UNITED STATES
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): March 22, 2005
DELCATH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-16133 06-1245881
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1100 Summer Street, Stamford, Connecticut 06905
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 323-8668
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))
2
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On March 22, 2005, Delcath Systems, Inc. (the "Company") entered into
Incentive Stock Option Agreements and/or Nonqualified Stock Option Agreements
with each of its directors and named executive officers providing for stock
options to each of such individuals as summarized below. Each of these options
has an exercise price of $2.02 per share, a term expiring on November 3, 2009
and becomes exercisable as to one-half of the shares covered thereby on November
3, 2005 and November 3, 2006.
Nonqualified Stock Options
Name of Optionee Number of Shares
Mark Corigliano 140,000
Daniel Isdaner 140,000
M. S. Koly 131,600
Victor Nevins 140,000
Incentive Stock Options
Name of Optionee Number of Shares
Paul M. Feinstein 5,000
Samuel Herschkowitz 90,000
M. S. Koly 68,400
The forms of the Nonqualified Stock Option Agreement and of the Incentive
Stock Option Agreement are filed as exhibits to this report.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable.
(c) Exhibits:
Exhibit Description
10.1 Form of Nonqualified Stock Option Agreement
10.2 Form of Incentive Stock Option Agreement
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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.
DELCATH SYSTEMS, INC.
By: /s/ M. S. KOLY
-------------------------
M. S. Koly
President and Chief Executive
Officer
Date: March 23, 2005
ECHIBIT INDEX
Exhibit Description
10.1 Form of Nonqualified Stock Option Agreement
10.2 Form of Incentive Stock Option Agreement
DELCATH SYSTEMS, INC.
2004 STOCK INCENTIVE PLAN
Nonqualified Stock Option Agreement
To: [NAME OF OPTIONEE]
We are pleased to notify you that, by action of the Compensation and Stock
Option Committee (hereinafter called the "Committee") on [DATE], a nonqualified
stock option to purchase 140,000 shares of the Common Stock, $0.01 par value, of
Delcath Systems, Inc. (herein called the "Company"), at the price of $[EXERCISE
PRICE] per share (herein called the "Exercise Price") was approved pursuant to
the Company's 2004 Stock Incentive Plan (the "2004 Plan"). In accordance with
the provisions of Section 6.2 of the 2004 Plan, this Agreement shall become
effective upon your execution hereof. This option may be exercised only upon the
terms and conditions set forth below.
Exercising options may not be a prudent business decision for some persons.
Therefore, we urge you to review this opportunity carefully and consult with
your own tax advisor prior to exercising this option as the decision as to
whether to exercise this option and the manner in which you exercise the option
should be guided by your personal financial and tax considerations.
1. Purpose of Option.
------------------
The purpose of the 2004 Plan under which this nonqualified stock option has
been granted is to further the growth and development of the Company and its
direct and indirect subsidiaries by encouraging selected employees, directors,
consultants, agents, independent contractors and other persons who contribute
and are expected to contribute materially to the Company's success to obtain a
proprietary interest in the Company through the ownership of stock, thereby
providing such persons with an added incentive to promote the best interests of
the Company, and affording the Company a means of attracting to its service
persons of outstanding ability.
2. Acceptance of Option Agreement.
-------------------------------
Your execution of this nonqualified stock option agreement will indicate
your acceptance of and your willingness to be bound by its terms; it imposes no
obligation upon you to purchase any of the shares subject to the option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in paragraph 4 hereof.
2
3. When Option May Be Exercised.
-----------------------------
This option shall be exercisable as follows:
(a) this option shall become exercisable on [DATE]as to [NUMBER] of
the shares covered hereby; and
(b) this option shall become exercisable on [DATE] as to the remaining
[NUMBER] shares covered hereby. [TO BE ADJUSTED DEPENDING ON VESTING SCHEDULE.]
This option may not be exercised for fewer than ten shares at any one time
(or the remaining shares then purchasable if less than ten), may not be
exercised for fractional shares of the Company's Common Stock, and expires on
[EXPIRATION DATE], unless sooner terminated as provided in paragraph 5 hereof.
4. How Option May Be Exercised.
----------------------------
This option is exercisable by a written notice signed by you and delivered
to the Company at its executive offices, signifying your election to exercise
the option ("Notice of Exercise"). The Notice of Exercise must state the number
of shares of Common Stock as to which your option is being exercised, must
contain a statement by you that such shares are being acquired by you for
investment and not with a view to their distribution or resale (unless a
registration statement covering the shares purchasable has been declared
effective by the Securities and Exchange Commission, with it being acknowledged
by you that the Company shall not be under any obligation to file any such
registration statement) and must be accompanied by:
(a) cash or check to the order of the Company for the full Exercise
Price of the shares being purchased plus such amount, if any, as is required for
withholding taxes; and
(b) a written acknowledgement by you, in such form as may be
determined by the Committee, that an investment in the Common Stock of the
Company involves a high degree of risk, that you have received a copy of the
Company's financial statements for the most recently ended fiscal year for which
such statement is available (which shall be provided annually to you by the
Company), and that you have had the opportunity to ask questions of management
concerning the Company prior to the exercise of the option (the Company to
provide such information as you may reasonably request).
The full Exercise Price for share of Common Stock purchased upon the
exercise of any option shall be paid at the time of such exercise (except that,
in the case of an exercise arrangement approved by the Committee and described
above, payment may be made as soon as practicable after the exercise).
3
The Committee may cause each certificate evidencing the purchased Common
Stock to be endorsed with one or more legends setting forth the restrictions on
transfer or otherwise of such Common Stock.
Certificates for shares of the Common Stock so purchased will be issued as
soon as practicable. The Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied with all requirements
of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, any stock exchange on which the Company's Common Stock may then be
listed and all applicable state laws in connection with the issuance or sale of
such shares or the listing of such shares on said exchange. Until the issuance
of the certificate for such shares, you or such other person as may be entitled
to exercise this option, shall have none of the rights of a stockholder with
respect to shares subject to this option.
You shall promptly advise the Company of any sale of shares of Common Stock
issued upon exercise of this option which occurs within one year from the date
of the exercise of this option.
By your acceptance hereof, you agree that you will not sell, transfer,
pledge or otherwise dispose of any shares of Common Stock you acquire upon an
exercise of this option prior to the first anniversary of the date of such
exercise.
5. Subject to Terms of the 2004 Plan.
----------------------------------
This Nonqualified Stock Option Agreement shall be subject in all respects
to the terms and conditions of the 2004 Plan and, in the event of any question
or controversy relating to the terms of the 2004 Plan, the decision of the
Committee shall be conclusive. THIS AGREEMENT SHALL BE NULL AND VOID AB INITIO,
AND THE OPTION GRANT REFLECTED HEREIN SHALL BE DEEMED FORFEITED, UNLESS THE
COMPANY RECEIVES, WITHIN TWO WEEKS OF ITS TENDER OF THIS AGREEMENT TO YOU, ONE
COPY HEREOF BEARING YOUR ORIGINAL COUNTERSIGNATURE BELOW.
6. Tax Status.
-----------
This option does not qualify as an "incentive stock option" under the
provisions of Section 422 of the Code, and the income tax implications of your
receipt of a
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nonqualified stock option and your exercise of such an option should be
discussed with your tax advisor.
Sincerely yours,
DELCATH SYSTEMS, INC.
By:
----------------------------
[NAME]
[TITLE]
Agreed to and Accepted
this [DAY] day of [MONTH], [YEAR].
- ----------------------------------
[NAME OF OPTIONEE]
EXHIBIT A
NOTICE OF EXERCISE
(To be Executed by an Optionholder to Purchase Shares of
Common Stock of Delcath Systems, Inc. under its 2004 Stock Incentive Plan)
The undersigned hereby irrevocably elects to exercise his or her right to
purchase ___________________ (__________) shares of Common Stock, $0.01 par
value per share (the "Shares"), of Delcath Systems, Inc. ("Delcath") as provided
by the Nonqualified Stock Option Agreement between the undersigned and Delcath,
dated ________________, and according to the conditions thereof, and hereby
makes payment of the Exercise Price for such Shares in the full amount of
$______________, by wire transfer or by check delivered herewith.
By executing this Notice of Exercise, the undersigned represents and
warrants to Delcath that the following statements are true and correct:
1. I am acquiring the shares of the Company's Common Stock for investment
purposes only and not with a view to their distribution or resale.
2. I understand that an investment in the Common Stock of the Company
involves a high degree of risk and is suitable only for persons of adequate
financial means and should not be made by anyone who cannot afford the loss of
his or her entire investment.
3. I have received and carefully read and am familiar with the Company's
financial statements for the most recently ended fiscal year for which such
statements are available.
4. I acknowledge that I have had an opportunity to consult with counsel and
other advisers about acquiring the shares of the Company's Common Stock for
investment purposes.
5. I have had the opportunity to ask questions of management concerning the
Company prior to the exercise of the option and the Company has made available
such information pertaining to my acquiring the Shares as I have reasonably
requested.
Signature:
-----------------------------
Print Name:
-----------------------------
Address:
-----------------------------
-----------------------------
-----------------------------
Dated:
----------------------
DELCATH SYSTEMS, INC.
2004 STOCK INCENTIVE PLAN
Incentive Stock Option Agreement
To: [NAME OF OPTIONEE]
We are pleased to notify you that, by action of the Compensation and Stock
Option Committee (hereinafter called the "Committee") on [DATE], an incentive
stock option to purchase [NUMBER OF SHARES] shares of the Common Stock, $0.01
par value, of Delcath Systems, Inc. (herein called the "Company"), at the price
of [EXERCISE PRICE] per share (herein called the "Exercise Price") was approved
pursuant to the Company's 2004 Stock Incentive Plan (the "2004 Plan"). In
accordance with the provisions of Section 6.2 of the 2004 Plan, this Agreement
shall become effective upon your execution hereof. This option may be exercised
only upon the terms and conditions set forth below.
Exercising options may not be a prudent business decision for some persons.
Therefore, we urge you to review this opportunity carefully and consult with
your own tax advisor prior to exercising this option as the decision as to
whether to exercise this option and the manner in which you exercise the option
should be guided by your personal financial and tax considerations.
1. Purpose of Option.
------------------
The purpose of the 2004 Plan under which this incentive stock option has
been granted is to further the growth and development of the Company and its
direct and indirect subsidiaries by encouraging selected employees (including
officers) who contribute and are expected to contribute materially to the
Company's success to obtain a proprietary interest in the Company through the
ownership of stock, thereby providing such persons with an added incentive to
promote the best interests of the Company, and affording the Company a means of
attracting to its service persons of outstanding ability.
2. Acceptance of Option Agreement.
-------------------------------
Your execution of this incentive stock option agreement will indicate your
acceptance of and your willingness to be bound by its terms; it imposes no
obligation upon you to purchase any of the shares subject to the option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in paragraph 4 hereof.
2
3. When Option May Be Exercised.
-----------------------------
This option shall be exercisable as follows:
(a) this option shall become exercisable on [DATE] as to [NUMBER] of
the shares covered hereby; and
(b) this option shall become exercisable on [DATE] as to the remaining
[NUMBER] shares covered hereby. [TO BE ADJUSTED DEPENDING ON VESTING SCHEDULE.]
This option may not be exercised for fewer than ten shares at any one time
(or the remaining shares then purchasable if less than ten), may not be
exercised for fractional shares of the Company's Common Stock, and expires on
[EXPIRATION DATE], unless sooner terminated as provided in paragraphs 5, 6 and 7
hereof.
4. How Option May Be Exercised.
----------------------------
This option is exercisable by a written notice signed by you and delivered
to the Company at its executive offices, signifying your election to exercise
the option ("Notice of Exercise"). The Notice of Exercise must state the number
of shares of Common Stock as to which your option is being exercised, must
contain a statement by you that such shares are being acquired by you for
investment and not with a view to their distribution or resale (unless a
registration statement covering the shares purchasable has been declared
effective by the Securities and Exchange Commission, with its being acknowledged
by you that the Company shall not be under any obligation to file any such
registration statement). A form of the Notice of Exercise is attached hereto as
Exhibit A. The payment of the Exercise Price of an option shall be subject to
the following:
(a) Payment of Exercise Price. The Exercise Price shall be payable in
cash, check to the order of the Company or by tendering shares of Common Stock
that (i) you have held for at least six (6) months and (ii) are valued at Fair
Market Value, as defined in the Plan, as of the day of exercise, or in any
combination thereof, as determined by the Committee, for the full purchase price
of the shares being purchased, plus such amount, if any, as is required for
withholding taxes.
(b) [Net Issuance Exercise Right. You may elect to pay the Exercise
Price upon the exercise of this option by surrendering this option (or a portion
hereof) on a cash-free basis in exchange for shares of Common Stock acquired
upon exercise of this option. If you surrender this option (or a portion hereof)
as payment for the exercised shares, the number of exercised shares to be issued
to you will be equal to the product of (i) a fraction, the numerator of which
will be (a) the Fair Market Value of one share of Common Stock on the
3
date of exercise, less (b) the Exercise Price, and the denominator of which will
be the Fair Market Value of a share of Common Stock on the date of exercise,
multiplied by (ii) the number of options to be exercised (the "Formula"). The
Formula may also be represented as:
X = (A -- B) Y
--------
A
[Where: X = the number of shares of Common Stock to be issued
to the Optionholder;
Y = the number of options to be exercised; A = the Fair
Market Value of one share of Common Stock on the
date of exercise; and
B = Exercise Price.]
(c) Unless the Company determines that it would not be permitted under
applicable law, you may elect to have the Company lend you sufficient funds to
pay the Exercise Price and any tax withholding resulting from such exercise upon
the exercise of an option.
(d) If requested by the Company, a written acknowledgement by you, in
the form contained in the Notice of Exercise that an investment in the Common
Stock of the Company involves a high degree of risk, that you have received a
copy of the Company's financial statements for the most recently ended fiscal
year for which such statement is available (which shall be provided annually to
you by the Company), and that you have had the opportunity to ask questions of
management concerning the Company prior to the exercise of this option (the
Company to provide such information as you may reasonably request).
The full Exercise Price for share of Common Stock purchased upon the
exercise of this option shall be paid at the time of such exercise.
The Committee may cause each certificate evidencing the purchased Common
Stock to be endorsed with one or more legends setting forth the restrictions on
transfer or otherwise of such Common Stock.
Certificates for shares of the Common Stock so purchased will be issued as
soon as practicable. The Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied with all requirements
of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, any stock exchange on which the Common Stock may then be listed and
all applicable state laws in connection with the issuance or sale of such shares
or the listing of such shares on said exchange. Until the issuance of the
certificate for such shares, you or such other person as may be entitled to
exercise this option, shall have none of the rights of a stockholder with
respect to shares subject to this option.
4
You shall promptly advise the Company of any sale of shares of Common Stock
issued upon exercise of this option which occurs within one year from the date
of the exercise of this option.
5. Subject to Terms of the 2004 Plan.
----------------------------------
This Incentive Stock Option Agreement shall be subject in all respects to
the terms and conditions of the 2004 Plan and, in the event of any question or
controversy relating to the terms of the 2004 Plan, the decision of the
Committee shall be conclusive. THIS AGREEMENT SHALL BE NULL AND VOID AB INITIO,
AND THE OPTION GRANT REFLECTED HEREIN SHALL BE DEEMED FORFEITED, UNLESS THE
COMPANY RECEIVES, WITHIN TWO WEEKS OF ITS TENDER OF THIS AGREEMENT TO YOU, ONE
COPY HEREOF BEARING YOUR ORIGINAL COUNTERSIGNATURE BELOW.
Sincerely yours,
DELCATH SYSTEMS, INC.
By:
-----------------------------
[NAME]
[TITLE]
Agreed to and Accepted
this [DAY] day of [MONTH], [YEAR].
- ----------------------------------
[NAME OF OPTIONEE]
EXHIBIT A
NOTICE OF EXERCISE
(To be Executed by an Optionholder to Purchase Shares of
Common Stock of Delcath Systems, Inc. under its 2004 Stock Incentive Plan)
The undersigned hereby irrevocably elects to exercise his or her right to
purchase ___________________ (__________) shares of Common Stock, $0.01 par
value per share (the "Shares"), of Delcath Systems, Inc. ("Delcath") as provided
by the Incentive Stock Option Agreement between the undersigned and Delcath,
dated ________________, and according to the conditions thereof, and hereby
makes payment of the Exercise Price for such Shares in the full amount of
$______________, by wire transfer or by check delivered herewith.
By executing this Notice of Exercise, the undersigned represents and
warrants to Delcath that the following statements are true and correct:
1. I am acquiring the shares of the Company's Common Stock for investment
purposes only and not with a view to their distribution or resale.
2. I understand that an investment in the Common Stock of the Company
involves a high degree of risk and is suitable only for persons of adequate
financial means and should not be made by anyone who cannot afford the loss of
his or her entire investment.
3. I have received and carefully read and am familiar with the Company's
financial statements for the most recently ended fiscal year for which such
statements are available.
4. I acknowledge that I have had an opportunity to consult with counsel and
other advisers about acquiring the shares of the Company's Common Stock for
investment purposes.
5. I have had the opportunity to ask questions of management concerning the
Company prior to the exercise of the option and the Company has made available
such information pertaining to my acquiring the Shares as I have reasonably
requested.
Signature:
----------------------------
Print Name:
----------------------------
Address:
----------------------------
----------------------------