Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On
May 23, 2018, the board of directors of Ritter Pharmaceuticals, Inc. (the “Company”) appointed John W. Beck as the
Company’s chief financial officer, effective May 24, 2018.
John
W. Beck, age 58, served as chief financial officer and senior vice president of finance & operations of Ardea Biosciences
Inc. (“Ardea”), from 2008 until its acquisition by AstraZeneca in 2012. Before joining Ardea, Mr. Beck spent 10 years
with Metabasis Thereapeutics Inc., as a co-founder and its chief financial officer.
Since
leaving Ardea in 2012, Mr. Beck has been serving as a board member and advisor to August Therapeutics, Inc., a San Diego California-based
company developing non-systemic therapeutics to treat disordered eating and obesity, and Pinnacle Medical Holdings, LLC, a Denver
Colorado-based physician-led network of health-care providers, which was acquired by OnPoint Medical Group, LLC in August 2017.
Mr. Beck holds a Bachelor’s degree in Accounting from the University of Washington, Seattle and a Bachelor’s degree
in Theology from a Seattle-area seminary.
The
Company entered into an offer letter with Mr. Beck on May 23, 2018 (the “Offer Letter”). Pursuant to the terms of
the Offer Letter, Mr. Beck’s annual base salary will be $320,000. He will also be eligible to receive a target annual bonus
equal to 40% of his base salary, as then in effect, as determined by the board of directors, and will receive reimbursement in
an amount up to $2,000 per month for reasonable travel and housing expenses in connection with his commute to Los Angeles, the
Company’s headquarters. Mr. Beck will also be eligible to participate in all employee benefit programs generally available
to other executive level employees of the Company.
Pursuant
to the terms of the Offer Letter, on May 23, 2018, the board of directors granted Mr. Beck a stock option to purchase 100,000
shares of the Company’s common stock, of which 25% of the shares will vest on May 24, 2019, with the remaining shares vesting
in 36 equal monthly installments beginning on the 24th day of each calendar month after May 24, 2019. The exercise price of the
option is $3.32 per share, the closing price of the Company’s common stock on the date of grant.
The
Company also entered into an Executive Severance and Change in Control Agreement (the “Severance Agreement”) with
Mr. Beck, effective as of May 24, 2018.
The
Severance Agreement provides that if after the six month anniversary of the date on which Mr. Beck’s employment with the
Company commences, the Company terminates his employment without Cause (as defined in the Severance Agreement) or Mr. Beck terminates
his employment for Good Reason (as defined in the Severance Agreement), Mr. Beck will be entitled to: (i) his earned but unpaid
base salary through the termination date, payment of any annual, long-term, or other incentive award which relates to a completed
fiscal year or performance period, as applicable, that is payable (but not yet paid) on or before the termination date, a lump-sum
payment in respect of accrued but unused vacation days at Mr. Beck’s per-business-day base salary rate in effect as of the
termination date, and any unpaid expense or other reimbursement due to Mr. Beck pursuant to the Company’ expense reimbursement
policy (the “Accrued Obligations”); (ii) an amount equal to six months of Mr. Beck’s base salary as in effect
immediately prior to the termination date; and (iii) medical, dental benefits until the earlier of (a) the six month anniversary
of the termination date or (b) the date Mr. Beck becomes covered under a subsequent employer’s medical and dental plans.
The
Severance Agreement also provides that in the event that within one month prior to or the 12 months following a Change in Control
(as defined in the Severance Agreement) the Company terminates Mr. Beck’s employment without Cause or Mr. Beck terminates
his employment with Good Reason, then, in lieu of the payments and benefits described in the preceding paragraph, Mr. Beck will
be entitled to: (i) the Accrued Obligations; (ii) an amount equal to the sum of six months of this base salary as in effect on
the termination date or the date of the Change in Control, whichever is greater; (iii) medical, dental benefits until the earlier
of (a) the six month anniversary of the termination date or (b) the date Mr. Beck becomes covered under a subsequent employer’s
medical and dental plans; and (iv) acceleration of vesting of all equity and equity-based awards granted to Mr. Beck.
Mr.
Beck’s entitlement to the payments (other than the Accrued Obligations) and benefits under the Severance Agreement as described
above are expressly contingent upon his providing the Company with a signed release satisfactory to the Company.
The
foregoing description of the Offer Letter and the Severance Agreement is not complete and is qualified in its entirety by reference
to the full text of the Offer Letter and the Severance Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to
this Current Report on Form 8-K (this “Report”) and incorporated herein by reference.