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.