Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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Promotion of Michael Rogers to Chief Financial and Business Officer
On May 14, 2019, the Board of Directors (the Board) of Aerpio Pharmaceuticals, Inc. (the Company) promoted Michael Rogers to Chief
Financial and Business Officer of the Company.
Mr. Rogers, age 59, previously served as the Chief Financial Officer of the Company from November
2017 to May 2019. From 2016 to 2017, Mr. Rogers served as a consultant to healthcare companies. Prior to that, Mr. Rogers was the chief financial officer at Acorda Therapeutics, Inc., a biopharmaceutical company, from 2013 to 2016. Prior
to Acorda Therapeutics, he was the Executive Vice President and chief financial officer of BG Medicine, Inc. from 2009 to 2012. From 1999 to 2009, Mr. Rogers was the chief financial officer of Indevus Pharmaceuticals, Inc. until the
companys sale to Endo Pharmaceuticals, Inc. He also served as chief financial officer at Advanced Health Corporation and Autoimmune. Prior to his roles as chief financial officer, Mr. Rogers was an investment banker at Lehman Brothers and
PaineWebber & Co., where he focused on life sciences companies. Mr. Rogers received his B.A. from Union College, and an M.B.A. from the Darden School of Business at the University of Virginia. He currently serves as a member of the
Board of Directors of Akebia Therapeutics, Inc. and EyePoint Pharmaceuticals, Inc.
In connection with his promotion to Chief Financial and Business
Officer, the Board of Directors of the Company approved an increase in Mr. Rogers annual base salary to $415,000 and an increase in his target annual performance bonus to 50% of his base salary. In addition, the Company issued
Mr. Rogers a stock option to purchase 169,500 shares of the Companys common stock pursuant to the Companys 2017 Stock Option and Incentive Plan (the 2017 Plan). Such stock options granted to Mr. Rogers will have an
exercise price per share equal to $1.04, the closing price of the Companys common stock on the Nasdaq Stock Market on the date of the grant. Such stock options shall vest 25% on the first anniversary of the grant date and the remainder shall
vest in equal monthly installments on the first day of each month thereafter over the next three years. If Mr. Rogers is terminated for a reason other than death, disability, or Cause (as defined in the 2017 Plan and the award agreements issued
thereunder), such options (to the extent vested and exercisable as of the termination date), will remain exercisable for a period of two years following Mr. Rogers termination date.
Mr. Rogers has no family relationship with any of the executive officers or directors of the Company. There are no arrangements or understandings between
Mr. Rogers and any other person pursuant to which he was appointed as an officer of the Company.
Employee Retention Matters
On May 14, 2019, the Board of Directors of the Company approved cash payments, stock option awards and severance arrangements for the Companys
remaining employees, including the Companys executive officers, in order to incentivize such employees to remain employed by the Company following the implementation of the Companys realignment plan in April 2019.
The Board of Directors of the Company approved cash retention payments to its salaried employees, which are expected to be paid at the end of the second
quarter in fiscal year 2020. Stephen Hoffman, the Companys Chief Executive Officer and principal executive officer, Joseph Gardner, the Companys President, and Michael Rogers, the Companys Chief Financial and Business Officer and
principal financial and accounting officer, who collectively constitute the Companys named executive officers for fiscal year 2018 will receive cash payments of $249,100, $210,000 and $193,000, respectively.
Additionally, employees of the Company, including these named executive officers, were granted retention stock option awards pursuant to the 2017 Plan.
Dr. Hoffman was granted a stock option to purchase 709,050 shares of the Companys common stock, Dr. Gardner was granted an option to purchase 349,350 shares of the Companys common stock, and Mr. Rogers was granted an
option to purchase 430,500 shares of the Companys common stock under these retention arrangements. The stock options vest 50% on June 30, 2020 and the remaining 50% vest on June 30, 2021, provided that the individual remains an
employee of the Company or its subsidiaries on each vesting date. If an employee is terminated for a reason other than death, disability, or Cause (as defined in the 2017 Plan and the award agreements issued thereunder), such options (to the extent
vested and exercisable as of the termination date), will remain exercisable for a period of two years following such employees termination date.
The Company also adopted severance arrangements pursuant to which Company employees, will receive certain severance benefits if the employee is terminated
without Cause (as defined in the 2017 plan and the award agreements issued thereunder). These benefits include continuation of such employees base salary and health benefits for a specified number of months,