each of its Representatives under its control and affiliates not to (and neither the Stockholders, nor any of their Representatives under its control or affiliates will assist or form a group within the meaning of Section 13(d)(3) of the Exchange Act, act in concert or participate with or encourage other persons to), directly or indirectly:

 

i.

initiate or publicly support any proposal or indication of interest for, or offer with respect to, any Acquisition Transaction;

 

ii.

initiate or publicly support any proposal for any Acquisition Transaction, recapitalization, reorganization, joint venture, liquidation, dissolution, spin-off or split-off, business combination or other extraordinary transaction involving the Company or any of the Company’s subsidiaries or any of their debt, securities or assets;

 

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iii.

seek or propose to influence, advise, change or control the management, the Board, governing instruments or policies or affairs of the Company, including by means of seeking to influence, advise or direct the vote of any third-party holder of debt or voting securities of the Company, or by engaging in, directly or indirectly, any “solicitation” (as defined in Rule 14a-1 of Regulation 14A) of proxies (or written consents) or otherwise become a “participant in a solicitation” (as such term is defined in Instruction 3 of Schedule 14A of Regulation 14A under the Exchange Act) in opposition to the recommendation or proposal of the Board, or recommend or request or induce or attempt to induce any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting of the Common Stock or grant a proxy with respect to the voting of the Common Stock or other voting securities to any person other than to the Board or persons appointed as proxies by the Board;

 

iv.

submit any stockholder proposal (pursuant to Rule 14a-8 promulgated by the SEC under the Exchange Act or otherwise) or any notice of nomination or other business for consideration, or nominate any candidate for election to the Board (including by way of Rule 14a-11 of Regulation 14A), other than as expressly permitted by this Letter Agreement;

 

v.

publicly seek election of or publicly seek to place a director on the Board, or publicly seek the removal of any director of the Company, or call or seek to have called any meeting of the stockholders of the Company or any “referendum” (whether or not precatory) of the stockholders of the Company, wage a consent solicitation, or execute any written consent in lieu of a meeting of the stockholders of the Company in connection with the foregoing matters, other than as expressly permitted by this Letter Agreement;

 

vi.

form, join in or in any other way participate in a “partnership, limited partnership, syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement or subject any shares of Common Stock to any voting agreement or pooling arrangement, other than to the extent such a group may be deemed to result with the Company or any of its affiliates as a result of this Letter Agreement; provided, however, the restrictions of this subsection (vi) do not apply to such group formed by the filing of its Schedule 13D, filed with the Securities and Exchange Commission (the “SEC”) on December 21, 2015 (the “Schedule 13D”) or to the addition to such group of any future affiliates of the Stockholders;

 

vii.

acquire, or offer, seek or agree to acquire, by purchase or otherwise, or direct any third party in the acquisition of, any voting securities or assets of the Company, or rights or options to acquire any voting securities or assets of the Company, or engage in any swap or hedging transactions or other derivative agreements of any nature with respect to voting securities, in each case if such acquisition or transaction would result in the Stockholders having beneficial ownership of more than 19.99% of the Company’s outstanding common stock;

 

viii.

advise, assist, encourage or knowingly finance any person in connection with any of the foregoing prohibited actions listed in clauses (i) through (vii);

 

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ix.

publicly disclose any plan, intention or proposal to do any of the prohibited actions listed in clauses (i) through (viii); and

 

x.

make any public disclosure or take any action that could require the Company to make any public disclosure, with respect to any of the prohibited actions listed in clauses (i) through (ix).

d. Notwithstanding anything herein to the contrary, nothing in this Section 4 shall be deemed to prevent the Designees who are then serving as directors on the Board from faithfully discharging their fiduciary duties to the Company.

e. This Section 4 shall not limit or restrict any of the rights and privileges of BVF set forth in Section 1 hereof, including, without limitation, the Designation Right, so long as BVF strictly complies in all respects with the terms and provisions set forth in this Letter Agreement.

f. For the avoidance of doubt, subsequent to the appointment of the Class I Designee and Class III Designee, nothing herein shall limit the ability of BVF or the Designees from confidentially submitting to the Board one or more additional director nominees or candidates for executive officer positions for consideration by the Board.

 

5.

Termination.

a. Notwithstanding anything in this Letter Agreement to the contrary, the Designation Right and this Letter Agreement shall terminate upon the earliest to occur of any of the following: (i) the Stockholders ceasing to beneficially own at least 15% (on an as-converted basis, including any warrants or convertible preferred stock owned by the Stockholders notwithstanding any restrictions on conversion) of the Company’s issued and outstanding Common Stock, (ii) thirty days after the date on which BVF notifies the Company in writing that it wishes to terminate the Designation Right and this Letter Agreement or (iii) any material breach of this Letter Agreement by any Stockholder. A breach of this Letter Agreement by any Designee will constitute a breach of this Letter Agreement by the Stockholders. In each case as used in this Letter Agreement, “beneficial ownership” and similar terms shall have the meaning set forth in Rules 13d-3 and 13d-5(b)(l) promulgated under the Exchange Act; provided, however, that for the avoidance of doubt, the ownership of the Stockholders shall be aggregated for purposes of determining beneficial ownership pursuant to this Letter Agreement. The parties agree that upon a termination of this Letter Agreement pursuant to this Section 5(a), each Designee will automatically (and without the need for further action) resign from the Board.

 

6.

Non-disparagement and Confidentiality.

a. Each party hereto agrees that, from the date of this Letter Agreement until the Expiration Date, neither it nor any of its affiliates or Representatives under its control will, and it will cause each of its affiliates and Representatives under its control not to, publicly disparage or criticize the other party, its business or any current or former directors, officers or employees.

b. Notwithstanding the foregoing, nothing in this Section 6 or elsewhere in this Letter Agreement shall prohibit any party from making any statement or disclosure required under the federal securities laws or other applicable laws; provided, that such party, to the extent legally permitted, must provide written notice to the other parties a reasonable time prior to making any such statement or disclosure required under the federal securities laws or other applicable laws that would otherwise be prohibited the provisions of this Section 6, and reasonably consider any comments of such other parties which are timely delivered.

 

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7.

Notices.

a. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Letter Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

To the Company:

Oncothyreon Inc.

2601 Fourth Avenue, Suite 500

Seattle, Washington 98121

Attention: Corporate Secretary

Tel: (206) 801-2100

Email: jeastland@oncothyreon.com

With a copy to:

Fenwick & West LLP

1191 Second Avenue, 10th Floor

Seattle, Washington 98101

Attention: Effie Toshav

Tel: (206) 389-4510

Email: etoshav@fenwick.com

To the Stockholder:

BVF Partners, L.P.

One Sansome Street, 30th Floor

San Francisco, CA 94104

Attention: Spike Loy

Tel: (415) 525-8890

Email: Loy@bvflp.com

With a copy to:

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Attention: Adam W. Finerman, Esq.

Tel: (212) 451-2289

Facsimile: (212) 451-2222

Email: afinerman@olshanlaw.com

 

8.

Miscellaneous.

 

a.

This Letter Agreement may not be amended, supplemented or modified except in writing, duly executed by all of the parties.

 

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b.

No later than two (2) business days following the execution of this Letter Agreement, (i) the Stockholders shall file with the SEC an amendment to the Schedule 13D in compliance with Section 13 of the Exchange Act, reporting their entry into this Letter Agreement, disclosing applicable items to conform to its obligations hereunder and appending this Letter Agreement as an exhibit thereto and (ii) the Company shall file with the SEC a Current Report on Form 8-K, reporting its entry into this Letter Agreement and appending this Letter Agreement. Each party shall provide the other its respective Representatives with a reasonable opportunity to review such filings prior to it being filed with the SEC and consider in good faith any comments of the other party and its Representatives.

 

c.

If any term, provision, covenant or restriction of this Letter Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Letter Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that the parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the parties agree to use their reasonable best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.

 

d.

This Letter Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Each of the parties represents that they has been advised by counsel in connection with their review, execution and delivery of this Letter Agreement.

 

e.

This Letter Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware.

 

f.

This Letter Agreement may be executed in more than one counterpart. Each such counterpart shall be deemed an original and all counterparts, taken together, shall constitute one and the same instrument. Signatures to this Letter Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing the original signature.

 

g.

Neither this Letter Agreement nor any rights or obligations hereunder shall be assigned or delegated by any party without the prior written consent of the other party.

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be executed in multiple originals by their authorized officers, all as of the date and year first written above.

 

(Signature Page to Letter Agreement)

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IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be executed in multiple originals by their authorized officers, all as of the date and year first written above.

 

(Signature Page to Letter Agreement)

Exhibit 10.2

RETIREMENT AND SEPARATION AGREEMENT

This Retirement and Separation Agreement (the “Agreement”) is entered into by and between ONCOTHYREON INC., a Delaware Corporation, (the “Company”) and ROBERT KIRKMAN, M.D. (“Executive”) (each of Executive and the Company, a “Party,” and collectively, the “Parties”). This Agreement shall become effective (the “Effective Date”) on January 11, 2016.

WHEREAS, the Company and Executive desire to supersede the Executive’s current employment agreement dated August 29, 2006 as amended on December 31, 2008 and December 3, 2009, to provide for Executive’s retirement on the terms and conditions hereinafter set forth on the Separation from Service Date (as defined below).

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid consideration, the sufficiency of which is acknowledged, the Parties hereto agree as follows:

1. Retirement. The Parties agree that Executive shall retire as President and Chief Executive Officer and as a member of the Board of Directors of the Company (the “Board”) on the Effective Date (the “Separation from Service Date”). Executive shall also resign from all other positions that he holds with the Company and any subsidiaries or affiliates of the Company on the Separation from Service Date.

2. Severance Obligations.

(a) Accrued Compensation. The Company will pay Executive (i) earned salary, (ii) any earned bonus that would have been paid to Executive with respect to fiscal year 2015 notwithstanding his retirement prior to January 31, 2016; (iii) any accrued, but unused vacation, and (iv) reimbursement of any outstanding expenses after receiving the customary and necessary substantiation from him, as of the Separation from Service Date. Executive will be entitled to these payments upon termination of his employment even if he does not execute this Agreement.

(b) Cash Severance. Executive (or in the event of his death, his beneficiary) shall receive, subject to Sections 3 and 4, $1,620,000, payable in one lump sum payment following the Separation from Service Date (reduced by any amount owed by Executive to the Company).

(c) Vesting and Exercisability of Option Awards. Subject to Section 3, all of Executive’s unvested stock options shall vest and become exercisable in full as soon as practicable following the Separation from Service Date, and subject to Section 3, and together with all of Executive’s currently vested and exercisable options (collectively, the “Options”) shall continue to be exercisable until the expiration of the Options’ current terms regardless of Executive’s retirement on the Separation from Service Date.

(d) In the event Executive is eligible for and timely elects continued health care under COBRA and subject to Section 3, Company shall pay for Executive’s health care coverage under COBRA for the period January 1, 2016 through December 31, 2016 or, if earlier, until Executive is eligible to be covered under another substantially equivalent medical

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insurance plan by a subsequent employer; provided that, if the Company determines in its sole discretion that it cannot provide the COBRA benefits described herein without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide Executive with a taxable lump sum payment in an amount equal to the then unreimbursed monthly COBRA premiums, which lump sum payment will be made on the first business day after the 60^th day following the Separation from Service Date.

(e) Sole Right to Severance. This Agreement is intended to represent Executive’s sole entitlement to severance payments and benefits in connection with the termination of his employment. To the extent Executive receives severance under any other Company plan, program, agreement, policy, practice, or the like, severance payments and benefits due to Executive under this Agreement will be correspondingly reduced (and vice-versa).

3. Conditions to Receipt of Severance; No Duty to Mitigate.

(a) Separation Agreement and Release of Claims. The receipt of the severance payment pursuant to Section 2(b), the Option vesting and Option exercisability pursuant to Section 2(c) and the COBRA payment pursuant to Section 2(d) will be subject to Executive signing and not revoking a release of claims, in a form attached hereto as Exhibit A (a “Release”), with the Release to become effective no later than thirty (30) days following the Separation from Service Date provided that such release shall not release any of Executive’s rights to indemnification or fiduciary insurance pursuant to the Company’s Certificate of Incorporation, Bylaws or other agreements with the Company. Such Release will provide (among other things) that Executive will not disparage the Company, its directors, or its executive officers and the Company similarly will not disparage, and will use its reasonable best efforts to ensure that the members of the Board and the Company’s senior executive officers do not disparage Executive.

(b) Nonsolicitation. Executive agrees that, for a period of one (1) year following the Separation from Service Date, Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, (i) will not solicit, induce, or influence any person to modify his or her employment or consulting relationship with the Company (the “No-Inducement”), and (ii) will not solicit business from any of the Company’s substantial customers and users (the “No-Solicit”). If Executive breaches the No-Inducement or the No-Solicit, all benefits to which Executive otherwise may be entitled pursuant to Section 2 will cease immediately.

(c) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.

4. Section 409A. Amounts paid under this Agreement satisfy the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder shall be subject to the additional tax imposed under Section 409A, and any ambiguities herein shall be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

 

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5. Consultancy. Executive will continue to be available for consultation and/or advice from the Separation from Service Date through March 31, 2016 (the “Consultancy Period”) for no additional consideration up to eight (8) hours per week.

6. Indemnification and Insurance. Executive will be covered under the Company’s insurance policies and, subject to applicable law, will be provided indemnification to the maximum extent permitted by the Company’s Bylaws and Certificate of Incorporation, with such insurance coverage and indemnification to be in accordance with the Company’s standard practices for senior executive officers but on terms no less favorable than provided to any other Company senior executive officer or director.

7. Confidential Information. Executive acknowledges and agrees that he continues to be bound by the Company’s standard form of employee confidential information agreement (the “Confidential Information Agreement”). Executive may retain his (i) Company cell phone and will work with the Company’s IT Department to delete confidential information and (ii) his laptop computer after it has been cleaned of all Company specific information by the Company.

8. Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors, and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. Any successor will expressly assume in writing all of the Company’s obligations under this Agreement. For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance, or other disposition of Executive’s right to compensation or other benefits will be null and void.

9. Notices. All notices, requests, demands, and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally, (b) one day after being sent by a well established commercial overnight service, or (c) four days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

Oncothyreon Inc.

2601 Fourth Avenue

Suite 500

Seattle, WA 98121

Attention: General Counsel

If to Executive:

at the last residential address known by the Company as provided by Executive in writing.

 

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10. Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement will continue in full force and effect without said provision.

11. Integration. This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous plan or agreements whether written or oral, including, without limitation, the employment agreement by and between Executive and the Company, dated as of August 29, 2006, as amended December 31, 2008 and December 3, 2009, and the Company’s Share Option Plan. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing that specifically references this Section and is signed by duly authorized representatives of the parties hereto.

12. Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

13. Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

14. Governing Law. This Agreement will be governed by the laws of the State of Washington (with the exception of its conflict of laws provisions).

15. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

16. Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by a duly authorized officer, as of the day and year written below.

COMPANY:

 

ONCOTHYREON INC.
By:		/s/ Dr. Christopher Henney, Ph.D.				Date:		January 11, 2016
Name:		Dr. Christopher Henney, Ph.D.
Title:		Chairman of the Board of Directors
EXECUTIVE:
/s/ Robert Kirkman, M.D.						Date:		January 11, 2016
ROBERT KIRKMAN, M.D.

SIGNATURE PAGE TO ROBERT KIRKMAN, M.D. AGREEMENT

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EXHIBIT A

Release Agreement

YOU ARE ADVISED TO CONSULT AN ATTORNEY BEFORE SIGNING THIS RELEASE OF CLAIMS.

Release of Claims

a. In consideration of the payments and benefits to be made under that certain Retirement and Separation Agreement between Robert Kirkman, M.D. (the “Executive”) and Oncothyreon Inc. (the “Company”), the sufficiency of which the Executive acknowledges, the Executive, with the intention of binding himself and his heirs, executors, administrators and assigns, does hereby release, remise, acquit and forever discharge the Company, and each of its subsidiaries and affiliates (collectively, the “Company Affiliated Group”), their present and former officers, directors, managers, executives, shareholders, partners, members, agents, attorneys, employees and employee benefit plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the foregoing (individually, a “Company Released Party” and, collectively, the “Company Released Parties”), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or nature, in law, at equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and whether now known or unknown, suspected or unsuspected (“Claims”), that the Executive, individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released Party that arises out of, or relates to, the Retirement and Separation Agreement or the Executive’s employment with the Company or any member of the Company Affiliated Group, or any termination of such employment, including Claims (i) for unpaid wages, salary or incentive payments, (ii) for breach of contract, wrongful discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm or other tort, (iii) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws concerning unlawful and unfair labor and employment practices) and (iv) for employment discrimination under any applicable federal, state or local statute, provision, order or regulation, and including, without limitation, any claim under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act (“ADA”), the Executive Retirement Income Security Act of 1974, as amended (“ERISA”), the Age Discrimination in Employment Act (“ADEA”), the Washington laws against discrimination, and any similar or analogous state statute, excepting only:

(i) rights of the Executive arising under, or preserved by, this Release of Claims;

(ii) rights of the Executive to severance and other benefits pursuant to the terms of the Retirement and Separation Agreement;

(iii) the right of the Executive to receive COBRA continuation coverage in accordance with applicable law;

 

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(iv) claims for benefits under any health, disability, retirement, life insurance or other, similar employee benefit plan (within the meaning of Section 3(3) of ERISA) of the Company Affiliated Group; and

(v) rights to indemnification the Executive has or may have under the by-laws or certificate of incorporation (or similar document) of any member of the Company Affiliated Group or as an insured under any director’s and officer’s liability insurance policy now or previously in force.

b. You hereby acknowledge that you are aware of the principle that a general release does not extend to claims that the releasor 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 releasee. With knowledge of this principle, you hereby agree to expressly waive any rights you may have to that effect.

It is expressly understood and agreed by the parties that this Release of Claims in full accord, satisfaction and discharge of any and all doubtful and disputed claims by the Executive against the Company Released Parties, and that this Release of Claims has been signed with the express intent of extinguishing all obligations as herein described, and as provided for in the Washington Civil Code or under the applicable laws of any other state.

c. From and after the date hereof, (a) the Executive shall not make any statement that is intended to become public, orally or in writing, regardless of whether such statement is truthful, nor take any action, that criticizes, ridicules or disparages or is otherwise derogatory of any of the members of the Board and the senior executive officers or which could reasonably be expected to harm the reputation or goodwill of the Company, the members of the Board or the senior executive officers and (b) the Company shall not make, and shall use its reasonable best efforts to ensure that its senior executive officers and the members of the Board shall not make, directly or indirectly, any statement that is intended to become public, or that should reasonably be expected to become public, orally or in writing, regardless of whether such statement is truthful, nor take any action that criticizes, ridicules or disparages or is otherwise derogatory of the Executive or his family or which could reasonably be expected to harm the reputation or goodwill of the Executive or his family.

d. The Parties acknowledge that the Executive is not releasing any Claim that may arise AFTER the execution of this Release of Claims, including Claims for violations of the Age Discrimination in Employment Act, 29 U.S.C. Section 621 et seq.

e. The Executive represents that he has not filed any claim, complaint, charge or lawsuit against any Company Released Party with any governmental agency or any state or federal court. The Executive agrees that neither he nor any person, organization or any other entity acting on his behalf will file, charge, claim, sue, participate in, join or cause or permit to be filed, charged or claimed, any action, claim, charge, grievance or demand for damages or other relief (including injunctive, declaratory, monetary or otherwise) against the Company Released Parties with respect to the Claims that are the subject of this Release of Claims. Notwithstanding the foregoing, nothing in this Release of Claims prohibits the Executive from filing a charge with the Equal Employment Opportunity Commission (“EEOC”) or participating

 

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in any investigation or proceeding conducted by the EEOC. Nothing in this Release shall be deemed to preclude the Executive from challenging the knowing and voluntary nature of his waiver of ADEA claims, or from challenging any breach of this Release of Claims, or to seek its enforcement in a court of competent jurisdiction.

f. The Executive acknowledges and agrees that the release of claims set forth in this Release of Claims is not to be construed in any way as an admission of any liability whatsoever by any Company Released Party, any such liability being expressly denied.

g. Executive hereby waives any right to recover damages, costs, attorneys’ fees, and any other relief in any charge, proceeding or action brought against a Company Released Party by the Executive or by any other person on the Executive’s behalf, including, without limitation, the EEOC or any other administrative agency, asserting any Claims released by the Executive herein. Notwithstanding the foregoing, the Executive does not waive rights, if any, he may have to unemployment insurance benefits or workers’ compensation benefits.

h. The Executive acknowledges that he has been given a period of twenty-one (21) days to consider whether to execute this Release of Claims prior to entering into it. Any modifications made to the Release of Claims, whether material or not, shall not extend or re-start the twenty-one (21) calendar day period. The Executive agrees to notify the Company of acceptance of the Release of Claims by delivering a signed copy of this Release of Claims to the Company. The Executive understands that the entire twenty-one (21) calendar day period may be taken to consider the Release of Claims. The Executive may return this Release of Claims in less than the full twenty-one (21) calendar day period. By signing and returning this Release of Claims, the Executive acknowledges that the consideration period afforded him was a reasonable period of time to consider fully each and every term of this Release of Claims. If the Executive accepts the terms hereof and executes this Release of Claims, he may thereafter, for a period of seven (7) calendar days following (and not including) the date of execution, revoke this Release of Claims. If the Executive elects to revoke this Release of Claims, written notice of such revocation must be delivered to the Chief Human Resources Officer at the Company in such a manner that it is actually delivered to the Company, attention Chief Human Resources Officer within the seven (7) calendar day period. If no such revocation occurs, this Release of Claims shall become irrevocable in its entirety, and binding and enforceable against the Executive, on the day next following the day on which the foregoing seven (7)-day period has elapsed. If such a revocation occurs, the Executive shall irrevocably forfeit any right to the benefits under Section 2 of the Retirement and Separation Agreement.

i. The Executive acknowledges that by this writing he has been advised by the Company to seek the advice and assistance of an attorney with regard to the effect of this Release of Claims prior to signing it, and has been given a sufficient period within which to consider this Release of Claims.

j. The Executive acknowledges that the release of claims set forth in this Release of Claims relates only to claims that exist as of the date of this Release of Claims.

 

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k. The Executive acknowledges that the payments he is receiving under the Retirement and Separation Agreement in connection with this Release of Claims are in addition to anything of value to which the Executive is entitled from the Company.

l. This Release of Claims shall be governed by the laws of the State of Washington, without regard to any reference to provisions concerning conflict of laws.

m. This Release of Claims may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of the undersigned.

n. If any provision of this Release of Claims or the application thereof to any person, place, or circumstance shall be held by an arbitrator or court of competent jurisdiction to be invalid, unenforceable, or void, the remainder of this Release of Claims and such provisions as applied to other person, places, and circumstances shall remain in full force and effect.

o. This Release of Claims is hereby incorporated into and forms a part of the Retirement and Separation Agreement.

 

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IN WITNESS WHEREOF, each of the parties has executed this Release of Claims, in the case of the Company by a duly authorized member of the Board of Directors, as of the day and year written below.

 

COMPANY:
ONCOTHYREON INC.
By:		/s/ Dr. Christopher Henney, Ph.D.				Date:		January 11, 2016
Name:		Dr. Christopher Henney, Ph.D.
Title:		Chairman of the Board of Directors
EXECUTIVE:
/s/ Robert Kirkman, M.D.						Date:		January 11, 2016
ROBERT KIRKMAN, M.D.

[SIGNATURE PAGE TO ROBERT KIRKMAN, M.D. RELEASE OF CLAIMS]

 

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Exhibit 10.3

ONCOTHYREON INC.

RETENTION PLAN

Adopted Effective January 11, 2016

 

1.	INTRODUCTION

The purpose of this Oncothyreon, Inc. Retention Plan (this “Plan”) is to provide specified cash retention payments to Participants in order to induce the Participants to remain employed by the Company through the Retention Date, as defined in this Plan. Capitalized terms used in this Plan shall have the meanings set forth herein.

 

2.	ELIGIBILITY AND PARTICIPATION

Only employees of the Company (other than the Company’s Chief Executive Officer) shall be eligible to participate in the Plan. An employee shall become a Participant in the Plan if (i) he or she is notified in a Participation Notice that he or she has been designated to participate in this Plan, and (ii) the employee has counter-signed such Participation Notice confirming his or her acceptance of and agreement with the terms of the Participation Notice and this Plan.

 

3.	RETENTION PAYMENTS

3.1 Retention Payments. A Participant who (i) has remained continuously employed by the Company or its successor through the Retention Date or (ii) has been terminated by the Company other than for Cause prior to the Retention Date, shall be paid a lump-sum cash retention payment within ten (10) days following the Retention Date as follows:

 

Position of Participant (as of the Effective Date)		Retention Payment
C-Suite Level (other than Chief Executive Officer)		An amount equal to eight months of Base Salary
Vice President		An amount equal to six months of Base Salary
Senior Director		An amount equal to five months of Base Salary
Director		An amount equal to four months of Base Salary
Senior Staff/Manager		An amount equal to three months of Base Salary
All Other Employees		An amount equal to two months of Base Salary

3.2 Termination without Cause Prior to Retention Date. A Participant whose employment with the Company or its successor has been terminated by the Company or its successor without Cause prior to the Retention Date shall be paid the lump-sum cash payment set forth in the Participant’s Participation Notice, provided, that the Participant has signed and delivered to the Company a general release of all known and unknown claims that the Participant may have against the Company and persons affiliated with the Company on the Company’s standard form of release, and has not revoked such release on or before the fifty-fifth (55^th) day following termination of employment, in which case payment shall be made not later than ten (10) days following the receipt of such release and the expiration of the release revocation period.

3.3 Termination for Reasons Other than For Cause Prior to Retention Date. If a Participant terminates employment with the Company prior to the Retention Date for any reason other than termination of employment by the Company without Cause, no payments shall be made under this Retention Plan.

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4.	DEFINITIONS

4.1 “Base Salary” means the Participant’s base salary in effect immediately prior to the Effective Date.

4.2 “Cause” shall mean (i) failure or refusal by a Participant to substantially perform his or her duties with the Company (except where the failure results from incapacity due to disability); or (ii) severe misconduct or activity deemed detrimental to the interests of the Company. This may include, but is not limited to:

 

(a)

acts involving dishonesty;

 

(b)

material violation of Company written policies (such as those related to alcohol, drugs, or so on);

 

(c)

discrimination and/or discriminatory harassment;

 

(d)

unauthorized disclosure of Company confidential information under the terms and conditions of the Company’s confidentiality and/or proprietary rights agreement between the Participant and the Company; or

 

(e)

the entry of a plea of nolo contendere to, or the conviction of, a crime or felony.

4.3 “Company” means Oncothyreon Inc., a Delaware corporation.

4.4 “Effective Date” means the date this Plan becomes effective which is January 11, 2016.

4.5 “Participant” means an employee of the Company providing services to the Company on or after the Effective Date who is designated to participate in the Plan in a Participation Notice.

4.6 “Participation Notice” means a written notice in the form attached as Exhibit A, that the employee has been designated to participate in the Plan.

4.7 “Plan Administrator” means the person or persons designated to administer the Plan in Section 5.

4.8 “Retention Date” means January 10, 2017.

 

5.	ADMINISTRATION

The Compensation Committee of the Board of Directors of the Company is the Plan Administrator responsible for the administration of the Plan. The Plan Administrator has sole discretion to make such rules, regulations, interpretations of the Plan and computations and shall take such other action to administer the Plan as it may deem appropriate in its sole discretion. Any decision by the Plan Administrator shall be conclusive and binding on all parties.

 

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The Plan Administrator may delegate any of its administrative responsibilities under the Plan to another person or persons pursuant to a written instrument that specifies the responsibilities so delegated to each such person or persons, in which case the responsibilities of the Plan Administrator under the Plan shall be carried out by the authorized delegates acting on behalf of the Plan Administrator.

 

6.	SOURCE OF PAYMENTS UNDER THE PLAN

The Plan shall be unfunded and all cash payments under the Plan shall be paid solely from the general assets of the Company.

 

7.	TAX WITHHOLDING

All payments and benefits under this Plan shall be subject to appropriate federal and state tax withholding.

 

8.	SUCCESSORS AND ASSIGNS

8.1 Successors and Assigns. The terms of the Plan and the benefits and obligations of the Company under the Plan shall insure to the benefit of and be binding on the successors and assigns of the Company.

8.2 No Assignment of Rights. The interest of a Participant in this Plan or in any distribution to be made under this Plan may not be assigned, pledged, alienated, anticipated, or otherwise encumbered (either at law or in equity) and shall not be subject to attachment, bankruptcy, garnishment, levy, execution, or other legal or equitable process. Any act in violation of this Section 8.2 shall be void.

 

9.	NO OBLIGATION TO EMPLOY PARTICIPANT

Participant’s participation in this Plan does not obligate the Company to continue to employ a Participant for any specific period of time, or in any specific role or geographic location. Participant is an “at-will” employee and Company may terminate a Participant’s employment at any time.

 

10.	MODIFICATION AND AMENDMENT

The Company reserves the right to amend or terminate this Plan by action of the Board of Directors of the Company at any time without the consent of any Participants, except that no amendment or termination shall impair or adversely affect the economic rights of a Participant or reduce the cash retention payment amounts owed or potentially owed to a Participant under Section 3 of this Plan.

 

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11.

VALIDITY

If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.

 

12.	APPLICABLE LAW

This Plan is a cash bonus plan and shall be governed by the laws of the state of Washington.

 

13.	EFFECTIVE DATE AND TERMINATION OF THE PLAN

This Plan shall (i) become effective upon the Effective Date, and (ii) automatically terminate and have no further force or effect following the settlement and payment of all amounts due and payable under the Plan following the Retention Date.

 

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EXHIBIT A

ONCOTHYREON INC.

RETENTION PLAN

PARTICIPATION NOTICE

Notice is hereby given by Oncothyreon Inc. (the “Company”) that the following employee of the Company (the “Participant”) has been designated as a Participant under the Oncothyreon Inc. Retention Plan (the “Plan”). Capitalized terms herein shall have the meaning ascribed to them herein or in the Plan document.

 

Participant Name:
Title:
Cash Retention Payment Amount:		[        ] Months of Base Salary

The terms and conditions of the Plan are incorporated herein by this reference. The Participant hereby acknowledges receipt of a copy of the Plan and this Participation Notice and has read, understands and accepts all of the terms and conditions of the Plan and this Participation Notice.

This Participation Notice must be accepted and countersigned by the Participant before it shall become effective. This Participation Notice may be signed in counterpart, each of which shall be deemed an original and all of which together shall constitute a single instrument.

 

						ONCOTHYREON INC.
Date:						By:
						Its:
Accepted and Agreed to by Participant:						PARTICIPANT
Date:

 

5

Exhibit 99.1

 

Oncothyreon Appoints Christopher Henney, Ph.D., D.Sc. as Interim CEO and Expands Board with

Additions of Mark Lampert and Gwen Fyfe, M.D.

— Robert L. Kirkman, M.D. to Retire as Director, President and CEO —

Seattle, January 11, 2016 — Oncothyreon Inc. (Nasdaq:ONTY), a clinical-stage biopharmaceutical company dedicated to the development of therapeutic products that can improve the lives and outcomes of patients with cancer, today announced that Robert L. Kirkman, M.D., has retired as president and CEO and as a member of the Board of Directors, effective January 11, 2016. Oncothyreon’s Board of Directors has appointed Christopher S. Henney, Ph.D., D.Sc., the company’s chairman, to serve as interim CEO while the company conducts a comprehensive search for a new CEO.

“We remain on track to initiate a potentially pivotal Phase 2 clinical trial of ONT-380 in combination with Xeloda^® (capecitabine) and Herceptin^® (trastuzumab) early this year,” said Dr. Henney. “Our development and regulatory teams are focused on bringing this important medicine to the market for advanced-stage breast cancer patients as soon as possible.”

Dr. Henney has served as the chairman of the Board for Oncothyreon since September 2006 and has been a member of the Board of Directors since March 2005. Previously Dr. Henney co-founded three major publicly held U.S. biotechnology companies, Immunex, ICOS and Dendreon, and held a seat on the board of directors and executive positions at each company, including serving as the chairman and CEO of Dendreon from 1995 to 2003. Dr. Henney currently serves on the board of directors of Cyclacel Pharmaceuticals, Anthera Pharmaceuticals, Inc. and Prothena Corporation.

“Because ONT-380 addresses such a serious unmet need for HER2-positive breast cancer patients with CNS metastases and should therefore be a major value driver for this company and its shareholders, we plan to move expeditiously to identify a permanent CEO that will take development of ONT-380 to the next level. We thank Bob for all he has done since joining in 2006, particularly licensing and developing ONT-380 to this critical point, and wish him well in his future endeavors,” said Ted W. Love, M.D., member of Oncothyreon’s Board of Directors.

Additionally, Oncothyreon has appointed two new members to its Board of Directors, Mark Lampert and Gwen Fyfe, M.D. Mr. Lampert brings extensive biotechnology and finance experience to the board. He is the founder of BVF Partners L.P., affiliates of which, including the Biotechnology Value Fund, L.P., have been shareholders of Oncothyreon since 2011. Dr. Fyfe previously served as vice president of Genentech’s oncology development group and later as vice president, Avastin Franchise Team at Genentech.

“I believe ONT-380 has enormous potential to improve the lives of women suffering from HER2 positive breast cancer, especially those with metastases to the brain. Currently there are no drugs approved to help these patients,” said Dr. Fyfe. “I consider it a privilege to join the Oncothyreon board in order to help bring this important drug to patients.”

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About Oncothyreon

Oncothyreon is a clinical-stage biopharmaceutical company specializing in the development of innovative therapeutic products for the treatment of cancer. Our goal is to discover, develop and commercialize novel compounds that have the potential to improve the lives and outcomes of cancer patients. Our most advanced product candidate is ONT-380, an orally active and selective small molecule HER2 inhibitor. We are developing preclinical product candidates in oncology and immune-oncology using our protocell technology. For more information, visit www.oncothyreon.com.

Forward-Looking Statements

In order to provide Oncothyreon’s investors with an understanding of its current results and future prospects, this release contains statements that are forward-looking. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include Oncothyreon’s expectations regarding clinical development activities.

Forward-looking statements involve risks and uncertainties related to Oncothyreon’s business and the general economic environment, many of which are beyond its control. These risks, uncertainties and other factors could cause Oncothyreon’s actual results to differ materially from those projected in forward-looking statements, including those predicting the timing, duration and results of clinical trials, the timing and results of regulatory reviews, the safety and efficacy of our product candidates, and the indications for which our product candidates might be developed. There can be no guarantee that the results of preclinical studies or clinical trials will be predictive of either safety or efficacy in future clinical trials. Although Oncothyreon believes that the forward-looking statements contained herein are reasonable, it can give no assurance that its expectations are correct. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For a detailed description of Oncothyreon’s risks and uncertainties, you are encouraged to review the documents filed with the securities regulators in the United States on EDGAR and in Canada on SEDAR. Oncothyreon does not undertake any obligation to publicly update its forward-looking statements based on events or circumstances after the date hereof.

CONTACT:

Investor Relations:

Julie Rathbun

Rathbun Communications

206-769-9219

ir@oncothyreon.com

Media Relations:

Kelly France, Ph.D.

BrewLife

415-946-1076

kfrance@brewlife.com