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 and Expiration of Provisional Term
On
July 31, 2020, the Board of Directors of the Company approved an amendment, effective July 31, 2020 (the “Amendment”),
of the employment agreement of Timothy Jones, the Company’s President and Chief Executive Officer (the “Employment
Agreement”). Mr. Jones is also a director of the Company. On that same date, pursuant to Section 1.1 of the Employment Agreement,
Mr. Jones’s employment with the Company was no longer considered “at will” and all rights and obligations set
forth in the Employment Agreement were deemed effective as of that date.
The
Amendment reduces the threshold dollar amount, from $5,000,000 to $2,500,000, of funds raised by the Company, above which the
Board of Directors may not exercise its discretion to withhold payment to Mr. Jones of accrued compensation. As such, the Amendment
will require Mr. Jones’ base salary and guaranteed bonus to be paid, rather than remain accrued and unpaid, once the Company
raises $2,500,000.
The
Amendment also amends the structure of Mr. Jones’ guaranteed bonus by (i) increasing the amount of the guaranteed bonus
payable on October 31, 2020 from $150,000 to $200,000, and (ii) decreasing the amount of the guaranteed bonus payable on March
31, 2021 from $250,000 to $200,000. No other amendments were made to the Employment Agreement.
Prior
to the approval of the Amendment, the Employment Agreement was filed by the Company on May 6, 2020, as Exhibit 99.1 to a Current
Report on Form 8-K. The description of the Amendment does not purport to be complete and is qualified in its entirety by reference
to the full text of the Amendment, a copy of which is attached as Exhibit 99.5 to this Current Report on Form 8-K and is
incorporated herein by reference.
The
press release announcing the expiration of the provisional term of Mr. Jones’ Employment Agreement is attached as Exhibit
99.6 to this Current Report on Form 8-K.
Stock
Option Pursuant to Employment Agreement
On
July 31, 2020, pursuant to Section 6.4(a) of the Employment Agreement, the Company granted to Mr. Jones a five-year, non-qualified
stock option to purchase 1,000,000 shares of Common Stock, exercisable at the closing price of a share of Common Stock on the
date of the grant, which vested in its entirety immediately upon grant, with such terms and conditions as are set forth in Section
6.4 of the Employment Agreement (the “Employment Agreement Stock Option”).
The
foregoing description of the Employment Agreement Stock Option granted 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 (as defined
below), 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, as supplemented by the Addendum attached as Exhibit 10.5 to the Company’s Current
Report on Form 8-K filed December 14, 2017, which is also incorporated herein by reference.
Approval
of Amendment of the Amended and Restated 2015 Stock and Stock Option Plan
On
July 31, 2020, the Board of Directors of the Company approved the adoption of the Fifth Amendment (the “Fifth Amendment”)
of the Amended and Restated RespireRx Pharmaceuticals, Inc. 2015 Stock and Stock Option Plan (the “2015 Plan”). The
Fifth Amendment increases the shares issuable under the 2015 Plan by 100,000,000, from 58,985,260 shares to 158,985,260. Other
than the change in the number of shares available under the 2015 Plan, no other changes were made to the 2015 Plan by the Fifth
Amendment.
The
2015 Plan provides for the issuance of shares of Company stock, in the form of stock grants and options to directors, officers,
employees, consultants and other service providers of the Company. The Company has not submitted, and currently does not intend
to submit, the 2015 Plan for stockholder approval. Accordingly, the 2015 Plan does not contemplate the issuance of Incentive Stock
Options. The foregoing description of the 2015 Plan does not purport to be complete and is qualified in its entirety by reference
to the full text of the 2015 Plan, as amended. Prior to the approval of any amendments to the 2015 Plan, a copy of the 2015 Plan
was filed by the Company on April 6, 2016, as Exhibit 10.1 to a Current Report on Form 8-K and is incorporated herein by reference.
A copy of the First Amendment of the 2015 Plan was filed by the Company on January 23, 2017, as Exhibit 10.1 to a Current Report
on Form 8-K and is incorporated herein by reference. A copy of the Second Amendment of the 2015 Plan was filed by the Company
on December 14, 2017, as Exhibit 10.3 to a Current Report on Form 8-K and is incorporated herein by reference. A copy of the Third
Amendment of the 2015 Plan was filed by the Company on January 4, 2019, as Exhibit 99.4 to a Current Report on Form 8-K and is
incorporated herein by reference. A copy of the Fourth Amendment of the 2015 Plan was filed by the Company on May 6, 2020, as
Exhibit 99.7 to a Current Report on Form 8-K and is incorporated herein by reference. A copy of the Fifth Amendment is attached
as Exhibit 99.14 to this Current Report on Form 8-K and is incorporated herein by reference.
Grant
of Common Stock Options to Executive Officers
On
July 31, 2020, the Board of Directors of the Company granted non-qualified options to two executive officers of the Company, as
detailed below.
The
Company granted a non-qualified stock option to Mr. Jones to purchase 16,000,000 shares of Common Stock of the Company. The options
vested or will vest, as applicable, in four installments: 25% on issuance, 25% on September 30, 2020, 25% on December 31, 2020,
and 25% on March 31, 2021. The options will expire on July 31, 2025. The exercise price of the options is the closing per share
market price of shares of Common Stock of the Company as of the date of issuance, which was $0.0072 per share. The option contains
a cashless exercise provision.
The
Company granted non-qualified options to Richard Purcell to purchase 5,000,000 shares of Common Stock of the Company. The options
vested or will vest, as applicable, in four installments: 25% on issuance, 25% on September 30, 2020, 25% on December 31, 2020,
and 25% on March 31, 2020. The options will expire on July 31, 2025. The exercise price of the options is the closing per share
market price of shares of Common Stock of the Company as of the date of issuance, which was $0.0072 per share. The option contains
a cashless exercise provision.
The
foregoing description of the options granted 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, as supplemented
by the Addendum attached as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed December 14, 2017, which is also
incorporated herein by reference.