Change in Directors or Principal Officers
Item 5.02(e). Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed on a Current Report on Form 8-K filed February 3, 2006, Cortex Pharmaceuticals, Inc. (the "Company") appointed Mark A. Varney, Ph.D. as its chief scientific officer and chief operating officer effective January 30, 2006. Under the terms of his employment letter, the Company agreed to provide certain benefits to Dr. Varney to assist him in his relocation from Massachusetts to Southern California.
On February 1, 2007, in order to further facilitate Dr. Varney's relocation and to assist him in the sale of his residence in Massachusetts, the Company entered into a Negative Equity Agreement (the "Negative Equity Agreement") with Dr. Varney, pursuant to which the Company agreed to pay Dr. Varney a relocation bonus (in an amount not to exceed $50,000) equal to the shortfall, if any, between the appraised value of his residence and its sales price at closing. The Company shall pay the relocation bonus directly to escrow for the sale of the residence immediately prior to the escrow closing date.
In the event that Dr. Varney's employment with the Company terminates for any reason following the Company's payment of the relocation bonus, Dr. Varney shall repay some or all of the relocation bonus to the Company as follows: (i) if such termination occurs within one (1) year of the payment date, Dr. Varney shall repay 100% of the relocation bonus; (ii) if such termination occurs more than one (1) year but within two (2) years of the payment date, Dr. Varney shall repay 75% of the relocation bonus; and (iii) if such termination occurs more than two (2) years but within three (3) years of the payment date, Dr. Varney shall repay 30% of the relocation bonus.
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