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ARGS > SEC Filings for ARGS > Form 8-K on 23-Jan-2017All Recent SEC Filings

Show all filings for ARGOS THERAPEUTICS INC

Form 8-K for ARGOS THERAPEUTICS INC


23-Jan-2017

Entry into a Material Definitive Agreement, Change in Directors or Princip


Item 1.01. Entry into a Material Definitive Agreement.

Lease Agreement

On January 17, 2017, Argos Therapeutics, Inc. (the "Company") entered into a Lease Agreement (the "Lease") with Keystone-Centennial II, LLC (the "Landlord"), pursuant to which the Company has agreed to lease 40,420 rentable square feet (the "Premises"), to be up-fit through a project jointly directed and funded by the Landlord and the Company (the "Project"), for occupancy and use by the Company as office space and as a commercial manufacturing facility. The Premises are located on North Carolina State University's ("NCSU") Centennial Campus in Raleigh, North Carolina. The Project will be divided into three phases and possession of the Premises will be delivered to the Company as each phase is completed. The term of the Lease is one hundred twenty-three (123) months from the date of substantial completion and delivery of the second phase of the Premises, expected to be on or about May 16, 2017. The Landlord has targeted completion of all three phases of the Premises by July 31, 2017, with abatement of rent to be provided to the Company in the event of late delivery. The Company will have options to renew the Lease for two successive five-year periods.

The Company's requirement to pay rent under the Lease begins on the date on which the Landlord delivers possession of the second phase of the Premises to the Company (the "Rent Commencement Date"). The initial base monthly rent under the Lease is as follows: (i) for the first three months following the Rent Commencement Date, $43,788.33 per month; and (ii) for months 4-15 following the Rent Commencement Date, $87,576.67 per month. Thereafter the base monthly rent shall increase at a rate of 3% per year. The Company will also pay for operating expenses, utility charges, taxes, insurance and maintenance. In addition, the Company has provided a security deposit in the amount of $2.4 million, which has been provided in the form of a letter of credit.

The Project will be financed by both the Landlord and the Company, with the Landlord contributing approximately $1.6 million to the Project and the Company funding the balance. The plans, specifications and budget for the Project are still being finalized, however the Company estimates that the Project budget will be approximately $6.6 million.

Either party may terminate the Lease: (i) if the Landlord fails to or cannot repair damage to the Premises, as described in the Lease or (ii) if the Premises are condemned by an appropriate condemning authority. If after reasonable efforts, the parties are unable to agree upon the plans, specifications and budget for the Project, the parties have agreed to binding arbitration. The Company may terminate the Lease prior to February 1, 2017 if it determines that NC State Non-Woven Fabrics Institute, which is another tenant in the building, will cause noise and/or vibrations that will prevent the Company from obtaining FDA Approval (as defined in the Lease) for its intended use of the Premises. The Landlord may terminate the Lease upon a default by the Company, including a failure to pay rent or failure to comply with the Company's other obligations under the Lease, after certain cure periods, in each case as set forth in the Lease.

The foregoing description of certain terms of the Lease does not purport to be complete and is qualified in its entirety by reference to the Lease that the Company intends to file as an exhibit to its annual report on Form 10-K for the year ending December 31, 2016.



Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 19, 2017, the Compensation Committee of the Board of Directors (the "Committee") of the Company, approved the payment of bonuses with respect to the year ended December 31, 2016, annual equity awards under the Company's 2014 Stock Incentive Plan and salary adjustments effective January 1, 2017 for members of executive management, including the following amounts for the Company's named executive officers and the principal financial officer:

- Jeffrey D. Abbey, President and Chief Executive Officer: Base salary increased to $480,000; option to purchase 386,212 shares of the Company's common stock; restricted stock award of 17,430 shares of the Company's common stock; and a cash bonus of $292,375.
- Richard D. Katz, M.D., Chief Financial Officer: Base salary increased to $305,000; option to purchase 105,000 shares of the Company's common stock; restricted stock award of 3,958 shares of the Company's common stock; and a cash bonus of $64,125.
- Charles Nicolette, Ph.D., Vice President of Research and Development and Chief Scientific Officer: Base salary increased to $385,000; option to purchase 185,000 shares of the Company's common stock; restricted stock award of 16,753 shares of the Company's common stock; and a cash bonus of $91,406.
- Joan Winterbottom, Chief Human Resources Officer: Base salary increased to $300,000; option to purchase 85,000 shares of the Company's common stock; restricted stock awards of 4,464 shares of the Company's common stock; and a cash bonus of $72,319.

The option awards referenced above have an exercise price of $4.85 and vest over a 4-year period, commencing January 1, 2017, with 25% of each award vesting on January 1, 2018 and the balance vesting in equal monthly installments over the 36-month period thereafter. The restricted stock awards referenced above are subject to a lapsing right of repurchase in favor of the Company as follows: (i) the right of repurchase will lapse with respect to 11,875 shares of Mr. Abbey's restricted stock on April 17, 2017 and with respect to the remaining 5,555 shares on December 9, 2017; (ii) the right of repurchase will lapse with respect to 3,958 shares of Dr. Katz's restricted stock on April 17, 2017; (iii) the right of repurchase will lapse with respect to all 5,642 shares of Dr. Nicolette's restricted stock on April 17, 2017 and with respect to the remaining 11,111 shares on December 9, 2017; and (iv) the right of repurchase will lapse with respect to all 4,464 shares of Ms. Winterbottom's restricted stock on April 17, 2017, in each case assuming such executive officer is still providing services to the Company on such date.



Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibit relating to Item 1.01 shall be deemed furnished, and not filed:

99.1   Press Release, dated January 19, 2017, entitled "Argos Therapeutics
       Completes Lease Agreement for Commercial Manufacturing Space on the
       Centennial Campus of North Carolina State University"


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