VaxGen and Celltrion entered into a Technical Support and Services Sub-Agreement (“Sub-Agreement”) effective in June 2005. The Sub-Agreement provides for VaxGen to assist Celltrion with services required under Celltrion’s agreement with BMS. The Sub-Agreement initially extends through November 2006 and may be extended via good faith negotiations. Under the Sub-Agreement, VaxGen will be paid for out-of-pocket expenses and services rendered, plus potentially $3.5 million for the successful completion of defined milestones. In February 2006, the Sub-Agreement was amended to eliminate the milestone payments.
In July 2005, VaxGen participated in a round of fund-raising with the Korean Investors and Celltrion and purchased from Celltrion 239,068 shares of common stock for $1.2 million.
In September 2005, VaxGen entered into an agreement to raise approximately $15.1 million in gross proceeds through the sale of 1.2 million of its shares in Celltrion to a group of Korean investors. The agreements are denominated in Korean Won. In 2005, VaxGen received $12.4 million of the gross proceeds from the transaction. VaxGen received the remaining proceeds in the first quarter of 2006. Nexol Co purchased 250,000 of these shares. Subsequent to this transaction, Nexol and its affiliates, collectively, became the largest stockholder of Celltrion. As a result, as of September 2005, VaxGen was no longer the primary beneficiary of Celltrion and, in accordance with FIN 46R, Celltrion will be deconsolidated from VaxGen; thereafter, VaxGen’s investment in Celltrion will be accounted for under the equity method.
In February 2006, Celltrion and VaxGen entered into an agreement whereby Celltrion agreed to use its best efforts to timely prepare annual and quarterly financial statements in accordance with U.S. GAAP. Under the agreement, VaxGen agreed to reimburse Celltrion for all invoiced costs of the independent accountants relating to the preparation of U.S. GAAP financial statements as well as all invoiced costs of audits and reviews performed by another independent registered public accounting firm. In addition, VaxGen will compensate Celltrion for the cost of internal resources utilized in support of these activities at a rate of 190% of the employee’s hourly wage; such costs shall not exceed the U.S. dollar equivalent of 300 million Korean Won (equivalent to $0.3 million at the exchange rate on February 28, 2006) per year and shall be subject to VaxGen’s approval.
During 2006, VaxGen received gross proceeds of $130 million from the sale of most of its Celltrion common stock to Nexol and affiliates of Nexol. As a result, as of June 2006, VaxGen was no longer entitled to hold two seats on Celltrion’s Board of Directors or appoint a Representative Director. In September 2006, the Revised JVA was terminated and the Korean Investors entered into a Celltrion shareholders’ agreement. In November 2006, Celltrion’s stockholders approved the appointment of their non-VaxGen Co-CEO as the sole CEO of Celltrion. Accordingly, VaxGen no longer had the ability to exercise significant influence over operating and financial policies of Celltrion, and as of November 2006, VaxGen’s investment in Celltrion will be accounted for under the cost method in accordance with APB 29. As of December 31, 2006, VaxGen’s remaining shares of Celltrion common stock represent less than a 1% ownership interest and VaxGen no longer has a representative on the Celltrion Board of Directors.
In June 2005, Celltrion entered into several agreements to manufacture biologic products being developed by Bristol-Myers Squibb Company (“BMS”). Technology transfer activities began immediately upon the execution of the BMS agreements. Production of product, which will be manufactured according to U.S. cGMP standards, is expected to utilize a significant portion of Celltrion’s 50,000 liters of bioreactor capacity and began in 2006. In July 2006, Celltrion entered into a Supply Agreement with BMS. Construction on the new facility, which is adjacent to the current facility, commenced in July 2006. The new facility will have 60,000 liters of bioreactor capacity.
In July 2005, Celltrion and Aphton Corporation’s wholly-owned subsidiary (“Igeneon”) signed a licensing and commercialization agreement and a product development and manufacturing agreement related to the manufacturing, marketing and distribution of Igeneon’s clinical product candidate IGN311. Under the agreements, Igeneon granted Celltrion a license to commercialize IGN311 in certain Asian countries, including Japan. In return, Igeneon will receive from Celltrion milestone payments totaling $6.0 million. In addition, Celltrion will provide development and manufacturing services related to the optimization and upscaling of IGN311 and will produce material for further clinical development.
In April 2006, Celltrion entered into several agreements with A&G Pharmaceutical, Inc. (“A&G”) to manufacture and supply clinical and commercial material of GP88Ab as well as to develop and commercialize a partner for GP88Ab. Under the agreements, A&G granted or will grant to Celltrion a first right of negotiation to manufacture and supply the clinical materials for Phase 3 clinical trials as well as the commercial materials. Also, A&G granted Celltrion an exclusive license and sublicense to develop and have developed, make, use, offer for sale, sell and have sold products in the certain territory and additionally the right to give a sublicense to third parties with the approval of A&G. In return, A&G will receive from Celltrion milestone payments totaling $2.0 million upon completion of various phases to reach the Phase 2 clinical trials. In consideration for the commercialization license, Celltrion shall pay to A&G a royalty equal to a certain percentage of the net sales of Celltrion. Separately, on July 14, 2006, Celltrion purchased 769,230 shares of A&G common stock for $2.0 million.
Financing for Facility Construction and Expansion
In October 2005, Celltrion issued a one-year bond for 20,000 million Korean Won ($19.2 million equivalent) to Shinhan Bank at a variable interest rate, equal to the 91-day CD rate plus 2.05%. Subsequent to the issuance of the bond, Celltrion entered into an interest rate swap agreement with the bank at a fixed interest rate of 6.63%.
During 2005 and 2006, Celltrion modified the construction design and work scope for the production of generic and specific products in its construction agreement with Daewoo. As a result of this modification, the total construction cost increased to 67,551 million Korean Won plus 26.9 million Swiss francs (equivalent to $93.1 million) from the original construction agreement in January 2003 which was for 47,400 million Korean Won plus 25.7 million Swiss francs.
In February 2006, Celltrion entered into a Land Purchase Agreement with Incheon Metropolitan City at a stated price of 24,700 million Korean Won ($25.5 million equivalent) and made an advance principal payment of 2,470 million Korean Won ($2.5 million equivalent). In March 2006, Celltrion and Incheon Metropolitan City entered into an amended agreement, which reduced the original discount received and increased the stated price of the land to 32,931 million Korean Won ($33.9 million equivalent). As a result, Celltrion made an additional advance payment of 823 million Korean Won ($0.8 million equivalent). Celltrion is obligated to pay for the land in five annual installments of 5,928 million Korean Won ($6.1 million equivalent), plus interest at 4.0%, beginning in March 2007.
In June 2006, Celltrion obtained collateralized long-term financing of 20,000 million Korean Won (equivalent to $21.1 million) and $20.8 million from Woori Bank and Shinhan Bank, respectively, to be used for construction of a second manufacturing facility adjacent to the current facility. In addition, Celltrion entered into an interest rate swap agreement with Shinhan Bank in order to hedge the variable interest rate. Celltrion also entered into a currency swap agreement with Shinhan Bank to convert the U.S. dollar-denominated borrowing into Korean Won-denominated borrowing.
In September 2006, Celltrion obtained additional U.S. dollar-denominated collateralized long-term financing of $3.8 million from Shinhan Bank to be used for construction of a second manufacturing facility adjacent to the current facility. In addition, Celltrion entered into an interest rate swap agreement with Shinhan Bank in order to hedge the variable interest rate. Celltrion also entered into a currency swap agreement with Shinhan Bank to convert the U.S. dollar-denominated borrowing into Korean Won-denominated borrowing.
In October 2006, Celltrion borrowed 20,000 million Korean Won ($21.0 million equivalent) from Shinhan Bank with a variable interest rate and a maturity of two-years. In connection to the borrowing, Celltrion entered into an interest rate swap agreement with Shinhan Bank in order to hedge the exposure to the variable interest rate.
In November 2006, Celltrion issued a collateralized three-year bond for 20,000 million Korean Won ($21.4 million equivalent) to Woori Bank at a variable interest rate, equal to the bank’s 91-day CD rate plus 1.4% (aggregate rate of 6.1% in November 2006).
In December 2006, Celltrion entered into a land purchase agreement for 783 million Korean Won ($0.8 million equivalent) which is required to be paid within 6 months.
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In December 2006, Celltrion obtained short-term borrowing amounting to 10,000 million Korean Won ($10.8 million equivalent) from Woori Bank. Celltrion also obtained a commitment for a letter of credit of $10.0 million from Shinhan Bank in December 2006 and $20.0 million from Woori Bank in November and December 2006.
In December 2006, Celltrion obtained additional collateralized long-term financing of $2.0 million from Shinhan Bank. In addition, in connection to the financing, Celltrion entered into a currency swap agreement with Shinhan Bank in order to hedge the exposure to foreign currency.
Celltrion Stock, Options and Warrants
On March 29, 2005 and March 24, 2006, Celltrion awarded stock option grants to employees for 302,900 and 267,950 common shares, respectively, at exercise prices of 7,675 Korean Won($7.49 equivalent) per share and 7,047 Korean Won($7.20 equivalent) per share, respectively. These grants and the stock option grants issued in 2002, 2003 and 2004 contain an anti-dilution provision. Accordingly, in 2005 and 2006, all Celltrion stock option grants’ exercise prices and the number of shares granted were modified, per the terms of the original stock option agreements.
In March 2005, Celltrion issued 1,949,700 shares of preferred stock under the Extended First Tranche at a price of 5,000 Korean Won($4.99 equivalent) per share, resulting in proceeds of 9,749 million Korean Won($9.7 million equivalent). This sale completed Nexol and Nexol Co’s purchases under their Warrants and remaining Unsubscribed Shares in the Extended First Tranche. In March 2005, Celltrion also converted all 12,515,000 preferred shares (including the 1,949,700 shares) into common stock upon approval at their stockholders’ meeting. A BCF of 9,749 million Korean Won ($9.7 million equivalent) was recognized as a deemed dividend in March 2005 associated with the exercise of the Warrant and the conversion of the preferred stock.
In May 2005, Celltrion issued 2,872,840 shares of common stock to existing stockholders in a proportionate stock dividend.
In July 2005, Celltrion sold 3.0 million shares of its common stock to the existing stockholders and others at a price of 5,000 Korean Won($4.80 equivalent) per share, resulting in proceeds of 15,000 million Korean Won($14.4 million equivalent). Celltrion’s non-VaxGen Co-CEO and his affiliates purchased an aggregate of 711,837 of these shares, two members of Celltrion’s Board of Directors purchased an aggregate of 756,321 of these shares, VaxGen purchased 239,068 shares, employees purchased an aggregate of 20,230 shares and two vendors purchased an aggregate of 24,554 shares.
In August 2005, Celltrion issued 1,986,301 shares of its common stock under the Second Tranche at a price of 5,000 Korean Won ($4.92 equivalent) per share, resulting in proceeds of 9,932 million Korean Won($9.8 million equivalent). A BCF of 9,932 million Korean Won ($9.8 million equivalent) was recognized as a deemed dividend in August 2005 associated with the exercise of the Warrant and the immediate conversion of the preferred stock on the exercise date. Also in August 2005, Celltrion issued 33,924 shares of its common stock to JS at a price of 22,500 Korean Won ($22.16 equivalent) per share, resulting in proceeds of 763 million Korean Won ($0.8 million equivalent). Celltrion’s stockholder holding the reallocation Warrants allowed the following parties to purchase a portion of its reallocation shares, consistent with the terms of the reallocation Warrants: a member of Celltrion’s Board of Directors purchased 79,149 of these shares, an employee purchased 924 shares and a vendor purchased 8,041 shares.
In August 2005, Nexol purchased 260,000 shares of Celltrion’s common stock from Daewoo.
In September 2005, Nexol Co purchased all of the outstanding common shares of JS. In October 2005, JS became an affiliate of Nexol. In connection with its acquisition by Nexol, its name was changed to Nexol Venture Capital Co., Ltd.
In January 2006, Celltrion sold 1,136,360 shares of its common stock to institutional investors at a price of 22,000 Korean Won($22.28 equivalent) per share, resulting in proceeds of 25,000 million Korean Won($25.3 million equivalent).
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SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)
(in thousands, except per share data)
The tables below present selected quarterly financial data.
| | | | | | | | | | | | | |
| | Year Ended December 31, 2004 | |
| |
| |
| | First
Quarter | | Second
Quarter | | Third
Quarter | | Fourth
Quarter | |
| |
| |
| |
| |
| |
| |
(in thousands, except per share data)
| |
Revenues | | $ | 3,945 | | $ | 11,109 | | $ | 7,254 | | $ | 9,087 | |
Net loss | | | (8,493 | ) | | (17,598 | ) | | (10,832 | ) | | (8,771 | ) |
Net loss applicable to common stockholders | | | (8,493 | ) | | (17,598 | ) | | (10,832 | ) | | (8,771 | ) |
Net loss per share applicable to common stockholders—basic and diluted | | $ | (0.34 | ) | $ | (0.70 | ) | $ | (0.43 | ) | $ | (0.32 | ) |
Weighted average shares used in computing basic and diluted loss per share | | | 25,048 | | | 25,221 | | | 25,371 | | | 27,055 | |
| | | | | | | | | | | | | |
| | Year Ended December 31, 2003 | |
| |
| |
| | First
Quarter | | Second
Quarter | | Third
Quarter | | Fourth
Quarter | |
| |
| |
| |
| |
| |
| |
(in thousands, except per share data)
| |
Revenues | | $ | 2,746 | | $ | 4,176 | | $ | 6,918 | | $ | 15,217 | |
Net loss before cumulative effect of change in accounting principle | | | (4,379 | ) | | (5,119 | ) | | (8,522 | ) | | (1,800 | ) |
Cumulative change in accounting principle | | | — | | | — | | | 700 | | | — | |
Net loss | | | (4,379 | ) | | (5,119 | ) | | (7,822 | ) | | (1,800 | ) |
Net loss applicable to common stockholders | | | (4,821 | ) | | (6,988 | ) | | (8,091 | ) | | (1,800 | ) |
Basic and diluted net loss applicable to common stockholders: | | | | | | | | | | | | | |
Before cumulative effect of change in accounting principle | | $ | (0.30 | ) | $ | (0.40 | ) | $ | (0.43 | ) | $ | (0.08 | ) |
Cumulative change in accounting principle | | | — | | | — | | | 0.03 | | | — | |
| |
|
| |
|
| |
|
| |
|
| |
Net loss per share applicable to common stockholders—basic and diluted | | $ | (0.30 | ) | $ | (0.40 | ) | $ | (0.40 | ) | $ | (0.08 | ) |
Weighted average shares used in computing basic and diluted loss per share | | | 15,846 | | | 17,358 | | | 20,561 | | | 21,815 | |
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In 2004, VaxGen adopted the provisions of FIN 46R and determined that Celltrion was a variable interest entity (“VIE”) and that VaxGen was Celltrion’s primary beneficiary. Accordingly, in accordance with FIN 46R, the consolidated financial statements include the results of Celltrion as a VIE since January 1, 2004. |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
KPMG LLP (“KPMG”) was our former independent registered public accounting firm. In April of 2004, the Audit Committee dismissed KPMG and selected PricewaterhouseCoopers LLP (“PwC”) as our new independent registered public accounting firm. Information regarding our change in independent registered public accounting firms is found in the Form 8-K/A filed with the Securities and Exchange Commission on November 19, 2004.
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Item 9A. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the year covered by this report. Disclosure controls and procedures are designed to ensure that the information required to be disclosed in our reports which we file or submit under the Securities Exchange Act of 1934 is (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) as appropriate to allow timely decisions regarding required disclosures, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based upon this review, due to the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
Notwithstanding the material weaknesses described below, management believes that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.
The certifications of our principal executive officer and principal financial officer required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits to this Annual Report on Form 10-K. The disclosures set forth in this Item 9A contain information concerning the evaluation of our disclosure controls and procedures and changes in internal control over financial reporting, referred to in the certifications. Those certifications should be read in conjunction with this Item 9A for a complete understanding of the matters covered by the certifications.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended).
Our management, including the Chief Executive Officer and Chief Financial Officer, were required to evaluate our internal control over financial reporting as of December 31, 2004. Our management initiated its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004, and in performing its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Management was not able to complete its assessment of the design of our internal control over financial reporting and the related testing of our internal control over financial reporting necessary for management to complete its required assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004.
A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Although our management was not able to complete its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, we consider the following control deficiencies that existed in the design or operation of our internal control over financial reporting to be material weaknesses in the effectiveness of our internal control over financial reporting as of December 31, 2004:
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1. | We did not maintain an effective control environment based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Specifically, the financial reporting organizational structure was not adequate to support the size, complexity or activities of the Company. In addition, certain key finance positions were staffed with individuals who did not possess the level of accounting knowledge, experience and training in the application of GAAP commensurate with the Company’s financial reporting requirements. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency affects substantially all financial statement accounts that could result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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2. | We did not maintain effective segregation of duties over automated and manual transaction processes. Specifically, inadequate segregation of duties led to the untimely identification and resolution of accounting and disclosure matters and failure to perform timely and effective supervision and reviews. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of substantially all financial statement accounts that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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The material weaknesses described above contributed to the existence of the material weaknesses discussed in items 3 through 9 below. |
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3. | We did not maintain effective controls over the accounting for revenue related to government contracts. Specifically, our controls over revenue were not adequate to ensure that all revenue transactions were completely and accurately recorded in the interim and annual consolidated financial statements which impacted revenue, deferred revenue and deferred costs. In particular, the following revenue control deficiencies are, in aggregate, considered a material weakness: (i) failure to properly recognize revenue for governmental contracts under cost-plus-fixed-fee arrangements; (ii) failure to properly apply cut-off procedures over billable expenses and the timing of revenue recognition; and (iii) failure to properly review the invoiced reimbursement costs. These control deficiencies resulted in the restatement of the Company’s 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, these control deficiencies could result in a misstatement of revenue, deferred revenue and deferred costs that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that these control deficiencies in aggregate constitute a material weakness. |
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4. | We did not maintain effective controls over the completeness and accuracy of account reconciliations. Specifically, account reconciliations and supporting schedules were not consistently documented, reviewed and approved in a timely manner. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of substantially all financial statement accounts that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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5. | We did not maintain effective controls to ensure that journal entries, both recurring and non-recurring, were consistently reviewed and approved in a timely manner to ensure the validity, completeness and accuracy of recorded entries. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of substantially all financial statement accounts that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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6. | We did not maintain effective controls over the completeness and accuracy of accounting for investments in affiliates. Specifically, the Company’s accounting for their investments in Celltrion, Inc. and VaxGen-Celltrion, Inc. were not in accordance with GAAP. This control deficiency resulted in the restatement of the Company’s 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of investments, current and long-term liabilities and stockholders’ equity that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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7. | We did not maintain effective controls over the completeness and accuracy of accounting for issuance of preferred stock, warrants and embedded derivatives. Specifically, the Company’s accounting for their Series A redeemable convertible preferred stock, along with the common stock warrants and other embedded derivatives were not in accordance with GAAP. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of current and long-term liabilities, stockholders’ equity and non-operating expenses that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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8. | We did not maintain effective controls over the completeness and accuracy of accounting for awards under our various stock compensation plans. Specifically, the timing of authorization for issuances of and modifications to stock compensation arrangements were not communicated to the appropriate accounting personnel responsible to accurately and timely account for these transactions in the Company’s consolidated financial statements. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of deferred stock compensation and the related stock compensation expense that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
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9. | We did not maintain effective controls to ensure that operating expenses were recorded in the appropriate period. Specifically, the Company’s controls over completeness and accuracy for operating expenses were insufficient to ensure clinical trial expenses, consulting fees and other operating expenses were completely and accurately recorded in the proper periods. This control deficiency resulted in the restatement of the Company’s 2001, 2002 and 2003 annual consolidated financial statements and audit adjustments to the Company’s 2004 interim and annual consolidated financial statements. Additionally, this control deficiency could result in a misstatement of accrued expenses and the related operating expenses that would result in a material misstatement to the Company’s interim or annual consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
Because of these material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2004 based upon the criteria in Internal Control-Integrated Framework issued by COSO.
Management has excluded Celltrion, Inc. from its assessment of internal control over financial reporting as of December 31, 2004 because the Company does not have the ability to dictate or modify the controls of the entity and does not have the ability, in practice, to assess those controls. Celltrion, Inc., which was in existence prior to December 15, 2003, is consolidated in the Company’s financial statements pursuant to FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51”, and whose total assets and total revenues represent 66% and 0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2004.
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PwC did not complete their audit of our internal control over financial reporting as of December 31, 2004 as described in their report included herein. PwC’s report on our internal control over financial reporting disclaims an opinion on our assessment and the effectiveness of our internal control over financial reporting as of December 31, 2004.
Changes in Internal Control over Financial Reporting
There have been no changes to the Company’s internal control over financial reporting during the quarter ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Remediation Efforts
As described above, management did not complete their assessment of our internal control over financial reporting, but is aware of the material weaknesses described above. These material weaknesses have been discussed with the Audit Committee. The Audit Committee has taken an active role in overseeing management’s implementation of the remedial measures described below. By implementing these remedial measures, management intends to improve our internal control over financial reporting and to avoid material misstatements in consolidated financial statements prepared for external purposes, in the future. Our management is working under the supervision of the Audit Committee to identify and implement additional corrective actions, where required, to improve the effectiveness of our internal control over financial reporting, including the enhancement of systems and procedures.
We have implemented or are implementing the following measures, which have materially affected, or are reasonably likely to materially affect our internal control over financial reporting:
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| • | The hiring of key additional accounting staff and financial reporting staff (although we have experienced difficulty in attracting and retaining such staff); |
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| • | The engagement of expert consultants specializing in accounting and financial reporting to augment our accounting staff; |
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| • | The acquisition of accounting and financial reporting research tools for the use of both our staff and our expert consultants; |
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| • | The initiation of an ongoing and comprehensive review of financial controls and procedures to address the issues identified above and to bring us into compliance with the requirements of the Sarbanes-Oxley Act with respect to internal controls and procedures; |
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| • | The selection and implementation of an Enterprise Resource Planning (“ERP”) software program designed to automate and systematize internal control over financial reporting; and |
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| • | The engagement of the services of an independent internal controls consultant to document, test and develop current and expanded internal controls and procedures. |
Management believes that, through implementation of the measures noted above, we have begun to address the conditions identified above as material weaknesses. We are monitoring the effectiveness of these measures, and of our internal control over financial reporting on an ongoing basis. We are continuing to assess our remediation plans and will take further action, as appropriate, to strengthen our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
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Item 9B. | Other Information |
None.
PART III
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Item 10. | Directors, Executive Officers and Corporate Governance |
Directors
The members of the Board of Directors of the Company as of December 31, 2004 are as follows:
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Name of Director | | Age | | Principal Occupation | | Director Since |
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Lance K. Gordon, Ph.D. | | 57 | | President and Chief Executive Officer | | 2001 |
Franklin M. Berger, CFA | | 55 | | Independent Biotechnology Analyst. Former Managing Director, Equity Research and Senior Biotechnology Analyst, J.P. Morgan | | 2003 |
Randall L-W. Caudill, D. Phil. | | 57 | | Chairman of the Board of Directors of VaxGen and President, Dunsford Hill Capital Partners | | 2001 |
Michel Greco | | 61 | | Retired, former President and Chief Operating Officer, Aventis Pasteur | | 2003 |
Myron M. Levine, M.D. | | 60 | | Co-Founder and Director of the University of Maryland School of Medicine’s Center for Vaccine Development | | 2004 |
Lance K. Gordon, Ph.D.
Dr. Gordon’s biography appears under “Executive Officers” in Part I of this report. Dr. Gordon resigned from the Board of Directors in January 2007 and was replaced by Mr. Panek.
Franklin Berger, CFA
Mr. Berger has served as a director since November 2003. Mr. Berger is currently an independent biotechnology analyst. From 1998 to 2002, Mr. Berger was a Managing Director, Equity Research and Senior Biotechnology Analyst for J. P. Morgan Securities, Inc. From 1997 to 1998, he served as a Director, Equity Research and Senior Biotechnology Analyst for Salomon Smith Barney. From 1991 to 1997, he served as a Managing Director, Research and Biotechnology Analyst for Josephthal & Co. Mr. Berger received a B.A. in International Relations and an M.A. in International Economics from Johns Hopkins University and an M.B.A. from Harvard University.
Randall L-W. Caudill, D. Phil.
Dr. Caudill has served as a director since February 2001; he had previously served as director from 1997 through 1999. Since 1997, Dr. Caudill has been the President of Dunsford Hill Capital Partners, a San Francisco-based financial consulting firm, serving emerging growth companies. From 1987 to 1997, he served in various capacities including heading the Merger and Acquisition Department and co-heading the Investment Bank at Prudential Securities. Dr. Caudill serves on the board of directors of Northwest Biotherapeutics, Inc., Ramgen Power Systems Inc., Helix BioMedix, Inc., MediQuest Therapeutics, Inc. and SCOLR, Inc. as well as several non-profit entities. Dr. Caudill received a D. Phil. from Oxford University, where he was a Rhodes Scholar, and an M.A. in Public and Private Management from Yale University.
Michel Greco
Mr. Greco has served as a director since February 2003. From 1998 until his retirement in January 2003, Mr. Greco was President and Chief Operating Officer of Aventis Pasteur and later deputy CEO. From 1994 to 1998, he helped create and also served as president and CEO of Pasteur Merieux MSD, a joint venture between Merck & Co. and Pasteur Merieux Connaught. In addition to his nearly 35 years of experience in the pharmaceuticals industry, with an emphasis on vaccines, Mr. Greco has served as president of the European Vaccine Manufacturers, chairman of IFPMA biological group and a member of the World Health Organization’s Strategic Advisory Group of Experts. He also was a member of the European Union Task Force on Bioterrorism, and a board member of the French
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Pharmaceutical Association and president of its European Affairs Commission. Mr. Greco serves on the board of directors of ID Biomedical Corporation and PowderJect Pharmaceuticals Plc. Mr. Greco received a Master’s degree from Institut d’Etudes Politiques de Paris and an M.B.A. from the Richard Ivey School of Business Administration at the University of Western Ontario.
Myron M. Levine, M.D.
Dr. Levine was elected as a director in October 2004. Dr. Levine is the Co-Founder and Director of the University of Maryland School of Medicine’s Center for Vaccine Development (“CVD”). Dr. Levine is also professor of medicine, pediatrics, epidemiology and preventive medicine, and microbiology and immunology at the University of Maryland’s School of Medicine. From 2000 to 2002 he co-chaired the Global Alliance for Vaccines and Immunization (“GAVI”) Task Force on Research and Development. Dr. Levine holds an M.D. from the Medical College of Virginia and a Diploma in Tropical Public Health (D.T.P.H.) with Distinction from the London School of Hygiene and Tropical Medicine.
Executive Officers
Information regarding our executive officers appears under “Executive Officers” in Part I of this report.
Audit Committee and Audit Committee Financial Expert
Three (3) non-employee directors comprise the Audit Committee at the end of 2004: Messrs. Berger and Greco and Dr. Caudill. The Board of Directors annually reviews Nasdaq’s listing standards definition of independence for Audit Committee members and has determined that all members of the Company’s Audit Committee are independent (as independence is currently defined in Rules 4350(d)(2)(A)(i) and (ii) of the Nasdaq listing standards). The Board of Directors has determined that Mr. Berger qualifies as an “audit committee financial expert,” as defined in applicable Securities and Exchange Commission (“SEC”) rules. The Board of Directors made a qualitative assessment of Mr. Berger’s level of knowledge and experience based on a number of factors, including his formal education and experience as a research analyst employed by brokerage firms.
Code of Ethics
The Company has adopted the VaxGen, Inc. Code of Business Conduct and Ethics (“Code”) that applies to all officers, directors and employees. The Code is available on our website atwww.vaxgen.com. If the Company makes any substantive amendments to the Code or grants any waiver from a provision of the Code to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website and file such disclosure on Form 8-K with the SEC.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the “1934 Act”) requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2004, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with, except that one report, covering one transaction, was filed late by Dr. Levine; one report, covering one transaction, was filed late by Dr. Jansen; one report, covering one transaction, was filed late by Mr. Cunha; and Form 4’s relating to stock options granted to Dr. Caudill, Mr. Greco and Mr. Young were not filed.
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| |
Item 11. | Executive Compensation |
The following table shows compensation awarded to, paid to or earned by, the Company’s Chief Executive Officer, its other four (4) most highly compensated executive officers and two former executives at December 31, 2004 (“Named Executive Officers”).
SUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | | |
| | | | Annual Compensation | | | Long-Term
Compensation
Awards | |
| | | |
| | |
| |
Name and Principal Position | | Year | | Salary
($) | | Bonus
($) | | Other
Annual
Compen-
sation($) | | | Securities
Underlying
Options/
SARs(#) | | All Other
Compensation
($) | |
| |
| |
| |
| |
| | |
| |
| |
Lance K. Gordon (1) | | | 2004 | | | 372,214 | | | 200,000 | | | 20,000 | (4) | | | — | | | — | |
President and Chief | | | 2003 | | | 339,121 | | | 200,000 | | | 42,206 | (3) | | | 100,000 | | | — | |
Executive Officer | | | 2002 | | | 330,850 | | | — | | | 123,300 | (2) | | | 75,000 | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Donald P. Francis (5) | | | 2004 | | | 29,575 | | | 115,000 | | | — | | | | — | | | 382,022 | |
Former President | | | 2003 | | | 348,075 | | | 115,000 | | | — | | | | — | | | — | |
| | | 2002 | | | 341,250 | | | — | | | — | | | | 75,000 | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Carter A. Lee(6) | | | 2004 | | | 86,660 | | | 75,000 | | | — | | | | — | | | 229,100 | |
Former Senior Vice President | | | 2003 | | | 283,263 | | | — | | | — | | | | — | | | — | |
| | | 2002 | | | 221,540 | | | 42,400 | | | — | | | | 24,000 | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Carmen M. Betancourt-Riche | | | 2004 | | | 260,750 | | | 130,000 | | | — | | | | — | | | — | |
Senior Vice President, Regulatory | | | 2003 | | | 224,852 | | | — | | | — | | | | 60,000 | | | — | |
Affairs & Quality Systems (8) | | | 2002 | | | 190,764 | | | — | | | — | | | | 75,000 | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Marc J. Gurwith | | | 2004 | | | 255,400 | | | 130,000 | | | — | | | | — | | | — | |
Senior Vice President, | | | 2003 | | | 239,700 | | | 130,000 | | | — | | | | 45,000 | | | — | |
Medical Affairs | | | 2002 | | | 226,556 | | | — | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | |
James P. Panek (7) | | | 2004 | | | 254,500 | | | 130,000 | | | — | | | | — | | | — | |
Senior Vice President, | | | 2003 | | | 235,750 | | | 130,000 | | | — | | | | 60,000 | | | — | |
Manufacturing Operations | | | 2002 | | | 187,251 | | | — | | | — | | | | 100,000 | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Piers C. Whitehead | | | 2004 | | | 245,000 | | | 100,000 | | | — | | | | — | | | — | |
Vice President, Corporate & | | | 2003 | | | 229,500 | | | — | | | — | | | | 45,000 | | | — | |
Business Development | | | 2002 | | | 112,500 | | | — | | | — | | | | 100,000 | | | — | |
(1) Dr. Gordon became Chief Executive Officer in September 2001 and President in March 2004. Dr. Gordon’s employment with the Company terminated in January 2007.
(2) As part of his employment agreement, Dr. Gordon received $120,652 in 2002 for a relocation allowance.
(3) As part of Dr. Gordon’s employment agreement, the Company forgave $40,000 of an outstanding note payable to the Company. The remaining amount of $2,206 represents forgiven interest on the loan.
(4) As part of Dr. Gordon’s employment agreement, the Company forgave $20,000 of an outstanding note payable to the Company.
(5) Dr. Francis’ employment with the Company terminated on January 31, 2004.
(6) Mr. Lee’s employment with the Company terminated on April 1, 2004.
(7) Mr. Panek was promoted to Chief Executive Officer in January 2007.
(8) Ms. Betancourt-Riche’s employment with the Company terminated in 2006.
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Stock Option Grants and Exercises
The Company grants options to its executive officers under its 1996 Amended and Restated Stock Option Plan, (“1996 Plan”). As of December 31, 2004, options to purchase a total of 3,895,709 shares were outstanding under the 1996 Plan and options to purchase 1,564,043 shares remained available for grant under the plan.
The Option/SAR Grants table has been omitted because there was no compensation awarded to, earned by or paid to any of the named executives required to be reported in the table during the fiscal year ended December 31, 2004.
The Aggregated Options/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values table is shown below.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR VALUES
| | | | | | | | | | | | | | | | | | | |
Name | | Shares
Acquired
on Exercise
(#) | | Value
Realized ($)
(1) | | Number of
Securities
Underlying
Unexercised
Options at
FY-End (#)
Exercisable/
Unexercisable
(2) (3) | | Value of
Unexercised
In-the-Money
Options at
FY-End ($)
Exercisable/
Unexercisable
(2) (4) | |
| |
| |
| |
| |
| |
Lance K. Gordon | | — | | | — | | | | 476,563 | / | | 98,437 | | | 1,709,599 | / | | 1,124,900 | |
Donald P. Francis | | — | | | — | | | | 118,500 | / | | — | | | 1,004,250 | / | | — | |
Carter A. Lee | | 24,000 | | | 281,040 | | | | 141,500 | / | | — | | | 987,750 | / | | — | |
Marc J. Gurwith | | — | | | — | | | | 113,021 | / | | 56,979 | | | 379,432 | / | | 413,068 | |
James P. Panek | | — | | | — | | | | 89,583 | / | | 70,417 | | | 764,581 | / | | 700,419 | |
Carmen M. Betancourt-Riche | | — | | | — | | | | 73,438 | / | | 61,562 | | | 643,832 | / | | 633,418 | |
Piers C. Whitehead | | — | | | — | | | | 74,480 | / | | 70,520 | | | 863,166 | / | | 815,334 | |
| |
|
(1) | Value realized is based on the fair market value of the Company’s Common Stock on the date of exercise minus the exercise price. |
| |
(2) | Reflects shares vested and unvested at December 31, 2004. |
| |
(3) | Includes both “in-the-money” and “out-of-the-money” options. “In-the money” options are options with exercise prices below the market price of the Company’s Common Stock at December 31, 2004. |
| |
(4) | Fair market value of the Company’s Common Stock at December 31, 2004 minus the exercise price of the options. |
Compensation of Directors
Each non-employee director of the Company receives an annual retainer of $10,000 and a fee per meeting of $1,000 for meetings attended in person and $500 for telephonic meetings, plus $1,000 for each committee meeting attended by committee members in person and $500 for telephonic meetings. In the fiscal year ended December 31, 2004, the total compensation paid to non-employee directors was $179,000. The members of the Board of Directors are also eligible for reimbursement for their expenses incurred in attending meetings of the Board of Directors in accordance with Company policy.
Each non-employee director of the Company also receives stock option grants under the 1998 Director Stock Option Plan (“Directors’ Plan”). Only non-employee directors of the Company are eligible to receive options under the Directors’ Plan. Options granted under the Directors’ Plan are intended by the Company not to qualify as incentive stock options under the Internal Revenue Code.
Option grants under the Directors’ Plan are non-discretionary. The Directors’ Plan provides that each person first elected or appointed as a non-employee director would be granted an option (“Initial Option”) for 20,000 shares of common stock on the day of his or her initial election or appointment. Additionally, each year on the day after the annual meeting of stockholders (or the next business day if that date is a legal holiday), each member of the Company’s Board of Directors who is not an employee of the Company and who was re-elected at the Annual
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Meeting is automatically granted an option to purchase 10,000 shares of common stock of the Company under the Directors’ Plan. No other options may be granted at any time under the Directors’ Plan. All options granted under the Directors’ Plan have an exercise price equal to the fair market value of the common stock on the date of grant and are not transferable otherwise than by will, by designation of a beneficiary or by laws of descent and distribution, except that options may be transferred by a plan participant to certain members of a participant’s immediate family, family trusts or partnerships. If a holder dies prior to the time that an option is fully exercised, the option may be exercised at any time within two years after the holder’s death (unless the option expires) to the extent it was exercisable on the date of death.
Generally, the fair market value of the common stock is the closing price per share on the date of grant as reported on the Nasdaq National Market. The exercise price may be paid in cash, or by surrendering previously acquired shares of common stock that have been outstanding for at least six (6) months and having a fair market value not less than the purchase price to be paid, or by a combination of cash and common stock.
Initial Options become exercisable in equal annual installments on each of the first three anniversaries of the date of grant, provided in each instance that the non-employee director’s service with the Company has not terminated more than sixty (60) days prior to the applicable anniversary date and the non-employee director has attended at least seventy-five percent (75%) of the combined number of meetings of the full Board of Directors and any committee(s) of the Board of Directors of which the non-employee director is a member. Annual Options are immediately exercisable in full on the date of grant. Unless earlier terminated under the terms of the Directors’ Plan or the option agreement, each option remains exercisable for ten years after grant.
The Directors’ Plan provides that in the event of (i) an acquisition by any person, partnership, corporation or other entity of more than fifty percent (50%) of the shares of common stock then outstanding, (ii) the sale of all or substantially all of the assets of the Company, (iii) a liquidation or dissolution of the Company or (iv) other material change in the capital structure of the Company, then the Board of Directors shall have the power to determine what effect, if any, such event shall have upon the Directors’ Plan and upon options outstanding under the Directors’ Plan, including the cancellation of options and payments made to the holders in exchange therefore and any surviving corporation assuming the Company’s rights and obligations under the outstanding options or substituting substantially equivalent options for such corporation’s stock.
During 2004, the Company granted options covering 40,000 shares to non-employee directors of the Company under the Directors’ Plan at a weighted average exercise price per share of $9.78. The weighted average fair market value of such common stock on the dates of grant was $9.78 per share (based on the closing sales price reported on the Nasdaq National Market on the grant date). As of December 31, 2004, no options had been exercised under the Directors’ Plan.
Employment Contracts
Dr. Gordon’s employment agreement provides for an annual base salary of $325,000, which was increased to $367,393 in January 2004. Dr. Gordon may receive an annual bonus of up to 30% of his base salary as determined at the discretion of the Board of Directors. In the event of a termination by VaxGen without cause or termination by Dr. Gordon for good reason (as defined in his employment agreement), the Company may be required to pay Dr. Gordon’s base salary for twelve (12) months following his termination. In addition, Dr. Gordon’s options will fully accelerate upon termination by VaxGen without cause or termination by Dr. Gordon for good reason or upon certain events after a change of control (as defined in Dr. Gordon’s employment agreement). Upon termination of employment, Dr. Gordon is subject to a one-year non-solicitation period.
Dr. Francis’ employment with the Company was terminated on January 31, 2004. His employment agreement provided for an annual base salary of $325,000. Dr. Francis was eligible to receive an annual bonus of up to 30% of his base salary as determined at the discretion of the Board of Directors. Per the terms of Dr. Francis’ employment agreement and a separate separation agreement executed in January 2004, the Company paid an amount equal to Dr. Francis’ annual base salary over the period from the termination of his employment through December 31, 2004. In addition, Dr. Francis’ options fully accelerated upon the termination of his employment. Dr. Francis was subject to a one-year non-solicitation period following his termination date.
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Mr. Carter Lee’s employment agreement provided for an annual base salary of $185,000. Mr. Lee was eligible to receive an annual bonus of up to 30% of his base salary, and options for up to 10,000 shares of common stock at the discretion of the Board of Directors. Mr. Lee also received an option to purchase up to 125,000 shares of common stock which vest over a four-year period. Per the terms of Mr. Lee’s employment agreement and a separate separation agreement executed in April 2004, the Company paid an amount equal to Mr. Lee’s annual base salary over the period from the termination of his employment through March 2005. In addition, Mr. Lee’s options fully accelerated upon the termination of his employment. Mr. Lee was subject to a one-year non-solicitation period following his termination date.
Mr. Panek’s employment agreement provides for an annual base salary of $175,000, which was increased to $254,500 by the Board of Directors in January 2004. Mr. Panek may also receive an annual bonus of up to 30% of his base salary, as determined at the discretion of the Board of Directors. Mr. Panek received options to purchase up to 160,000 shares of common stock which vest over a four-year period. In the event of a termination by VaxGen without cause, or termination by Mr. Panek for good reason (as defined in his employment agreement), following his termination, the Company may be required to pay Mr. Panek’s base salary for six months, plus one additional month of base salary for each full year of employment with VaxGen up to a maximum of 12 months annual base salary. In addition, Mr. Panek’s options will fully accelerate upon termination by VaxGen without cause or termination by Mr. Panek for good reason or upon certain events after a change of control (as defined in Mr. Panek’s employment agreement). Upon termination of employment, Mr. Panek is subject to a one-year non-competition period.
Dr. Gurwith’s employment agreement provides for an annual base salary of $235,000, which was increased to $255,400 in January 2004. Upon the commencement of his employment, Dr. Gurwith received a $40,000 start-up bonus along with an option to purchase up to 125,000 shares of common stock which vest over a four-year period. Dr. Gurwith may receive an annual bonus of up to 30% of his base salary as determined at the discretion of the Board of Directors. In the event of a termination by VaxGen without cause or termination by Dr. Gurwith for good reason (as defined in his employment agreement), following his termination, the Company may be required to pay Dr. Gurwith’s base salary for six months, plus one additional month of base salary for each full year of employment with VaxGen up to a maximum of 12 months annual base salary. In addition, Dr. Gurwith’s options will fully accelerate upon termination by VaxGen without cause or termination by Dr. Gurwith for good reason or upon certain events after a change of control (as defined in Dr. Gurwith’s employment agreement). Upon termination of employment, Dr. Gurwith is subject to a one-year non-solicitation period.
Ms. Betancourt-Riche’s employment agreement provides for an annual base salary of $205,000, which was increased to $260,750 in January 2004. Ms. Betancourt-Riche may also receive an annual bonus of up to 30% of her base salary, as determined at the discretion of the Board of Directors. Ms. Betancourt-Riche has received options to purchase up to 135,000 shares of common stock which vest over a four-year period. In the event of a termination by VaxGen without cause or termination by Ms. Betancourt-Riche for good reason (as defined in her employment agreement), following her termination, the Company may be required to pay Ms. Betancourt-Riche’s base salary for six months, plus one additional month of base salary for each full year of employment with VaxGen up to a maximum of 12 months annual base salary. In addition, Ms. Betancourt-Riche’s options will fully accelerate upon termination by VaxGen without cause or termination by Ms. Betancourt-Riche for good reason or upon certain events after a change of control (as defined in Ms. Betancourt-Riche’s employment agreement). Upon termination of employment, Ms. Betancourt-Riche is subject to a one-year non-solicitation period.
Mr. Whitehead’s employment agreement provides for an annual base salary of $205,000, which was increased to $245,000 in January 2004. Mr. Whitehead may also receive an annual bonus of up to 30% of his base salary, as determined at the discretion of the Board of Directors. Mr. Whitehead has received options to purchase up to 145,000 shares of common stock which vest over a four-year period. In the event of a termination by VaxGen without cause or termination by Mr. Whitehead for good reason (as defined in his employment agreement), following his termination, the Company may be required to pay Mr. Whitehead’s base salary for six months, plus one additional month of base salary for each full year of employment with VaxGen up to a maximum of 12 months annual base salary. In addition, Mr. Whitehead’s options will fully accelerate upon termination by VaxGen without cause or termination by Mr. Whitehead for good reason or upon certain events after a change of control (as defined in Mr. Whitehead’s employment agreement). Upon termination of employment, Mr. Whitehead is subject to a one-year non-solicitation period.
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Dr. Jansen’s employment agreement provides for an annual base salary of $260,000. Dr. Jansen also received a one-time signing bonus of $50,000 upon commencing her employment at VaxGen. Dr. Jansen may also receive an annual bonus of up to 30% of her base salary, as determined at the discretion of the Board of Directors. Dr. Jansen has received options to purchase up to 120,000 shares of common stock which vest over a four-year period. These options were granted outside of the VaxGen, Inc. 1996 Stock Plan ( “Plan”) but on terms substantially similar to those of the Plan. Dr. Jansen’s employment agreement also provides for relocation and housing assistance and certain other expenses. In the event of a termination by VaxGen without cause or termination by Dr. Jansen for good reason (as defined in her employment agreement), the Company may be required to pay Dr. Jansen’s base salary for twelve months following her termination. In addition, Dr. Jansen’s options will fully accelerate upon termination by VaxGen without cause or termination by Dr. Jansen for good reason or upon certain events after a change of control (as defined in Dr. Jansen’s employment agreement). Upon termination of employment, Dr. Jansen is subject to a one-year non-competition and non-interference period.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee was, at any time since our formation, an officer or employee of VaxGen. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
| |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Securities Authorized for Issuance under Equity Compensation Plans
The table below sets forth certain information with respect to our common stock which is authorized for issuance under our equity compensation plans, including stock option plans and the 2001 Employee Stock Purchase Plan, as of December 31, 2004.
In September 2001, VaxGen granted employment inducement stock options for 400,000 shares of VaxGen common stock outside the Plan to a newly hired executive with an exercise price of $14.90 per share. In October 2004, VaxGen granted stock options for 120,000 shares and 30,000 shares outside the approved plans to a new executive and director with an exercise price of $11.40 per share and $12.27 per share, respectively. These options were granted without stockholder approval, but pursuant to Nasdaq Marketplace Rules on terms that are substantially in accordance with VaxGen’s standard stock option terms for employees. As of December 31, 2004, none of these stock options have been exercised, canceled or repurchased.
| | | | | | | | | | |
Plan Category | | Number of securities to be
issued upon exercise of
outstanding options,
warrants
and rights
(a) | | Weighted-average
exercise price of
outstanding options, warrants
and rights
(b) | | Number of securities
remaining available for
issuance under equity
compensation plans
(excluding securities
reflected
in column (a))
(c)(1) | |
| |
| |
| |
| |
Equity compensation plans approved by security holders: | | 4,084,671 | | | | $ | 10.21 | | | 2,147,437 | | |
| | | | | | | | | | | | |
Equity compensation plans not approved by security holders | | 550,000 | | | | $ | 13.99 | | | — | | |
| |
| | | | | | | |
| | |
Total | | 4,634,671 | | | | $ | 10.66 | | | 2,147,437 | | |
| |
| | | | | | | |
| | |
(1) Includes 472,356 shares issuable under the 2001 Employee Stock Purchase Plan, as amended.
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The following table sets forth certain information regarding the ownership of the Company’s common stock as of November 30, 2006 by: (i) each director; (ii) the Chief Executive Officer and the Company’s other four most highly compensated executive officers during the 11 months ended November 30, 2006; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than five percent of its common stock.
| | | | | | | |
| | Beneficial Ownership (1) | |
| |
| |
Beneficial Owner | | Number of
Shares | | Percent of Total | |
| |
| |
| |
5% Stockholders | | | | | | | |
| | | | | | | |
None | | | — | | | — | |
Directors and Executive Officers | | | | | | | |
Randall L-W. Caudill, Chairman of the Board and Director (2),(3) | | | 82,960 | | | * | |
Lance K. Gordon, President, Chief Executive Officer and Director (2) (4) | | | 561,404 | | | 1.67 | % |
Franklin Berger, Director (2) | | | 30,000 | | | * | |
Michel Greco, Director (2) | | | 40,000 | | | * | |
Myron Levine, Director (2) | | | 16,875 | | | * | |
Kevin Reilly, Director (2),(4) | | | — | | | — | |
Eve Slater, Director (2),(4) | | | — | | | — | |
Marc Gurwith, Senior Vice President, Medical Affairs & Chief Medical Officer (2) | | | 176,120 | | | * | |
James P. Panek, Senior Vice President, Manufacturing Operations (2) | | | 161,973 | | | * | |
Piers Whitehead, Vice President, Corporate and Business Development (2) | | | 147,823 | �� | | * | |
Ronald Lance Ignon (2) | | | 119,202 | | | * | |
All executive officers and directors as a group (12 persons) (2) | | | 1,336,357 | | | 3.89 | % |
| |
|
| |
* Less than one percent. |
(1)
|
This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13D and 13G filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 33,106,523 shares outstanding on November 30, 2006 adjusted as required by rules promulgated by the SEC.
|
(2)
|
Includes options under the Company’s stock option plans exercisable within 60 days of November 30, 2006 for the following number of shares: Dr. Caudill — 53,817; Dr. Gordon — 558,333; Mr. Berger — 30,000; Mr. Greco — 40,000; Dr. Levine — 16,875; Mr. Reilly — zero; Dr. Slater — zero; Dr. Gurwith — 162,500; Mr. Panek — 150,000; Mr. Whitehead — 137,500; Mr. Ignon — 116,250; and all executive officers and directors as a group — 1,265,275.
|
(3)
|
Includes 17,143 shares underlying warrants issued to Dunsford Hill Capital Partners pursuant to an early stage corporate finance advisory engagement. Dr. Caudill is President of Dunsford Hill Capital Partners. Also includes 1,000 shares owned by Dr. Caudill’s wife. Dr. Caudill disclaims beneficial ownership of these 1,000 shares except to the extent of any pecuniary interest therein.
|
(4)
|
Mr. Reilly and Dr. Slater have been directors of the Company’s since 2005; and Dr. Gordon’s employment with the Company terminated in January 2007.
|
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| |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
The following is a summary of certain related party transactions with the Company in which certain of the Company’s executive officers, directors or greater than five percent stockholders or any members of the immediate family of any of the foregoing had or have a direct or indirect material interest. The Company believes that each of these transactions was on terms at least as fair to the Company as could have been obtained from unaffiliated third parties.
All future transactions, including any loans from the Company to its officers, directors, principal stockholders or affiliates, will be approved by a majority of the Board of Directors, including a majority of the independent and disinterested members of the Board of Directors or, if required by law, a majority of disinterested stockholders, and will be on terms no less favorable to the Company than could be obtained from unaffiliated third parties.
The Company has entered into indemnity agreements with certain officers and directors which provide, among other things, that the Company will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of the Company, and otherwise to the fullest extent permitted under Delaware law and the Company’s Bylaws.
The Company has entered into a License and Supply Agreement with Genentech, Inc. pursuant to which Genentech, Inc. received payments totaling $0.3 million and $2.3 million in 2004 and 2003, respectively. This agreement related to the license of AIDSVAX by the Company from Genentech, Inc. The Company believes that this transaction was on terms at least as fair to the Company as could have been obtained from unaffiliated third parties.
| |
Item 14. | Principal Accounting Fees and Services |
The following table represents aggregate fees billed to the Company for work performed during the years ended December 31, 2004 and 2003, by PricewaterhouseCoopers LLP (“PwC”) and KPMG LLP (“KPMG”), the Company’s principal accountants during those years, respectively (in thousands):
| | | | | | | |
| | Year Ended
December 31, | |
| |
| |
| | 2004 | | 2003 | |
| |
| |
| |
Audit Fees (1) | | $ | 990 | | $ | 675 | |
Audit-Related Fees | | | — | | | — | |
Tax Fees (2) | | | — | | | 3 | |
All Other Fees (3) | | | 1 | | | 1 | |
| |
|
| |
|
| |
Total Fees | | $ | 991 | | $ | 679 | |
| |
|
| |
|
| |
| |
(1) | Includes fees for services that normally would be provided by an independent auditor in connection with regulatory filings. Also includes fees necessary to perform an audit or review in accordance with auditing standards generally accepted in the United States of America and fees for services that generally only the independent auditors can reasonably provide, such as comfort letters, consents and assistance with and review of documents filed with the SEC. Audit fees billed to the Company by PwC for the year ended December 31, 2004 include amounts for work performed in 2004 related to the audit of the Company’s financial statements for the year ended December 31, 2004 and the re-audit of the Company’s financial statements for the years ended December 31, 2003, 2002 and 2001. As of December 31, 2004, neither the 2004 audit nor the re-audit of the years ended December 31, 2003, 2002 and 2001 had been completed. |
| |
(2) | Consists primarily of fees for the preparation of federal and state tax returns. |
| |
(3) | Includes fees for consultancy services related to non-U.S.-based activities. |
All fees described above were approved by the Audit Committee.
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Under the provisions of the revised Audit Committee Charter which was adopted in March 2004 and subsequently approved by the full Board of Directors, the Audit Committee may approve in advance the engagement of the independent auditor for all audit services and non-audit services, based on independence, qualifications and, if applicable, performance, and approve the fees and other terms of any such engagement; provided, however, that, except as otherwise required by applicable law, rule or regulation, (i) the Committee may establish pre-approval policies and procedures for any engagement to render such services, provided that such policies and procedures (x) are detailed as to particular services, (y) do not involve delegation to management of the Committee’s responsibilities hereunder, and (z) provided that, at its next scheduled meeting, the Committee is informed as to each such service for which the independent auditor is engaged pursuant to such policies and procedures, and (ii) the Committee may delegate to one or more members of the Committee the authority to grant pre-approvals for such services, provided that (a) the decisions of such member(s) to grant any such pre-approvals shall be presented to the Committee at its next scheduled meeting, and (b) the Committee has established policies and procedures for such pre-approval of services consistent with the requirements of subsections (x) and (y) above.
PART IV
| |
Item 15. | Exhibits and Financial Statement Schedules |
(a) (1) Financial Statements
(a) (2) Financial Statement Schedules
SCHEDULE I
The condensed parent company financial data has been prepared in accordance with Rule 12-04 of Regulation S-X. The parent company financial data includes VaxGen, Inc. (“VaxGen”) and its subsidiary, VaxGen-Celltrion, Inc. (“VCI”) (collectively “Parent Company”). This financial data does not consolidate VaxGen’s variable interest entity, Celltrion, because VaxGen does not have the ability to transfer or dividend assets of Celltrion to the Parent Company. VaxGen’s relationship to Celltrion is more fully described in Note 1 to the consolidated financial statements.
The Parent Company financial data has been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the Parent Company accounts for Celltrion using the equity method. Refer to the footnotes to the consolidated financial statements presented in Item 8. Financial Statements and Supplementary Data for additional information and disclosures with respect to this financial data.
- 136 -
VaxGen, Inc.
CONDENSED PARENT COMPANY BALANCE SHEETS
(in thousands)
| | | | | | | |
| | December 31, | |
| |
| |
| | 2004 | | 2003 | |
| |
| |
| |
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 8,791 | | $ | 13,221 | |
Investment securities | | | 25,392 | | | 15,464 | |
Accounts receivable | | | 2,730 | | | 4,464 | |
Unbilled accounts receivable | | | 1,855 | | | 2,094 | |
Due from related party | | | 813 | | | 386 | |
Prepaid expenses and other current assets | | | 1,490 | | | 682 | |
| |
|
| |
|
| |
Total current assets | | | 41,071 | | | 36,311 | |
Investment in affiliate | | | 25,450 | (A) | | 34,561 | |
Property and equipment | | | 22,017 | | | 18,517 | |
Restricted cash | | | 1,105 | | | 1,092 | |
Other assets | | | 349 | | | 3,983 | |
| |
|
| |
|
| |
Total assets | | $ | 89,992 | | $ | 94,464 | |
| |
|
| |
|
| |
Liabilities and Stockholders’ Equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 4,896 | | $ | 4,908 | |
Accrued and other current liabilities | | | 8,872 | | | 4,155 | |
Derivative liabilities | | | — | | | 3,407 | |
Current portion of obligation to related party | | | — | | | 2,575 | |
Due to related parties | | | — | | | 210 | |
| |
|
| |
|
| |
Total current liabilities | | | 13,768 | | | 15,255 | |
Obligation to related party, non-current | | | — | | | 31,540 | |
Other liabilities | | | 608 | | | 629 | |
| |
|
| |
|
| |
Total liabilities | | | 14,376 | | | 47,424 | |
| |
|
| |
|
| |
Minority interest of subsidiary | | | — | | | 5,818 | |
| |
|
| |
|
| |
Stockholders’ equity: | | | | | | | |
Common stock | | | 292 | | | 250 | |
Additional paid-in capital | | | 268,928 | (A) | | 184,032 | |
Deferred stock compensation | | | (1,195 | ) | | (242 | ) |
Accumulated deficit | | | (195,975 | ) | | (146,438 | ) |
Accumulated other comprehensive income | | | 3,566 | | | 3,620 | |
| |
|
| |
|
| |
Total stockholders’ equity | | | 75,616 | | | 41,222 | |
| |
|
| |
|
| |
Total liabilities and stockholders’ equity | | $ | 89,992 | | $ | 94,464 | |
| |
|
| |
|
| |
| |
(A) | Investment in affiliate is eliminated against additional paid-in capital in consolidation as of December 31, 2004. |
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VaxGen, Inc.
CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS
(in thousands)
| | | | | | | | | | |
| | Year Ended December 31, | |
| |
| |
| | 2004 | | 2003 | | 2002 | |
| |
| |
| |
| |
Revenues: | | | | | | | | | | |
Research contracts and grants | | $ | 31,395 | | $ | 28,006 | | $ | 2,819 | |
Related party services | | | 427 | (B) | | 1,051 | | | 392 | |
| |
|
| |
|
| |
|
| |
Total revenues | | | 31,822 | | | 29,057 | | | 3,211 | |
| |
|
| |
|
| |
|
| |
Operating expenses: | | | | | | | | | | |
Research and development: | | | | | | | | | | |
Related party | | | 55 | | | 140 | | | 3,536 | |
Other | | | 41,065 | | | 32,021 | | | 23,690 | |
| |
|
| |
|
| |
|
| |
Total research and development | | | 41,120 | | | 32,161 | | | 27,226 | |
General and administrative | | | 18,579 | | | 15,988 | | | 10,753 | |
| |
|
| |
|
| |
|
| |
Loss from operations | | | (27,877 | ) | | (19,092 | ) | | (34,768 | ) |
| |
|
| |
|
| |
|
| |
Other expense: | | | | | | | | | | |
Investment income and other | | | 305 | | | 488 | | | 2,038 | |
Valuation adjustments | | | (17,583 | ) (C) | | 4,499 | | | (4,297 | ) |
Loss on sale of subsidiary stock | | | (4,858 | ) (B) | | — | | | — | |
|
Equity in loss of affiliate | | | (336 | )(B) | | (6,735 | ) | | (803 | ) |
| |
|
| |
|
| |
|
| |
Total other expense | | | (22,472 | ) | | (1,748 | ) | | (3,062 | ) |
| |
|
| |
|
| |
|
| |
Net loss before minority interest | | | (50,349 | ) | | (20,840 | ) | | (37,830 | ) |
Minority interest in loss of subsidiary | | | 812 | (B) | | 1,020 | | | 162 | |
| |
|
| |
|
| |
|
| |
Loss before cumulative effect of change in accounting principle | | | (49,537 | ) | | (19,820 | ) | | (37,668 | ) |
Cumulative effect of change in accounting principle | | | — | | | 700 | | | — | |
| |
|
| |
|
| |
|
| |
Net loss | | | (49,537 | ) | | (19,120 | ) | | (37,668 | ) |
Charges related to Series A preferred stock: | | | | | | | | | | |
Dividends | | | — | | | (109 | ) | | (1,090 | ) |
Accretion to redemption value | | | — | | | (848 | ) | | (6,846 | ) |
Beneficial conversion charges | | | — | | | (1,623 | ) | | (9,098 | ) |
| |
|
| |
|
| |
|
| |
Net loss applicable to common stockholders | | $ | (49,537 | ) | $ | (21,700 | ) | $ | (54,702 | ) |
| |
|
| |
|
| |
|
| |
Basic and diluted net loss per share applicable to common stockholders: | | | | | | | | | | |
Before cumulative effect of change in accounting principle | | $ | (1.93 | ) | $ | (1.19 | ) | $ | (3.76 | ) |
Cumulative effect of change in accounting principle | | | — | | | 0.04 | | | — | |
| |
|
| |
|
| |
|
| |
Basic and diluted net loss per share applicable to common stockholders | | $ | (1. 93 | ) | $ | (1.15 | ) | $ | (3.76 | ) |
| |
|
| |
|
| |
|
| |
Weighted average shares used in computing basic and diluted net loss per share applicable to common stockholders | | | 25,677 | | | 18,916 | | | 14,567 | |
| |
|
| |
|
| |
|
| |
| |
(B) | Eliminated in consolidation for the year ended December 31, 2004. |
| |
(C) | Includes $1.4 million for the change in fair value of a financial instrument. The financial instrument was terminated in 2004; however, the change is eliminated in consolidation for the year ended December 31, 2004. |
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VaxGen, Inc.
CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOWS
(in thousands)
| | | | | | | | | | |
| | Year Ended December 31, | |
| |
| |
| | 2004 | | 2003 | | 2002 | |
| |
| |
| |
| |
Cash flows from operating activities: | | | | | | | | | | |
Net loss | | $ | (49,537 | ) | $ | (19,120 | ) | $ | (37,668 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | |
Minority interest in loss of subsidiary | | | (812 | ) | | (1,020 | ) | | (162 | ) |
Depreciation and amortization | | | 1,760 | | | 1,245 | | | 1,000 | |
Amortization of premiums and discounts on investment securities | | | 262 | | | (152 | ) | | (410 | ) |
Stock compensation expense | | | 955 | | | 840 | | | 840 | |
Loss on sale of subsidiary stock | | | 4,858 | (D) | | — | | | — | |
Warrants issued to consultants | | | — | | | 55 | | | — | |
Valuation adjustments | | | 16,803 | (C) | | (4,499 | ) | | 4,297 | |
Cumulative effect of change in accounting principle | | | — | | | (700 | ) | | — | |
Equity in loss of affiliate | | | 336 | (D) | | 6,735 | | | 803 | |
Changes in assets and liabilities: | | | | | | | | | | |
Receivables | | | 1,546 | | | (4,702 | ) | | (1,804 | ) |
Prepaid expenses and other current assets | | | (807 | ) | | 994 | | | (559 | ) |
Accounts payable | | | (12 | ) | | 3,900 | | | 451 | |
Accrued and other current liabilities | | | 4,561 | | | (717 | ) | | 2,308 | |
Due to related party | | | (210 | ) | | (2,177 | ) | | 1,814 | |
Other | | | (50 | ) | | 193 | | | (271 | ) |
| |
|
| |
|
| |
|
| |
Net cash used in operating activities | | | (20,347 | ) | | (19,125 | ) | | (29,361 | ) |
| |
|
| |
|
| |
|
| |
Cash flows from investing activities: | | | | | | | | | | |
Purchase of investment securities | | | (36,915 | ) | | (19,069 | ) | | (15,693 | ) |
Proceeds from sale and maturities of investment securities | | | 26,671 | | | 17,037 | | | 42,333 | |
Purchase of property and equipment | | | (5,260 | ) | | (14,051 | ) | | (3,409 | ) |
Change in restricted cash | | | (13 | ) | | (59 | ) | | (503 | ) |
Other | | | 34 | | | — | | | — | |
| |
|
| |
|
| |
|
| |
Net cash provided by (used in) investing activities | | | (15,483 | ) | | (16,142 | ) | | 22,728 | |
| |
|
| |
|
| |
|
| |
Cash flows from financing activities: | | | | | | | | | | |
Proceeds from private placements, net | | | 37,491 | | | 38,224 | | | — | |
Proceeds from sale of VCI’s common stock, net | | | — | | | — | | | 7,000 | |
Purchase of VCI’s common stock | | | (7,664 | ) (D) | | — | | | — | |
Exercise of employee stock options | | | 1,025 | | | 927 | | | 962 | |
Employee stock purchase plan | | | 447 | | | 575 | | | 274 | |
Other | | | 102 | | | (598 | ) | | 258 | |
| |
|
| |
|
| |
|
| |
Net cash provided by financing activities | | | 31,401 | | | 39,128 | | | 8,494 | |
| |
|
| |
|
| |
|
| |
Increase in cash and cash equivalents | | | (4,429 | ) | | 3,861 | | | 1,861 | |
Cash and cash equivalents at beginning of year | | | 13,221 | | | 9,360 | | | 7,499 | |
| |
|
| |
|
| |
|
| |
Cash and cash equivalents at end of year | | $ | 8,792 | | $ | 13,221 | | $ | 9,360 | |
| |
|
| |
|
| |
|
| |
| |
(D) | Eliminated for the year ended December 31, 2004. |
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SCHEDULE II
VaxGen, Inc.
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
| | | | | | | | | | | | | |
| | Balance at
Beginning of
Year | | Additions | | Deductions | | Balance at
End of Year | |
| |
| |
| |
| |
| |
Note receivable allowance
Year ended December 31: | | | | | | | | | | | | | |
2004 | | $ | — | | $ | — | | $ | — | | $ | — | |
2003 | | $ | 487 | | $ | — | | $ | (487 | ) | $ | — | |
2002 | | $ | 487 | | $ | — | | $ | — | | $ | 487 | |
| | | | | | | | | | | | | |
| | Balance at
Beginning of
Year | | Additions | | Deductions | | Balance at
End of Year | |
| |
| |
| |
| |
| |
Tax valuation allowance
Year ended December 31: | | | | | | | | | | | | | |
2004 | | $ | 47,027 | | $ | 17,048 | | $ | — | | $ | 64,075 | |
2003 | | $ | 39,781 | | $ | 7,246 | | $ | — | | $ | 47,027 | |
2002 | | $ | 40,735 | | $ | — | | $ | (954 | ) | $ | 39,781 | |
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(a)(3) Exhibits (Note: Management contracts and compensatory plans or arrangements are identified with a “+” in the following list.)
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
3.1 | | Amended and Restated Certificate of Incorporation. | | S-8 | | 333-84922 | | 3-26-02 | | 4.1 | | |
| | | | | | | | | | | | |
3.2 | | Amendment to the Amended and Restated Certificate of Incorporation. | | S-8 | | 333-84922 | | 3-26-02 | | 4.3 | | |
| | | | | | | | | | | | |
3.3 | | Amended and Restated Bylaws. | | S-1 | | 333-78065 | | 6-11-99 | | 3.2 | | |
| | | | | | | | | | | | |
3.4 | | Amended and Restated Bylaws, dated as of May 26, 2004. | | 10-Q | | 000-26483 | | 02-07-07 | | 3.4 | | |
| | | | | | | | | | | | |
4.1 | | Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4 | | | | | | | | | | |
| | | | | | | | | | | | |
4.2 | | Certificate of Designations, Rights and Preferences of Series A 6% Cumulative Convertible Preferred Stock. | | S-8 | | 333-84922 | | 3-26-02 | | 4.2 | | |
| | | | | | | | | | | | |
4.3 | | Securities Purchase Agreement by and among Registrant and Certain Stockholders. | | 8-K | | 000-26483 | | 5-24-01 | | 10.1 | | |
| | | | | | | | | | | | |
4.4 | | Registrant Rights Agreement by and among Registrant and Certain Stockholders. | | 8-K | | 000-26483 | | 5-24-01 | | 10.2 | | |
| | | | | | | | | | | | |
4.5 | | Form of Common Stock Purchase Warrant. | | 8-K | | 000-26483 | | 5-24-01 | | 4.1 | | |
| | | | | | | | | | | | |
4.6 | | Specimen Stock Certificate for Common Stock of Registrant. | | S-1 | | 333-78065 | | 6-11-99 | | 4.1 | | |
| | | | | | | | | | | | |
10.1 | | Registration Rights Agreement between VaxGen and Genentech, dated as of May 5, 1997. | | S-1 | | 333-78065 | | 5-7-99 | | 10.1 | | |
| | | | | | | | | | | | |
10.2 | | 1996 Registration Rights Agreement between VaxGen and certain stockholders. | | S-1 | | 333-78065 | | 5-7-99 | | 10.2 | | |
| | | | | | | | | | | | |
10.3 | | 1998 Registration Rights Agreement between VaxGen and certain stockholders. | | S-1 | | 333-78065 | | 5-7-99 | | 10.3 | | |
| | | | | | | | | | | | |
10.4 | | VaxGen, Inc. Amended and Restated 1996 Stock Option Plan. + | | S-8 | | 333-85391 | | 8-17-99 | | 99.1 | | |
| | | | | | | | | | | | |
10.5 | | 1998 Director Stock Option Plan. + | | S-1 | | 333-78065 | | 5-7-99 | | 10.5 | | |
| | | | | | | | | | | | |
10.6 | | Form of stock option agreement. + | | S-1 | | 333-78065 | | 5-7-99 | | 10.6 | | |
| | | | | | | | | | | | |
10.7 | | Form of common stock warrant. | | S-1 | | 333-78065 | | 5-7-99 | | 10.7 | | |
| | | | | | | | | | | | |
10.9 | | Amended and Restated Employment. Agreement between VaxGen and Phillip W. Berman. + | | S-8 | | 333-85391 | | 8-17-99 | | 99.5 | | |
| | | | | | | | | | | | |
10.10 | | Employment Agreement between VaxGen and Carter A. Lee, dated as of April 1, 1999. + | | S-1 | | 333-78065 | | 5-7-99 | | 10.13 | | |
| | | | | | | | | | | | |
10.11 | | License and Supply Agreement with Genentech, dated as of May 1, 1996. | | S-1 | | 333-78065 | | 5-7-99 | | 10.14 | | |
| | | | | | | | | | | | |
10.12 | | Letter of Intent for Supply Development Agreement between VaxGen and Pasteur Merieux Serums et Vaccins (Pasteur Merieux Connaught), dated April 10, 1998. | | S-1 | | 333-78065 | | 5-7-99 | | 10.16 | | |
| | | | | | | | | | | | |
10.12.1 | | Amendment to Letter of Intent for Supply Development Agreement between VaxGen and Pasteur Merieux Serums et Vaccins (Pasteur Merieux Connaught), dated May 3, 1999. | | S-1 | | 333-78065 | | 5-7-99 | | 10.16.1 | | |
- 141 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.13 | | Form of trial clinic agreement. | | S-1 | | 333-78065 | | 5-7-99 | | 10.17 | | |
|
10.14 | | Lease Agreement between VaxGen and Oyster Point Tech Center LLC, dated October 26, 1998. | | S-1 | | 333-78065 | | 5-7-99 | | 10.18 | | |
| | | | | | | | | | | | |
10.15 | | Lease Agreement between VaxGen and Spieker Properties, L.P., dated May 20, 1998. | | S-1 | | 333-78065 | | 5-7-99 | | 10.19 | | |
| | | | | | | | | | | | |
10.16 | | Common Stock Purchase Agreement between VaxGen and Vulcan Ventures, Inc., dated October 15, 1999. | | 10- K | | 000-26483 | | 3-30-00 | | 10.20 | | |
| | | | | | | | | | | | |
10.17 | | Loan and Security Agreement entered into between Donald P. Francis and VaxGen, Inc. dated as of December 20, 2000. + | | 10- K | | 000-26483 | | 3-30-01 | | 10.22 | | |
| | | | | | | | | | | | |
10.18 | | Loan and Security Agreement entered into between Phillip W. Berman and VaxGen, Inc. dated as of December 20, 2000. + | | 10-K | | 000-26483 | | 3-30-01 | | 10.24 | | |
| | | | | | | | | | | | |
10.19 | | Employment Agreement between VaxGen and William Heyward, dated as of January 3, 2000. + | | 10-K | | 000-26483 | | 3-30-01 | | 10.25 | | |
| | | | | | | | | | | | |
10.20 | | Employment Agreement between VaxGen and George T. Baxter, dated as of September 5, 2000. + | | 10-K | | 000-26483 | | 3-30-01 | | 10.26 | | |
| | | | | | | | | | | | |
10.21 | | Subcontract Agreement entered into between BBI Biotech Research Laboratories, Inc. and VaxGen, Inc. dated as of May 1, 1999. | | 10-Q | | 000-26483 | | 5-03-01 | | 10.27 | | |
| | | | | | | | | | | | |
- 142 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.22 | | Employment Agreement between VaxGen and Lance K. Gordon, dated as of September 6, 2001. + | | 10-Q | | 000-26483 | | 11-01-01 | | 10.28 | | |
| | | | | | | | | | | | |
10.23 | | Employment Agreement between VaxGen and Roland Lance Ignon, dated as of September 25, 2001. + | | 10-Q | | 000-26483 | | 11-01-01 | | 10.29 | | |
| | | | | | | | | | | | |
10.24 | | Joint Venture Agreement between VaxGen and certain investors, dated February 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.24 | | |
| | | | | | | | | | | | |
10.25 | | Land Purchase and Sale Agreement between VaxGen and Incheon Metropolitan City, dated February 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.25 | | |
| | | | | | | | | | | | |
10.26 | | Contribution Agreement between VaxGen and certain investors, dated February 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.26 | | |
| | | | | | | | | | | | |
10.27 | | Employment Agreement between VaxGen and Donald P. Francis, dated as of October 2, 2001. + | | 10-K | | 000-26483 | | 4-01-02 | | 10.27 | | |
| | | | | | | | | | | | |
10.28 | | Employment Agreement between VaxGen and Marc Gurwith, dated as of October 28, 2001. + | | 10-K | | 000-26483 | | 4-01-02 | | 10.28 | | |
| | | | | | | | | | | | |
10.29 | | Sublease Agreement between VaxGen and TSI Communications, dated as of September 21, 2001. | | 10-K | | 000-26483 | | 4-01-02 | | 10.29 | | |
|
10.30 | | Stock Option Agreement between VaxGen and Lance K. Gordon, dated September 6, 2001. + | | 10-K | | 000-26483 | | 4-01-02 | | 10.30 | | |
- 143 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.31 | | Assignment Agreement between VaxGen and Celltrion, Inc., dated March 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.31 | | |
| | | | | | | | | | | | |
10.32 | | Employment Agreement between VaxGen and Carmen M. Betancourt, dated as of January 28, 2002. + | | 10- Q | | 000-26483 | | 5-15-02 | | 10.32 | | |
| | | | | | | | | | | | |
10.33 | | Employment Agreement between VaxGen and James P. Panek, dated as of February 4, 2002. + | | 10- Q | | 000-26483 | | 5-15-02 | | 10.33 | | |
| | | | | | | | | | | | |
10.34 | | Employment Agreement between VaxGen and Phillip W. Berman, dated as of February 7, 2002. + | | 10- Q | | 000-26483 | | 5-15-02 | | 10.34 | | |
| | | | | | | | | | | | |
10.35 | | License Agreement between VaxGen and Celltrion, dated as of March 25, 2002. | | 10- Q | | 000-26483 | | 5-15-02 | | 10.35 | | |
| | | | | | | | | | | | |
10.36 | | Sub-License Agreement between VaxGen and Celltrion, dated as of March 25, 2002. | | 10- Q | | 000-26483 | | 5-15-02 | | 10.36 | | |
| | | | | | | | | | | | |
10.37 | | Supply Agreement between VaxGen and Celltrion, dated as of March 25, 2002. | | 10- Q | | 000-26483 | | 5-15-02 | | 10.37 | | |
| | | | | | | | | | | | |
10.38 | | Amended and Restated License and Supply Agreement between VaxGen, Inc., and Genentech, Inc., entered into as of May 1, 2002. | | 8-K | | 000-26483 | | 7-15-02 | | 99.2 | | |
| | | | | | | | | | | | |
10.39 | | Contract between VaxGen and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, under Contract No. N01-AI-25494, dated September 30, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.39 | | |
| | | | | | | | | | | | |
10.40 | | Amendment of contract between VaxGen and the National Institutes of Health, under Contract No. N01-AI-95373, dated September 30, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.40 | | |
| | | | | | | | | | | | |
10.41 | | Employment Agreement between VaxGen and Piers C. Whitehead, dated as of July 1, 2002. + | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.41 | | |
| | | | | | | | | | | | |
10.42 | | Joint Venture Agreement between VaxGen and Celltrion, Inc., dated as of June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.42 | | |
| | | | | | | | | | | | |
10.43 | | License Agreement between VaxGen and VaxGen-Celltrion, Inc., dated June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.43 | | |
| | | | | | | | | | | | |
10.44 | | Sub-License Agreement between VaxGen and VaxGen-Celltrion, Inc., dated June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.44 | | |
| | | | | | | | | | | | |
10.45 | | Consulting Services Agreement between VaxGen and VaxGen-Celltrion, Inc., dated June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.45 | | |
| | | | | | | | | | | | |
10.46 | | Contract between VaxGen and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, under Contract No. N01-AI-95373, dated July 9, 1999. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.46 | | |
- 144 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.47 | | Contract between VaxGen and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, under Contract No. N01-AI-30053, dated September 30, 2003. | | 10- Q | | 000-26483 | | 11-19- 03 | | 10.47 | | |
| | | | | | | | | | | | |
10.48 | | 2001 Employee Stock Purchase Plan + | | S-8 | | 333-10811 | | 08-21- 03 | | 99.3 | | |
| | | | | | | | | | | | |
10.49 | | License Agreement between VaxGen and U.S. Army Medical Research Institute of Infectious Diseases, dated as of October 7, 2003. | | 8-K | | 000-26483 | | 12-02- 03 | | 99.1 | | |
| | | | | | | | | | | | |
10.50 | | Office and R&D Sublease, dated August 1, 2002, by and between Cellegy Pharmaceuticals, Inc. and VaxGen, Inc. | | 8-K | | 000-26483 | | 12-09- 03 | | 99.1 | | |
| | | | | | | | | | | | |
10.51 | | Partnership Agreement between VaxGen, Inc. and the Chemo-Sero-Therapeutic Research Institute. | | 10-K | | 000-26483 | | 03-30-04 | | 10.51 | | |
| | | | | | | | | | | | |
10.53 | | Transition and separation agreement between VaxGen and Phillip W. Berman dated as of February 13, 2004.+ * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.53 | | |
| | | | | | | | | | | | |
10.54 | | Transition and separation agreement between VaxGen and Donald P. Francis dated as of February 13, 2004. + * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.54 | | |
| | | | | | | | | | | | |
10.55 | | Transition and separation agreement between VaxGen and William Heyward dated as of February 13, 2004. + * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.55 | | |
| | | | | | | | | | | | |
10.56 | | Transition and separation agreement between VaxGen and Carter A. Lee dated as of February 13, 2004. + * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.56 | | |
| | | | | | | | | | | | |
10.57 | | Executive Employment Agreement between VaxGen and James M. Cunha, dated May 20, 2004. + | | 8-K | | 000-26483 | | 6-06-05 | | 10.2 | | |
| | | | | | | | | | | | |
10.58 | | Amendment, dated July 14, 2004, to Joint Venture Agreement between VaxGen and certain investors, dated February 25, 2002. | | 10-Q | | 000-26483 | | 02-07-07 | | 10.58 | | |
| | | | | | | | | | | | |
10.59 | | Warrant Exchange Agreement, by and between VaxGen and CD Investment Partners, Ltd, dated September 21, 2004. | | 8-K | | 000-26483 | | 9-24-04 | | 10.52 | | |
| | | | | | | | | | | | |
10.60 | | Warrant Exchange Agreement by and between VaxGen and Societe Generale, Kepler Capital, LLC, Cheyenne LLC and Prism Capital 5, L.P., dated September 21, 2004. | | 8-K | | 000-26483 | | 9-24-04 | | 10.53 | | |
| | | | | | | | | | | | |
10.61 | | Employment Agreement between VaxGen and Dr. Kathrin Jansen, dated September 30, 2004. + | | 8-K | | 000-26483 | | 10-21-04 | | 10.56 | | |
| | | | | | | | | | | | |
10.62 | | Stock Option Agreement between VaxGen and Dr. Kathrin Jansen, dated October 15, 2004. + | | 8-K | | 000-26483 | | 10-21-04 | | 10.57 | | |
| | | | | | | | | | | | |
10.63 | | Stock Option Agreement between VaxGen and Myron Levine, dated October 21, 2004. + | | 8-K | | 000-26483 | | 10-21-04 | | 10.58 | | |
- 145 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.64 | | Supply Contract No. HHS0100200300001C, between the Department of Health and Human Services, Office of Research and Development Coordination and Office of Public Health Emergency Preparedness and VaxGen, Inc. dated November 4, 2004.* | | 8-K/A | | 000-26483 | | 11-19-04 | | 99.1 | | |
| | | | | | | | | | | | |
10.65 | | Agreement by and between VaxGen and Celltrion pursuant to which VaxGen acquired all of Celltrion’s interest in VaxGen-Celltrion, Inc., dated December 30, 2004 | | | | | | | | | | X |
| | | | | | | | | | | | |
10.66 | | Revised Joint Venture Agreement between VaxGen and certain investors, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.67 | | Termination Agreement between VaxGen and Celltrion, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.68 | | Surrender Agreement between VaxGen and certain investors, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.69 | | Technical Support and Services Agreement between VaxGen and Celltrion, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.70 | | Form of Stock Purchase Agreement between VaxGen and certain institutional investors, entered into November 19, 2004. | | 8-K | | 000-26483 | | 11-24-04 | | 4.1 | | |
| | | | | | | | | | | | |
21.1 | | Subsidiaries | | | | | | | | | | X |
| | | | | | | | | | | | |
31.1 | | Certification | | | | | | | | | | X |
| | | | | | | | | | | | |
31.2 | | Certification | | | | | | | | | | X |
| | | | | | | | | | | | |
32.1 | | Certification | | | | | | | | | | X |
| | | | | | | | | | | | |
99.1 | | Celltrion, Inc. Financial Statements for the years ended December 31, 2003 and 2002. | | 10-K/A | | 000-26483 | | 09-26-06 | | 99.1 | | |
| |
* Confidential treatment requested. The redacted portions have been separately filed with the SEC as required by Rule 406 of Regulation C. |
- 146 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| |
| VaxGen, Inc. |
| (Registrant) |
| |
| By: /s/ Matthew J. Pfeffer |
|
|
| Matthew J. Pfeffer |
| Chief Financial Officer |
| (Principal Financial and Accounting Officer) |
| |
| February 6, 2007 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
By: /s/ James P. Panek | | February 6, 2007 |
| | |
James P. Panek | | |
President, Chief Executive Officer and Director | | |
(Principal Executive Officer) | | |
| | |
By: /s/ Matthew J. Pfeffer | | February 6, 2007 |
| | |
Matthew J. Pfeffer | | |
Chief Financial Officer | | |
(Principal Financial and Accounting Officer) | | |
| | |
By: /s/ Franklin M. Berger | | February 5, 2007 |
| | |
Franklin M. Berger | | |
Director | | |
| | |
By: /s/ Randall L-W. Caudill | | February 3, 2007 |
| | |
Randall L-W. Caudill | | |
Director | | |
| | |
By: /s/ Michel Greco | | February 2, 2007 |
| | |
Michel Greco | | |
Director | | |
| | |
By: /s/ Myron M. Levine | | February 6, 2007 |
| | |
Myron M. Levine | | |
Director | | |
| | |
By: /s/ Kevin L. Reilly | | February 6, 2007 |
| | |
Kevin L. Reilly | | |
Director | | |
| | |
By: /s/ Eve E. Slater | | February 5, 2007 |
| | |
Eve E. Slater | | |
Director | | |
- 147 -
EXHIBIT INDEX
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
3.1 | | Amended and Restated Certificate of Incorporation. | | S-8 | | 333-84922 | | 3-26-02 | | 4.1 | | |
| | | | | | | | | | | | |
3.2 | | Amendment to the Amended and Restated Certificate of Incorporation. | | S-8 | | 333-84922 | | 3-26-02 | | 4.3 | | |
| | | | | | | | | | | | |
3.3 | | Amended and Restated Bylaws. | | S-1 | | 333-78065 | | 6-11-99 | | 3.2 | | |
| | | | | | | | | | | | |
3.4 | | Amended and Restated Bylaws, dated as of May 26, 2004. | | 10-Q | | 000-26483 | | 02-07-07 | | 3.4 | | |
| | | | | | | | | | | | |
4.1 | | Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4 | | | | | | | | | | |
| | | | | | | | | | | | |
4.2 | | Certificate of Designations, Rights and Preferences of Series A 6% Cumulative Convertible Preferred Stock. | | S-8 | | 333-84922 | | 3-26-02 | | 4.2 | | |
| | | | | | | | | | | | |
4.3 | | Securities Purchase Agreement by and among Registrant and Certain Stockholders. | | 8-K | | 000-26483 | | 5-24-01 | | 10.1 | | |
| | | | | | | | | | | | |
4.4 | | Registrant Rights Agreement by and among Registrant and Certain Stockholders. | | 8-K | | 000-26483 | | 5-24-01 | | 10.2 | | |
| | | | | | | | | | | | |
4.5 | | Form of Common Stock Purchase Warrant. | | 8-K | | 000-26483 | | 5-24-01 | | 4.1 | | |
| | | | | | | | | | | | |
4.6 | | Specimen Stock Certificate for Common Stock of Registrant. | | S-1 | | 333-78065 | | 6-11-99 | | 4.1 | | |
| | | | | | | | | | | | |
10.1 | | Registration Rights Agreement between VaxGen and Genentech, dated as of May 5, 1997. | | S-1 | | 333-78065 | | 5-7-99 | | 10.1 | | |
| | | | | | | | | | | | |
10.2 | | 1996 Registration Rights Agreement between VaxGen and certain stockholders. | | S-1 | | 333-78065 | | 5-7-99 | | 10.2 | | |
| | | | | | | | | | | | |
10.3 | | 1998 Registration Rights Agreement between VaxGen and certain stockholders. | | S-1 | | 333-78065 | | 5-7-99 | | 10.3 | | |
| | | | | | | | | | | | |
10.4 | | VaxGen, Inc. Amended and Restated 1996 Stock Option Plan. + | | S-8 | | 333-85391 | | 8-17-99 | | 99.1 | | |
| | | | | | | | | | | | |
10.5 | | 1998 Director Stock Option Plan. + | | S-1 | | 333-78065 | | 5-7-99 | | 10.5 | | |
| | | | | | | | | | | | |
10.6 | | Form of stock option agreement. + | | S-1 | | 333-78065 | | 5-7-99 | | 10.6 | | |
| | | | | | | | | | | | |
10.7 | | Form of common stock warrant. | | S-1 | | 333-78065 | | 5-7-99 | | 10.7 | | |
| | | | | | | | | | | | |
10.9 | | Amended and Restated Employment. Agreement between VaxGen and Phillip W. Berman. + | | S-8 | | 333-85391 | | 8-17-99 | | 99.5 | | |
| | | | | | | | | | | | |
10.10 | | Employment Agreement between VaxGen and Carter A. Lee, dated as of April 1, 1999. + | | S-1 | | 333-78065 | | 5-7-99 | | 10.13 | | |
| | | | | | | | | | | | |
10.11 | | License and Supply Agreement with Genentech, dated as of May 1, 1996. | | S-1 | | 333-78065 | | 5-7-99 | | 10.14 | | |
| | | | | | | | | | | | |
10.12 | | Letter of Intent for Supply Development Agreement between VaxGen and Pasteur Merieux Serums et Vaccins (Pasteur Merieux Connaught), dated April 10, 1998. | | S-1 | | 333-78065 | | 5-7-99 | | 10.16 | | |
| | | | | | | | | | | | |
10.12.1 | | Amendment to Letter of Intent for Supply Development Agreement between VaxGen and Pasteur Merieux Serums et Vaccins (Pasteur Merieux Connaught), dated May 3, 1999. | | S-1 | | 333-78065 | | 5-7-99 | | 10.16.1 | | |
- 148 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.13 | | Form of trial clinic agreement. | | S-1 | | 333-78065 | | 5-7-99 | | 10.17 | | |
|
10.14 | | Lease Agreement between VaxGen and Oyster Point Tech Center LLC, dated October 26, 1998. | | S-1 | | 333-78065 | | 5-7-99 | | 10.18 | | |
| | | | | | | | | | | | |
10.15 | | Lease Agreement between VaxGen and Spieker Properties, L.P., dated May 20, 1998. | | S-1 | | 333-78065 | | 5-7-99 | | 10.19 | | |
| | | | | | | | | | | | |
10.16 | | Common Stock Purchase Agreement between VaxGen and Vulcan Ventures, Inc., dated October 15, 1999. | | 10- K | | 000-26483 | | 3-30-00 | | 10.20 | | |
| | | | | | | | | | | | |
10.17 | | Loan and Security Agreement entered into between Donald P. Francis and VaxGen, Inc. dated as of December 20, 2000. + | | 10- K | | 000-26483 | | 3-30-01 | | 10.22 | | |
| | | | | | | | | | | | |
10.18 | | Loan and Security Agreement entered into between Phillip W. Berman and VaxGen, Inc. dated as of December 20, 2000. + | | 10-K | | 000-26483 | | 3-30-01 | | 10.24 | | |
| | | | | | | | | | | | |
10.19 | | Employment Agreement between VaxGen and William Heyward, dated as of January 3, 2000. + | | 10-K | | 000-26483 | | 3-30-01 | | 10.25 | | |
| | | | | | | | | | | | |
10.20 | | Employment Agreement between VaxGen and George T. Baxter, dated as of September 5, 2000. + | | 10-K | | 000-26483 | | 3-30-01 | | 10.26 | | |
| | | | | | | | | | | | |
10.21 | | Subcontract Agreement entered into between BBI Biotech Research Laboratories, Inc. and VaxGen, Inc. dated as of May 1, 1999. | | 10-Q | | 000-26483 | | 5-03-01 | | 10.27 | | |
| | | | | | | | | | | | |
- 149 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
| | | | | | | | | | | | |
10.22 | | Employment Agreement between VaxGen and Lance K. Gordon, dated as of September 6, 2001. + | | 10-Q | | 000-26483 | | 11-01-01 | | 10.28 | | |
| | | | | | | | | | | | |
10.23 | | Employment Agreement between VaxGen and Roland Lance Ignon, dated as of September 25, 2001. + | | 10-Q | | 000-26483 | | 11-01-01 | | 10.29 | | |
| | | | | | | | | | | | |
10.24 | | Joint Venture Agreement between VaxGen and certain investors, dated February 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.24 | | |
| | | | | | | | | | | | |
10.25 | | Land Purchase and Sale Agreement between VaxGen and Incheon Metropolitan City, dated February 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.25 | | |
| | | | | | | | | | | | |
10.26 | | Contribution Agreement between VaxGen and certain investors, dated February 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.26 | | |
| | | | | | | | | | | | |
10.27 | | Employment Agreement between VaxGen and Donald P. Francis, dated as of October 2, 2001. + | | 10-K | | 000-26483 | | 4-01-02 | | 10.27 | | |
| | | | | | | | | | | | |
10.28 | | Employment Agreement between VaxGen and Marc Gurwith, dated as of October 28, 2001. + | | 10-K | | 000-26483 | | 4-01-02 | | 10.28 | | |
| | | | | | | | | | | | |
10.29 | | Sublease Agreement between VaxGen and TSI Communications, dated as of September 21, 2001. | | 10-K | | 000-26483 | | 4-01-02 | | 10.29 | | |
|
10.30 | | Stock Option Agreement between VaxGen and Lance K. Gordon, dated September 6, 2001. + | | 10-K | | 000-26483 | | 4-01-02 | | 10.30 | | |
- 150 -
| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.31 | | Assignment Agreement between VaxGen and Celltrion, Inc., dated March 25, 2002. | | 10-K | | 000-26483 | | 4-01-02 | | 10.31 | | |
| | | | | | | | | | | | |
10.32 | | Employment Agreement between VaxGen and Carmen M. Betancourt, dated as of January 28, 2002. + | | 10- Q | | 000-26483 | | 5-15-02 | | 10.32 | | |
| | | | | | | | | | | | |
10.33 | | Employment Agreement between VaxGen and James P. Panek, dated as of February 4, 2002. + | | 10- Q | | 000-26483 | | 5-15-02 | | 10.33 | | |
| | | | | | | | | | | | |
10.34 | | Employment Agreement between VaxGen and Phillip W. Berman, dated as of February 7, 2002. + | | 10- Q | | 000-26483 | | 5-15-02 | | 10.34 | | |
| | | | | | | | | | | | |
10.35 | | License Agreement between VaxGen and Celltrion, dated as of March 25, 2002. | | 10- Q | | 000-26483 | | 5-15-02 | | 10.35 | | |
| | | | | | | | | | | | |
10.36 | | Sub-License Agreement between VaxGen and Celltrion, dated as of March 25, 2002. | | 10- Q | | 000-26483 | | 5-15-02 | | 10.36 | | |
| | | | | | | | | | | | |
10.37 | | Supply Agreement between VaxGen and Celltrion, dated as of March 25, 2002. | | 10- Q | | 000-26483 | | 5-15-02 | | 10.37 | | |
| | | | | | | | | | | | |
10.38 | | Amended and Restated License and Supply Agreement between VaxGen, Inc., and Genentech, Inc., entered into as of May 1, 2002. | | 8-K | | 000-26483 | | 7-15-02 | | 99.2 | | |
| | | | | | | | | | | | |
10.39 | | Contract between VaxGen and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, under Contract No. N01-AI-25494, dated September 30, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.39 | | |
| | | | | | | | | | | | |
10.40 | | Amendment of contract between VaxGen and the National Institutes of Health, under Contract No. N01-AI-95373, dated September 30, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.40 | | |
| | | | | | | | | | | | |
10.41 | | Employment Agreement between VaxGen and Piers C. Whitehead, dated as of July 1, 2002. + | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.41 | | |
| | | | | | | | | | | | |
10.42 | | Joint Venture Agreement between VaxGen and Celltrion, Inc., dated as of June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.42 | | |
| | | | | | | | | | | | |
10.43 | | License Agreement between VaxGen and VaxGen-Celltrion, Inc., dated June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.43 | | |
| | | | | | | | | | | | |
10.44 | | Sub-License Agreement between VaxGen and VaxGen-Celltrion, Inc., dated June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.44 | | |
| | | | | | | | | | | | |
10.45 | | Consulting Services Agreement between VaxGen and VaxGen-Celltrion, Inc., dated June 7, 2002. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.45 | | |
| | | | | | | | | | | | |
10.46 | | Contract between VaxGen and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, under Contract No. N01-AI-95373, dated July 9, 1999. | | 10- Q | | 000-26483 | | 11-14- 02 | | 10.46 | | |
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| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.47 | | Contract between VaxGen and the National Institute of Allergy and Infectious Diseases, National Institutes of Health, under Contract No. N01-AI-30053, dated September 30, 2003. | | 10- Q | | 000-26483 | | 11-19- 03 | | 10.47 | | |
| | | | | | | | | | | | |
10.48 | | 2001 Employee Stock Purchase Plan + | | S-8 | | 333-10811 | | 08-21- 03 | | 99.3 | | |
| | | | | | | | | | | | |
10.49 | | License Agreement between VaxGen and U.S. Army Medical Research Institute of Infectious Diseases, dated as of October 7, 2003. | | 8-K | | 000-26483 | | 12-02- 03 | | 99.1 | | |
| | | | | | | | | | | | |
10.50 | | Office and R&D Sublease, dated August 1, 2002, by and between Cellegy Pharmaceuticals, Inc. and VaxGen, Inc. | | 8-K | | 000-26483 | | 12-09- 03 | | 99.1 | | |
| | | | | | | | | | | | |
10.51 | | Partnership Agreement between VaxGen, Inc. and the Chemo-Sero-Therapeutic Research Institute. | | 10-K | | 000-26483 | | 03-30-04 | | 10.51 | | |
| | | | | | | | | | | | |
10.53 | | Transition and separation agreement between VaxGen and Phillip W. Berman dated as of February 13, 2004.+ * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.53 | | |
| | | | | | | | | | | | |
10.54 | | Transition and separation agreement between VaxGen and Donald P. Francis dated as of February 13, 2004. + * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.54 | | |
| | | | | | | | | | | | |
10.55 | | Transition and separation agreement between VaxGen and William Heyward dated as of February 13, 2004. + * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.55 | | |
| | | | | | | | | | | | |
10.56 | | Transition and separation agreement between VaxGen and Carter A. Lee dated as of February 13, 2004. + * | | 10- Q | | 000-26483 | | 02-07-07 | | 10.56 | | |
| | | | | | | | | | | | |
10.57 | | Executive Employment Agreement between VaxGen and James M. Cunha, dated May 20, 2004. + | | 8-K | | 000-26483 | | 6-06-05 | | 10.2 | | |
| | | | | | | | | | | | |
10.58 | | Amendment, dated July 14, 2004, to Joint Venture Agreement between VaxGen and certain investors, dated February 25, 2002. | | 10-Q | | 000-26483 | | 02-07-07 | | 10.58 | | |
| | | | | | | | | | | | |
10.59 | | Warrant Exchange Agreement, by and between VaxGen and CD Investment Partners, Ltd, dated September 21, 2004. | | 8-K | | 000-26483 | | 9-24-04 | | 10.52 | | |
| | | | | | | | | | | | |
10.60 | | Warrant Exchange Agreement by and between VaxGen and Societe Generale, Kepler Capital, LLC, Cheyenne LLC and Prism Capital 5, L.P., dated September 21, 2004. | | 8-K | | 000-26483 | | 9-24-04 | | 10.53 | | |
| | | | | | | | | | | | |
10.61 | | Employment Agreement between VaxGen and Dr. Kathrin Jansen, dated September 30, 2004. + | | 8-K | | 000-26483 | | 10-21-04 | | 10.56 | | |
| | | | | | | | | | | | |
10.62 | | Stock Option Agreement between VaxGen and Dr. Kathrin Jansen, dated October 15, 2004. + | | 8-K | | 000-26483 | | 10-21-04 | | 10.57 | | |
| | | | | | | | | | | | |
10.63 | | Stock Option Agreement between VaxGen and Myron Levine, dated October 21, 2004. + | | 8-K | | 000-26483 | | 10-21-04 | | 10.58 | | |
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| | | | | | | | | | | | |
| | | | Incorporated by Reference |
Exhibit
No. | | Exhibit | | Form | | File No. | | Filing Date | | Exhibit
No. | | Filed
Herewith |
| |
| |
| |
| |
| |
| |
|
10.64 | | Supply Contract No. HHS0100200300001C, between the Department of Health and Human Services, Office of Research and Development Coordination and Office of Public Health Emergency Preparedness and VaxGen, Inc. dated November 4, 2004.* | | 8-K/A | | 000-26483 | | 11-19-04 | | 99.1 | | |
| | | | | | | | | | | | |
10.65 | | Agreement by and between VaxGen and Celltrion pursuant to which VaxGen acquired all of Celltrion’s interest in VaxGen-Celltrion, Inc., dated December 30, 2004 | | | | | | | | | | X |
| | | | | | | | | | | | |
10.66 | | Revised Joint Venture Agreement between VaxGen and certain investors, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.67 | | Termination Agreement between VaxGen and Celltrion, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.68 | | Surrender Agreement between VaxGen and certain investors, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.69 | | Technical Support and Services Agreement between VaxGen and Celltrion, dated December 30, 2004. | | | | | | | | | | X |
| | | | | | | | | | | | |
10.70 | | Form of Stock Purchase Agreement between VaxGen and certain institutional investors, entered into November 19, 2004. | | 8-K | | 000-26483 | | 11-24-04 | | 4.1 | | |
| | | | | | | | | | | | |
21.1 | | Subsidiaries | | | | | | | | | | X |
| | | | | | | | | | | | |
31.1 | | Certification | | | | | | | | | | X |
| | | | | | | | | | | | |
31.2 | | Certification | | | | | | | | | | X |
| | | | | | | | | | | | |
32.1 | | Certification | | | | | | | | | | X |
| | | | | | | | | | | | |
99.1 | | Celltrion, Inc. Financial Statements for the years ended December 31, 2003 and 2002. | | 10-K/A | | 000-26483 | | 09-26-06 | | 99.1 | | |
| | | | | | | | | | | | |
| * | Confidential treatment requested. The redacted portions have been separately filed with the SEC as required by Rule 406 of Regulation C. |
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