AMPE Ampio Pharmaceuticals Inc (CE)

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On December 14, 2019, Ampio Pharmaceuticals, Inc. (the “Company”) entered into Amendment No. 2 to the Employment Agreement (the “Amendment No. 2”) with Daniel Stokely.  The Amendment (i) extends the time period over which the Company agrees to pay commuting expenses from six (6) months to eight (8) months following the effective date of the Employment Agreement, or until March 31, 2020, and (ii) authorizes an equity grant of 30,000 stock options on January 2, 2020 at an exercise price per share equal to the closing price of the Company’s common stock as reported on the New York Stock Exchange on the grant date (50% of which will vest immediately and 50% on the date that is 365 days from Mr. Stokely’s employment start date, or July 31, 2020).

On December 14, 2019, the Company entered into an Employment Agreement with Michael Macaluso, which will become effective on January 10, 2020 (the “Start Date”) immediately following the expiration of his current employment agreement. In connection with his continued service as the Company’s Chief Executive Officer (“CEO”) and as a member of the Board of Directors, Mr. Macaluso will continue to receive an annual base salary of $300,000 pursuant to the Employment Agreement and is entitled to continue to participate in the Company’s  benefit plans on terms available to other Company employees. The Employment Agreement has an initial term of 3 years from the Start Date, and is subject to certain automatic renewal provisions.

Mr. Macaluso will receive a one-time equity award of 200,000 stock options at an exercise price per share equal to the closing price of the Company’s common stock as reported on the New York Stock Exchange on the Start Date (50% of which will vest on the Start Date and 50% of which will vest on January 10, 2021).  Subject to approval of the Company’s Compensation Committee, Mr. Macaluso will be eligible to participate in compensation programs established by the Company as set forth from time to time for senior executive officers, with a target annual equity award opportunity no less favorable than is available to other similarly-situated senior executives of the Company generally.  He will be eligible for an annual discretionary bonus of up to 50% of his annual base salary based on the achievement of certain performance goals established by the Company. Mr. Macaluso will also be able to allocate bonus compensation to others through (i) a special cash bonus pool of $50,000, which he shall be able to allocate in his sole discretion to employees of the Company, and (ii) recommendations to the Compensation Committee of issuance of up to 100,000 stock options. Each of the cash and stock option bonus pools shall be fully allocated before December 31, 2020. As consideration for the bonus pools, Mr. Macaluso will forfeit previously granted options to purchase 100,000 shares of common stock, which were originally granted on August 12, 2010. In the event of termination without cause (as defined in the Employment Agreement), Mr. Macaluso will be entitled to a lump sum payment equal to six months of his base salary in effect at the date of termination, less applicable withholding and certain offsetting payments (including offsets for any and all compensation that she may receive from other employment subsequent to his employment with the Company pursuant to a duty to mitigate such severance payment).  Additionally, all outstanding stock options held by Mr. Macaluso will become fully vested and exercisable upon his termination without cause.

The foregoing descriptions of Amendment No. 2 and the Employment Agreement do not purport to be complete, and are qualified in their entirety by reference to the full text of Amendment No. 2 and the Employment Agreement, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8‑K and incorporated herein.