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Securities and Exchange Commission
Washington, DC 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 10, 2004
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ASTRALIS LTD.
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-30997 84-1508866
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
75 Passaic Avenue, Fairfield, New Jersey 07004
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (973) 227-7168
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(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))
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ITEM 1.01 Entry into a Material Definitive Agreement.
The Registrant entered into an employment agreement with Mr. Jose Antonio
O'Daly, the Chairman of the Board of Directors and the Chief Science Officer,
until December 31, 2007. Under the terms of his employment agreement, Mr. O'Daly
is entitled to an annual base salary of $231,000 payable in arrears in
bi-monthly installments, less statutory deductions (the "Base Salary") and an
annual bonus of up to 25% of his Base Salary and based upon achievement of such
goals and subject to such additional terms as may be determined by the Board of
Directors. As a member of the Registrant's senior management team, Mr. O'Daly
has been granted the option to purchase 728,000 shares of common stock of the
Registrant with an initial exercise price of $0.70 per share. The options are
fully vested and have a term of ten years.
In the event of a voluntary termination for Good Reason or if Mr. O'Daly
is terminated following a change in control or without Cause, he generally will
receive, among other things, the following severance benefits: (a) an amount
equal to two times his annual Base Salary established for the fiscal year in
which the date of termination occurs and (b) an amount equal to two times his
annual bonus award established for the fiscal year in which his date of
termination occurs. In the event of a voluntary termination without Good Reason
or if Mr. O'Daly is terminated with Cause, he will receive the following
severance benefits: (a) an amount equal to his Base Salary for one year and (b)
an amount equal to his one times his annual bonus award established for the
fiscal year in which his date of termination occurs. The employment agreement
includes certain non-competition and confidentiality provisions.
ITEM 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
The Registrant retained Mr. James Sharpe as its President and Chief
Executive Officer and elected Mr. Sharpe as a member of the Board of Directors.
Mr. Sharpe, prior to joining Astralis, served from 1999 to 2005 as
President and founder of Ankyr Consulting, L.L.C, an independent consulting
company focused on strategy, business development, finance, mergers,
acquisitions and operations for healthcare and biotechnology companies. In early
1999, he served as President of Small Molecule Therapeutics, a privately owned
drug discovery company. From 1997 to 1998, Mr. Sharpe served as Chief Operating
Officer of FEI Technologies, Inc., a privately owned drug delivery company. From
1991 to 1996, Mr. Sharpe served as President and co-founder of GX BioSystems
A/S, a privately owned biotechnology company focused on vaccines and
biopesticides. Mr. Sharpe recently founded Metacine, Inc., a cancer vaccine
company, based on dendritic cell technology, and co-founded Optigenix, Inc., a
directed evolution company. Mr. Sharpe was also a participant in the founding of
AthenaBio Technologies, Inc., which involved the merger of four companies
including Optigenix. Mr. Sharpe has a B.S. in Chemistry from Union College, and
a MBA in Marketing and Finance from the University of Rochester. He was a
founding member of the Pennsylvania Biotechnology Association, where he served
as President for two years and was a member of its Board of Directors for eight
years. He also served for three years as a member of the Board of Governors of
the Emerging Company Section of the Biotechnology Industry Association (BIO).
As of February 15, 2005, the Registrant entered into an employment
agreement with Mr. James Sharpe to serve as the Chief Executive Officer of the
Registrant until January 15, 2007. Under the terms of his employment agreement,
Mr. Sharpe is entitled to an annual base salary of $231,000 payable in arrears
in bi-monthly installments, less statutory deductions (the "Base Salary") and an
annual bonus of up to 25% of his Base Salary and based upon achievement of such
goals and subject to such additional terms as may be determined by the Board of
Directors. As a member of the Registrant's senior management team, Mr. Sharpe
has been granted the option to purchase 728,000 shares of common stock of the
Registrant, which will vest to the extent of 182,000 immediately and then an
additional 182,000 shares per year on a cumulative basis until all options have
vested. The options have an initial exercise price of $0.70 per share and have a
term of ten years. In addition, on the first date of employment, Mr. Sharpe
shall be issued 100,000 shares of common stock and on the date that is one year
following the first date of employment, an additional 100,000 shares, which will
be fully vested and fully paid on the date of issuance. Also, the Registrant
will make the following payments to Mr. Sharpe: (a) $35,000, no later than
January 15, 2006 and (b) an additional amount of not less than $35,000 and not
more than $65,000 no later than January 15, 2007, provided however, that if
prior to January 15, 2007, the cash balance of the Registrant falls below
$350,000, the Registrant will immediately pay the minimum remaining amount to
Mr. Sharpe.
In the event that Mr. Sharpe is terminated after a change of control, he
generally will receive, among other things, the following severance benefits:
(a) an amount equal to two times his annual Base Salary established for the
fiscal year in which the date of termination occurs and (b) an amount equal to
two times his annual bonus award established for the fiscal year in which his
date of termination occurs. In the event Mr. Sharpe is terminated for Good
Reason, without Cause, or non-renewal, he will generally receive the following
severance benefits: (a) an amount equal to one times his annual Base Salary
established for the fiscal year in which the date of termination occurs and (b)
an amount equal to one times his annual bonus award established for the fiscal
year in which the date of termination occurs. The employment agreement includes
certain non-competition and confidentiality provisions.
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.
ASTRALIS LTD.
Date: February 18, 2005 By: /s/ Jose Antonio O'Daly
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Jose Antonio O'Daly
Chairman of the Board of Directors