UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of
Earliest Event Reported):
October 26,
2007
AVI BioPharma, Inc.
(Exact name of Company as
specified in its charter)
Oregon
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0-22613
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93-0797222
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(State or other
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(Commission File No.)
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(I.R.S. Employer
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jurisdiction of
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Identification No.)
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incorporation)
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One S.W.
Columbia, Suite 1105
Portland,
OR 97258
(Address of principal
executive offices)
(503)
227-0554
Registrants telephone
number, including area code
Not
Applicable
(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:
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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
240.14d-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 1.01
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Entry Into a Material Definitive Agreement
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Item 5.02
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Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers
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Effective October 29, 2007, AVI BioPharma, Inc. (the Company)
entered into an agreement with the AVI
Shareholder Advocacy Trust (the Trust),
the Shareholder Advocate LLC, and Richard Macary (the Trust Agreement). Under
the Trust Agreement, the Board of Directors of the Company agreed to appoint Dr. Gil Price and Mr. William Goolsbee as directors of the Company. These new
directors will fill the unexpired terms of James Hicks and Alan Timmins, who
have resigned as directors of the Company effective October 29, 2007. Alan
Timmins will continue to serve as President and Chief Operating Officer and Dr.
Hicks will continue to serve the Company as a consultant.
As
directors,
Dr. Gil Price
and Mr. William Goolsbee will
receive (a) a grant of options to purchase 33,000 shares of the Companys
common stock at the closing price on the date of grant, with vesting of such
options in equal annual installments over a four year period; (b) directors
fees of $30,000 per year paid in equal quarterly installments of
$7,500; (c) eligibility to receive additional fees if appointed to serve
on any board committees; and (d) reimbursement of expenses incurred on behalf
of the Company, including but not limited to those incurred for attendance at
meetings of the Board of Directors. While serving as directors they will
also be eligible to receive annual grants of options to purchase 10,000 shares
of the Companys common stock, with such options vesting in equal monthly
installments over a period of 12 months.
Under
the Trust Agreement, the Trust, the Trusts managing trustee, the Shareholder
Advocate LLC, and Richard Macary have agreed to terminate the Trust and,
subject to certain conditions, not to take certain actions until at least the
close of the Companys annual meeting of shareholders in 2010. These actions
include any activities that relate to or would result in extraordinary
transactions, including mergers, liquidation and transfer of a material amount
of the Companys assets, changes in the Board or management of the Company,
changes in the Companys business or corporate structure or material assets, or
changes in the Companys charter or bylaws.
The
Companys Board of Directors has discussed the Trust Agreement and theses
actions with its largest shareholder, who has expressed his support for terms
of the Boards agreement with the Trust. This shareholder has agreed, until at
least February 26, 2008, not to initiate or support others who may initiate
actions that would call for additional changes in the Companys management,
Board structure or Board composition, or any transaction that might result in a
change of control of the Company.
Effective
October 26, 2007, the Company entered into an Amended and Restated Employment
Agreement with Alan Timmins, the Companys President and Chief Operating
Officer (the Employment Agreement). Under the terms of the Employment
Agreement, Mr. Timmins will continue to receive his salary of $310,000,
continue to be eligible for bonuses awarded at the discretion of the Board of
Directors and continue to be eligible for benefits provided by the Company to
its executive officers. Under the Employment Agreement, Mr. Timmins severance
compensation was modified to provide that upon termination of his employment by
the Company other than for Cause (as such term is defined in the Employment Agreement),
or upon his voluntary termination of employment for Good Reason (as defined in
the Employment Agreement), (a) the Company shall pay to Mr. Timmins $630,000, without
interest, payable as follows: 1/3 paid on the
effective date of termination with the balance to be paid in equal
installments over the 12 months following such effective date in accordance
with the Companys standard payroll
procedures; (b) all outstanding options granted to Mr. Timmins pursuant to the
Companys 1992 Stock Incentive Plan, or successor plan, which vest with the
passage of time (and are not performance related) shall be immediately fully
vested and (c) the exercise period of all such options shall be extended to the
earlier of their original expiration date or eighteen (18) months from the date
of termination.
Effective
October 26, 2007, the Company entered into a consulting agreement with James
Hicks (the Consulting Agreement). Under the terms of the Consulting Agreement,
for a period of two years, Dr. Hicks will provide services as requested by the Board
of Directors up to eight hours per month and, in return for such services, will
be paid $2,500 per month, plus options each year of the Consulting Agreement to
purchase 10,000 shares of the Companys common stock. Such options shall have
an exercise price not less than fair market value on the grant date and shall
vest ratably on each monthly anniversary date of the grant over twelve months
of continued service as a consultant. Services in excess of 8 hours per month
will be billed at the hourly rate of $312.50.