0001144204-16-112813.txt : 20160713 0001144204-16-112813.hdr.sgml : 20160713 20160713160548 ACCESSION NUMBER: 0001144204-16-112813 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20160707 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160713 DATE AS OF CHANGE: 20160713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AYTU BIOSCIENCE, INC CENTRAL INDEX KEY: 0001385818 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 470883144 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-53121 FILM NUMBER: 161765717 BUSINESS ADDRESS: STREET 1: 373 INVERNESS PARKWAY STREET 2: SUITE 200 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: (720) 437-6580 MAIL ADDRESS: STREET 1: 373 INVERNESS PARKWAY STREET 2: SUITE 200 CITY: ENGLEWOOD STATE: CO ZIP: 80112 FORMER COMPANY: FORMER CONFORMED NAME: AYTU BIOSCIENCE, INC. DATE OF NAME CHANGE: 20150609 FORMER COMPANY: FORMER CONFORMED NAME: Rosewind CORP DATE OF NAME CHANGE: 20070110 8-K 1 v444158_8k.htm FORM 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 7, 2016

AYTU BIOSCIENCE, INC.
(Exact Name of Registrant as Specified in Charter)

Delaware	000-53121	47-0883144
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

373 Inverness Parkway, Suite 206, Englewood, Colorado		80112
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (720) 437-6580

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective July 12, 2016, our Board appointed Gary Cantrell as a director and chair of the Compensation Committee and a member of the Audit Committee and the Nominating and Governance Committee, and also appointed John Donofrio, Jr. as a director and chair of the Audit Committee and a member of the Compensation Committee and the Nominating and Governance Committee. Messrs. Cantrell and Donofrio will each hold office until our next annual meeting of stockholders, which is anticipated to be held in November 2016.

Gary Cantrell has 30 years of experience in the life sciences industry ranging from clinical experience as a respiratory therapist to his current exclusive consulting role with Mayne Pharma (ASX: MYX) as Business Development Executive focused on acquiring branded prescription assets for Mayne’s U.S. Specialty Brands Division. Mr. Cantrell served as CEO of Yasoo Health Inc., a global specialty nutritional company from 2007 through June 2016, highlighted by the sale of its majority asset AquADEKs to Actavis in March 2016. Previously, he was President of The Catevo Group, a U.S.-based healthcare consulting firm. Prior to that, he was Executive Vice President, Sales and Marketing for TEAMM Pharmaceuticals, an Accentia Biopharmaceuticals company, where he led all commercial activities for a public specialty pharmaceutical business. His previous 22 years were at GlaxoSmithKline plc where he held progressively senior management positions in sales, marketing and business development. Mr. Cantrell is a graduate of Wichita State University and serves as an advisor to several emerging life science companies. He served as a director for Yasoo Health Inc., Yasoo Health Limited and Flexible Stenting Solutions, Inc., a leading developer of next generation peripheral arterial, venous, neurovascular and biliary stents, which was sold to Cordis, while a Division of Johnson & Johnson in March 2013.

John Donofrio, Jr. is a Senior Finance Executive with 24 years of experience in the pharmaceutical industry across a broad range of areas, including consolidated financial reporting, international accounting and internal controls, financial systems development and implementation, cost accounting, inventory management, supply chain, transfer pricing, budget and forecast planning, integration of mergers and acquisitions and business development. He has served as the Chief Financial Officer and Head of North American Business Development for Merz North America, or Merz, since August 2013. Merz is a specialty healthcare company that develops and commercializes innovative treatment solutions in aesthetics, dermatology and neurosciences in the U.S. and Canada. At Merz, Mr. Donofrio is accountable for financial performance, cost management, business development and strategic business planning and analysis for the finance organization in North America. Prior to joining Merz, Mr. Donofrio served as Vice President, Stiefel Global Finance, U.S. Specialty Business and Puerto Rico for Stiefel, a GlaxoSmithKline plc company from July 2009 to July 2013. In that role, Mr. Donofrio was responsible for the financial strategy, management reporting, and overall control framework for the Global Dermatology Business Unit. He was also the Senior Finance Partner accountable for the U.S. Specialty Business Units of GlaxoSmithKline plc. Mr. Donofrio holds a degree in Accounting from North Carolina State University.

There are no arrangements or understandings between Messrs. Cantrell or Donofrio and any other person pursuant to which Messrs. Cantrell and/or Donofrio were appointed to the Board and there are no related party transactions between Mr. Cantrell and Aytu or Mr. Donofrio and Aytu.

Jarrett Disbrow, Chief Operating Officer and a director of the Company, resigned from the Board of Aytu, effective July 7, 2016. Mr. Disbrow will remain Aytu’s Chief Operating Officer. Mr. Disbrow’s decision to resign did not involve any disagreement with our operations, policies or practices. Mr. Disbrow elected to resign in order to allow for a majority of the Company’s board to be independent and thus meet the listing requirements of a national stock exchange, to which the company is planning to uplist its stock in the future.

A copy of the press release announcing the appointments of Messrs. Cantrell and Donofrio and the resignation of Mr. Disbrow is attached hereto as Exhibit 99.1 and incorporated herein by reference.

In connection with Messrs. Cantrell and Donofrio’s appointments to the Board, we granted each of them options to purchase 15,000 shares of our common stock with an exercise price of $3.23, that vest 25% on September 30, 2016, December 31, 2016, March 31, 2017 and June 30, 2017. We also granted each of them 65,000 restricted shares of our common stock. The restricted shares vest on July 12, 2026, subject to earlier vesting in certain situations, as well as the recipients’ continued service.

Additionally, on July 7, 2016, the Board approved restricted stock awards to certain executive officers and directors. Josh Disbrow, our Chief Executive Officer, received 195,000 shares of restricted stock; Greg Gould, our Chief Financial Officer, received 160,000 shares of restricted stock; Jarrett Disbrow, our Chief Operating Officer, received 160,000 shares of restricted stock; Jon McGrael, our Vice President of Commercial Operations, received 140,000 shares of restricted stock; Doug Miller, our Vice President of Technical Operations, received 80,000 shares of restricted stock; Mike Macaluso, a director, received 65,000 shares of restricted stock; and Carl Dockery, a director, received 65,000 shares of restricted stock. The restricted shares vest on July 7, 2026, subject to earlier vesting in certain situations, as well as the recipients’ continued employment or service.

The foregoing summary of the restricted stock awards does not purport to be complete and is qualified in its entirety by reference to such agreements. Copies of the form of Restricted Stock Agreement for Non-Employee Directors and the form of Restricted Stock Agreement for Employees are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

	(d)	Exhibits

	Exhibit No.	Description

	10.1	Form Restricted Stock Agreement for Non-Employee Directors
	10.2	Form Restricted Stock Agreement for Employees
	99.1	Press Release dated July 13, 2016.

SIGNATURE

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 hereunto duly authorized.

Date: July 13, 2016	AYTU BIOSCIENCE, INC.


	/s/ Gregory A. Gould
	Name:	Gregory A. Gould
	Title:	Chief Financial Officer

EX-10.1 2 v444158_ex10-1.htm EXHIBIT 10.1

Exhibit 10.1

RESTRICTED STOCK AWARD AGREEMENT

This RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made and entered into as of July __, 2016 (the “Effective Date”), by and between Aytu BioScience, Inc., a Delaware corporation (the “Company”), and ___________________ (the “Grantee”).

WHEREAS, in connection with Grantee’s continued provision of valuable services as a director of the Company, the Company’s Board of Directors (the “Board”) has determined to issue _________________ (####) shares of the Company’s common stock to Grantee, subject to the terms of this Agreement.

NOW, THEREFORE, in consideration of the foregoing, the Company and the Grantee agree as follows.

1. Grant of Stock. The Company hereby agrees to issue to the Grantee _________________ (####) shares of the Company’s common stock (the “Shares”). All of the Shares received by the Grantee from the Company pursuant to this Agreement are subject to the terms of this Agreement, including but not limited to an option by the Company to repurchase such Shares.

2. Company’s Repurchase Option.

(a) The termination of the Grantee’s service as a director of the Company for any reason will be a “Triggering Event.” Service will not be considered to have terminated in the case of an approved leave of absence. An approved leave of absence for this purpose will include sick leave, military leave, or any other authorized personal leave, so long as the Company has a reasonable expectation that the Grantee will return to provide services for the Company, and provided further that the leave does not exceed six (6) months, unless the Grantee has a statutory or contractual right to return to active service following a longer leave.

(b) In the event that a Triggering Event occurs, the Company will have an option (the “Repurchase Option”) for a period of 90 days from the date of such event (as reasonably fixed and determined by the Company), to repurchase any of the Shares that are not vested pursuant to the vesting provisions set forth on Exhibit A hereto as of the date of such Triggering Event (such Shares, the “Unvested Shares”) for no additional consideration. In the event the Company elects to exercise the Repurchase Option, it will be exercised by the Company by written notice to the Grantee, which notice will specify the number of Shares and the time (not later than 30 days from the date of the Company’s notice) and place for the closing of the repurchase of the Shares. Upon delivery of such notice and payment of the purchase price (if any) in accordance with the terms hereof, the Company will become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company will have the right to retain and transfer to its own name the number of Shares being repurchased by the Company.

(c) If, at any time during the two (2) years immediately following the Effective Date, the Company desires to have its common stock listed on a national securities exchange and the Board determines that the existence of this grant of Shares will prohibit or materially jeopardize, delay or limit such listing, then the Company may exercise the Repurchase Option as to any Unvested Shares, on the same terms and conditions as described in Section 2(b) above.

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(d) Whenever the Company has the right to repurchase Shares hereunder, the Board may designate and assign to one or more assignees the right to exercise all or part of the Company’s repurchase rights under this Agreement to purchase all or a part of such Shares.

3. Release of Shares From Repurchase Option. In the event the Repurchase Option is triggered pursuant to a Triggering Event and the Company (or its assigns) fails to exercise the Company’s option for the repurchase of any or all of the Shares then, upon the expiration of the 90-day option period, any and all such Shares not repurchased by the Company will be released from the Repurchase Option. Upon the release of the Repurchase Option, any Unvested Shares will immediately vest.

4. Restriction on Transfer. Except for a transfer to a “Permitted Transferee” (as defined below), none of the Unvested Shares or any beneficial interest therein will be transferred, pledged, hypothecated, encumbered or otherwise disposed of in any way. For purposes of this Agreement, “Permitted Transferee” will mean any of Grantee’s spouse, the lineal descendant(s) (natural or adopted) of Grantee’s parents, the spouse(s) of such descendants, or a trust for the sole benefit of such persons or any of them. All transferees of Shares or any interest therein (including Permitted Transferees) will receive and hold such Shares or interest subject to the provisions of this Agreement, and will agree in writing to take such Shares or interest therein subject to all the terms of this Agreement, including restrictions on further transfer. Any sale or transfer of the Company’s Shares will be void unless the provisions of this Agreement are met.

5. Ownership Rights. Grantee, as beneficial owner of the Shares, will have full voting rights with respect to the Shares during and after the vesting period, except to the extent repurchased to the Repurchase Option. Grantee will be entitled to receive dividends with respect to Unvested Shares prior to the vesting of such Shares as follows: (a) any regular cash dividends paid with respect to an Unvested Share will be retained by the Company and will be paid to Grantee, without interest, within thirty (30) days after the associated Share vests as provided in this Agreement, and will be forfeited if and when the associated Share is repurchased, and (b) any property (other than cash) distributed with respect to an Unvested Share (including without limitation a distribution of stock by reason of a stock dividend, stock split, or otherwise, or a distribution of other securities with respect to an associated Share) will be subject to the restrictions of this Agreement in the same manner and for so long as the associated Share remains subject to those restrictions, and will be forfeited if and when the associated Share is repurchased or will vest if and when the associated Share vests. If any Shares are repurchased pursuant to the Repurchase Option, then, on the date of such repurchase, Grantee will no longer have any rights as a stockholder with respect to such repurchased Shares or any interest therein.

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6. Investment Intent; Legends on Certificates.

(a) Simultaneously with the execution hereof, the Grantee has executed and delivered to the Company a copy of the Investment Representation Statement in the form of Exhibit B hereto concerning the Grantee’s investment intent with respect to the Shares.

(b) The Grantee acknowledges that the certificates evidencing the Shares will be endorsed with a legend, in addition to any other legends required by any other agreement to which the Shares are subject, substantially as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION PROVISIONS.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RESTRICTED STOCK AWARD AGREEMENT AND TO THE RESTRICTIONS CONTAINED THEREIN, INCLUDING RESTRICTIONS UPON TRANSFER. A COPY OF THE AGREEMENT WILL BE FURNISHED TO ANY INTERESTED PARTY UPON WRITTEN REQUEST, WITHOUT CHARGE.

(c) The Grantee understands and agrees that neither the Company nor any agent of the Company will be under any obligation to recognize and transfer any of the Shares if, in the opinion of counsel for the Company, such transfer would result in violation by the Company of any federal or state law with respect to the offering, issuance or sale of securities.

(d) Grantee understands and agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

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7. Adjustment for Stock Splits and the Like. All references to the number of Shares will be appropriately and equitably adjusted to reflect any stock split, stock dividend or other change in the Company’s capitalization that may be made by the Company after the date of this Agreement.

8. Tax Matters.

(a) The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign (if applicable) tax consequences of the grant of the Shares and the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee (and not the Company) will be responsible for the Grantee’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

(b) The Grantee understands that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”) taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares lapse. The Grantee understands that he/she may elect to be taxed at the time the Shares are received rather than when and as the Repurchase Option expires by filing an election under Section 83(b) of the Code with the I.R.S. within 30 days from the date of transfer to the Grantee. If the Grantee makes any tax election relating to the treatment of the Shares under the Code, at the time of such election the Grantee will notify the Company of such election.

(c) THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.

(d) Grantee understands that, at the time that the Shares are granted, or at the time of vesting, Grantee may incur tax obligations under federal, state, local, and/or foreign law, and the Company may be required to withhold amounts from Grantee’s compensation or otherwise collect from Grantee related to such obligations. Grantee agrees that the Company may satisfy such withholding obligations relating to the Shares by any of the following means or by a combination of such means, in the Company’s discretion: (i) withholding from any compensation otherwise payable to the Grantee by the Company; (ii) causing the Grantee to tender a cash payment; or (iii) withholding Shares with a fair market value (measured as of the date the tax withholding obligations are to be determined) equal to the amount of such tax withholding obligations from the Shares otherwise issuable to Grantee; provided, however, that the number of such Shares so withheld will not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income (or such lesser amount as may be necessary to avoid classification of the Shares as a liability for financial accounting purposes). Grantee understands that all matters with respect to the total amount of taxes to be withheld in respect of such compensation income will be determined by the Company in its reasonable discretion. Grantee further understands that, although the Company will pay withheld amounts to the applicable taxing authorities, the Grantee remains responsible for payment of all taxes due as a result of income arising under the Agreement.

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9. General Provisions.

(a) This Agreement will be construed and enforced in accordance with and governed by the laws of the State of Delaware, without giving effect to the choice of law rules of any jurisdiction.

(b) Any notice, demand or request required or permitted to be given pursuant to the terms of this Agreement will be in writing and will be deemed given when delivered personally, one day after deposit with a recognized international delivery service (such as FedEx), or three days after deposit in the U.S. mail, first class, certified or registered, return receipt requested, with postage prepaid, in each case addressed to the parties at the addresses of the parties set forth at the end of this Agreement or such other address as a party may designate by notifying the other in writing.

(c) The rights and obligations of the Company and the Grantee hereunder will be binding upon, inure to the benefit of and be enforceable against their respective successors and assigns, legal representatives and heirs. In addition, the rights and obligations of the Company under Section 2 of this Agreement will be transferable to any one or more persons or entities as set forth therein.

(d) Either party’s failure to enforce any provision or provisions of this Agreement, except for the exercise by the Company of its Repurchase Option, will not in any way be construed as a waiver of any such provision or provisions, nor prevent the party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative and will not constitute a waiver of any party’s right to assert all other legal remedies available to it under the circumstances.

(e) Grantee agrees, upon request, to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.

(f) This Agreement is not employment or service contract, and nothing in this Agreement creates or will be deemed to create in any way whatsoever any obligation on the part of the Company to continue Grantee’s service.

(g) This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. This Agreement may only be amended by a writing signed by both the Grantee and the Company.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have duly executed this Restricted Stock Award Agreement as of the day and year first set forth above.

COMPANY:

Aytu BioScience, Inc.


By:

Name:

Title:

Address:	373 Inverness Parkway, Suite 206
	Englewood, Colorado 80112


GRANTEE:

[NAME]


		(SEAL)

Address:

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EXHIBIT A

VESTING

A. Vesting. The Shares are unvested when granted, and will vest on July 7, 2026, subject to Grantee’s continued service as a director of the Company through such date. Immediately upon such vesting, the Shares will be released from the Repurchase Option.

B. Accelerated Vesting. Notwithstanding the foregoing, vesting will be accelerated and the Shares will be released from the Repurchase Option upon the first to occur of the following events, subject to Grantee’s continued service as a director of the Company through the date of such occurrence.

The consummation of a Change in Control Transaction (as defined below);

Grantee is removed from the Board by the shareholders for a reason other than Cause (as defined below);

Grantee’s service as a director of the Company ends as a result of the Board’s failure to renominate Grantee to serve as a director for a reason other than Cause (as defined below); or

Grantee’s service as a director with the Company is terminated as a result of Grantee’s Disability (as defined below).

In the event that accelerated vesting occurs as described in B.2., B.3., or B.4. above, then Grantee acknowledges and agrees that he will not sell any of the Shares so vested for a period of ninety (90) days immediately following such vesting (or such longer period as may be agreed in a separate written agreement, if any, between the Company and Grantee).

C. Cessation of Vesting. To the extent vesting does not occur at the time of the termination of Grantee’s service as a director of the Company as described in B.2., B.3., or B.4. above, vesting will cease upon such termination.

D. Definitions. As used herein, the following terms have the definitions provided below.

“Change in Control Transaction” means the occurrence of any of the following:

(i) The acquisition by any Person (as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), and including a “group” as defined in Section 13(d) thereof) of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the value of then outstanding equity securities of the Company (the “Outstanding Company Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) (the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling Interest”); provided, however, that for purposes of this Exhibit A, the following acquisitions shall not constitute or result in a Change in Control: (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Entity; or (z) any acquisition by any entity pursuant to a transaction that complies with clauses (A), (B), and (C) of subsection (iii) below; or

Exhibit A to Restricted Stock Award Agreement

Page 1

(ii) During any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) Consummation of a reorganization, merger, statutory share exchange, or consolidation or similar transaction involving the Company or any of its Related Entities, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or equity of another entity by the Company or any of its Related Entities (each a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the value of the then outstanding equity securities and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or comparable governing body of an entity that does not have such a board), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or more of the value of the then outstanding equity securities of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the Board or other governing body of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

Exhibit A to Restricted Stock Award Agreement

Page 2

“Cause” means a determination by the Board (excluding Grantee for such purpose) that the Grantee’s service on the Board should be terminated as a result of (i) any material breach by the Grantee of any agreement between the Grantee and the Company; (ii) the conviction of or plea of nolo contendere by the Grantee to a felony or a crime involving moral turpitude; (iii) any material misconduct or willful and deliberate non-performance (other than by reason of Disability) by the Grantee of the Grantee’s duties as a director of the Company; or (iv) the Grantee’s fraud, embezzlement, or act(s) of dishonesty relating to the Company or any Related Entity.

“Disability” means (i) Grantee’s incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, that results in Grantee being substantially unable to perform his duties as a director of the Company for six consecutive months (or for six months out of any nine month period); or (ii) a qualified independent physician mutually acceptable to the Company and Grantee determines that Grantee is incapacitated due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, so as to be unable to regularly perform his duties as a director of the Company and such condition is expected to be of a permanent or near-permanent duration.

“Related Entity” means any “parent corporation” of the Company, whether now or hereafter existing, within the meaning of Section 424(e) of the Code, and any “subsidiary corporation” of the Company, whether now or hereafter existing, within the meaning of Section 424(f) of the Code.

Exhibit A to Restricted Stock Award Agreement

Page 3

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

Grantee:

Issuer:		Aytu Bioscience, Inc. (the “Company”)

Security:		Common Stock

No. of Shares:

In connection with the receipt of the above securities, the Grantee represents to the Company as follows.

1. Grantee is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the securities. Grantee is acquiring the securities for investment for Grantee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

2. Grantee understands that the securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Grantee’s investment intent as expressed herein.

3. Grantee further understands that the securities must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is available. Moreover, Grantee understands that the Company is under no obligation to register the securities. In addition, Grantee understands that the certificate evidencing the securities will be imprinted with a legend that prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

Date: July __, 2016	GRANTEE:



	[NAME]

Exhibit B to Restricted Stock Award Agreement

EX-10.2 3 v444158_ex10-2.htm EXHIBIT 10.2

Exhibit 10.2

RESTRICTED STOCK AWARD AGREEMENT

WHEREAS, in connection with Grantee’s continued provision of valuable services as an employee of the Company, the Company’s Board of Directors (the “Board”) has determined to issue _________________ (####) shares of the Company’s common stock to Grantee, subject to the terms of this Agreement.

NOW, THEREFORE, in consideration of the foregoing, the Company and the Grantee agree as follows.

2. Company’s Repurchase Option.

(a) The termination of the Grantee’s employment with the Company or a Related Entity (as defined below) for any reason will be a “Triggering Event.” A Grantee’s employment will be deemed to have terminated either upon an actual termination of employment or upon the entity for which the Grantee provides services ceasing to be a Related Entity. Employment will not be considered interrupted in the case of any approved leave of absence or a transfer between the Company and any Related Entity. An approved leave of absence for this purpose will include sick leave, military leave, or any other authorized personal leave, so long as the Company or Related Entity has a reasonable expectation that the Grantee will return to provide services for the Company or Related Entity, and provided further that the leave does not exceed six (6) months, unless the Grantee has a statutory or contractual right to re-employment following a longer leave. The term “Related Entity” means any “parent corporation” of the Company, whether now or hereafter existing, within the meaning of Section 424(e) of the Internal Revenue Code of 1986, as amended (the “Code”), and any “subsidiary corporation” of the Company, whether now or hereafter existing, within the meaning of Section 424(f) of the Code.

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6. Investment Intent; Legends on Certificates.

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8. Tax Matters.

(b) The Grantee understands that Section 83 of the Code taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares lapse. The Grantee understands that he/she may elect to be taxed at the time the Shares are received rather than when and as the Repurchase Option expires by filing an election under Section 83(b) of the Code with the I.R.S. within 30 days from the date of transfer to the Grantee. If the Grantee makes any tax election relating to the treatment of the Shares under the Code, at the time of such election the Grantee will notify the Company of such election.

(d) Grantee understands that, at the time that the Shares are granted, or at the time of vesting, Grantee may incur tax obligations under federal, state, local, and/or foreign law, and the Company may be required to withhold amounts from Grantee’s compensation or otherwise collect from Grantee related to such obligations. Grantee agrees that the Company (or a Related Entity) may satisfy such withholding obligations relating to the Shares by any of the following means or by a combination of such means, in the Company’s discretion: (i) withholding from any compensation otherwise payable to the Grantee by the Company; (ii) causing the Grantee to tender a cash payment; or (iii) withholding Shares with a fair market value (measured as of the date the tax withholding obligations are to be determined) equal to the amount of such tax withholding obligations from the Shares otherwise issuable to Grantee; provided, however, that the number of such Shares so withheld will not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income (or such lesser amount as may be necessary to avoid classification of the Shares as a liability for financial accounting purposes). Grantee understands that all matters with respect to the total amount of taxes to be withheld in respect of such compensation income will be determined by the Company in its reasonable discretion. Grantee further understands that, although the Company will pay withheld amounts to the applicable taxing authorities, the Grantee remains responsible for payment of all taxes due as a result of income arising under the Agreement.

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9. General Provisions.

(a) This Agreement will be construed and enforced in accordance with and governed by the laws of the State of Delaware, without giving effect to the choice of law rules of any jurisdiction.

(e) Grantee agrees, upon request, to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have duly executed this Restricted Stock Award Agreement as of the day and year first set forth above.

COMPANY:

Aytu BioScience, Inc.


By:

Name:

Title:

Address:	373 Inverness Parkway, Suite 206
	Englewood, Colorado 80112


GRANTEE:

[NAME]


		(SEAL)

Address:

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EXHIBIT A

VESTING

A. Vesting. The Shares are unvested when granted, and will vest on July 7, 2026, subject to Grantee’s continued employment with the Company or a Related Entity through such date. Immediately upon such vesting, the Shares will be released from the Repurchase Option.

B. Accelerated Vesting. Notwithstanding the foregoing, vesting will be accelerated and the Shares will be released from the Repurchase Option upon the first to occur of the following events, subject to Grantee’s continued employment with the Company or a Related Entity through the date of such occurrence.

The consummation of a Change in Control Transaction (as defined below);

Grantee’s employment with the Company or a Related Entity is terminated as a result of Grantee’s resignation for Good Reason (as defined below), provided that Grantee has completed at least two (2) years of continued employment from the date the Shares were granted;

Grantee’s employment with the Company or a Related Entity is terminated as a result of Grantee’s Disability (as defined below); or

Grantee’s employment with the Company or a Related Entity is terminated by the Company without Cause (as defined below).

C. Cessation of Vesting. To the extent vesting does not occur at the time of the termination of Grantee’s employment as described in B.2., B.3., or B.4. above, vesting will cease upon such termination.

D. Definitions. As used herein, the following terms have the definitions provided below.

“Change in Control Transaction” means the occurrence of any of the following:

Exhibit A to Restricted Stock Award Agreement

Page 1

Exhibit A to Restricted Stock Award Agreement

Page 2

“Cause” means, unless otherwise provided in an employment agreement between the Company or a Related Entity and the Grantee, a determination by the Board (excluding Grantee for such purposes if Grantee is then a Board member) that the Grantee’s employment with the Company or a Related Entity should be terminated as a result of (i) any material breach by the Grantee of any agreement between the Grantee and the Company; (ii) the conviction of or plea of nolo contendere by the Grantee to a felony or a crime involving moral turpitude; (iii) any material misconduct or willful and deliberate non-performance (other than by reason of Disability) by the Grantee of the Grantee’s duties to the Company; (iv) the Grantee’s fraud, embezzlement, or act(s) of dishonesty relating to the Company or any Related Entity, or (v) the Grantee’s failure to follow the lawful instructions of the Company’s Chief Executive Officer (or the Board if Grantee is the Chief Executive Officer).

“Disability” means (i) Grantee’s incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, that results in Grantee being substantially unable to perform his duties as an employee of the Company or a Related Entity for six consecutive months (or for six months out of any nine month period); or (ii) a qualified independent physician mutually acceptable to the Company and Grantee determines that Grantee is incapacitated due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, so as to be unable to regularly perform his duties as an employee of the Company or a Related Entity and such condition is expected to be of a permanent or near-permanent duration.

“Good Reason” means any of the following, occurring without Grantee’s written consent: (i) there is a material reduction of the level of Grantee’s compensation (excluding any bonuses) (except where there is a general reduction applicable to the similarly-situated employees generally), (ii) there is a material reduction in Grantee’s overall responsibilities or authority, or scope of duties; or (iii) there is a material change in the principal geographic location at which Grantee must perform his services (it being understood that the relocation of Grantee to a facility or a location within forty (40) miles of the Grantee’s principal workplace as of the Effective Date shall not be deemed material for purposes of this Agreement). No event shall be deemed to be “Good Reason” if the Company has cured the event (if susceptible to cure) within 30 days of receipt of written notice from Grantee specifying the event or events which, absent cure, would constitute “Good Reason.”

Exhibit A to Restricted Stock Award Agreement

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EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

Grantee:

Issuer:		Aytu Bioscience, Inc. (the “Company”)

Security:		Common Stock

No. of Shares:

In connection with the receipt of the above securities, the Grantee represents to the Company as follows.

Date: July __, 2016	GRANTEE:



	[NAME]

Exhibit B to Restricted Stock Award Agreement

EX-99.1 4 v444158_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

Aytu BioScience Strengthens Board with the Appointment of Two Pharmaceutical Industry Veterans as Independent Directors

Englewood, CO – July 13, 2016 – Aytu BioScience, Inc. (OTCQX: AYTU), a specialty pharmaceutical company focused on global commercialization of novel products in the field of urology, today announced the addition of John Donofrio, Jr., a 24-year pharmaceutical veteran and U.S. CFO of a global specialty pharmaceutical company, and Gary Cantrell, a seasoned pharmaceutical executive with 30 years in the life sciences industry at global pharmaceutical companies and specialty life sciences companies, to the company’s board of directors. Together they bring strong financial and commercial leadership expertise in pharmaceuticals to Aytu, in addition to independent strategic insight. The two will join current Board members Josh Disbrow, Aytu Chief Executive Officer, and directors Carl Dockery and Michael Macaluso.

Josh Disbrow, Chief Executive Officer of Aytu BioScience, Inc., stated, “We are very pleased to welcome John and Gary to Aytu’s Board of Directors. With these appointments we gain two highly qualified pharmaceutical executives with decades of experience in commercial and financial operations, organizational leadership and global business development. The additions to our board are in line with our proactive transformation from an emerging spin-out to an established commercial entity with three differentiated urology products. Additionally, Aytu is taking multiple steps toward a possible uplisting to a national stock exchange as quickly as possible in order to increase visibility, liquidity, and interest among a broader and more diverse shareholder base. These appointments help to create a board consistent with the standards of the national exchanges while providing the company with extensive pharmaceutical industry experience and board leadership.”

Mr. Donofrio is the Chief Financial Officer and Head of North American Business Development for Merz North America, or Merz, since August 2013. Over his 24-year career in pharmaceuticals he has a broad range of experience in consolidated financial reporting, international accounting and internal controls, budget and forecast planning, mergers and acquisitions, business development and other strategic and financial areas. Mr. Donofrio has been instrumental in Merz North America’s growth; sales and profits have more than doubled since he joined the company. Previously, he served as interim CFO and vice president of Stiefel Global Finance, U.S. specialty business and Puerto Rico, for Stiefel, a GlaxoSmithKline plc. company (GSK). He was also the senior finance partner for the U.S. specialty business units of GSK. Mr. Donofrio holds a degree in accounting from North Carolina State University.

Mr. Cantrell’s thirty years’ experience in the life sciences industry ranges from clinical experience as a respiratory therapist to his current executive-level consulting role with Mayne Pharma (ASX: MYX), as business development executive focused on acquiring branded prescription assets for Mayne Pharma’s U.S. specialty brands division. Prior to forming his professional consultancy, Mr. Cantrell served as CEO of Yasoo Health Inc., a global specialty nutritional company from 2007 to 2015, highlighted by the sale of its majority asset, AquADEKs, to Actavis in March 2015. He was also president of the Catevo Group, a North Carolina-based healthcare consulting firm, and executive vice president, sales and marketing at TEAMM Pharmaceuticals, an Accentia Biopharmaceuticals company. Mr. Cantrell started his pharmaceutical career at GSK, where he held multiple senior management positions in sales, marketing and business development over a period of 22 years. He has served as an advisor or board member of several emerging life science companies including his role as a board member at Flexible Stenting Solutions, Inc., which was sold to Cordis, while a division of Johnson & Johnson in March 2013. Mr. Cantrell is a graduate of Wichita State University.

In conjunction with the appointments of John Donofrio, Jr. and Gary Cantrell to Aytu Board of Directors, Jarrett Disbrow resigned as a board member to allow for a majority of the board’s five members to be independent. Mr. Donofrio and Mr. Cantrell join Carl Dockery as the Board’s independent directors. Expanding the board to five members, with three independent directors, further prepares the company for potential uplisting to a national stock exchange, to which the company expects to apply in the future.

About Aytu BioScience, Inc.

Aytu BioScience is a commercial-stage specialty pharmaceutical company focused on global commercialization of novel products in the field of urology. The company currently markets three products: Natesto^®, the first and only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone, or “Low T”), ProstaScint^® (capromab pendetide), the only FDA-approved imaging agent specific to prostate specific membrane antigen (PSMA) for prostate cancer detection, and Primsol^® (trimethoprim hydrochloride), the only FDA-approved trimethoprim-only oral solution for urinary tract infections. Additionally, Aytu is developing MiOXSYS™, a novel, rapid semen analysis system with the potential to become a standard of care for the diagnosis and management of male infertility caused by oxidative stress. MiOXSYS is commercialized outside the U.S. where it is a CE Marked, Health Canada cleared product, and Aytu is conducting U.S.-based clinical trials in pursuit of 510k de novo medical device clearance by the FDA. Aytu’s strategy is to continue building its portfolio of revenue-generating urology products, leveraging its focused commercial team and expertise to build leading brands within well-established markets.

For Investors & Media:

Tiberend Strategic Advisors, Inc.
Joshua Drumm, Ph.D.: jdrumm@tiberend.com; (212) 375-2664
Janine McCargo: jmccargo@tiberend.com; (646) 604-5150

Forward Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. All statements other than statements of historical facts contained in this presentation, including statements regarding our anticipated future clinical and regulatory events, future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. Forward looking statements are generally written in the future tense and/or are preceded by words such as “may,” “will,” “should,” “forecast,” “could,” “expect,” “suggest,” “believe,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” or similar words, or the negatives of such terms or other variations on such terms or comparable terminology. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include, among others: risks relating to Aytu’s ability to have its common stock listed on a national stock exchange, gaining market acceptance of our products, obtaining reimbursement by third-party payors, the potential future commercialization of our product candidates, the anticipated start dates, durations and completion dates, as well as the potential future results, of our ongoing and future clinical trials, the anticipated designs of our future clinical trials, anticipated future regulatory submissions and events, our anticipated future cash position and future events under our current and potential future collaborations. We also refer you to the risks described in “Risk Factors” in Part I, Item 1A of Aytu BioScience, Inc.’s Annual Report on Form 10-K and in the other reports and documents we file with the Securities and Exchange Commission from time to time.