AIM ImmunoTech Inc. 10-Q

ITEM 5: Other Information On August 12, 2020, the Company granted to Thomas K. Equels, Chief Executive Officer, consistent with his employment agreement, 300,000 ten-year options to purchase common stock with an exercise price of $3.07 per share which vest in one year. The Company also granted to Dr. William Mitchell and Stewart Appelrouth, as compensation for their services as members of committees of the board of directors, each 50,000 ten-year options to purchase common stock with an exercise price of $2.77 per share which vest in one year. On November 10, 2020, we entered into a five year employment agreement with Thomas Equels (the “Employment Agreement”). Pursuant to the Employment Agreement, Mr. Equels will continue to serve as our President, CEO and will serve as our Executive Vice Chairman of the Board of Directors. Mr. Equels will receive an annual base salary of $850,000 and is entitled to a year-end target bonus of $350,000 based upon performance goals established by the Board’s Compensation Committee. To incentivize Mr. Equels to advance our long term objectives, each year he will receive options (“Long Term Options”) to purchase 300,000 shares of our common stock, the first such Long Term Options to be issued on November 30, 2021. The exercise price of these options will be the closing price of our common stock on the NYSE American on the trading date immediately preceding the date of the award The Long Term Options will vest one year after their issuance. Mr. Equels will be entitled to awards (“Event Awards”) equal to 3% of the “Gross Proceeds” from specific licensing agreements or individual acquisitions of a “therapeutic indication” (each, an “Event”). Gross Proceeds means those cash amounts paid to us by the other parties for each licensing agreement and specific therapeutic indication acquisition, and “specific therapeutic indication means a specific target organ pathologically recognized as a cancer indication, a vaccine enhancer for a specific infectious target, broad spectrum antiviral indications, or a medical entity associated with persistent severe fatigue. Mr. Equels also will be entitled to an award (an “Acquisition Award”) equal to 3% of the Gross Proceeds, upon the sale of our company or substantially all of our assets (an “Acquisition”). An Event Award or Acquisition Award shall be paid in cash within 90 days of our receipt of the Gross Proceeds. Mr. Equels will receive customary allowances and fringe benefits as set forth in the Employment Agreement. The Employment Agreement runs for five years and, thereafter, automatically renews for three year periods unless either party informs the other in writing at least 180 days prior to the end of the then term of the Employment Agreement, that it does not intend to renew the Employment Agreement. In the event of a change in control of our company (excluding any Acquisition), the term of the Employment Agreement shall be extended for three years on the date of change in control. We may terminate Mr. Equels’ employment with or without “Cause”. “Cause” means the willful engaging by Mr. Equels in illegal conduct, gross misconduct or gross violation of our Code of Ethics and Business Conduct, which is demonstrably and materially injurious to us. Mr. Equels shall not be deemed to have been terminated for Cause unless he receives notice that a majority of our Directors believes that he should be terminated for Cause. The matter shall be adjudicated by a retired Florida judge or a Florida certified mediator mutually acceptable to our Board and Mr. Equels, before whom Mr. Equels has been given the opportunity to be heard, and requires a finding that he was guilty of intentional and material misconduct according to the foregoing standards and utilizing the legal standard of beyond all reasonable doubt. Upon termination for Cause, Mr. Equels shall be entitled to his salary, bonus and Long Term Options through the last day of his actual employment by us subsequent to the foregoing proceeding. If we terminate him without Cause, Mr. Equels shall be entitled to his compensation through the last day of the then current term of the Employment Agreement. In the event Mr. Equels’ employment is terminated due to his death or disability, we shall pay to him or his estate, at the time of such termination, his base salary, applicable benefits, and all unvested Long Term Options shall immediate vest. In the event of his permanent disability, we will provide an additional two years of base salary. The Compensation Committee, after reviewing a report from a compensation advisor, determined that Mr. Equels’ compensation was below that of certain peer pharmaceutical/biotechnology companies in certain compensation categories and noted that, due to substantial financial constraints, Mr. Equels had not received an increase in base salary in four years. The Compensation Committee also noted that, under Mr. Equels’ leadership, we had recovered from a distressed situation, which included insufficient funds for drug development, no adequate reserves of experimental drug product and the consequent inability to conduct clinical trials and a high burn rate. Under his tenure we have substantially reduced our burn rate through a series of moves to eliminate waste and inefficiency, raised significant capital to provide an operating reserve, initiated an oncology clinical program which now has multiple oncology clinical trials at academic centers underway, initiated a COVID-19 R&D program with clinical trials imminent and initiated multiple provisional Ampligen utility patent applications in COVID-19, oncology, endometriosis, and manufacturing. To compensate Mr. Equels for these accomplishments, we awarded him 300,000 options with the same terms as the Long Term Options. The above summaries of the Employment Agreement is not complete and is qualified in its entirety by reference to the full text of the agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference. ITEM 6: Exhibits (a) Exhibits 10.1 November 10, 2020 employment agreement with Thomas K. Equels.* 10.2 July 1, 2020, Material Transfer and Research Agreement with the Japanese National Institute of Infectious Diseases and Shionogi & Co., Ltd. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))** 10.3 July 6, 2020, Clinical Trial Agreement with Roswell Park Comprehensive Cancer Center. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))** 10.4 August 6, 2020, Project Work Order with Amarex Clinical Research LLC. (Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10))** 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.* 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.* 32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.* 32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.* 101.INS XBRL Instance Document * *** 101.SCH XBRL Taxonomy Extension Schema Document * *** 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document * *** 101.DEF XBRL Taxonomy Extension Definition Linkbase Document * *** 101.LAB XBRL Taxonomy Extension Label Linkbase Document * *** 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * *** * Filed herewith. ** Filed with the Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020 filed August 14, 2020 and is hereby incorporated by reference. *** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections. 40 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AIM IMMUNOTECH INC. /s/ Thomas K. Equels Thomas K. Equels, Esq. Chief Executive Officer & President /s/ Ellen M. Lintal Ellen M. Lintal Chief Financial Officer Date: November 12, 2020 41