-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IVvU76+ydQO0sHKkPiTGf5AI9cswOVjkGP4OBSKG8A8SmFNDxupx2A+MAC+cstLm LqLlnsFjDzrHp1xmwA187w== 0000950116-01-500658.txt : 20010815 0000950116-01-500658.hdr.sgml : 20010815 ACCESSION NUMBER: 0000950116-01-500658 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOSE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000877902 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 133549286 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27718 FILM NUMBER: 1709050 BUSINESS ADDRESS: STREET 1: 102 WITMER RD CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2154415890 MAIL ADDRESS: STREET 1: 102 WITMER ROAD CITY: HORSHAM STATE: PA ZIP: 19044 FORMER COMPANY: FORMER CONFORMED NAME: NEOSE PHARMACEUTICALS INC DATE OF NAME CHANGE: 19950817 10-Q 1 ten-q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to ___________________ Commission file number: 0-27718 NEOSE TECHNOLOGIES, INC. ------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3549286 --------------------------------- --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 102 Witmer Road Horsham, Pennsylvania 19044 ----------------------------------------- ----------- (Address of principal executive offices) (Zip Code) (215) 441-5890 ---------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 14,036,148 shares of common stock, $.01 par value, were outstanding as of July 31, 2001. NEOSE TECHNOLOGIES, INC. (a development-stage company) INDEX
Page ---- PART I.FINANCIAL INFORMATION: Item 1. Financial Statements Consolidated Balance Sheets (unaudited) at December 31, 2000 and June 30, 2001...........................3 Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2000 and 2001, and for the period from inception through June 30, 2001..........................4 Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2000 and 2001, and for the period from inception through June 30, 2001..........................5 Notes to Unaudited Consolidated Financial Statements.....................................................6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................................................................................7 Item 3. Quantitative and Qualitative Disclosure About Market Risk...............................................11 PART II. OTHER INFORMATION: Item 4. Submission of Matters to a Vote of Security Holders.....................................................11 Item 6. Exhibits and Reports on Form 8-K........................................................................12 SIGNATURES ......................................................................................................13
PART I. FINANCIAL INFORMATION Item 1. Financial Statements NEOSE TECHNOLOGIES, INC. (a development-stage company) CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except per share amounts)
Assets December 31, 2000 June 30, 2001 ----------------- ------------- Current assets: Cash and cash equivalents $ 66,989 $ 41,215 Marketable securities 27,773 44,687 Restricted funds 893 349 Prepaid expenses and other current assets 583 721 -------- --------- Total current assets 96,238 86,972 Property and equipment, net 13,577 14,455 Other assets 4,953 4,654 -------- --------- Total assets $ 114,768 $ 106,081 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 1,100 $ 1,100 Accounts payable 83 204 Accrued compensation 601 569 Accrued expenses 1,527 1,523 Deferred revenue 389 306 --------- --------- Total current liabilities 3,700 3,702 Long-term debt 6,200 5,100 --------- --------- Total liabilities 9,900 8,802 --------- --------- Stockholders' equity: Preferred stock, $.01 par value, 5,000 shares authorized, none issued - - Common stock, $.01 par value, 30,000 shares authorized; 13,992 and 14,025 shares issued and outstanding 140 140 Additional paid-in capital 173,757 174,670 Deferred compensation (717) (710) Deficit accumulated during the development-stage (68,312) (76,821) --------- --------- Total stockholders' equity 104,868 97,279 --------- --------- Total liabilities and stockholders' equity $ 114,768 $ 106,081 ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 3 NEOSE TECHNOLOGIES, INC. (a development-stage company) CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts)
Three months Six months Period from ended June 30, ended June 30, inception --------------------------- ------------------------- (January 17, 1989) 2000 2001 2000 2001 to June 30, 2001 ------------- ------------- ----------- ------------- ------------------- Revenue from collaborative agreements $ 1,769 $ 292 $ 3,716 $ 604 $ 11,971 -------- -------- -------- -------- --------- Operating expenses: Research and development 3,764 3,934 6,657 7,101 70,748 Marketing, general and administrative 1,418 2,531 2,698 4,197 31,078 -------- -------- -------- -------- --------- Total operating expenses 5,182 6,465 9,355 11,298 101,826 -------- -------- -------- -------- --------- Operating loss (3,413) (6,173) (5,639) (10,694) (89,855) Interest income 1,468 1,031 1,987 2,352 16,318 Interest expense (115) (68) (234) (167) (3,284) -------- -------- -------- -------- --------- Net loss $ (2,060) $ (5,210) $ (3,886) $ (8,509) $ (76,821) ======== ======== ======== ======== ========= Basic and diluted net loss per share $ (0.15) $ (0.37) $ (0.30) $ (0.61) ======== ======== ======== ======== Basic and diluted weighted-average shares outstanding 13,900 14,016 12,890 14,011 ======== ======== ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 4 NEOSE TECHNOLOGIES, INC. (a development-stage company) CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
Six months ended Period from June 30, inception -------------------------------- (January 17, 1989) 2000 2001 to June 30, 2001 ------------- ------------- --------------------- Cash flows from operating activities: Net loss $ (3,886) $ (8,509) $ (76,821) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 940 1,153 9,465 Non-cash compensation 886 547 2,746 Common stock issued for non-cash and other charges - - 35 Changes in operating assets and liabilities: Prepaid expenses and other current assets (2,548) (138) (721) Accounts payable (152) 121 204 Accrued compensation 85 (32) 569 Accrued expenses 401 (4) 841 Deferred revenue (333) (83) 306 -------- -------- --------- Net cash used in operating activities (4,607) (6,945) (63,376) -------- -------- --------- Cash flows from investing activities: Purchases of property and equipment (1,033) (1,732) (21,193) Proceeds from sale-leaseback of equipment - - 1,382 Purchases of marketable securities (88,377) (72,770) (293,632) Proceeds from sales of marketable securities - - 11,467 Proceeds from maturities of and other changes in marketable securities 27,788 55,856 237,478 Purchase of acquired technology (500) - (4,550) Investment in private equity (1,250) - (1,250) Restricted cash related to acquired technology 500 - - -------- -------- --------- Net cash used in investing activities (62,872) (18,646) (70,298) -------- -------- --------- Cash flows from financing activities: Proceeds from issuance of debt - - 11,955 Repayment of debt (1,000) (1,100) (7,052) Restricted cash related to debt 453 544 (278) Proceeds from issuance of preferred stock, net - - 29,497 Proceeds from issuance of common stock, net - - 18,277 Proceeds from public offerings, net 68,605 - 118,071 Proceeds from exercise of stock options and warrants 1,909 373 4,491 Dividends paid - - (72) -------- -------- --------- Net cash provided by (used in) financing activities 69,967 (183) 174,889 -------- -------- --------- Net increase (decrease) in cash and cash equivalents 2,488 (25,774) 41,215 Cash and cash equivalents, beginning of period 10,365 66,989 - -------- -------- --------- Cash and cash equivalents, end of period $ 12,853 $ 41,215 $ 41,215 ======== ======== ========= Supplemental disclosure of cash flow information: Cash paid for interest $ 234 $ 185 $ 3,204 ======== ======== ========= Non-cash financing activities: Issuance of common stock for dividends $ - $ - $ 90 ======== ======== ========= Issuance of common stock to employees in lieu of cash compensation $ - $ - $ 44 ======== ======== =========
The accompanying notes are an integral part of these consolidated financial statements 5 NEOSE TECHNOLOGIES, INC. (a development-stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation We have used generally accepted accounting principles for interim financial information to prepare unaudited consolidated financial statements: o As of June 30, 2001; o For the three and six months ended June 30, 2000 and 2001; and o For the period from inception (January 17, 1989) to June 30, 2001. Our consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In our opinion, the unaudited information includes all the normal recurring adjustments that are necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. You should not base your estimate of our results of operations for 2001 solely on our results of operations for the six months ended June 30, 2001. You should read these consolidated financial statements in combination with: o The other Notes in this section; o "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing in the following section; and o The Consolidated Financial Statements, including the Notes to the Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2000. 2. Agreement with Bristol-Myers Squibb Amended and Assigned to Progenics In May 2001, Bristol-Myers Squibb amended and assigned our research and development agreement to Progenics Pharmaceuticals, Inc. Under the amended agreement, Progenics has the right to negotiate with Neose for the supply of two gangliosides for use as the active pharmaceutical ingredients in the cancer vaccines. Under the terms of the original agreement, Neose was developing proprietary technologies to enable cGMP manufacturing of these gangliosides. On May 15, 2001, Progenics announced the initiation of a Phase III clinical trial with the most advanced of these vaccines to prevent the relapse of malignant melanoma. 3. Net Loss Per Share Basic and diluted net loss per share are presented in conformity with Statement of Financial Accounting Standards No. 128, "Earnings per Share." Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution from the exercise or conversion of securities into common stock. For the six months ended June 30, 2000 and 2001, the effects of the exercise of outstanding 6 stock options and warrants were antidilutive; accordingly, they were excluded from the calculation of diluted earnings per share. 4. Comprehensive Loss Our comprehensive loss for the six months ended June 30, 2000 and 2001 was approximately $3.9 million and $8.5 million, respectively. Comprehensive loss is comprised of net loss and other comprehensive income or loss. We had no other comprehensive income or loss during the six months ended June 30, 2000 and 2001. 5. Reclassifications Certain prior year amounts have been reclassified to conform to our current year presentation. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION ACT OF 1995: This report and the documents incorporated by reference herein contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this report and the documents incorporated herein by reference, the words "anticipate," "believe," "may," "expect," "estimate," and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements include, among others, the statements in Management's Discussion and Analysis of Financial Conditions and Results of Operations about our: o estimate of the sufficiency of our existing cash and cash equivalents and investments to finance our operating and capital requirements; and o expectations for future capital requirements. Our actual results could differ materially from those results expressed in, or implied by, these forward-looking statements. Potential risks and uncertainties that could affect our actual results include the following: o our ability to commercialize any of our products or technologies; o our ability to maintain our existing collaborative arrangements and enter into new collaborative arrangements; o unanticipated cash requirements to support current operations or research and development; o the timing and extent of funding requirements for the activities of our joint venture with McNeil Specialty; and o general economic conditions. 7 These and other risks and uncertainties that could affect our actual results are discussed in greater detail in this report and in our other filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance, or achievements. We do not assume responsibility for the accuracy and completeness of the forward-looking statements. We do not undertake any duty to update after the date of this report any of the forward-looking statements in this report to conform them to actual results. You should read this section in combination with the Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2000, included in our Annual Report on Form 10-K and in our 2000 Annual Report to Stockholders. Overview Neose develops proprietary technologies for the synthesis and manufacture of complex carbohydrates, which are chains of simple sugar molecules that can be joined together in many different combinations. Our enzymatic glycosylation technology platform makes feasible the synthesis of a wide range of complex carbohydrates for pharmaceutical, biotechnology, nutritional, and consumer product applications. Our GlycoAdvance(TM) program uses our technologies to enable the completion and correction of glycosylation in recombinant glycoprotein discovery, development, and manufacture. Our GlycoTherapeutics(TM) program uses our technologies to develop and produce novel carbohydrate-based therapeutics, and our GlycoActives(TM) program uses our technologies to develop and produce novel carbohydrate-based food ingredients. We have incurred operating losses each year. As of June 30, 2001, we had an accumulated deficit of approximately $77 million. We expect additional losses for some time as we expand research and development efforts, manufacturing scale-up activities, and marketing activities. Results of Operations Revenues Revenues from collaborative agreements for the three and six months ended June 30, 2001 were $292,000 and $604,000, respectively, compared to $1,769,000 and $3,716,000, respectively, for the corresponding period in 2000. Payments under our agreement with Bristol-Myers accounted for approximately $3.1 million of our collaborative revenues in the six months ended June 30, 2000. We do not expect any future payments under this agreement unless we negotiate new terms with Progenics. Operating Expenses Research and development expenses for the three and six months ended June 30, 2001, were $3,934,000 and $7,101,000, respectively, compared to $3,764,000 and $6,657,000, respectively, for the corresponding periods in 2000. The increases were primarily attributable to increased personnel and related costs. General and administrative expenses for the three and six months ended June 30, 2001, were $2,531,000 and $4,197,000, respectively, compared to $1,418,000 and $2,698,000, respectively, for the corresponding periods in 2000. The increases were primarily attributable to the hiring of 8 additional business development and administrative personnel, marketing and promotional expenses as we have accelerated our commitment to the commercialization of GlycoAdvance, and increased legal and patent expenses as we continue to expand our intellectual property position. Interest Income and Expense Interest income for the three and six months ended June 30, 2001 was $1,031,000 and $2,352,000, respectively, compared to $1,468,000 and $1,987,000, respectively, for the corresponding periods in 2000. The changes were primarily due to lower interest rates during the 2001 periods, and the impact of our public offering in March 2000. Interest expense for the three and six months ended June 30, 2001 was $68,000 and $167,000, respectively, compared to $115,000 and $234,000, respectively, for the corresponding periods in 2000. The changes were due to lower average interest rates and lower average loan balances outstanding during the 2001 periods. Net Loss We incurred net losses of $5,210,000 and $8,509,000, or $0.37 and $0.61 per share, for the three and six months ended June 30, 2001, respectively, compared to $2,060,000 and $3,886,000, or $0.15 and $0.30 per share, respectively, for the corresponding periods in 2000. Liquidity and Capital Resources We have incurred operating losses each year since our inception. As of June 30, 2001, we had an accumulated deficit of approximately $77 million. We have financed our operations through private and public offerings of our securities, and revenues from our collaborative agreements. We had $85.9 million in cash and marketable securities as of June 30, 2001, compared to $94.8 million in cash and marketable securities as of December 31, 2000. On August 7, 2001, Genzyme Corporation and Novazyme Pharmaceuticals announced Genzyme's pending acquisition of Novazyme. Upon closing of the transaction, which is expected to occur in the third quarter, we expect to receive shares of Genzyme General, a division of Genzyme Corporation, worth approximately $6 million. In addition, Genzyme acquired Novazyme's obligation to pay us $1.5 million plus interest in November 2002. During the six months ended June 30, 2001, we purchased approximately $1.7 million of property, equipment, and building improvements. We anticipate making capital expenditures during 2001 and 2002 of approximately $14 million to provide additional cGMP manufacturing capacity in our Horsham, Pennsylvania facility to support the initial requirements of our anticipated GlycoAdvance customers. Even if we make these capital expenditures, we may not be able to enter into collaborations with potential GlycoAdvance customers. In addition, we anticipate in the next 12 to 24 months we will obtain, either through lease or purchase, another facility. We plan to relocate our non-cGMP research laboratories and corporate office space from our current facility in Horsham, Pennsylvania into the new facility, leaving our current facility available for future expansion of our cGMP manufacturing capacity. 9 We may be required to make additional investments in our joint venture with McNeil Specialty to fund capital expenditures. If the joint venture builds additional production facilities, and we wish to maintain our 50% ownership interest in the joint venture, we are required to invest up to $8.85 million to fund half of such expenditures. However, we may elect to fund as little as $1.85 million of the cost of the facilities, so long as our aggregate investments in the joint venture are at least 15% of the joint venture's aggregate capital expenditures. In this case, McNeil Specialty will fund the remainder of our half of the joint venture's capital expenditures, and our ownership percentage will be proportionately reduced. We have an option, expiring in September 2006, to return to 50% ownership of the joint venture by reimbursing McNeil Specialty for this amount. In 1997, we issued, through the Montgomery County (Pennsylvania) Industrial Development Authority, $9.4 million of taxable and tax-exempt bonds. The bonds were issued to finance the purchase of our previously leased building and the construction of a pilot-scale manufacturing facility within our building. The bonds are supported by an AA-rated letter of credit, and a reimbursement agreement between our bank and the letter of credit issuer. The interest rate on the bonds will vary weekly, depending on market rates for AA-rated taxable and tax-exempt obligations, respectively. As of June 30, 2001, the weighted-average, effective interest rate was 5.3% per year, including letter-of-credit and other fees. The terms of the bond issuance provide for monthly, interest-only payments and a single repayment of principal at the end of the twenty-year life of the bonds. However, under our agreement with our bank, we are making monthly payments to an escrow account to provide for an annual prepayment of principal. As of June 30, 2001, we had restricted funds relating to the bonds of $349,000, which consisted of our monthly payments to an escrow account plus interest revenue on the balance of the escrow account. To provide credit support for this arrangement, we have given a first mortgage on the land, building, improvements, and certain machinery and equipment to our bank. We have also agreed to a covenant to maintain a minimum required cash and short-term investments balance of at least two times the current loan balance. At June 30, 2001, we were required to maintain a cash and short-term investments balance of $12.4 million. If we fail to comply with this covenant, we are required to deposit with the lender cash collateral up to, but not more than, the loan's unpaid balance, which was $6.2 million as of June 30, 2001. We expect that our existing cash and short-term investments will be adequate to fund our operations through at least 2002, although changes in our collaborative relationships or our business, whether or not initiated by us, may cause us to deplete our cash and short-term investments sooner than the above estimate. The timing and amount of our future capital requirements and the adequacy of available funds will depend on many factors, including if or when any products manufactured using our technology are commercialized. Joint Venture with McNeil Specialty Our joint venture with McNeil Specialty is owned equally by Neose and McNeil Specialty. Each of Neose and McNeil Specialty contributed various intellectual property to the joint venture. In addition, McNeil Specialty contributed to the joint venture the pilot commercial manufacturing facility, for which 50% of the cost will be reimbursed by the joint venture. We account for our investment in the joint venture under the equity method, under which we recognize our share of the income and losses of the joint venture. In 1999, we reduced the carrying value of our initial investment in the joint venture of approximately $350,000 to zero to reflect our share of the joint 10 venture's losses. We recorded this amount as research and development expense in our Consolidated Statements of Operations. We will record our share of post-1999 losses of the joint venture, however, only to the extent of our actual or committed investment in the joint venture. If the joint venture becomes profitable, we will recognize our share of the joint venture's profits only after the amount of our capital contributions to the joint venture is equivalent to our share of the joint venture's accumulated losses. As of June 30, 2001, the joint venture had an accumulated loss since inception of approximately $6 million, of which our 50% share is approximately $3 million. Until the joint venture is profitable, McNeil Specialty is required to fund, as a non-recourse, no-interest loan, all of the joint venture's aggregate capital expenditures in excess of an agreed-upon amount, and all of the joint venture's operating losses. The loan balance would be repayable by the joint venture to McNeil Specialty over a seven-year period commencing on the earlier of September 30, 2006 or the date on which Neose attains a 50% ownership interest in the joint venture after having had a lesser ownership interest. In the event of any dissolution of the joint venture, the loan balance would be payable to McNeil Specialty before any distribution of assets to us. As of June 30, 2001, the joint venture owed McNeil Specialty approximately $7.5 million. Item 3. Quantitative and Qualitative Disclosure About Market Risk Our holdings of financial instruments are comprised primarily of government agency securities. All such instruments are classified as securities held to maturity. We seek reasonable assuredness of the safety of principal and market liquidity by investing in rated fixed income securities, while at the same time seeking to achieve a favorable rate of return. Our market risk exposure consists principally of exposure to changes in interest rates. Our holdings are also exposed to the risks of changes in the credit quality of issuers. We typically invest in the shorter-end of the maturity spectrum. The approximate principal amount and weighted-average interest rate of our investment portfolio at June 30, 2001 was $84.6 million and 3.5%, respectively. We have exposure to changing interest rates on our taxable and tax-exempt bonds, and we are currently not engaged in hedging activities. Interest on approximately $6.2 million of outstanding indebtedness is at an interest rate that varies weekly, depending on the market rates for AA-rated taxable and tax-exempt obligations. As of June 30, 2001, the weighted-average, effective interest rate was approximately 5.3% per year. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders A. Our Annual Meeting of Stockholders was held on June 20, 2001. 11 B. The motions before stockholders were: 1. To elect eight Directors.
Votes Votes Votes Broker Name of Director For Against Withheld Abstentions Nonvotes ---------------- ----- ------- -------- ----------- -------- Stephen A. Roth, Ph.D. 11,563,520 -- 539,362 -- -- P. Sherrill Neff 11,678,550 -- 424,332 -- -- William F. Hamilton, Ph.D. 11,752,031 -- 350,851 -- -- Douglas J. MacMaster, Jr. 11,749,231 -- 353,651 -- -- Mark H. Rachesky, M.D. 11,748,631 -- 354,251 -- -- Lindsay A. Rosenwald, M.D. 11,761,787 -- 341,095 -- -- Lowell E. Sears 11,749,531 -- 353,351 -- -- Jerry A. Weisbach, Ph.D. 11,747,031 -- 355,851 -- --
2. To approve and adopt our Amended and Restated 1995 Stock Option/Stock Issuance Plan to increase the number of shares authorized for issuance under the plan. Votes For 9,678,597 Votes Against 2,380,031 Votes Withheld -- Abstentions 44,254 Broker Nonvotes -- Item 6. Exhibits and Reports on Form 8-K. (a) List of Exhibits: 10.1 Separation of Employment Agreement dated as of May 18, 2001, between Eric Sichel and Neose. (b) Reports on Form 8-K. On May 18, 2001, we filed a Current Report on Form 8-K announcing the amendment and assignment by Bristol-Myers Squibb Company of our Research and Development Agreement with Bristol-Myers to Progenics Pharmaceuticals, Inc. 12 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 thereunto duly authorized. NEOSE TECHNOLOGIES, INC. Date: August 13, 2001 By: /s/ P. Sherrill Neff --------------------------------------- P. Sherrill Neff President, Chief Operating Officer, and Chief Financial Officer EX-10.1 3 ex10-1.txt EXHIBIT 10.1 EXHBIT 10.1 SEPARATION OF EMPLOYMENT AGREEMENT THIS SEPARATION OF EMPLOYMENT AGREEMENT (the "Agreement") is made as of May 18, 2001 between Neose Technologies, Inc., a Delaware corporation (the "Company"), and Eric Sichel ("Employee"). Background By mutual consent, Employee's employment with the Company as Vice President, Corporate Communications and Business Strategy, will terminate as of 5:00 p.m., Philadelphia time, on June 30, 2001 (the "Effective Date"). The parties are entering into this Agreement to set forth the terms and conditions of the termination. Terms NOW, THEREFORE, in consideration of the covenants and conditions set forth in this Agreement, the parties, intending to be legally bound, agree as follows: 1. Termination of Employment. Employee's employment with the Company will terminate as of the Effective Date. Employee hereby confirms that he voluntarily and irrevocably has resigned, as of the Effective Date, any and all positions he holds with the Company. Except as expressly provided in this Agreement, all rights and obligations of the Company and Employee with respect to such employment will be effectively terminated on the Effective Date. 2. Period Through Termination. From the date hereof through the Effective Date, Employee will remain employed by the Company, but will not be required to be present at the offices of the Company, or to perform his regular duties and responsibilities. During such time, Employee will be available by telephone as reasonably necessary during normal business hours to consult with the Company. 3. Rights to Severance. Employee understands and acknowledges that, in consideration for signing this Agreement, Employee is receiving rights which he is not otherwise entitled to receive, and that payments made or to be made and benefits provided or to be provided hereunder are in lieu of any and all compensation and benefits due to Employee under the terms of any agreement, arrangement or understanding (whether written or oral) binding upon the Company and Employee. 4. Payments. 4.1 Lump Sum. On the Effective Date, Neose will pay to Employee as severance a lump sum payment of $82,500, an amount equal to his current base salary for the period from July 1, 2001 through November 15, 2001, less applicable withholding. 4.2 Benefits. Employee acknowledges that the period within which the Company must make available the purchase of continued health insurance under COBRA (pursuant to Section 4980B of the Internal Revenue Code) will commence on the Effective Date. Except as expressly provided in this Agreement, Employee shall not be entitled to any benefits provided to employees of the Company after the Effective Date, other than benefits previously accrued under the terms of the Company's 401(k) or pension plans, if any. Employee specifically acknowledges that he is not entitled to participate after the Effective Date in any of the Company's benefit plans, including, without limitation, the Company's health and life insurance, disability insurance or 401(k) or pension plans. 4.3 Taxes. Employee will be solely responsible for payment of all federal, state and local taxes in respect of the payments to be made and benefits to be provided to him under this Agreement including, without limitation, under Sections 3 and 5. Employee hereby acknowledges that the Company is responsible for the withholding of income, FICA, FUTA and other payroll taxes, and the Company is authorized to make such withholdings or to require that Employee pay to the Company the amount of any such required withholdings as a condition of any payment or benefit. 5. Options. Under the Company's Amended and Restated 1995 Stock Option/Stock Issuance Plan (the "Plan"), Employee was granted an option to purchase 125,000 shares of the common stock of the Company, of which 25,000 are currently vested. The Company will accelerate vesting for an additional 12,500 shares and extend the period during which Employee can exercise the vested option. As a result, as of the Effective Date, (i) Employee will have a vested option under the Plan to purchase 37,500 shares of common stock of the Company, (ii) the option for the remaining shares will terminate, and (iii) the vested option to purchase 37,500 shares may be exercised by Employee on or before June 30, 2003. 6. Return of Company Property. On or before the Effective Date, Employee will return to the Company all lists, books, records, documents, credit cards and other materials or property in his possession, custody or control which are or were owned by the Company, or which are or were used by Employee in connection with the conduct of the business of the Company, and Employee will not retain or deliver to any other persons or entities copies thereof or permit any copies thereof to be made by any other person or entity. 7. Release. 7.1 In consideration of the foregoing, (including without limitation the promises and payments as described in Sections 4 and 5, which are in excess of that to which Employee would have otherwise been entitled upon termination of employment), Employee hereby knowingly, willingly and voluntarily remises, waives, releases and forever discharges the Company and its subsidiaries and affiliates, the directors, officers, employees, advisors and agents of the Company and its subsidiaries and affiliates, and the heirs, executors, administrators, predecessors, successors, joint venture partners, and 2 assigns of such parties (collectively referred to as the "Releasees"), of and from any and all manner of actions and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, claims and demands whatsoever in law or equity which Employee, his heirs, executors, administrators or assigns has, had or may hereafter have against the Releasees or any of them from or by reason of any cause, matter or thing whatsoever from the beginning of his employment with the Company to the Effective Date, excepting only claims against the Company relating to its obligations under Sections 4 and 5 of this Agreement, and including any claims arising from or relating in any way to his employment relationship with the Company, the termination of that relationship, the terms and conditions of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. ss. 2000e-1 et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. ss.12101 et seq., the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., the Family and Medical Leave Act, the Fair Labor Standards Act, and any and all state statutory analogues; and any other any federal or state common law or statutory claims now existing or hereinafter recognized including, but not limited to, claims for breach of contract, defamation, wrongful discharge, intentional and/or negligent infliction of emotional distress, outrageous conduct, invasion of privacy, promissory estoppel and attorney's fees and costs. 7.2 Covenant Not to Sue. Employee agrees and covenants that neither he, nor any person, organization, or other entity on his behalf, will file, charge, claim, sue or cause or permit to be filed, charged or claimed, any civil action, suit, or legal proceeding for personal relief (including any action for damages, injunctive, declaratory, monetary, or other relief) against Neose involving any matter occurring at any time in the past up to and including the date of this Separation Agreement and General Release or involving any continuing effects of any acts or practices which may have arisen or occurred prior to the date of this Agreement. Employee further agrees that if any person, organization, or other entity should bring a claim against Neose involving any such matter, Employee will not accept any personal relief in any such action. 8. Confidential Information. 8.1 Existing Agreement. Employee acknowledges that, upon, and as a condition of, first becoming an employee of the Company, he executed and delivered to the Company the Company's standard form of noncompetition and confidentiality agreement, dated November 27, 2000 (the "Confidentiality Agreement"). In consideration of the provisions of this Agreement, Employee (i) is reaffirming the Confidentiality Agreement contemporaneously with the execution of the Agreement, thereby confirming that he is and shall be legally bound by its terms and (ii) acknowledges that the terms of the Confidentiality Agreement are valid, binding and enforceable, and that he is and shall remain legally bound thereby at all times after the Effective Date regardless of termination of his employment by the Company. Employee agrees that he will provide, and that the Company may similarly provide, a copy of the Confidentiality Agreement to any business or enterprise (i) which he may directly or 3 indirectly own, manage, advise, operate, finance, join, control or participate in the ownership, management, operation, financing or control of or (ii) with which he may be connected with as an officer, director, advisor, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which he may use or permit his name to be used. 8.2 Third Party Information. Employee recognizes that the Company has received from third parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee shall hold all such confidential or proprietary information in the strictest confidence and shall not disclose it to any person or entity or use it except as consistent with the Company's agreements with such third parties. 9. Time Allowed to Review this Agreement: In compliance with the Older Workers Benefit Protection Act ("OWBPA"), Employee has twenty-one (21) days to consider this Agreement and is hereby advised to consult an attorney prior to signing the Agreement. If Employee signs the Agreement, Employee will have the right to revoke or cancel the Agreement within seven (7) days after Employee signs the Agreement by submitting written notice of revocation to Sandra Keller, Neose Technologies, Inc., 102 Witmer Road, Horsham, PA 19044. If Employee signs the Agreement and does not revoke the Agreement, the Agreement becomes binding, irrevocable, and enforceable at the expiration of such seven (7) day revocation period. Employee is not obligated to sign this Agreement, and refusal to do so will not jeopardize Employee's right to benefits to which Employee is already entitled. 10. Governing Law. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania, without giving effect to the principles of conflicts of law thereof. 11. Confidentiality. The parties agree that, except as required by law, the terms and conditions of this Agreement shall be kept confidential, and shall not be published, revealed, publicized, communicated, or otherwise made public in any manner or form. 12. No Admission of Liability. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company (or any of its agents) to Employee. There have been no such violations, and the Company specifically denies any such violations. 13. Non-disparagement. Employee and the Company agree that they will not, in any manner whatsoever, disparage the other or engage in any other conduct that would adversely affect the reputation of the other in any business or professional community. The Company will reasonably attempt to aid Employee in his search for new employment. 4 14. Preservation of Privilege. Employee will assist and cooperate with the Company in holding, preserving and not waiving any privilege or protection of the Company, including without limitation the attorney-client privilege and work product doctrine, as to any matter. 15. Section 16 Compliance. Employee represents and confirms that all transactions reportable on Form 3, 4, or 5 under Section 16 of the Securities Exchange Act of 1934, as amended, for the period commencing on November 28, 2000 and ending on the date hereof, have been so reported. 16. Notices. All notices that are permitted or required to be given under this Agreement shall be hand-delivered or sent by registered or certified mail, nationally recognized overnight delivery service, or by facsimile to each party at the following addresses: If to Neose, to: Neose Technologies, Inc. 102 Witmer Road Horsham, PA 19044 Attention: President Fax: (215) 441-5896 If to Employee, to: Eric Sichel, M.D. 411 Highview Road Englewood, NJ 07631 Fax: (201) 569-1973 or to such other names or addresses as the Company or Employee, as the case may be, shall designate by notice to the other in the manner specified in this Section. 17. Miscellaneous. 17.1 Compensation Committee Approval. This Agreement is conditioned upon, and shall not be effective until, the approval of the Compensation Committee of the Board of Directors of the Company. 17.2 Entire Agreement. This Agreement supersedes all prior agreements and sets forth the entire understanding among the parties hereto with respect to the subject matter hereof, except that this Agreement shall not supersede and shall be in addition to the Confidentiality Agreement. This Agreement may not be changed, modified, extended or terminated except upon written amendment executed by Employee and approved by the board of directors of the Company and executed on behalf of the Company by a duly authorized officer. Without limitation of the foregoing, Employee and the Company acknowledge that the effect of this provision is that no oral modifications of any nature whatsoever to this Agreement shall be permitted. 17.3 Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by 5 the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto. 17.4 Severability. If any provision of this Agreement is held invalid or unenforceable in any jurisdiction, the remaining provisions shall remain in full force and effect. 17.5 Remedies Cumulative; No Waiver. No remedy conferred upon the Company by this Agreement or the Confidentiality Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by the Company in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the Company from time to time and as often as may be deemed expedient or necessary by the Company in its sole discretion. 18. Consultation with Legal Counsel. Employee and the Company acknowledge that no promise or inducement for this Agreement has been made except as set forth herein. Employee acknowledges that this Agreement is executed without Employee's reliance upon any statement or representation by or on behalf of the Company; that Employee has had an opportunity to discuss this Agreement with his attorney, and that Employee is legally competent to and does voluntarily execute this Agreement and accept full responsibility therefor. IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have executed this Agreement as of the date first written above. NEOSE TECHNOLOGIES, INC. By: /s/ P. Sherrill Neff ----------------------------- P. Sherrill Neff President and Chief Operating Officer /s/ Eric Sichel ---------------------------- Eric Sichel, M.D. 6 -----END PRIVACY-ENHANCED MESSAGE-----