Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Compensation
Increase and Option Grant for Chief Financial Officer
On
January 15, 2019, the Board of Directors (the “Board”) of Adhera Therapeutics, Inc. (the “Company”) approved
an increase of the base salary to be paid to R. Eric Teague, the Chief Financial Officer of the Company, from $285,000 per year
to $305,000 per year, effective immediately. The Board also granted to Mr. Teague options to purchase up to an aggregate of 100,000
shares of the common stock of the Company at an exercise price of $0.32 per share, with 25,000 options being exercisable immediately
and with 25,000 options vesting on each of the first, second and third anniversary of the grant date. Mr. Teague serves as Chief
Financial Officer of the Company pursuant to that certain Employment Agreement dated as of September 24, 2018 by and between the
Company and Mr. Teague, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September
24, 2018.
Resignation
of Chief Commercial Officer
On
January 15, 2019, the Board accepted the resignation of Erik Emerson as Chief Commercial Officer of the Company, effective immediately.
Mr. Emerson will remain as a member of the Board.
Throughout
the fourth quarter of the 2018 fiscal year, Mr. Emerson worked closely with Jay Schwartz, Senior Vice President – Commercial
Operations of the Company, to transition his responsibilities. During the same period, Mr. Schwartz successfully built out the
commercial team that is focused on educating healthcare providers on the benefits of the Company’s U.S. Food and Drug Administration
(“FDA”) approved product, Prestalia
®
.
In
connection with his resignation, among other things, Mr. Emerson executed and delivered a general release of claims in favor of
the Company and affirmed his obligations to be bound by the restrictive covenants contained in the employment offer letter between
Mr. Emerson and the Company dated June 5, 2017 (including the Confidentiality, Restrictive Covenant and Intellectual Property
Agreement attached thereto), and the Company: (i) agreed to make severance payments to Mr. Emerson in the amount of $86,250 (with
$43,125 to be paid immediately and $43,125 to be paid on March 1, 2019); (ii) agreed that options to purchase up to an aggregate
of 562,500 shares of common stock at an exercise price of $0.66 that were granted to Mr. Emerson in July 2018 and that were to
vest in equal annual installments in July 2019, July 2020 and July 2021 shall vest in full immediately; and (iii) executed and
delivered a general release of claims in favor of Mr. Emerson.
In
addition, Mr. Emerson agreed that for twelve (12) months following the date of his resignation, he would not engage in a business
relating to the commercialization of Prestalia (or a pharmaceutical or therapeutic product that addresses substantially the same
market) or that utilizes the Company’s DyrctAxess / Prestalia Direct platforms (or platforms that are substantially similar
to, or that use substantially the same technology as is utilized by, such platforms).
Simultaneous
with Mr. Emerson’s resignation as an executive officer of the Company, the Company and Mr. Emerson entered into a Consulting
Agreement dated as of January 15, 2019 pursuant to which Mr. Emerson agreed to provide certain consulting services regarding the
Company’s FDA-approved Prestalia product. As consideration for such services, the Company shall pay to Mr. Emerson a consulting
fee of $3,000 per month.