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) November
7, 2006
ADVANCED
MAGNETICS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
0-14732
|
04-2742593
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
125
CambridgePark Drive, 6th
Floor
|
|
Cambridge,
Massachusetts
|
02140
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(617)
498-3300
(Registrant’s
telephone number, including area code)
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
1.01.
|
Entry
into a Material Definitive
Agreement.
|
Indemnification
Agreements
On
November 7, 2006, Advanced Magnetics, Inc. (the “Company”) entered into separate
indemnification agreements with Joseph L. Farmer, the Company’s General Counsel
and Vice President of Legal Affairs, and Michael N. Avallone, the Company’s
Chief Financial Officer and Vice President of Finance. On the same date,
the
Company also entered into separate indemnification agreements with Michael
Narachi and Ron Zwanziger, each of whom joined the Board of Directors of
the
Company as described in Item 5.02 below. The indemnification agreements are
identical in all material respects to the Company’s previously-filed
Representative Form of Indemnification Agreement, dated as of August 4, 2004.
Item
5.02.
|
Departure
of Directors or Principal Officers, Election of Directors, Appointment
of
Principal Officers; Compensatory Arrangements of Certain
Officers.
|
Principal
Officers
On
November 7, 2006, Jerome Goldstein retired as Chief Executive Officer of
the
Company and assumed the role of Executive Chairman, effective immediately.
Mr.
Goldstein will continue to serve as Treasurer of the Company.
On
November 7, 2006, Brian J.G. Pereira, M.D. was appointed the Company’s Chief
Executive Officer. Dr. Pereira will continue to serve as the Company’s
President.
Mr.
Goldstein is a co-founder of the Company and served as Chief Executive Officer,
Treasurer and Chairman of the Board of Directors since the Company was founded
in November 1981. Mr. Goldstein was President of the company from 1981 to
1997
and from 2001 to 2005. In his new role as Executive Chairman, he will be
responsible for the effective performance of the Board of Directors and will
continue to work closely with Dr. Pereira, acting in an advisory capacity
to him
and other executives. In addition to leading Board activities, Mr. Goldstein
will collaborate with Dr. Pereira on corporate strategy and direction and
in
advancing both the ferumoxytol and Combidex® programs.
Dr.
Pereira has been a director of the Company since July 2004 and was elected
President of the Company in November 2005. Dr. Pereira served as President
and
Chief Executive Officer of the New England Health Care Foundation, a physician’s
group at Tufts-New England Medical Center, from 2001 to 2005, and held various
other positions at Tufts-New England Medical Center from 1993 to 2001. He
is a
Professor of Medicine at Tufts University School of Medicine and at the Sackler
School of Biomedical Sciences of Tufts University. Dr. Pereira served as
President of the National Kidney Foundation from 2002 to 2004, and has served
on
the editorial board of twelve scientific journals. He also serves as a director
of the National Kidney Foundation, Kidney Care Partners, Wellbound Inc.,
and
Satellite Health Care Inc. In addition, Dr. Pereira is a member of the advisory
boards of Amgen, Inc. and Sigma-Tau Pharmaceuticals, Inc. along with several
other organizations.
Appointment
of Directors
On
November 7, 2006, the Board of Directors (the "Board") was expanded by two
members, and Michael Narachi and Ron Zwanziger were appointed to serve as
members of the Board.
Michael
Narachi is currently Chairman of Naryx Pharma, Inc. He recently retired as
an
Officer and Vice President of Amgen Inc. (“Amgen”), where he served as General
Manager of Amgen’s Anemia Business from 1999 to 2003. In this role, Mr. Narachi
led an integrated medical, marketing and sales team whose chief aim was to
eliminate anemia and its complications. Mr. Narachi joined Amgen in July
1984 as
a Molecular Biology Research Associate. He held various positions throughout
the
organization
including:
Product Development Team Leader for NEUPOGEN®; Director of Clinical Operations
in Thousand Oaks, CA and Cambridge, UK; VP of Development and Representative
Director for Amgen Japan; Head of Corporate Strategic Planning; Chief Operations
Officer of Amgen BioPharma, Amgen’s Colorado-based company which developed new
therapies for inflammatory diseases; and VP, Licensing and Business Development.
Mr. Narachi received a BS and MA degree in Molecular Genetics from the
University of California at Davis in 1984. He received an MBA from the Anderson
Graduate School of Management at UCLA.
Mr.
Zwanziger has served as Chairman and Chief Executive Officer of Inverness
Medical Innovations, Inc. since 2001. Inverness Medical is a major global
developer, manufacturer and marketer of advanced, pioneering consumer and
professional medical diagnostic products. From 1992 to 2001, he served in
the
same capacity at Inverness Medical Technology, Inc., a consumer-focused company
he co-founded that developed proprietary technologies and manufacturing
processes. In November 2001, Inverness Medical Technology was sold to Johnson
& Johnson for $1.3 billion. From 1981 to 1991, Mr. Zwanziger was Chairman,
Chief Executive Officer and Founder of Medisense, Inc. (“Medisense”), a company
which focused on sensor technology. Under his guidance, Medisense launched
the
first electronchemical blood glucose monitor in 1987. Medisense was acquired
by
Abbott Laboratories for approximately $900 million. Mr. Zwanziger received
his
undergraduate degree from Imperial College in 1975 and an MBA from the Harvard
Business School in 1981.
For
their
services as non-employee directors, Messrs. Narachi and Zwanziger will be
entitled to receive the standard compensation for a newly elected non-employee
director of the Company as described in Exhibit 10.1 to this report.
Accordingly, on November 7, 2006, each of Messrs. Narachi and Zwanziger received
an option to purchase $250,000 in value, or 8,801 shares, of the Company’s
common stock at an exercise price of $41.16, the fair market value of a share
of
the Company’s common stock on the date of grant. These options will vest in four
equal annual installments beginning on the first anniversary of the date
of
grant and have a ten-year term. The actual number of shares granted was
determined using a Black-Scholes option pricing model identical to that used
by
the Company for purposes of preparing its financial statements.
Directors
Not Standing for Re-Election
On
November 7, 2006, Sheldon L. Bloch, Professor Edward B. Roberts, Ph.D. and
Theodore I. Steinman, M.D., three current members of the Board of Directors,
announced that they will not stand for re-election at the annual meeting
of
stockholders of the Company currently scheduled to be held on February 6,
2007.
Mr. Bloch is currently the Chairman of the Audit Committee and a member of
the
Compensation Committee and Nominating Committee. Mr. Roberts is currently
a
member of the Audit Committee and the Nominating Committee. Mr. Steinman
is
currently a member of the Nominating Committee. Messrs. Bloch, Roberts and
Steinman advised the Board that the reasons for their decisions were not
the
result of any disagreement with the Company.
Executive
Officer Compensation
On
November 7, 2006, the Board of Directors of the Company approved, based on
the
recommendation of the Company’s Compensation Committee, the
following:
1.
A four
percent (4%) cost-of-living increase to Mr. Goldstein’s annual base salary for
fiscal 2007, however, effective February 6, 2007 Mr. Goldstein’s base salary
will be reduced by twenty-five percent (25%). Mr. Goldstein was also granted
options to purchase 50,000 shares of common stock at an exercise price of
$41.16, the fair market value of a share of the Company’s common stock on the
date of grant. Such
options
have a ten year term and vest in four equal annual installments beginning
on the
first anniversary of the date of grant.
2.
A four
percent (4%) cost-of-living increase to Dr. Pereira’s annual base salary for
fiscal 2007. Dr. Pereira was also granted options to purchase 50,000 shares
of
common stock at an exercise price of $41.16, the fair market value of a share
of
the Company’s common stock on the date of grant. Such options have a ten year
term and vest in four equal annual installments beginning on the first
anniversary of the date of grant.
3.
Dr.
Pereira will be eligible to receive a bonus of up to fifty percent (50%)
of his
annual base salary at the discretion of the Company’s Compensation Committee,
based on the achievement of set performance goals for the fiscal year ended
September 30, 2007. The specific terms of Dr. Pereira’s performance goals are
not being disclosed because they involve confidential commercial and business
information, the disclosure of which would cause competitive harm to the
Company.
4.
Mr.
Farmer’s annual base salary for fiscal year 2007 will increase to
$225,000.
5.
Mr.
Avallone’s annual base salary for fiscal year 2007 will increase to
$160,000.
6.
A
performance bonus for the fiscal year ending September 30, 2006 to the following
executive officers:
|
Jerome
Goldstein
|
Chief
Executive Officer, Treasurer and Chairman
|
$100,000
|
|
Brian
J.G. Pereira
|
President
|
$100,000
|
|
Joseph
Farmer
|
General
Counsel and Vice President of Legal Affairs
|
$20,559
|
|
Michael
Avallone
|
Chief
Financial Officer and Vice President of Finance
|
$15,362
|
All
bonuses except the bonus paid to Dr. Pereira were discretionary. Dr. Pereira’s
bonus award was calculated based on specific performance goals established
by
the Company’s Chief Executive Officer during the course of the fiscal year ended
September 30, 2006, pursuant to Dr. Pereira’s employment agreement.
The
respective employment agreements between Mr. Goldstein and Dr. Pereira and
the
Company will be amended to reflect their respective revised titles,
responsibilities and compensation.
Director
Compensation
On
November 7, 2006, the Board of Directors approved, based on the recommendation
of the Company’s Compensation Committee, a revised plan of non-employee director
compensation. The revised compensation plan approved is described in Exhibit
10.1 to this report and incorporated by reference herein.
Item
9.01.
|
Financial
Statements and Exhibits.
|
(d)
Exhibits.
The
Company hereby files the following exhibit:
Number
|
Description
|
|
|
10.1
|
Summary
of Non-Employee Director Compensation.
|
|
|
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 thereunto
duly authorized.
|
ADVANCED
MAGNETICS, INC.
|
|
|
|
By:
/s/ Brian J.G. Pereira, M.D.
Brian
J.G. Pereira, M.D.
Chief
Executive Officer
|
Date:
November 9, 2006
EXHIBIT
INDEX
Exhibit
Number
|
|
Description
|
10.1
|
|
Summary
of Non-Employee Director Compensation.
|
|
|
|