Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Amendment
of Employment Agreement of Jeff E. Margolis
On
June 30, 2017, the Board of Directors of RespireRx Pharmaceuticals Inc. (the “Company”) by unanimous written consent
approved the amendment, effective July 1, 2017, of the employment agreement of Jeff Eliot Margolis, the Company’s
Vice President, Secretary and Treasurer. Mr. Margolis is also a director of the Company.
The
amendment includes the following terms:
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Mr.
Margolis, who has been acting as Interim Chief Financial Officer, is now the Chief Financial Officer of the Company.
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Mr.
Margolis has been promoted from Vice President to Senior Vice President.
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Mr.
Margolis’s annual compensation has been increased from $195,000 to $300,000 and will remain at $300,000 annually when,
and if, the Company hires a new Chief Financial Officer.
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Mr.
Margolis will be paid the $60,000 bonus that he was granted on June 30, 2015 in cash in three installments as follows: (i)
$15,000 to be paid upon the next closing of any financing by the Company in excess of $100,000, (ii) $15,000 to be paid by
the end of the month in which cumulative closings of any financings by the Company (including the closing triggering the payment
in clause (i)) have occurred in excess of $200,000, and (iii) $30,000 to be paid upon the next closing of any financing in
excess of an additional $250,000 (after the closings that trigger payments under clauses (i) and (ii)).
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The
Company will grant a one-time bonus of 25,000 non-qualified stock options to purchase the Company’s common stock,
with an exercise price equal to the market price of the Company’s common stock on the date of grant and a term of five
years, to Mr. Margolis as soon as practical after July 1, 2017, which, at Mr. Margolis’s direction, may be issued to
his family trusts as the recipients in such proportion as he specifies.
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With
respect to future executive bonuses, option, equity and equity-linked grants and any fringe benefits (including without limitation,
auto allowance, expense allowance, life insurance, health insurance), Mr. Margolis would receive terms at least as favorable
as the lowest terms granted to any other member of the executive management team (meaning any person with the title of Senior
Vice President, Chief Financial Officer or higher, regardless of whether that person is also a director of the Company), except
for a signing bonus or grants of equity, options or similar grant, if any, necessary to induce the hiring of a Chief Financial
Officer, Chief Medical Officer, or other executive officer.
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Except
as specified above, all other aspects of Mr. Margolis’s existing employment agreement remain in full force and effect. Mr.
Margolis’s existing agreement was filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed August 19,
2015. The Company intends to file a copy of the amendment as an exhibit to its Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017.
Award
of Common Stock Options
In
the same unanimous Written Consent dated June 30, 2017, the Board of Directors of the Company also awarded non-qualified options
(i) to purchase 50,000 shares of Common Stock of the Company to each of James S. Manuso, Arnold S. Lippa and Jeff E. Margolis,
(ii) to purchase 25,000 shares of Common Stock of the Company to each of James Sapirstein and Kathryn MacFarlane, and (iii)
to purchase 40,000 shares to Richard D. Purcell, Jr. The options were awarded as compensation for those individuals. An additional
45,000 options in the aggregate were awarded to certain of the Company’s service providers. The awarded options vested upon
issuance and expire on June 30, 2022. The exercise price of the options of $2.00 per share is the closing market price of shares
of Common Stock of the Company as of the date of issuance. In addition, the Board authorized the issuance of another 125,000 options
to purchase common stock to be awarded at management’s discretion through December 31, 2017, which will vest in three installments,
25% on issuance, 25% on September 30, 2017, and 50% on December 31, 2017. These 125,000 will have an exercise price equal to the
closing price of the Company’s common stock on the date of grant. The foregoing description of the options awarded does
not purport to be complete and is qualified in its entirety by reference to the full text of the Form of Non-Statutory Stock Option
Award Agreement under the 2015 Plan, a copy of which is attached as Exhibit 10.2 to the Company’s Current Report on Form
8-K filed July 8, 2015, and which is incorporated herein by reference.
Cautionary
Statement Regarding Forward-Looking Statements
This
report contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934 and the Company intends that such forward-looking statements be subject
to the safe harbor created thereby. In some cases, forward-looking statements may be identified by words including “anticipates,”
“believes,” “intends,” “estimates,” “expects,” “plans,” and similar
expressions include, but are not limited to, statements regarding (i) future research plans, expenditures and results, (ii) potential
collaborative arrangements, (iii) the potential utility of the Company’s proposed products, and (iv) the need for, and availability
of, additional financing.
The
forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties.
These forward-looking statements are based on assumptions regarding the Company’s business and technology, which involve
judgments with respect to, among other things, future scientific, economic and competitive conditions, and future business decisions,
all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. Although
the Company believes that the assumptions underlying the forward-looking statements are reasonable, actual results may differ
materially from those set forth in the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking
information included herein, the inclusion of such information should not be regarded as a representation by the Company or any
other person that the Company’s objectives or plans will be achieved.
Factors
that could cause or contribute to such differences include, but are not limited to, regulatory policies or changes thereto, available
cash, research and development results, competition from other similar businesses, and market and general economic factors. This
discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2016, including the section entitled “Item 1A. Risk Factors.” The Company does not intend to update or revise
any forward-looking statements to reflect new information, future events or otherwise.
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.
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Date:
July 7, 2017
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RESPIRERX
PHARMACEUTICALS INC.
(Registrant)
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By:
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/s/
James S. Manuso
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James
S. Manuso
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Chief
Executive Officer
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