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 31 , 2005
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Advaxis,
Inc.
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(Exact
name of registrant as specified in its
charter)
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Colorado
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00028489
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84-1521955
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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212
Carnegie Center #206, Princeton, New Jersey
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08546
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (609)
895-7150
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(Former
name or former address, if changed since last
report.)
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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):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
o
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 Principal Officers; Election of Directors; Appointment
of
Principal Officer
J.
Todd
Derbin, the President and Chief executive officer of the Company, have entered
into a Termination of Employment Agreement effective December 31, 2005 pursuant
to which Mr. Derbin’s employment by the Company will end on December 31, 2005.
Pursuant to such agreement Mr. Derbin’s salary for 2005 is set at $225,000 plus
a bonus for 2005 in shares of Common Stock of the Company to be determined
by
the Board of Directors. Following his resignation Mr. Derbin shall service
as a
consultant to the Company for a fee of $6,250 per month for 6 months ending
June
30, 2006. Mr. Derbin will continue to serve as Chairman and a member of the
Board of directors of the Company until at least September 30,
2006.
Mr.
Derbin will be replaced as President and chief executive officer of the Company
by Roni Appel, our Chief Financial Officer, effective as of December 31,
2005.
Mr.
Appel
has served as a member of our Board of Directors and as our Secretary and
Chief
Financial Officer since November 2004. Prior thereto he has served as Advaxis’
Secretary and Chief Financial Officer since it was formed. Since January
1999,
Mr. Appel has been a partner and managing director in LV Equity Partners
(fka
Liberty View Equity Partners). From 1998 until 1999, he was a founder and
the
director of business development at Americana Financial Services, Inc. From
1994
to 1998, he was an attorney and completed his MBA at Columbia University.
Mr.
Appel will continue to serve as Chief Financial Officer of the
Company.
Mr.
Appel’s services to the Company are provided pursuant to a Consulting Agreement
(the “Consulting Agreement”) between the Company and LVEP Management LLC
(“LVEP”) dated as of January 19, 2005, and amended on April 15, 2005, and
October 31, 2005. LVEP is owned by Scott Flamm, one of our directors and
a
principal shareholder. LVEP employs Mr. Flamm and Mr. Roni Appel, our Chief
Financial Officer. Pursuant to the Consulting Agreement , LVEP is to provide
financial management and strategic business development consulting services
to
us. The initial term of the Consulting Agreement as amended is until December
31, 2007 and thereafter the term of the agreement shall be automatically
extended for one year periods unless we notify LVEP at least 60 days prior
to
the end of term of our intent not to extend. In addition, the Consulting
Agreement may be terminated by us for any reason upon 60 days prior notice
or by
Consultant upon 45 days prior notice, Upon such notice all compensation and
bonuses payable under the Consulting Agreement shall continue until the later
to
occur of the end of the term or twelve (12) months from such termination.
In
consideration for providing the consulting services, under the Consulting
Agreement as amended LVEP shall receive compensation of $250,000 per year
payable at the rate of $20,833.33 per month for the term of the agreement
plus
reimbursement of approved expenses in connection with providing the consulting
services. LVEP intends to pay all such compensation to Mr. Appel. The Consultant
will receive a bonus payment at the end of 2005 not to exceed $75,000. In
subsequent years the bonus shall equal 40% of the base consulting compensation.
At the election of the Company or of Consultant up to 100% of the bonus may
be
paid in common stock of the Company .Additionally, LVEP shall receive additional
options to purchase common stock of the Company bringing options held LVEP
to 5%
of the outstanding shares and options of the Company as of December 31, 2005.
The incremental options shall vest monthly over four years commencing in
April,
2006. LVEP has assigned such options to Mr. Appel.
2
Item
9.01. Financial
Statements and Exhibits
| a) |
Not
applicable.
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| b) |
Not
applicable.
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| c) |
Exhibits
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10.1.
Resignation Agreement between J. Todd Derbin and the Company dated October
31,
2005,
10.2.
Second Amendment to Consulting Agreement between the Company and LVEP Management
LLC dated October 2005.
3
SIGNATURE
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.
| ADVAXIS, INC. | ||
| |
|
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| Date: November 7, 2005 | By: | /s/ Roni Appel |
|
Name: Roni Appel |
||
|
Title:
Chief Financial
Officer
|
||
4
Advaxis,
Inc
212
Carnegie Center
Princeton,
NJ 08540
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Mr.
J. Todd Derbin
3051
Lawrenceville rd
Lawrencville,
NJ 08648
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October
31,
2005
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Dear
Todd:
Re:
Termination of Employment Agreement
It
is
hereby agreed that your restated employment agreement dated December 20,
2005
(“Agreement”)
and
your employment with Advaxis shall terminate, effective December 31, 2005.
The
following terms and conditions shall apply:
| 1. |
Base
compensation:
Your base compensation shall continue to be paid until December 31,
2005
such that your gross annual salary for 2005 shall be $225,000. Thereafter,
no further compensation will be paid or due. Your bonus for year
2005
shall be determined on or prior to January 31, 2006 by the board
of
directors as per the Agreement and shall be paid in common shares,
on or
prior to February 28, 2006. Such shares shall have piggyback registration
rights (i.e.,
you
shall have the right to offer any or all of such shares for sale
pursuant
to any registration statement filed by Advaxis with the Securities
and
Exchange Commission (“SEC”) under the Securities Act of 1933 and Advaxis
will give you notice of its intent to file any such registration
statement
with the SEC no less than ten business days prior to the date of
such
filing).
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| 2. |
Consulting
Fee.
You shall receive a consulting fee of $6,250 per month for a period
of 6
(six) months commencing January 1, 2006 and ending June 30, 2006.
In
addition, the Company shall reimburse your health insurance expense
up to
$714.19 per month until the earliest of June 30, 2006 or such time
when
you will obtain health insurance from a new
employer.
|
| 3. |
Resignation.
Your resignation as President and Chief Executive Officer and from
all
employee and executive positions in the Company shall become effective
December 31, 2005.
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| 4. |
Board
member and Chairman:
You shall continue to be a director and assume the position of a
non
executive Chairman of the Company until such time as you shall resign
or
be removed by a vote of a majority of the directors, or until the
next
shareholder meeting provided that you shall not be removed from this
position by a vote of the directors prior to September 30, 2006.
You shall
receive no compensation as director or
chairman.
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| 5. |
Options:
No vesting of options shall occur after 12.31.2005. Upon your resignation
you shall have the following vested options: (a) under the approved
2004
option plan, you shall have 928,441 options exercisable at $0.1952
per
share. These options shall be subject to the terms of the 2004 option
plan; (b) under the 2005 option plan, you shall have 427,796 options
exercisable at $0.287 per share. The parties acknowledge that these
options are subject to the 2005 option plan being approved and ratified
by
the shareholders of the Company; (c) The options under this section
5
shall be exercisable at any time on or prior to December 31, 2006.
Advaxis
hereby represents to you that the issuance to you by Advaxis of each
of
the options referred to in this section 5 and the shares of common
stock
referred to in section 1 has been approved by the board of directors
of
Advaxis or a committee of the board of directors that is composed
solely
of two or more Non-Employee Directors (as defined in Rule 16b-3(b)(3)(i)
promulgated by the SEC under the Securites Exchange Act of 1934,
as
amended).
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| 6. |
Non-Competition
and Non-Solicitation:
You
shall not for two years from the date of this letter for any reason:
(a)
directly or indirectly compete with the Company, or advise or become
a
partner, consultant, agent, director, advisor or a 1% shareholder
in a
business that is substantially similar to or competitive with the
business
or planned business of the Company, or (b) solicit any clients or
customers of the Company for any business that is substantially similar
to
or competitive with the business or planned business of the Company.
You
acknowledge and agree that the geographic, length of term, and types
of
activity restrictions contained in this Section 6 are reasonable
and
necessary to protect the legitimate business interests of the
Company.
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| 7. |
Confidentiality:
The parties acknowledge the existing confidentiality agreement executed
and dated as of January 6, 2005. Such agreement shall remain in full
force
and effect.
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| 8. |
Severability.
If any provision of this Agreement or application thereof to anyone
or
under any circumstances is adjudicated to be invalid or unenforceable
in
any jurisdiction, such invalidity or unenforceability shall not affect
any
other provision or application of this Agreement which can be given
effect
without the invalid or unenforceable provision or application and
shall
not invalidate or render unenforceable such provision or application
in
any other jurisdiction.
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| 9. |
Assignment.
All of the terms and provisions of this Agreement shall be binding
upon
and inure to the benefit of and be enforceable by the respective
heirs,
executors, administrators, legal representatives, successors and
assigns
of the parties hereto, except that your duties and responsibilities
hereunder are of a personal nature and shall not be assignable or
delegatable in whole or in part by you.
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| 10. |
Governing
Law.
This Agreement shall be governed by and interpreted under the laws
of the
State of New Jersey without giving effect to any conflict of laws
provisions. Any dispute arising from this Agreement shall be submitted
to
an arbitration conducted by a single arbitrator in Princeton, New
Jersey.
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| 11. |
Miscellaneous.
All section headings are for convenience only. This Agreement may
be
executed in several counterparts, each of which is an original. It
shall
not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other
counterparts.
|
Upon
your
acceptance, this letter will contain the entire agreement and understanding
between you and the Company and supersedes any prior or contemporaneous
agreements, understandings, communications, offers, representations, warranties,
or commitments by or on behalf of the Company (oral or written). Without
derogating from the generality of the foregoing sentence, it is agreed and
understood that the employment agreements dated December 15, 2004 and October
24, 2002 are terminated.
If
these
terms are agreeable to you, sign and date the letter in the appropriate space
at
the bottom and return it us.
Sincerely,
/s/
Roni
Appel
______________
Name:
Roni Appel
Title:
CFO
I
understand and accept the terms and conditions of this agreement.
/s/
Todd
Derbin
______________
J
Todd Derbin
SECOND
AMENDMENT TO CONSULTANCY AGREEMENT
THIS
SECOND AMENDMENT TO CONSULTANCY AGREEMENT is made as of this 31st
day of
October, 2005, by and between Advaxis,
Inc, a Colorado corporation, having a principal place of business at 212
Carnegie Center, Princeton, NJ (“Company”),
and
LVEP
Management, LLC
with a
place of business at 111
River
Street, 10th
floor,
Hoboken, NJ 07030
(“Consultant”).
WHEREAS,
Consultant and Company have entered into a Consultancy Agreement for the
performance by Consultant of certain consulting services on or about January
19
2005 (the “Agreement”);
and
WHEREAS,
the Agreement has been amended on March 29, 2005; and
WHEREAS,
Consultant and Company wish to amend Schedule
B
and
certain terms of the Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants, terms, and conditions
hereinafter set forth, and intending to be legally bound, Company and Consultant
agree as follows:
| 1. |
Compensation:
Company shall pay Consultant or its assignee or designee the compensation
per the attached Amended
Schedule B
effective as of the Effective Date. The “Effective
Date”
shall be defined as the earlier of (a) January 1, 2006 or (b) the
date in
which Todd Derbin shall resign his position as
CEO.
|
| 2. |
Title
and reporting:
Roni Appel (“Appel”) shall be named President and Chief Executive Officer
of the Company, shall manage all company activities and report
directly to
the board of directors of the Company. It is understood that the
Company
shall not actively search for a replacing Chief Executive Officer
and in
any event shall not hire such replacing Chief Executive Officer
or absent
termination for Cause or termination under Paragraph 4 (b) (below)
change
the title, reporting relationship or responsibilities of Appel
prior to
June 30, 2006. After June 30, 2006, Company may hire a Chief Executive
Officer and change Appel’s title and responsibilities to a Chief Financial
Officer, provided that in such an event (a) Consultant’s assignee’s or
designee’s compensation and termination benefits shall return to the level
in place as of this date; (b) 25% of the unvested options of Consultant
shall immediately become fully vested and exercisable; and (c)
in the
event that this Agreement is terminated or not renewed for any
reason
other than for Cause, Consultant’s options shall be exercisable for 9
months post the termination date. Only termination for the following
shall
constitute Termination for “Cause” for purpose of this section 2: (a)
Conviction of, or plea of no contest by, Appel in a court of competent
jurisdiction of any criminal offense involving dishonesty or breach
of
trust or any felony or crime of moral turpitude; (b) Willful refusal
by
Consultant to perform the duties reasonably assigned to Consultant
by the
board of directors (which duties are consistent with your position
with
the Company), which failure or breach continues for more than 20
days
after written notice given to Consultant pursuant to a vote of
at least a
majority of all of the members of the board of directors, such
vote to set
forth in reasonable detail the nature of such refusal; (c) Diverting
any
business opportunity of the Company or its affiliates for Consultant’s own
personal gain; or, (d) Materially breaching any provision of this
Agreement, which breach is not cured within thirty (30) days after
receiving written notice from the board of directors specifying
the nature
of such breach
|
| 3. |
Disability.
In the event of the Permanent Disability (as defined below) of
Consultant,
this Agreement may be terminated by the Company. In such event,
the
Company shall pay Consultant (i) Consultant’s earned but unpaid
compensation, pro rata earned bonus and accrued but unused vacation
through the date of termination, (ii) the amount of any unreimbursed
expenses, and (iii) for a period of six (6) months from the date
of such
termination, Consultant’s compensation as in effect at the time of such
termination; provided,
that such amounts shall be offset by any amounts otherwise paid
to
Consultant under the then-existing disability benefit plans of
the
Consultant. In addition, Consultant shall be entitled to be reimbursed
for
benefits that have already vested or which otherwise are to be
provided
pursuant to the terms of employee benefits plans maintained by
the
Consultant for its employees (including without limitation the
payments
prescribed for Consultant’s employees under any disability benefit plans
which may be in effect for executives of the Consultant and in
which
Consultant participated). Consultant shall also be entitled to
be
reimbursed by Company for group hospitalization and health insurance,
if
and to the extent the Company maintains policies generally, for
the
periods specified in the Comprehensive Omnibus Budget Reconciliation
Act
(“COBRA”) upon payment by Consultant of the required amounts under COBRA.
Except as set forth above or as otherwise required by law, no other
payments shall be made, or benefits provided, by the Company under
this
Agreement in the event the Company terminates this Agreement due
to
Consultant’s employee’s Permanent Disability. The term “Permanent
Disability” shall mean the inability of Consultant to perform Consultant’s
essential duties and other services which Consultant is retained
to
perform, even with reasonable accommodation, for a total of three
(3)
calendar months during any twelve (12) consecutive calendar months
due to
illness or injury of a physical or mental nature, supported by
the
completion by Consultant’s assignee’s or designee’s attending physician of
a medical certification form outlining the disability and treatment.
The
Company and Consultant will cooperate with each other and comply
with all
reasonable requests to determine whether a disability exists and,
if so,
whether there is a reasonable accommodation that does not produce
undue
hardship to the Company’s business. It is the parties' intent to comply
with the Americans with Disabilities Act and the New Jersey Law
Against
Discrimination with respect to any disability or
handicap.
|
1
| 4. |
Term
and Termination:
|
| a. |
Term.
The initial term of this Agreement shall begin on the Effective
Date and
shall end on December 31, 2007 (“Term”). Thereafter, the Term shall be
automatically extended by 12-month periods unless Company notifies
Consultant no later than 60 days prior to the end of the Initial
Term or
any extension thereof of its intent not to extend the
Agreement.
|
| b. |
Termination.
Consultant may terminate this Agreement for any reason during the
term
hereof upon forty five (45) days prior written notice to the Company.
Company may terminate the Agreement upon sixty (60) days prior
written
notice to the Consultant provided that upon such early termination
Company
shall continue to pay Consultant the full consulting fee, option
vesting,
benefits and expenses for the greater of 12 months following the
termination date or until the end of the Term (as extended), which
shall
be subject to mitigation if Consultant shall have other sources
of
revenue.
|
| 5. |
All
other terms and conditions remain
unchanged.
|
IN
WITNESS HEREOF, the parties have read and agree to be bound by the above
terms
and conditions and have entered into this Agreement effective as of the date
set
forth above.
|
Company
|
Consultant | ||
| /s/ Scott Flamm | /s/ Roni Appel | ||
|
|
|
||
|
Scott
Flamm
Member
of the compensation committee
|
By:
Roni Appel Name: Manager |
| /s/ Thomas McKearn | |||
|
|
|||
|
Thomas
McKearn
Member of the compensation committee
|
2
Amended
Schedule B
COMPENSATION
AND PAYMENT SCHEDULE.
| i. |
Cash:
during
the Term of the Agreement, and starting as of the Effective Date,
Company
shall pay Consultant $250,000 per annum, paid at the rate of $20,833.33
monthly.
|
| ii. |
Bonus:
Consultant
shall receive a maximum potential bonus at each year-end equal
to 40% of
the base compensation based on certain milestones determined by
Consultant
and the board of directors. At Consultant’s choice 100% of the bonus, and
at Company choice 50% of the bonus may be paid in common shares
at the
average price of the 30 days preceding December 31 or the applicable
year.
It is agreed that the bonus for year 2005 shall be determined by
the board
in good faith based on Company progress and Consultant’s performance with
a maximum potential discretionary bonus of up to
$75,000.
|
| iii. |
Benefits:
Company
shall reimburse Consultant for the same level and type of benefits
which
it provides to its most senior executives, including family healthcare
coverage, paid vacation, 401K plan and any other benefit per the
company’s
practice.
|
| iv. |
Expenses:
Company
shall reimburse all approved expenses incurred by Consultant in
connection
with the Services provided herein.
|
| v. |
Options: Company
shall grant Consultant
a
new incentive stock option grant (“New Grant”) which, together with
Consultants existing options shall be equal to 5% (five percent)
of the
total issued and outstanding common shares and options of the Company,
as
of December 31, 2005. The exercise price of these options shall
be the
lower of (a) $0.287 per share, or (b) the average market price
in the
month of December 2005. The New Grant shall be subject to the terms
and
condition of the Company’s 2005 option plan (“Plan”).
The options shall vest monthly over four years with a starting
vesting
date of April 1, 2005. There shall be full vesting acceleration
of all the
options held by Consultant in the event of a change of control
of the
Company. Consultant may assign or designate all of its options
to its
employees involved with performing the service under this
agreement.
|
| vi. |
Vacation: Consultant
may provide to its employees 21 annual vacation days not including
paid
company holidays.
|
| vii. |
Time
commitment:
Consultant shall not exceed more than 5% (five percent) of normal
working
hours on any outside project during any given work week without
the
approval of the board.
|
|
Company
|
Consultant | ||
| /s/ Scott Flamm | /s/ Roni Appel | ||
|
|
|
||
|
Scott
Flamm
Member
of the compensation committee
|
By:
Roni Appel Name: Manager |
| /s/ Thomas McKearn | |||
|
|
|||
|
Thomas
McKearn
Member of the compensation committee
|
3