Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Jim Scully as Interim
Chief Executive Officer and Principal Accounting Officer
.
On August 6, 2018, the Company announced
that Jim Scully has been appointed Chief Executive Officer and Principal Accounting Officer of Neuralstem, Inc. (the “Company”),
on an interim basis, effective August 1, 2018 (“Effective Date”).
Mr. Scully, age 56, has over 20 years
of pharmaceutical industry experience focusing on commercial, clinical development, and manufacturing operations. From 2017 to
2018, Mr. Scully served as Partnership Valuation Leader for GE Healthcare Partners, a leading provider of outcomes-based solutions
for major health systems. Prior to that from 2015 to 2016, Mr. Scully served as Senior Director of capacity, metrics, and reporting
for Astellas Pharmaceuticals, a publicly traded Japanese pharmaceutical company. From 2011 to 2015, Mr. Scully served in several
capacities, most recently as the Senior Director of the clinical trials services BU for Walgreen Company. Prior to 2011, Mr. Scully
served in management level roles for Takeda Pharmaceuticals, a publicly traded Japanese pharmaceutical company, and Abbott Laboratories
pharmaceutical division. Mr. Scully holds a BS in Economics from the University of Pennsylvania – Wharton School of Business
and an MBA from the University of Chicago – Booth School of Business.
There is no arrangement or understanding
between Mr. Scully and any other person pursuant to which Mr. Scully was selected as the Company’s interim Chief Executive
Officer or interim Principal Accounting Officer. Mr. Scully has no direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of Regulation S-K. There are no family relationships between Mr. Scully and any of the
directors or officers of the Company or any of its subsidiaries.
Employment Related Contracts
On August 4, 2018, the Company entered
into a binding term sheet (“Term Sheet”) with Mr. Scully, summarized as follows:
Mr. Scully will serve as the interim Chief
Executive Officer and interim Principal Accounting Officer beginning on the Effective Date. Mr. Scully will receive $25,000 per
calendar month and shall work three (3) full days per week. In the event Mr. Scully works additional days, he will receive $2,000
per day of full time service. The term of Mr. Scully’s employment will be for six (6) months beginning on the Effective Date
and ending on January 31, 2018, unless terminated earlier upon sixty (60) days prior notice (the “Term”).
Pursuant to his appointment, Mr. Scully
was issued an option to purchase 250,000 shares of common stock, with a grant date of August 4, 2018, a term of five (5) years,
and an exercise price of $1.15 per share (the “Option”). The Option is fully vested on the grant date but is subject
to immediate termination in the event that Mr. Scully voluntarily ceases to be a service provider of the Company prior to the end
of the Term, or is terminated “for cause” prior to the end of the Term.
In the event that Mr. Scully exercises
the Option during the Term, he will be required to complete the Term in full. In such event, if he does not voluntarily complete
the Term or is terminated by the Company “for cause”, Mr. Scully will be required to pay liquidated damages consisting
of, (i) the repayment of any gain from the sales of the shares underlying the Option or (ii) if the shares are not sold, the Company
will have the right to repurchase the shares for (a) the amount of cash paid by Mr. Scully to purchase the shares or (b) $0.01
in the event the option is exercised on a cashless basis.
The Company anticipates entering into a
formal employment agreement with Mr. Scully that contains materially the same terms as the Term Sheet.
The foregoing description of the Term Sheet
is a summary only, does not purport to be complete and is subject to, and qualified in its entirety by reference, to the Term Sheet,
which is attached as Exhibit 10.01 hereto and is incorporated herein by reference.
