UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 1, 2004
PHARMAFRONTIERS CORP.
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(Exact name of registrant as specified in its charter)
Texas 000-25513 760333165
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(State of organization) (Commission File Number) (IRS Employer
Identification No.)
2408 Timberloch Place
Suite B-7
The Woodlands, Texas 77380
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (281) 272-9331
Former name or former address, if changed since last report: Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a- 12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 1, 2004, the Company and C. W. Bill Rouse entered into an
amended employment agreement with Mr. Rouse. The amended agreement increases Mr.
Rouse's annual salary to $180,000 effective July 1, 2004, and changes the
exercise price and vesting schedule for a five-year option to purchase 100,000
shares of Company common stock granted to Mr. Rouse on April 28, 2004, which
terms are similar to those options granted to other Company executive officers.
The Exercise Price is reduced to $3.00 per share and will vest, provided
continued employment: 33,333 shares of common stock on April 29, 2005, 33,333 of
common stock on April 29, 2006, and 33,334 shares on April 29, 2007. There are
no other changes to Mr. Rouse's employment agreement.
On September 10, 2004, PharmaFrontiers Corp. (the "Company") and Warren
C. Lau entered into an amended employment agreement with Mr. Lau. As amended,
Mr. Lau's employment agreement will continue through September 10, 2005. The
amended agreement does not increase Mr. Lau's compensation. However, the amended
agreement will make several changes from his existing agreement. Consistent with
the Company's Current Report on Form 8-K filed with the SEC on September 21,
2004, where the Company disclosed Mr. Lau resigned as Chief Executive Officer,
Chief Operating Officer, President and Treasurer and assumed the position of
Managing Director of Licensing, Mr. Lau's employment agreement is amended to
reflect his new title. Additionally, Mr. Lau is not entitled to any severance
benefits in the event his employment agreement is terminated upon a change of
control or by the Company with or without cause. Although Mr. Lau's employment
agreement does not contain a non-solicit/no-hire provision, his agreement
contains confidentiality, non-compete, assignment of inventions and conflict of
interest provisions consistent with his fiduciary duty obligations owed to the
Company.
On October 31, 2004, the Company and R. Wayne Fritzsche entered into a
Termination, Settlement and Release Agreement. Under the agreement, Mr.
Fritzsche agreed to terminate his employment with the Company and resign as Vice
President of Corporate Development and as a member of the Scientific Advisory
Board, effective as of October 31, 2004. Additionally, Mr. Fritzsche agreed to
settle any claims that he may have with the Company and release the Company from
any claims under his employment agreement or otherwise. In exchange, the Company
agreed to purchase Mr. Fritzsche's option to purchase up to 400,000 shares of
Company common stock, which option is to be paid upon the closing of a sale of
Company securities resulting in gross proceeds of at least $5 million in one or
a series of equity or debt financings by the Company commencing after July 1,
2004, which financings include the Company's exchangeable, convertible,
subordinated notes. Additionally, the Company agreed to waive any claims against
Mr. Fritzsche under his employment agreement or otherwise.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
Pursuant to the Termination, Settlement and Release Agreement between
the Company and R. Wayne Fritzsche discussed in Item 1.01, his employment
agreement is terminated effective October 31, 2004.
The Company entered into a Lease Termination Agreement with Stebbins
Green Corner, L.P. terminating the lease for office/warehouse space formally
occupied by Opexa Pharmaceuticals, Inc. ("Opexa"), effective January 13, 2005.
The Company's right to use and occupy the premises underlying the lease shall
terminate on February 28, 2005.
In its acquisition of Opexa in November 2004, which acquisition was
previously announced on a Current Report on Form 8-K filed on November 8, 2004,
the Company assumed a lease on a 32,041 square foot office/warehouse facility
used as Opexa's headquarters located in Houston, TX. This facility was deemed
unsuitable for future expansion and a lease termination was negotiated by the
Company which terminates the remaining eight year obligation and reduces the
annual facility expenses by $215,000. The lease termination calls for a final
monthly lease payment to be paid for February 2005, surrender of the security
deposit in the amount of $15,380, and a lease termination fee of $56,763. The
agreement also contains a mutual release provisions releasing both parties from
any claims each may hold against the other under the lease dated on or about May
31, 2002.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
R. Wayne Fritzsche resigned as Vice President of Corporate Development
and as a member of the Scientific Advisory Board of the Company effective
October 31, 2004, as discussed previously in Item 1.01.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBIT
(c) Exhibits
The following exhibits are to be filed as part of this 8-K:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
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99.1 Second Amended Employment Agreement with C. William
Rouse dated July 1, 2004
99.2 Amended Employment with Warren C. Lau dated
September 10, 2004
99.3 Termination, Settlement and Release Agreement with
R. Wayne Fritzsche dated October 31, 2004
99.4 Lease Termination Agreement dated January 13, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHARMAFRONTIERS CORP.
By: /s/ David McWilliams
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David McWilliams, Chief Executive Officer
DATE: February 4, 2005
EXHIBIT INDEX
Exhibit No. Description
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99.1 Second Amended Employment Agreement with C. William Rouse dated
July 1, 2004
99.2 Amended Employment with Warren C. Lau dated September 10, 2004
99.3 Termination, Settlement and Release Agreement with R. Wayne
Fritzsche dated October 31, 2004
99.4 Lease Termination Agreement dated January 13, 2005