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Form 8-K Biodel Inc For: Apr 01

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April 1, 2016 5:01 PM EDT

 

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): April 1, 2016

 

BIODEL INC.
(Exact name of registrant as specified in its charter)

 

 

Commission File Number 001-33451

 

     
Delaware
(State or other jurisdiction of incorporation or organization)		   90-0136863
(IRS Employer Identification Number)
     

100 Saw Mill Road

Danbury, Connecticut

(Address of principal executive offices)

  

06810

(Zip code)

 

 

(203) 796-5000
(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:

 

[  ] 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))

 

 

Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On April 1, 2016, Biodel Inc. (the “Company”) entered into an Amendment to Executive Employment Agreement with Gary G. Gemignani (the “Gemignani Amendment”) and an Amendment to Executive Severance Agreement and Change of Control Agreement with Paul S. Bavier (the “Bavier Amendment”, and together with the Gemignani Amendment, the “Amendments”). Mr. Gemignani is the Company’s Interim Chief Executive Officer and Chief Financial Officer and Mr. Bavier is the Company’s Interim President, Chief Administrative Officer, General Counsel and Secretary.

 

The Amendments were entered into in order to amend and harmonize certain severance and other employment benefits in conjunction with the Company’s previously announced review of its strategic alternatives.

 

Gemignani Amendment

 

The Gemignani Amendment amends his existing Employment Agreement with the Company as follows:

 

·revises Mr. Gemignani’s 2016 bonus structure to provide that in the event the Company is combined with an unaffiliated third party (a “Transaction”) in calendar year 2016 and he remains employed with the Company through such date, then on the closing date of the Transaction he shall receive, in lieu of the previously specified annual bonus for the fiscal year ending September 30, 2016, a one-time, lump sum, cash bonus award of (A) $250,000, plus (B) 100% of his pro-rated target bonus for fiscal year 2016;
·revises severance benefits upon termination of Mr. Gemignani’s employment by the Company without cause or by Mr. Gemignani for good reason as follows:

 

(i) cash severance payable upon such termination to the sum of (A) eighteen (18) months of his then-current base salary, plus (B) one and a half times the amount of his target bonus, such amount to be payable in equal installments during an eighteen (18) month period following the delivery of a customary release; (ii) provides for a lump sum payment equal to eighteen (18) months of COBRA insurance premiums regardless of whether COBRA coverage is elected; and (iii) except as with regard to an option grant made on January 21, 2016, any outstanding equity awards or stock options will immediately vest and the provision in any agreement evidencing any outstanding stock option causing the option to terminate upon the expiration of three months (or any other period relating to termination of employment) after termination of employment shall be of no force or effect, except that nothing shall extend any such option beyond its original term or shall affect its termination for any reason other than termination of employment; and

 

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·includes within the definition of “good reason” the Company’s requiring him to be based at any office or location that is more than thirty five (35) miles from the Company’s current headquarters in Danbury, Connecticut or his place of residence as of the date of his termination.

 

Bavier Amendment

 

The Bavier Amendment amends his existing Executive Severance Agreement and Change of Control Agreement with the Company as follows:

 

·provides for an annual bonus upon meeting the applicable performance criteria established by the Compensation Committee of the Board in its sole discretion, for a given fiscal year of the Company, targeted at an amount equal to 35% of the his base salary at the beginning of such fiscal year;
·revises Mr. Bavier’s 2016 bonus structure to provide that in the event the Company is combined with an unaffiliated third party (a “Transaction”) in calendar year 2016 and he remains employed with the Company through such date, then on the closing date of the Transaction he shall receive, in lieu of the previously specified annual bonus for the fiscal year ending September 30, 2016, a one-time, lump sum, cash bonus award of (A) $250,000, plus (B) 100% of his pro-rated target bonus for fiscal year 2016;
·revised severance benefits upon termination of Mr. Bavier’s employment by the Company without cause or by Mr. Bavier for good reason as follows:

 

(i) cash severance payable upon such termination to the sum of (A) eighteen (18) months of his then-current base salary, plus (B) one and a half times the amount of his target bonus, such amount to be payable in equal installments during an eighteen (18) month period following the delivery of a customary release; (ii) provides for a lump sum payment equal to eighteen (18) months of COBRA insurance premiums regardless of whether COBRA coverage is elected; and (iii) except as with regard to an option grant made on January 21, 2016, any outstanding equity awards or stock options will immediately vest and the provision in any agreement evidencing any outstanding stock option causing the option to terminate upon the expiration of three months (or any other period relating to termination of employment) after termination of employment shall be of no force or effect, except that nothing shall extend any such option beyond its original term or shall affect its termination for any reason other than termination of employment; and

 

·includes within the definition of “good reason” the Company’s requiring him to be based at any office or location that is more than thirty five (35) miles from the Company’s current headquarters in Danbury, Connecticut or his place of residence as of the date of his termination.

 

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The foregoing descriptions of the Gemignani Amendment and the Bavier Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the Gemignani Amendment and the Bavier Amendment, which are included as Exhibits 10.1 and 10.2, respectively, hereto and are incorporated herein by reference.

 

Item 9.01.  Financial Statements and Exhibits

 

(d)      Exhibits – The following exhibits are filed as part of this report:

 

10.1    Amendment to Executive Employment Agreement dated April 1, 2016 between the Company and Gary G. Gemignani

10.2    Amendment to Executive Severance Agreement and Change of Control Agreement dated April 1, 2016 between the Company and Paul S. Bavier

 

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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:  April 1, 2016 BIODEL INC.
   
   
  By:      /s/ Paul S. Bavier                               
  Paul S. Bavier, Interim President, General Counsel
  and Secretary

 

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Exhibit 10.1

BIODEL INC.

EXECUTIVE EMPLOYMENT AGREEMENT – GARY G. GEMIGNANI

AMENDMENT

 

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made as of April 1, 2016 by and between Biodel Inc., a Delaware corporation (the “Company”), and Gary G. Gemignani, an individual (“Executive” or “you”) (and, together, “Parties”).

WHEREAS, the Company and Executive are parties to an Employment Agreement, dated August 21, 2014, with an effective date of September 15, 2014 (the “Agreement”);

WHEREAS, the Company and Executive desire to amend the Agreement to provide for certain adjustments to the provisions thereof;

NOW THEREFORE, in consideration of the options and potential cash awards described herein, the Parties agree that the Agreement is amended as follows:

1.  The following sentence shall be added at the end of Section 1 of the Agreement (Engagement):

You will be based at, and work primarily from, the Company’s headquarters location.

2.  Section 2(b) of the Agreement (Incentive Bonus) is hereby replaced with the following:

Upon meeting the applicable performance criteria established by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion, you will be eligible to receive an annual incentive bonus (the “Annual Bonus”) for a given fiscal year of the Company targeted at an amount equal to 35% of your Base Salary in effect at the Effective Date or, for subsequent years, at an amount equal to 35% of the Executive’s Base Salary at the beginning of such fiscal year (the “Target Bonus”). The Annual Bonus, if any, will be paid in a lump sum when other executives receive their bonuses under comparable arrangements but, in any event, no later than March 15 of the year following the fiscal year with respect to which it is earned. The applicable performance criteria for each fiscal year of the Company shall be determined by the Compensation Committee no later than 90 days after the commencement of that fiscal year. In the event the Company is combined with an unaffiliated third party (a “Transaction”) in calendar year 2016 and you remain employed with the Company through such date, then on the closing date of the Transaction you shall receive, in lieu of the Annual Bonus for the fiscal year ending September 30, 2016, a one-time, lump sum, cash bonus award of (a) $250,000, plus (b) 100% of your pro-rated Target Bonus for fiscal year 2016 (the “Transaction Bonus”).

3.  Section 2 (c) of the Agreement (Equity Awards) is hereby amended to state: On January 21, 2016, the Company granted you stock options for 600,000 shares of the Company’s common stock (the “Option Award”). The Option Award (i) was issued under the Company’s 2010 Stock Incentive Plan; (ii) has an exercise price equal to the last reported sale price of the Company’s common stock on the NASDAQ Capital Market on the effective date of the resolution granting the award; (iii) vests and therefore becomes exercisable quarterly in equal installments over a three year period; (iv) fully and immediately vests upon termination of employment by the Company without cause or resignation for good reason, in either case as set forth in this

 

 

Agreement; (v) is exercisable, upon termination of employment by the Company without cause or resignation for good reason, in either case as set forth in this Agreement, for a period of three years from the date of such event (or until its earlier expiration date), notwithstanding any terms to the contrary in this Agreement; (vi) qualifies as an “incentive stock option” described in Section 422 of the Code (as defined below) to the extent permissible under the Code; (vii) has a term of seven years and (viii) is evidenced by an agreement otherwise substantially in the form of the stock option agreement previously approved by the Company’s Board of Directors.

4.  Section 4(b)(i) of the Agreement (Cash Severance) is hereby replaced with the following:

(i)  Cash Severance. The Company will pay to you in cash an amount equal to the sum of (a) eighteen (18) months of your then-current Base Salary, plus (b) one and a half times the amount of your Target Bonus; the foregoing amount to be payable in equal installments during an eighteen (18) month period following the delivery of the release contemplated in Section 4(b)(iv) below, in accordance with the Company’s normal pay practices, subject to the provisions of Section 5 hereof, as applicable.

5.  Section 4(b)(ii) of the Agreement (Benefits) is hereby replaced with the following:

(ii)  Benefits. The Company will pay to you a lump sum payment equal to eighteen (18) months of COBRA insurance premiums that you would have to pay for COBRA health insurance benefit continuation under COBRA. The lump sum will be paid regardless of whether you elect COBRA coverage.

6.  Section 4(b)(iii) of the Agreement (Equity Compensation) is hereby replaced with the following:

(iii)  Equity Compensation. Except as with regard to the equity awards set forth in Section 2(c), in addition to the compensation and benefits described in 4(b)(i) and (ii) above and subject to the release required under Section 4(b)(iv), any outstanding equity awards or stock options will immediately vest and the provision in any agreement evidencing any outstanding stock option causing the option to terminate upon the expiration of three months (or any other period relating to termination of employment) after termination of employment shall be of no force or effect, except that nothing herein shall extend any such option beyond its original term or shall affect its termination for any reason other than termination of employment.

7.  Section 4(b)(iv) of the Agreement (Release) is hereby replaced with the following:

(iv)    Release. To receive any severance benefits provided for under Section 4(b)(i), (ii) or (iii) of this Agreement, you must deliver to the Company an executed general release of claims in a customary form provided by the Company, provided, that in no event shall the release purport to release claims to the compensation described in Section 4(a) and (b) and, if applicable, Sections 2(b) and 2(c) or other continuing rights under this Agreement. Such release shall be delivered by the Company not later than the fifth day following the Company’s termination of your employment without Cause or your resignation from the Company for Good Reason, and must be executed and returned by you not later than 28 calendar days following delivery thereof. Payment of any severance or other benefits under this Agreement shall commence on the next payroll date following execution, delivery and non-revocation of the release by you.

 

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8.  Section 4(c)(ii)(II)(iii) (Good Reason) is hereby replaced with the following:

(iii) the Company's requiring you to be based at any office or location that is more than thirty five (35) miles from the Company’s current headquarters in Danbury, Connecticut or your place of residence as of the date of your termination.

 

9.  This Amendment supersedes any inconsistent provision of the Agreement. Otherwise, all provisions of the Agreement not subject to this Amendment remain unchanged and effective.

IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed and you have hereunto set your hand to be effective as of the Effective Date.

 

    BIODEL INC.  
       
       
April 1, 2016   By:       /s/ Arlene M. Morris  
Date      
       
       
    GARY G. GEMIGNANI  
       
       
April 1, 2016         /s/ Gary G. Gemignani  
Date      

 

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Exhibit 10.2

BIODEL INC.

EXECUTIVE SEVERANCE AGREEMENT

AND CHANGE OF CONTROL AGREEMENT – PAUL S. BAVIER

AMENDMENT

 

THIS AMENDMENT TO     EXECUTIVE SEVERANCE AGREEMENT AND CHANGE OF CONTROL AGREEMENT (this “Amendment”) is made as of April 1, 2016 by and between Biodel Inc., a Delaware corporation (the “Company”), and Paul S. Bavier, an individual (“Executive” or “you”) (and, together, “Parties”).

WHEREAS, the Company and Executive are parties to an Executive Severance Agreement, dated June 13, 2008 (the “Severance Agreement”);

WHEREAS, the Company and Executive are parties to a Change of Control Agreement, dated June 13, 2008 (the “Change of Control Agreement”);

WHEREAS, the Company and Executive desire to amend the Severance Agreement and Change of Control Agreement to provide for certain adjustments to the provisions thereof;

NOW THEREFORE, in consideration of the options and potential cash awards described herein, the Parties agree that the Severance Agreement and Change of Control Agreement are amended as follows:

 

1.    Section 3.3 of the Change of Control Agreement is hereby replaced with the following:

During the Change of Control Period, the Executive’s services shall be performed at the Company’s headquarters location.

2.    The introductory language of Section 5 of the Change of Control Agreement is hereby replaced with the following:

During any period prior to the Change of Control Period, and during the Change of Control Period, as long as the Executive remains employed by the Company, the Company agrees to pay or cause to be paid to the Executive, and the Executive agrees to accept in exchange for the services rendered to the Company, the following compensation:

3.    Section 5.2 of the Change of Control Agreement is hereby replaced with the following:

5.2    INCENTIVE BONUS. Upon meeting the applicable performance criteria established by the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion, the Executive will be eligible to receive an annual incentive bonus (the “Annual Bonus”) for a given fiscal year of the Company targeted at an amount equal to 35% of the Executive’s Base Salary in effect at the Effective Date or, for subsequent years, at an amount equal to 35% of the Executive’s Base Salary at the beginning of such fiscal year (the “Target Bonus”). The Annual Bonus, if any, will be paid in a lump sum when other executives receive their bonuses under

 

 

comparable arrangements but, in any event, no later than March 15 of the year following the fiscal year with respect to which it is earned. The applicable performance criteria for each fiscal year of the Company shall be determined by the Compensation Committee no later than 90 days after the commencement of that fiscal year. In the event the Company is combined with an unaffiliated third party (a “Transaction”) in calendar year 2016 and the Executive remains employed with the Company through such date, then on the closing date of the Transaction the Executive shall receive, in lieu of the Annual Bonus for the fiscal year ending September 30, 2016, a one-time, lump sum, cash bonus award of (a) $250,000, plus (b) 100% of the Executive’s pro-rated Target Bonus for fiscal year 2016 (the “Transaction Bonus”).

4.    Sections 8.1(a)(ii), (iii) and (iv) of the Change of Control Agreement are hereby deleted in their entirety.

5.    Section 8.1(a)(v) of the Change of Control Agreement is hereby changed to Section 8.1(a)(ii).

6.    Sections 8.1(b), (c) and (d) of the Change of Control Agreement are hereby replaced by the following:

(b)    The Company will pay to the Executive a lump sum payment equal to eighteen (18) months of COBRA insurance premiums that the Executive would have to pay for COBRA health insurance benefit continuation under COBRA. The lump sum will be paid regardless of whether the Executive elects COBRA coverage.

(c)    The Company will pay to the Executive in cash an amount equal to the sum of (i) eighteen (18) months of the Executive’s then-current Base Salary, plus (ii) one and a half times the amount of the Executive’s Target Bonus; the foregoing amount to be payable in equal installments during an eighteen (18) month period following the delivery of a release in the form of Exhibit A hereto, in accordance with the Company’s normal pay practices, subject to the provisions of Section 8.10 hereof, as applicable.

(d)    To receive any severance benefits provided for under Section 8.1 (b), (c) and (e) of this Agreement, the Executive must deliver to the Company an executed general release of claims in the form of Exhibit A hereto, provided, that in no event shall the release purport to release claims to the compensation described in Sections 8.1 (a), (b), (c) or (e) and, if applicable, Section 5 or other continuing rights under this Agreement. Such release shall be delivered by the Company not later than the fifth day following the Company’s termination of the Executive’s employment without Cause or the Executive’s resignation from the Company for Good Reason, and must be executed and returned by the Executive not later than 28 calendar days following delivery thereof. Payment of any severance or other benefits under this Agreement shall commence on the next payroll date following execution, delivery and non-revocation of the release by the Executive.

7.    Sections 8.1(e) and (f) of the Change of Control Agreement are hereby replaced by the following Section 8.1(e):

(e)    Except as with regard to the equity awards set forth in Section 3.1 of the Severance Agreement dated June 13, 2008, as amended, in addition to the compensation and benefits described in 8.1(b) and (c) above and subject to the release required under Section 8.1(d), any

 

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outstanding equity awards or stock options will immediately vest and the provision in any agreement evidencing any outstanding stock option causing the option to terminate upon the expiration of three months (or any other period relating to termination of employment) after termination of employment shall be of no force or effect, except that nothing herein shall extend any such option beyond its original term or shall affect its termination for any reason other than termination of employment.

8.    Section 8.6(c) (Good Reason) of the Change of Control Agreement is hereby replaced with the following:

(c)    The Company’s requiring the Executive to be based at any office or location that is more than thirty five (35) miles from the Company’s current headquarters in Danbury, Connecticut or the Executive’s place of residence as of the date of the Executive’s termination;

9.    Section 3 of the Severance Agreement is hereby amended to add the following Section 3.1:

Section 3.1 Stock Options: On January 21, 2016, the Company granted the Executive stock options for 500,000 shares of the Company’s common stock (the “Option Award”). The Option Award (i) was issued under the Company’s 2010 Stock Incentive Plan; (ii) has an exercise price equal to the last reported sale price of the Company’s common stock on the NASDAQ Capital Market on the effective date of the resolution granting the award; (iii) vests and therefore becomes exercisable quarterly in equal installments over a three year period; (iv) fully and immediately vests upon termination of employment by the Company without cause or resignation for good reason, in either case as set forth in this Agreement; (v) is exercisable, upon termination of employment by the Company without cause or resignation for good reason, in either case as set forth in this Agreement, for a period of three years from the date of such event (or until its earlier expiration date), notwithstanding any terms to the contrary in this Agreement; (vi) qualifies as an “incentive stock option” described in Section 422 of the Code (as defined below) to the extent permissible under the Code; (vii) has a term of seven years and (viii) is evidenced by an agreement otherwise substantially in the form of the stock option agreement previously approved by the Company’s Board of Directors.

10.    Sections 5.1(a)(ii), (iii) and (iv) of the Severance Agreement are hereby deleted in their entirety.

11.    Section 5.1(a)(v) of the Severance Agreement is hereby changed to Section 5.1(a)(ii).

12.    Sections 5.1(b), (c) and (d) of the Severance Agreement are hereby replaced by the following:

(b)    The Company will pay to the Executive a lump sum payment equal to eighteen (18) months of COBRA insurance premiums that the Executive would have to pay for COBRA health insurance benefit continuation under COBRA. The lump sum will be paid regardless of whether the Executive elects COBRA coverage.

(c)    The Company will pay to the Executive in cash an amount equal to the sum of (i) eighteen (18) months of the Executive’s then-current Base Salary, plus (ii) one and a half times the amount

 

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of the Executive’s Target Bonus; the foregoing amount to be payable in equal installments during an eighteen (18) month period following the delivery of a release in the form of Exhibit A hereto, in accordance with the Company’s normal pay practices, subject to the provisions of Section 8.10 hereof, as applicable.

(d)    To receive any severance benefits provided for under Section 5.1 (b), (c) and (e) of this Agreement, the Executive must deliver to the Company an executed general release of claims in the form of Exhibit A hereto, provided, that in no event shall the release purport to release claims to the compensation described in Sections 5.1 (a), (b), (c) or (e) or other continuing rights under this Agreement. Such release shall be delivered by the Company not later than the fifth day following the Company’s termination of the Executive’s employment without Cause or the Executive’s resignation from the Company for Good Reason, and must be executed and returned by the Executive not later than 28 calendar days following delivery thereof. Payment of any severance or other benefits under this Agreement shall commence on the next payroll date following execution, delivery and non-revocation of the release by the Executive.

13.    Sections 5.1(e) and (f) of the Severance Agreement are hereby replaced by the following Section 5.1(e):

(e)    Except as with regard to the equity awards set forth in Section 3.1, in addition to the compensation and benefits described in 5.1(b) and (c) above and subject to the release required under Section 5.1(d), any outstanding equity awards or stock options will immediately vest and the provision in any agreement evidencing any outstanding stock option causing the option to terminate upon the expiration of three months (or any other period relating to termination of employment) after termination of employment shall be of no force or effect, except that nothing herein shall extend any such option beyond its original term or shall affect its termination for any reason other than termination of employment.

14.    Section 5.6(c) (Good Reason) of the Severance Agreement is hereby replaced with the following:

(c)    The Company’s requiring the Executive to be based at any office or location that is more than thirty five (35) miles from the Company’s current headquarters in Danbury, Connecticut or the Executive’s place of residence as of the date of the Executive’s termination;

15.    The Executive acknowledges that the payments specified in Section 8.1 of the Change of Control Agreement and the payments specified in Section 5.1 of the Severance Agreement are the same and are not cumulative.

16.    This Amendment supersedes any inconsistent provision of the Severance Agreement and Change of Control Agreement. Otherwise, all provisions of the Severance Agreement and Change of Control Agreement not subject to this Amendment remain unchanged and effective.

 

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IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed and the Executive has hereunto set his hand to be effective as of the Effective Date.

 

    BIODEL INC.  
       
       
April 1, 2016   By:     /s/ Arlene M. Morris  
Date        
       
       
    Paul S. Bavier  
       
       
April 1, 2016     /s/ Paul S. Bavier  
Date        

 

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