SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: JANUARY 28, 2005
NORTHFIELD LABORATORIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 000-24050 36-3378733
(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
1560 Sherman Avenue
Suite 1000
Evanston, Illinois 60201-4800
(847) 864-3500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
N/A
(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 (see General Instruction A.2. below):
[] 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
EMPLOYMENT AGREEMENTS
On January 28, 2005, Northfield Laboratories Inc. (the "Company") entered into
employment agreements with Steven A. Gould, M.D., Chief Executive Officer of the
Company, and Jack J. Kogut, Senior Vice President and Chief Financial Officer of
the Company. The agreements are filed as Exhibits 99.1 and 99.2, respectively,
to this Current Report on Form 8-K.
The annual salaries payable under the agreements with Dr. Gould and Mr. Kogut
are $350,000 and $275,625, respectively, effective as of January 1, 2005. The
Board of Directors is obligated to review the salaries on an annual basis and
may increase but not decrease the salaries in its discretion.
Pursuant to the agreements, Dr. Gould and Mr. Kogut received cash bonus payments
of $100,000 and $50,000 on January 28, 2005. In addition, the executives are
entitled to receive cash bonus payments equal to 150% and 100% of their
respective annual base salary, as then in effect, upon the approval by Food and
Drug Administration of the commercial sale of PolyHeme(R) in the United States
for any indication. Each executive is also entitled to receive an annual cash
bonus for achieving performance goals to be determined by mutual agreement of
the Board of Directors and the executive. The first such bonus is payable in
January 2006 with respect to performance during the 2005 calendar year. The
target bonus opportunity is equal to 50% and 40%, respectively, of the
executive's annual base salary in effect during the applicable performance year,
with a maximum bonus opportunity for superior performance of 150% and 100%,
respectively, of the executive's annual base salary for that year. A reduced
bonus may be payable at the discretion of the Board of Directors for partial
achievement of the executive's performance goals.
Pursuant to the agreements, Dr. Gould and Mr. Kogut received stock option awards
of 100,000 and 50,000 shares of the Company's common stock on January 28, 2005,
at an exercise price per share equal to the fair market value of the Company's
common stock on that date, which was $18.55. The Board of Directors may in its
discretion grant additional awards of stock options or other forms of equity
incentive compensation to the executives from time to time. The agreements also
entitle the executives to participate in all executive benefit plans and fringe
benefit programs available to the Company's senior executive officers and to
receive reimbursement by the Company for financial planning and tax preparation
assistance, estate planning services, annual physical examinations and legal
services in connection with the negotiation of the agreements.
Each executive's employment may terminate upon his death, disability,
termination by the Company for cause or voluntary termination by the executive
at any time. Each executive is entitled to the following payments upon
termination of his employment with the Company for any reason: (i) base salary
through the date of termination, (ii) the balance of any earned but
unpaid bonus, (iii) up to a maximum of 60 days of accrued but unused paid time
off, (iv) all vested benefits under the Company's benefit plans and (v) all
benefit continuation and conversion rights as provided under the Company's
benefit plans. If the executive's employment terminates due to death or
disability, the executive is also entitled to receive a cash bonus equal to his
target bonus payable with respect to the year in which the date of termination
occurs.
Additionally, if the Company terminates the executive's employment other than by
reason of death, disability or cause, or if the executive terminates his
employment for good reason, the executive will be entitled to receive a cash
bonus equal to his target bonus with respect to the year in which the date of
termination occurs (prorated based on date of termination), as well as a lump
sum cash payment of an amount equal to 200% of his annual base salary and target
bonus payable with respect to that year (300% if the executive's termination
occurs within 12 months following a change in control of the Company or the
executive voluntarily terminates his employment within 90 days following a
change in control of the Company). In addition, the executive will remain
eligible to participate in the Company's insurance and similar plans for 24
months after termination (36 months if the executive's termination occurs within
12 months following a change in control of the Company or the executive
voluntarily terminates his employment within 90 days following a change in
control of the Company). Each executive also will be entitled to Company-paid
executive level career transition assistance, immediate vesting of all unvested
stock options and other equity compensation awards and the right to exercise all
stock options and other equity compensation awards for 12 months following
termination.
DIRECTOR COMPENSATION
On January 28, 2005, the Compensation Committee of the Company's Board of
Directors approved certain changes in the compensation to be paid to the
Company's non-employee directors.
The Compensation Committee authorized the current payment of a $10,000 cash
retainer to each non-employee director. Beginning with the Company's 2005 annual
meeting of stockholders, each non-employee director elected by the Company's
stockholders will be entitled to receive an annual $10,000 cash retainer and the
annual grant of stock options the Company makes to each non-employee director
will be increased from 5,000 to 10,000 shares. Non-employee directors will
continue to receive an annual grant of stock options covering a number of shares
having a fair market value equal to $15,000 and to be entitled to a $1,000 fee
for participating in each board or committee meeting. All stock options granted
to non-employee directors will be fully-vested and will provide for an exercise
price equal to the fair market value of the Company's common stock as of the
date of grant.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 99.1 Employment Agreement dated January 28, 2005 between
Steven A. Gould, M.D. and Northfield Laboratories
Inc.
Exhibit 99.2 Employment Agreement dated January 28, 2005 between
Jack J. Kogut and Northfield Laboratories Inc.
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.
Northfield Laboratories Inc.
Date: January 31, 2005 By: /s/ Jack J. Kogut
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Jack J. Kogut
Senior Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
99.1 Employment Agreement dated January 28, 2005 between Steven A.
Gould, M.D. and Northfield Laboratories Inc.
99.2 Employment Agreement dated January 28, 2005 between Jack J. Kogut
and Northfield Laboratories Inc.