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): July 21, 2010
NILE
THERAPEUTICS, INC.
(Exact
name of Registrant as Specified in its Charter)
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Delaware
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001-34058
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88-0363465
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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4
West 4th Ave., Suite 400
San
Mateo, California 94402
(Address
of Principal Executive Offices)
(650)
458-2670
(Registrant’s
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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¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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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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¨
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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.
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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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Appointment
of Executive Chairman
On July 21, 2010 (the “Effective
Date”), Richard B. Brewer was appointed to serve as Executive Chairman of Nile
Therapeutics, Inc. (the “Company”). The terms of Mr. Brewer’s employment
with the Company are set forth in a letter agreement dated July 15, 2010 and
delivered to the Company on July 21, 2010 (the “Agreement”). Pursuant to the
Agreement, Mr. Brewer will receive an annualized base salary of $240,000 and
will be expected to devote an average of approximately two days per week to the
performance of his duties as the Company’s Executive Chairman.
On the Effective Date, as provided for
in the Agreement, Mr. Brewer was granted a 10-year stock option (the “Initial
Option”) to purchase 450,000 shares of the Company’s common stock at an exercise
price of $0.32 per share. The Initial Option was awarded pursuant to the
Company’s Amended and Restated 2005 Stock Option Plan (the “Plan”) and was
fully-vested and immediately-exercisable upon the date of grant. Further
to the terms of the Agreement, on July 26, 2010, following stockholder approval
of an amendment to the Plan as discussed below under the heading “Amendment of
Stock Option Plan,” Mr. Brewer was awarded a 10-year stock option (the
“Additional Option,” and together with the Initial Option, the “Stock Options”)
to purchase an additional 900,000 shares of the Company’s common stock at an
exercise price of $0.37 per share, with the right to purchase the shares subject
to the Additional Option vesting and becoming exercisable in eight equal
quarterly installments beginning on September 30, 2011 and continuing on the
last day of each calendar quarter thereafter until fully-vested; provided,
however, that the vesting of the Additional Option shall accelerate upon a
“change of control” of the Company, as such term is defined in the Plan.
The Stock Options are evidenced by stock option agreements between the Company
and Mr. Brewer in the standard form of agreement for use under the Plan, a copy
of which was filed as Exhibit 10.10 to the Company’s Current Report on Form 8-K
filed on September 21, 2007.
Pursuant to the terms of the Agreement,
the Company may terminate Mr. Brewer’s employment at any time with no obligation
to make severance payments to Mr. Brewer. The Agreement further provides
that, in the event of such termination, Mr. Brewer shall tender his resignation
as a director of the Company.
The foregoing description of the
material terms of the Agreement is qualified in its entirety by reference to the
actual Agreement, which is attached hereto and incorporated by reference herein
as Exhibit 10.1. A copy of the Company’s press release issued July 22,
2010, announcing Mr. Brewer’s appointment is attached hereto and incorporated by
reference herein as Exhibit 99.1.
Severance
Benefits Agreement with Chief Financial Officer
On July 24, 2010, the Company entered
into a Severance Benefits Agreement with Daron Evans, the Company’s Chief
Financial Officer. The Severance Benefits Agreement provides that, if Mr.
Evans’ employment is terminated by the Company other than for “cause” (as
defined below), Mr. Evans shall be entitled, upon execution of a customary
release, to continued payment of his then-current base salary for a period of
six months thereafter.
For purposes of the Severance Benefits
Agreement, “cause” means the following conduct or actions taken by Mr. Evans:
(i) willful failure to perform his duties to the Company or willful misconduct
in the performance of such duties; (ii) any willful, intentional or grossly
negligent act causing material harm to the business or reputation of the
Company; (iii) any material violation of the confidentiality, invention
assignment, or non-solicitation obligations set forth in the agreement; (iv)
indictment of any felony or a misdemeanor involving moral turpitude; or (v) any
misappropriation or embezzlement of the Company’s property.
The foregoing description of the
material terms of the Severance Benefits Agreement is qualified in its entirety
by reference to the actual agreement, which is attached hereto and incorporated
by reference herein as Exhibit 10.2.
Stock
Option Award to Chief Financial Officer
On July
26, 2010, Mr. Evans was granted a 10-year option to purchase 250,000 shares
of the Company’s common stock at an exercise price equal to $0.37 per share. The
stock option award, which was made pursuant to the Plan, will vest in
twelve equal quarterly installments over three years with the first
installment vesting on September 30, 2010, and is evidenced by a stock option
agreement in the standard form of agreement for use under the Plan.
Amendment
of Compensation Plan for Non-Employee Directors
On July
26, 2010, the Board approved an amendment to the Company’s compensation plan for
its non-employee directors to increase the annual stock option grants to be
awarded to such directors. As amended, the plan provides that (i)
non-employee directors shall receive annual stock option grants relating to
80,000 shares of the Company’s common stock, and (ii) the chairs of the Board’s
Audit and Compensation committees shall receive annual stock option grants
relating to an additional 20,000 shares. All such stock options shall be
awarded as of each director’s re-election at the Company’s annual meeting of
stockholders and shall vest in their entirety on the first anniversary of the
date of grant. In addition to the annual stock option grants summarized
above, newly-appointed non-employee directors are entitled to an initial stock
option to purchase 130,000 shares, vesting in three equal annual installments
commencing on the first anniversary of the date of grant. A summary of the
compensation payable to the Company’s non-employee directors pursuant to the
amended plan is attached hereto as Exhibit 10.3 and incorporated herein by
reference.
In
accordance with the terms of the amended plan, on July 26, 2010, each
non-employee director of the Company was awarded a 10-year stock option to
purchase 80,000 shares of the Company’s common stock, and the chairs of each of
the Audit and Compensation Committees received an option to purchase an
additional 20,000 shares of common stock (100,000 shares total). All such stock
options are exercisable at $0.37 per share (the closing sale price on the date
of grant) and vest in full on July 26, 2011.
Amendment
of Stock Option Plan
On July
26, 2010, at the 2010 Annual Meeting of Stockholders, the Company’s
stockholders ratified and approved an
amendment to the Company’s Amended and Restated 2005 Stock Option Plan to
increase the number of shares of the Company’s common stock issuable thereunder
from 5,517,676 to 9,500,000 shares. The Board had previously adopted the
amendment to the Plan, subject to stockholder approval, on June 14,
2010.
Set forth
below is a summary of the Plan, as amended. This summary is qualified in its
entirety by reference to the complete text of the Plan, as amended, a copy of
which was attached as Appendix A to the Company’s definitive proxy statement on
Schedule 14A filed with the Securities and Commission on June 15, 2010, and is
incorporated herein by reference.
General
The
purpose of the Plan is to increase stockholder value and to advance the
interests of the Company by furnishing a variety of economic incentives
(“Incentives”) designed to attract, retain and motivate employees and directors
of and consultants to the Company. The Plan provides that a committee (the
“Committee”) composed of at least two disinterested members of the Board of
Directors of the Company may grant Incentives in the following forms: (a) stock
options; (b) stock appreciation rights (“SARs”); (c) stock awards; (d)
restricted stock; (e) performance shares; and (f) cash awards. Incentives may be
granted to employees, directors, consultants, advisors or other independent
contractors who provide services to the Company (including members of the
Company’s scientific advisory board) as selected from time to time by the
Committee. In the event there is no Committee, then the entire Board shall have
responsibility for administering the Plan.
As
amended, the Plan authorizes a total of 9,500,000 shares of common stock for
issuance. There are currently outstanding under the Plan stock options
representing the right to purchase an aggregate of 6,807,749 shares of our
common stock at a weighted average exercise price of $1.46 and an average
remaining life of 8.0 years. In addition to the shares reserved for issuance
pursuant to the outstanding stock options, we have already issued an additional
240,025 shares of common stock under the Plan pursuant to exercises of stock
options. Shares of common stock that are issued under the Plan or that are
subject to outstanding Incentives are applied to reduce the maximum number of
shares of common stock remaining available for issuance under the Plan.
Accordingly, there are currently 2,452,226 shares of common stock remaining
available for future issuance under the Plan, as amended.
Types
of Incentives
Stock Options. Under
the Plan, the Committee may grant non-qualified and incentive stock options to
eligible participants to purchase shares of common stock from the Company. The
Plan confers on the Committee discretion, with respect to any such stock option,
to determine the number and purchase price of the shares subject to the option,
the term of each option and the time or times during its term when the option
becomes exercisable. The purchase price for incentive stock options may not be
less than the fair market value of the shares subject to the option on the date
of grant. The number of shares subject to an option will be reduced
proportionately to the extent that the optionee exercises a related SAR. The
term of a non-qualified option may not exceed 10 years and one day from the date
of grant and the term of an incentive stock option may not exceed 10 years from
the date of grant. Unless otherwise provided by the Committee, any option shall
become immediately exercisable in the event of specified changes in corporate
ownership or control. The Committee may accelerate the exercisability of any
option.
The
option price may be paid in cash, check, bank draft or, at the discretion of the
Committee, by delivery of shares of common stock valued at their fair market
value at the time of purchase or by withholding from the shares issuable upon
exercise of the option shares of common stock valued at their fair market
value.
In the
event that an optionee ceases to be an employee of or consultant to the Company,
or the optionee’s other service with the Company is terminated, for any reason,
including death, any stock option or unexercised portion thereof which was
otherwise exercisable on the date of termination shall expire at the time or
times established by the Committee.
Stock Appreciation Rights.
A stock appreciation right, or a SAR, is a right to receive, without
payment to the Company, a number of shares, cash or any combination thereof, the
amount of which is determined pursuant to the formula described below. A SAR may
be granted with respect to any stock option granted under the Plan, or alone,
without reference to any stock option. A SAR granted with respect to any stock
option may be granted concurrently with the grant of such option or at such
later time as determined by the Committee and as to all or any portion of the
shares subject to the option.
The Plan
confers on the Committee discretion to determine the number of shares as to
which a SAR will relate as well as the duration and exercisability of a SAR. In
the case of a SAR granted with respect to a stock option, the number of shares
of common stock to which the SAR pertains will be reduced in the same proportion
that the holder exercises the related option. The term of a SAR may not exceed
10 years and one day from the date of grant. Unless otherwise provided by the
Committee, a SAR will be exercisable for the same time period as the stock
option to which it relates is exercisable. The Committee may accelerate the
exercisability of any SAR. Unless otherwise provided by the Committee, any SAR
shall become immediately exercisable in the event of specified changes in
corporate ownership or control.
Upon
exercise of a SAR, the holder is entitled to receive an amount which is equal to
the aggregate amount of the appreciation in the shares of common stock as to
which the SAR is exercised. For this purpose, the “appreciation” in the shares
consists of the amount by which the fair market value of the shares of common
stock on the exercise date exceeds (a) in the case of a SAR related to a stock
option, the purchase price of the shares under the option or (b) in the case of
a SAR granted alone, without reference to a related stock option, an amount
determined by the Committee at the time of grant. The Committee may pay the
amount of this appreciation to the holder of the SAR by the delivery of common
stock, cash, or any combination of common stock and cash.
Restricted Stock.
Restricted stock consists of the sale or transfer by the Company to an
eligible participant of one or more shares of common stock which are subject to
restrictions on their sale or other transfer by the participant. The price at
which restricted stock will be sold will be determined by the Committee, and it
may vary from time to time and among participants and may be less than the fair
market value of the shares at the date of sale. All shares of restricted stock
will be subject to such restrictions as the Committee may determine. Subject to
these restrictions and the other requirements of the Plan, a participant
receiving restricted stock shall have all of the rights of a stockholder as to
those shares, including, for example, the right to vote such
shares.
Stock Awards. Stock
awards consist of the transfer by the Company to an eligible participant of
shares of common stock, without payment, as additional compensation for services
to the Company. The number of shares transferred pursuant to any stock award
will be determined by the Committee.
Performance Shares.
Performance shares consist of the grant by the Company to an eligible
participant of a contingent right to receive shares of common stock. The
performance shares shall be paid in shares of common stock to the extent
performance objectives set forth in the grant are achieved. The number of shares
granted and the performance criteria will be determined by the Committee. At the
discretion of the Committee, performance shares may be paid in cash in lieu of
shares of common stock.
Non-Transferability
of Most Incentives
No stock
option, SAR, restricted stock or performance award granted under the Plan is
transferable by its holder, except in the event of the holder’s death, by will
or the laws of descent and distribution. During a participant’s lifetime, an
Incentive may be exercised only by him or her or by his or her guardian or legal
representative.
Amendment
to the Plan
The Board
of Directors may amend or discontinue the Plan at any time. However, no such
amendment or discontinuance may, subject to adjustment in the event of a merger,
recapitalization, or other corporate restructuring, (a) change or impair,
without the consent of the recipient thereof, an Incentive previously granted,
(b) materially increase the maximum number of shares of common stock which may
be issued to all participants under the Plan, (c) materially change or expand
the types of Incentives that may be granted under the Plan, (d) materially
modify the requirements as to eligibility for participation in the Plan, or (e)
materially increase the benefits accruing to participants. Certain Plan
amendments require stockholder approval, including amendments which would
materially increase benefits accruing to participants, increase the number of
securities issuable under the Plan, or change the requirements for eligibility
under the Plan.
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Item 5.07.
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Submission
of Matters to a Vote of Security
Holders.
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On July
26, 2010, the Company held its 2010 Annual Meeting of Stockholders. Set
forth below is a brief description of each matter voted upon at the meeting and
the voting results with respect to each matter.
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1.
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A
proposal to elect seven directors to hold office until the Company’s 2011
Annual Meeting of Stockholders, or until their respective successors have
been elected and have qualified, or until their earlier resignation or
removal.
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Director Nominee
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Votes For
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Votes Withheld
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Arie
S. Belldegrun
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15,055,820
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18,607
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Pedro
Granadillo
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15,046,820
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27,607
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Peter
M. Kash
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14,974,311
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100,116
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Joshua
A. Kazam
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15,050,820
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23,607
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Frank
Litvack
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15,055,820
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18,607
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Paul
A. Mieyal
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15,051,320
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23,107
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Gregory
Schafer
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15,054,320
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20,107
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2.
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A
proposal to ratify and approve an amendment to the Company’s Amended and
Restated 2005 Stock Option Plan to increase the number of shares of the
Company’s common stock issuable thereunder from 5,517,676 to 9,500,000
shares, as described above under Item
5.02.
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For
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Against
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Abstentions
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Broker Non-Votes
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14,485,119
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327,198
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262,110
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9,001,077
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3.
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A
proposal to ratify the appointment of Crowe Horwath LLP as the Company’s
independent registered public accounting firm for the fiscal year ending
December 31, 2010.
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For
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Against
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Abstentions
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Broker Non-Votes
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23,959,213
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39,321
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76,970
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0
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Pursuant
to the foregoing votes, the seven director nominees listed above were elected to
serve as directors until the next annual meeting of stockholders, the amendment
to the Company’s Amended and Restated 2005 Stock Option Plan to increase the
number of shares of the Company’s common stock issuable thereunder from
5,517,676 to 9,500,000 shares was ratified and approved, and the appointment of
Crowe Horwath LLP as the Company’s independent registered public accounting firm
for the fiscal year ending December 31, 2010 was ratified.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
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10.1
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Letter
Agreement between Nile Therapeutics, Inc. and Richard Brewer, dated July
15, 2010.
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10.2
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Severance
Benefits Agreement between Nile Therapeutics, Inc. and Daron Evans, dated
July 24, 2010.
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10.3
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Summary
terms of compensation plan for directors of Nile Therapeutics, Inc., as
amended July 26, 2010.
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99.1
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Press
release dated July 22,
2010.
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SIGNATURES
Pursuant to the requirements 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, hereunto duly
authorized.
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NILE
THERAPEUTICS, INC.
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Date: July
27, 2010
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By:
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/s/ Daron Evans
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Daron
Evans
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Chief
Financial Officer
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EXHIBIT
INDEX
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10.1
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Letter
Agreement between Nile Therapeutics, Inc. and Richard Brewer, dated July
15, 2010.
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10.2
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Severance
Benefits Agreement between Nile Therapeutics, Inc. and Daron Evans, dated
July 24, 2010.
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10.3
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Summary
terms of compensation plan for directors of Nile Therapeutics, Inc., as
amended July 26, 2010.
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99.1
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Press
release dated July 22,
2010.
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