UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 8, 2021
CASI PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in its Charter)
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delaware (State or other jurisdiction of incorporation or organization) |
0-20713 (Commission File Number)
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58-1959440 (IRS Employer Identification No.) |
9620 Medical Center Drive, Suite 300
Rockville, Maryland
(Address of principal executive offices)
20850
(Zip Code)
(240) 864-2600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of exchange on which
registered |
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| Common Stock | CASI | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 2, 2021, the Compensation Committee (the “Committee”) of the Board of Directors of CASI Pharmaceuticals, Inc. (the “Board”) recommended, and, on December 8, 2021, the Board approved, a title change for Alexander A. Zukiwski, MD, from Chief Medical Officer to Executive Vice President and Chief Medical Officer. In addition, the Board expanded certain of Dr. Zukiwski’s responsibilities. In connection with these changes, Dr. Zukiwski’s base salary was raised to USD $504,000. Dr. Zukiwski was also allowed a $1,500 per month car allowance. Both are retroactive to August 16, 2021. In addition, the Board approved and amendment to Dr. Zukiwski’s change in control agreement te extend the severance payments from nine months to 12 months.
A copy of Amendment No. 1 to Dr. Zukiwski’s Employment Agreement is attached hereto as Exhibit 10.1 and incorporated by reference herein. No other material changes were made to Dr. Zukiwski’s Employment Contract, which was previously filed as exhibit 10.1 to the Company’s Form 10-Q filed on August 14, 2017 and is incorporated by reference herein.
As previously reported, the Committee approved a grant to Dr. Zukiwski of options to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.87 (the closing price on the grant date of December 2, 2021). The options vest 25 percent on each anniversary of the grant date until the options are fully vested. In addition, the Committee granted Dr. Zukiwski a performance-based option covering 500,000 shares of common stock, the vesting of which is subject to meeting certain clinical development milestones.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit | |||
| Number | Description | ||
| 10.1 | Amendment No. 1 to Employment Agreement (filed herewith). | ||
| 10.2 | Employment Contract by and between CASI Pharmaceuticals, Inc. and Alexander A. Zukiwski, MD, dated April 3, 2017 (incorporated by reference from exhibit 10.1 to the Form 10-Q filed on August 14, 2017). | ||
| 10.3 | First Amendment to Change in Control Agreement (filed herewith) | ||
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K |
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.
| CASI PHARMACEUTICALS, INC. | |
| (Registrant) | |
| /s/ Larry Zhang | |
| President and Principal Financial Officer |
Date: December 10, 2021
Exhibit 10.1
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to the Employment Agreement is entered into and is effective as of December 9, 2021, by and between CASI PHARMACEUTICALS, INC., a Delaware corporation having its principal office at 9620 Medical Center Drive, Suite 300, Rockville, MD 20850 (the “Company”) and ALEXANDER ZUKIWSKI (“Executive”).
RECITALS
WHEREAS, the Company and Executive previously entered into that certain Employment Agreement dated April 3, 2017 (the “Agreement”); and
WHEREAS, the Company and Executive desire to make certain amendments to the Agreement.
NOW, THEREFORE, in consideration of the above premises and the following mutual covenants and conditions, the parties agree as follows:
| 1. | Paragraph 1 of the Agreement is hereby amended in its entirety and restated as follows: |
Employment; Position and Duties; Other Service. Subject to the terms hereof, the Company hereby agrees to employ Executive during the Term (as hereafter defined) to act as, and to exercise all of the powers and functions of, its Chief Medical Officer, Executive Vice-President and to perform such acts and duties and to generally furnish such services to the Company and its subsidiaries as is customary for a senior executive management person with a similar position in like companies. Among other things, and subject to change at the discretion of the Board of Directors (the “Board”), the President and the Chief Executive Officer (the “CEO”), Executive shall play a leading role in developing, advocating and executing the Company’s overall clinical development and regulatory plan. Executive will also be a key member of the Company’s business development team, including participating in the clinical and medical evaluation of business development opportunities, and in the strategic scouting and searching for in-license opportunities from the medical community. Executive will from time to time participate in the Company’s finance and investment relations activities, and attend and make corporate presentations in conferences and investor meetings as requested from time to time by the President or CEO. Executive shall also assume responsibilities for supervision and management of the Rockville, Maryland office, supervision of the U.S. based non-finance staff members and their responsibilities (legal, investor relations, public relations, information technology, office maintenance, human resources, etc.) and investor calls and inquiries. Executive shall report directly to the CEO, and have such other powers, duties and responsibilities as the President, CEO and the Board shall from time to time reasonably prescribe. Executive hereby agrees to accept such employment and shall perform and discharge faithfully, diligently, and to the best of his abilities such duties and responsibilities and shall devote sufficient working time and efforts to the business and affairs of the Company and its subsidiaries. During the Term, Executive will be permitted to (i) maintain a clinical oncology practice, (ii) provide consulting services, up to three (3) days per month, and (iii) serve on the board of directors or the Scientific Advisory Board of companies that are not Competing Companies (as hereafter defined); provided, in each case, that such service does not significantly interfere with the performance of Executive’s responsibilities as an employee of the Company; and provided, further, that such service shall be subject to the consent of the CEO, which consent may be withdrawn in whole or in part at any time. Upon the request of the CEO, but no less frequently than quarterly, Executive shall provide a listing of the companies for which Executive provides such services.
| 2. | Paragraph 2 of the Agreement is hereby amended and restated in its entirety as follows: |
While Executive is employed by the Company during the Term, Executive shall conduct his duties and responsibilities hereunder from the executive office located in Rockville, Maryland and from the Company’s office located in Beijing, China (except for routine and customary business travel), or from such other location as approved by the President or CEO. Executive may participate in a remote work policy, to the extent established by the Company, or as approved by the President or CEO.
| 3. | Paragraph 3(a) of the Agreement is hereby amended and restated in its entirety as follows: |
Base Salary. While the Company employs Executive during the Term, the Company shall pay to Executive an annual base salary (“Base Salary”) of no less than US$522,000, effective as of August 16, 2021, payable in accordance with the Company’s customary payroll policy for its executives.
| 4. | Paragraph 3(b) of the Agreement is hereby amended by replacing “US$400,000” with “US$522,000”. |
| 5. | The Agreement is hereby amended to add a new paragraph 3(f) of the Agreement, which reads as follows: |
Special Bonus. Executive shall be entitled to receive a special one-time bonus in the amount of US$500,000, which shall be payable upon certification by the compensation committee of the Board, in its sole discretion, that a Phase II study of CID-103 demonstrates a Proof of Principle that would support a decision to initiate a Phase III clinical trial, provided that Executive is employed on the date of such certification. Such bonus, if any, shall be paid within sixty (60) days of such certification.
| 6. | The fifth sentence of paragraph 8(d) of the Agreement is hereby amended and restated to read as follows: |
However, in addition to the above, if Executive is terminated by the Company (i) pursuant to this subparagraph 8(d) or (ii) upon the Company’s nonextension of the Term in accordance with Section 4 (provided that Executive is then willing and able to continue to provide services under terms and conditions substantially similar to those in this contract) and for any reason other than Cause, death or Disability, the Company shall (A) pay Executive a payment equal to the amount of his Base Salary that would have been payable had Executive remained employed through the last day of the twelve (12) months following the month in which termination occurred, which payment shall be divided into twelve (12) equal installments and paid monthly in the twelve (12) subsequent months following such termination; and (B) a lump sum payment in an amount equal to twelve (12) months of COBRA premiums for the level of coverage that Executive had in effect as of immediately prior to his termination.
Except as expressly amended herein, all other provisions of the Agreement shall continue in effect and be unaffected hereby.
IN WITNESS WHEREOF, the parties have set their signatures on the date first written above.
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THE COMPANY |
EXECUTIVE |
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CASI PHARMACEUTICALS, INC.
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| By: | /s/ Larry (Wei) Zhang | ||
| Name: | Larry (Wei) Zhang | /s/ ALEXANDER ZUKIWSKI | |
| Its: | President | ||
Exhibit 10.3
FIRST AMENDMENT TO CHANGE IN CONTROL AGREEMENT
This First Amendment to the Change in Control Agreement is entered into and is effective as of December 9, 2021, by and between CASI PHARMACEUTICALS, INC., (the “Company”) and ALEXANDER ZUKIWSKI (“Executive”).
RECITALS
WHEREAS, the Company and Executive previously entered into that certain Change in Control Agreement dated April 3, 2017 (the “Agreement”); and
WHEREAS, the Company and Executive desire to make certain amendments to the Agreement.
NOW, THEREFORE, in consideration of the above premises and the following mutual covenants and conditions, the parties agree as follows:
| 1. | Section 3.1 of the Agreement is hereby amended in its entirety and restated as follows: |
Severance Payment. In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, including, without limitation, any severance payments under the Employment Agreement, the Company shall pay to the Executive a lump sum severance payment, in cash, without discount. The severance payment shall be equal to the sum of (a) the product of (x) twelve (12) months and (y) the Executive's Monthly Base Salary and (b) the Executive's Average Bonus (the “Full Severance Payment”).
| 2. | Section 3.3 of the Agreement is hereby amended in its entirety and restated as follows: |
Lump Sum Equal to COBRA Premiums. The Company shall pay to Executive a lump sum payment in an amount equal to twelve (12) months of COBRA premiums for the level of coverage that Executive had in effect as of immediately prior to his termination (provided that such lump sum payment shall be equal to only six (6) months of COBRA premiums for the level of coverage that Executive had in effect as of immediately prior to his termination if the Date of Termination is within six (6) months of the commencement of employment with the Company by the Executive).
Except as expressly amended herein, all other provisions of the Agreement shall continue in effect and be unaffected hereby.
IN WITNESS WHEREOF, the parties have set their signatures on the date first written above.
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THE COMPANY |
EXECUTIVE |
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CASI PHARMACEUTICALS, INC.
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| By: | /s/ Larry (Wei) Zhang | ||
| Name: | Larry (Wei) Zhang | /s/ ALEXANDER ZUKIWSKI | |
| Its: | President | ||