Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Executive Officer
On January 3, 2022, the Board appointed Dr. Stephen Snowdy as Chief Executive
Officer of the Company, effective as of January 10, 2022, to serve until a
successor is chosen and qualified, or until his earlier resignation or removal.
There is no family relationship between Dr. Snowdy and any director or executive
officer of the Company. There are no transactions between Dr. Snowdy and the
Company that would be required to be reported under Item 404(a) of Regulation
S-K of the Securities Exchange Act of 1934, as amended.
Employment Agreement with Dr. Stephen Snowdy
On January 3, 2022, the Company entered into a new employment agreement,
effective January 10, 2022 (the "Effective Date"), with Dr. Stephen Snowdy,
under which the Company agreed to employ Dr. Snowdy as its Chief Executive
Officer through December 31, 2022 (the "Employment Agreement"). Pursuant to the
Employment Agreement, Dr. Snowdy is entitled to a base annual salary of
$500,000. Dr. Snowdy also is entitled to receive a signing bonus of $100,000,
payable in four quarterly installments, with the first installment to be paid on
the date that is 90 days following the Effective Date, and an annual bonus to be
determined by the Board in its sole discretion, based on certain performance
criteria as established by the Board, with such bonus payable no later than the
last regular payroll in 2022. Dr. Snowdy is also eligible to receive a bonus of
up to 3.0% of the amount of non-broker assisted funding raised to fund Centurion
on terms acceptable to both the Board of Centurion BioPharma and CytRx. The
Employment Agreement also entitles Dr. Snowdy to receive customary benefits and
reimbursement for ordinary business expenses.
In connection with Dr. Snowdy's appointment and as a further inducement to enter
into the Employment Agreement, the Company granted Dr. Snowdy 300,000 cash-based
stock appreciation rights with a base price equal to the closing price of the
Company's common stock on the date of grant, subject to the terms and conditions
of the Company's form of cash-based stock appreciation rights agreement, which
terms shall include vesting in three substantially equal tranches on the first,
second and third anniversary of the Effective Date. Under the Employment
Agreement, Dr. Snowdy is also eligible to receive nonqualified stock options
equal to 2% of the fully diluted common stock of Centurion with an exercise
price equal to the fair market value of Centurion on the date of grant, subject
to the terms and conditions of a grant agreement.
In the event Dr. Snowdy's employment is terminated without "cause" or due to
"disability" (each term as defined in the Employment Agreement) or death, the
Company has agreed to (i) pay Dr. Snowdy or his heirs or personal
representatives, as applicable, a lump-sum severance amount equal to six months'
base annual salary, or twelve months' base annual salary if Dr. Snowdy's
employment is terminated without "cause" following a "change in control" (each
term as defined in the Employment Agreement), and (ii) continue the
participation, at the Company's cost, for a period of six months, or twelve
months if the Employment Agreement is terminated without "cause" following a
"change in control", of Dr. Snowdy and his dependents in the employee benefits
plan in which Dr. Snowdy was participating. In the event Dr. Snowdy's employment
is terminated without "cause", all of Dr. Snowdy's vested stock options and any
other vested equity awards will remain exercisable for their full term
notwithstanding the termination of his employment. In the event Dr. Snowdy's
employment is terminated due to Dr. Snowdy's "disability" or death, all of Dr.
Snowdy's unvested stock options and other equity awards based on the Company's
securities will immediately vest in full and all of Dr. Snowdy's stock options
and any other equity awards will remain exercisable for their full term
notwithstanding the termination of his employment. Dr. Snowdy may also terminate
the Employment Agreement for good reason.
In the event the Employment Agreement is not renewed or extended, the Company
will continue to pay Dr. Snowdy's annual salary thereunder during the period
commencing on expiration of the employment and ending on June 30, 2023 or the
date Dr. Snowdy is employed by another employer, whichever is earlier.
The foregoing description of the Employment Agreement contained in this Item
5.02 does not purport to be a complete description of the terms and provisions
therein and is qualified in its entirety by reference to the full text of the
Employment Agreement, a copy of which is attached hereto as Exhibit 10.1 and
incorporated herein by reference.
Departure of Chairman and Chief Executive Officer
On January 3, 2022, in connection with the Separation Agreement (as defined
below), Steven A. Kriegsman, who served as the Chairman and Chief Executive
Officer of CytRx Corporation (the "Company"), departed from his roles as an
officer of the Company and the Chairman of the Company's board of directors (the
"Board"), effective immediately. Mr. Kriegsman's departure as Chairman of the
Board was not in connection with any disagreement between Mr. Kriegsman and the
Company, its management, the Board or any committee of the Board on any matter
relating to the Company's operations, policies or practices, or any other
matter.
General Release and Severance Agreement with Steven Kriegsman
On January 3, 2022 (the "Departure Date"), in connection with Mr. Kriegsman's
departure, the Company and Mr. Kriegsman entered into a General Release and
Separation Agreement, dated January 3, 2022 (the "Separation Agreement").
Pursuant to the Separation Agreement, Mr. Kriegsman will perform certain
consulting services to Centurion BioPharma Corporation ("Centurion"), generally
related to fund raising efforts for a Centurion BioPharma cancer center in Las
Vegas, Nevada with a goal of raising at least $100,000,000, for a period of time
to be mutually agreed upon by the parties (the "Consulting Services"). The
Separation Agreement stipulates that the average level of the Consulting
Services to be provided by Mr. Kriegsman shall not exceed 20% of the average
level of bona fide services performed by Mr. Kriegsman as an employee of the
Company during the 36-month period immediately preceding the Departure Date. Mr.
Kriegsman will not receive any fees for the Consulting Services unless otherwise
agreed to, in writing, by the Company, which the Company shall consider once
funding has been obtained.
The Separation Agreement provides Mr. Kriegsman the opportunity to revoke his
acceptance of the Separation Agreement within seven calendar days of the
Departure Date by providing written notice of such revocation to the Company.
Under the Separation Agreement, Mr. Kriegsman and the Company have agreed to
mutually waive and release any claims in connection with Mr. Kriegsman's
employment, separation and departure from the Company. The Separation Agreement
also provides for certain customary covenants regarding confidentiality.
In connection with the execution of the Separation Agreement, Mr. Kriegsman's
existing executive employment agreement, as amended (the "Prior Employment
Agreement"), was terminated; provided, however, that certain surviving customary
confidentiality provisions and milestone and royalty payments as defined in the
Prior Employment Agreement remain in full force and effect. Pursuant to the
Prior Employment Agreement and the Separation Agreement, Mr. Kriegsman will be
entitled to receive a lump sum cash payment equal to approximately $6.0 million.
The foregoing description of the material terms of the Separation Agreement
contained in this Item 5.02 does not purport to be a complete description of the
terms and provisions therein and is qualified in its entirety by reference to
the full text of the Separation Agreement, a copy of which is attached hereto as
Exhibit 10.2 and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On January 3, 2022, the Company issued a press release announcing the departure
of Mr. Kriegsman and the appointment of Dr. Snowdy as the Company's Chief
Executive Officer. A copy of the press release is furnished as Exhibit 99.1 and
is incorporated by reference herein.
The information included under Item 7.01 (including Exhibit 99.1) is furnished
pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18
of the Exchange Act, or otherwise be subject to the liabilities of that section,
nor shall it be deemed to be incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, whether made before or
after the date hereof and regardless of any general incorporation language in
such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Employment Agreement, January 3, 2022, by and between CytRx
Corporation and Dr. Stephen Snowdy.
10.2 General Release and Separation Agreement, dated January 3, 2022, by
and between CytRx Corporation and Steven A. Kriegsman.
99.1 Press Release, dated January 3, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
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