Avi Biopharma Inc - Current report filing (8-K)
April 16 2008 - 5:15PM
Edgar (US Regulatory)
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):
April 10, 2008
AVI BioPharma, Inc.
(Exact name of Company as specified in its
charter)
Oregon
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001-14895
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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 5.02
Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 10, 2008, AVI
BioPharma, Inc. (the Company) hired Dr. Ryszard Kole as the Companys
Senior Vice President of Discovery Research.
Prior to his appointment as
Senior Vice President of Discovery Research, Dr. Kole, age 61, had served
as a consultant to the Company since the closing of the Companys
acquisition of Ercole Biotech, Inc., a
privately held Delaware corporation (Ercole), on March 20, 2008.
In the five years prior to his appointment as Senior
Vice President of Discovery Research, prior to his service as a consultant with
the Company and Ercoles acquisition by the Company, Dr. Kole served as
President, Chief Scientific Officer and a member of the Board of Directors of
Ercole from the time he founded Ercole in 2001.
He served as a compensated consultant to Ercole from September 2007
until its acquisition in March 2008.
As a member of Ercoles senior management, Dr. Kole had primary
responsibility for managing Ercoles internal and collaborative research
activities. At the time of its
acquisition, Ercole had six full-time employees and two part-time consultants,
including Dr. Kole.
In addition to his work with Ercole, Dr. Kole
has been employed by the University of North Carolina at Chapel Hill (UNC) as
a Professor in UNCs Department of Pharmacology since 1996. Prior to his employment as a Professor, Dr. Kole
had also been employed by UNC as an Associate Professor and an Assistant
Professor. In his capacity as a
Professor at UNC, Dr. Kole had responsibility for managing an academic
research lab.
Prior to his appointment as Senior Vice President of
Discovery Research, the Company had been paying Dr. Kole $12,500 per month
in connection with the consulting services provided to the Company. The Company and Dr. Kole have agreed to
terminate their consulting relationship effective as of April 10,
2008. As stated above, Dr. Kole had
been an officer, a member of the Board of Directors, and a stockholder of
Ercole prior to the Companys acquisition of Ercole. In his capacities as a member of Ercoles
Board of Directors and as a stockholder of Ercole, Dr. Kole voted to
approve Ercoles acquisition by the Company.
The shares of Ercole capital stock held by Dr. Kole individually or
jointly with his spouse were exchanged for 1,960,542 shares of AVI common stock
worth approximately $2.58 million when valued at the price per share determined
in accordance with the Agreement and Plan of Merger by and among the Company,
EB Acquisition Corp., and Ercole and the Stockholder Representative dated March 12,
2008 (the Merger Agreement), or $1.3161 per share. Consistent with the treatment of all
stockholders of Ercole, 11% of the shares issued to Dr. Kole in the merger
have been delivered to an escrow agent in connection with indemnification
obligations applicable to all Ercole stockholders under the terms of the Merger
Agreement. Prior to the merger between
the Company and Ercole, the two companies had entered into two cross-license
and collaboration agreements in December 2006 and May 2007. These agreements are described in greater
detail in the Companys Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 17, 2008.
As a member of the Board of Directors of Ercole, Dr. Kole approved
Ercoles entry into these transactions. Dr. Kole
is not related to any member of the Companys Board of Directors or any of the
Companys executive officers.
In connection with his appointment as Senior Vice
President of Discovery Research, the Company has entered into an Employment
Agreement with Dr. Kole dated April 10, 2008 (the Employment
Agreement). Under the terms of his
Employment Agreement, the Company will pay Dr. Kole an annual base salary
of $235,000 per year. In addition to his
base compensation, Dr. Kole will be eligible for an annual bonus up to 25%
of his annual base compensation amount, subject to achievement and satisfaction
of goals and objectives established upon mutual agreement of the Companys
Chief Executive Officer, the Companys Compensation Committee and Dr. Kole. The Company also granted Dr. Kole an
option to purchase 150,000 shares of the Companys Common Stock. Dr. Koles stock option grant will vest
in equal installments over four years.
The Company has also agreed to reimburse up to $65,000 of expenses
incurred by Dr. Kole in connection with his relocation. The Companys Employment Agreement with Dr. Kole
provides for certain benefits payable to Dr. Kole upon termination of Dr. Koles
employment by the Company for any reason other than for cause or termination of
employment by Dr. Kole for circumstances constituting good reason, as
those terms are defined in the Employment Agreement. If terminated by the Company without cause or
if terminating his own employment for good reason, the Employment Agreement
provides that Dr. Kole is entitled to receive severance benefits equal to (i) six
months of base compensation if the
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termination
occurs prior to the first anniversary of Dr. Koles employment with the
Company or (ii) 12 months of base compensation if the termination occurs
after the first anniversary of Dr. Koles employment with the Company.
A copy of the press release issued by the Company
announcing appointment of Dr. Kole is furnished as Exhibit 99.1
hereto.
Item 9.01
Financial Statements and
Exhibits.
(d)
Exhibits
The following exhibits are
furnished herewith:
99.1
Press Release dated April 16, 2008.
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SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Portland, State of Oregon, on April 16, 2008.
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AVI
BioPharma, Inc.
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By:
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/s/
Alan P. Timmins
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Alan
P. Timmins
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President and Chief Operating Officer
(Principal Operating Officer)
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Exhibit Index
Exhibit
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Description
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99.1
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Press
Release dated April 16, 2008.
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