9. SUBSEQUENT EVENTS

 

Management Transition

 

On July 29, 2013, the Company announced that Harry Palmin, the Company’s President and CEO and a Director, will step down from his positions with the Company, in order to pursue other opportunities, upon the naming of his successor. A search process is underway to select a replacement for Mr. Palmin, during which time he will continue in his current roles to ensure an orderly transition.

 

In addition, Kim Hawkins, the Company’s Vice President of Clinical Development, has resigned effective August 9, 2013 in order to accept a position at a large pharmaceutical company.

 

Kevin Kozak, M.D., Ph.D., the Director of Radiation Oncology, Mercy Regional Cancer Center Janesville Wisconsin, has agreed to serve as Chief Medical Officer, effective August 1, 2013, on a consulting basis.

 

Amendment of Employment Agreement

 

In connection with the management transition, on July 26, 2013, the employment agreement between the Company and Harry Palmin, President and CEO was amended to provide for a lump sum payment of $150,000, equal to six months base salary, to provide for the continuation of benefits for six months following a termination without cause prior to March 31, 2014, to provide for the acceleration of vesting of all of Mr. Palmin’s unvested options in the event of a termination without cause or a resignation for good reason, to extend the exercise period of Mr. Palmin’s options to a period of 18 months following termination, and to provide for the payment of $150,000 to Mr. Palmin upon the completion of certain milestones prior to September 30, 2013.

 

Entry into Retention Agreements

 

Also in connection with the management transition, on July 26, 2013, the Company entered into retention agreements with two executive officers. The retention agreements provide for the payment of a retention bonus equal to thirty percent of the executive’s salary if the executives remain employed with the Company as of December 31, 2013. Furthermore, the agreements provide for a lump-sum payment of six months base salary and continuation of benefits for six months following a termination without cause or resignation with good reason on or before June 30, 2014. Upon such a termination, all unvested options held by the executives shall be credited with an additional six months vesting and all vested options held by the executives shall be exercisable for eighteen months following termination. A total of $392,000 may become payable to the executives pursuant to the retention agreements.