On June 15, 2017, we entered into an employment agreement with Gregory A. Gould, effective June 16, 2017, to serve as our Chief Financial Officer. Mr. Gould has been serving as our Chief Financial Officer on a part-time basis since April 2015.

The agreement is identical to the two-year employment agreement entered into effective April 16, 2017, with Jarrett Disbrow, our Chief Operating Officer, except for the positon that Mr. Gould is to occupy.

The agreement is for a term of 24 months beginning on June 16, 2017, subject to termination by us with or without Cause (as defined below) or as a result of Mr. Goulds disability, or by Mr. Gould with or without Good Reason (as defined below). Mr. Gould is entitled to receive $250,000 in annual salary, pl us a discretionary performance bonus with a target of 125% of his base salary, based on his individual achievements and company performance objectives established by the board or the compensation committee in consultation with Mr. Gould. Mr. Gould is also eligible to participate in the benefit plans maintained by us from time to time, subject to the terms and conditions of such plans.

We agreed to issue to Mr. Gould on or promptly after August 1, 2017 stock options to purchase shares of our common stock in an amount agreed upon by us and Mr. Gould, and commensurate with Mr. Goulds role as a senior executive at our company. The exercise price will be the last sale price of our common stock as reported during the period immediately preceding the date of grant, and in accordance with our 2015 Stock Option and Incentive Plan, and will vest as follows: 50% will vest on the date of grant; 25% will vest 365 days after the date of grant; and 25% will vest 730 days after the date of grant. All such options will vest in full upon a Change in Control (as defined below), death, disability, or termination with or without Cause or for Good Reason.

In the event Mr. Goulds employment is terminated without Cause by us or Mr. Gould terminates his employment with Good Reason, we will be obligated to pay him any accrued compensation and a lump sum payment equal to two times his base salary in effect at the date of termination, as well as continued participation in our health and welfare plans for up to two years. All vested stock options will remain exercisable from the date of termination until the expiration date of the applicable award. So long as a Change in Control is not in effect, then all options which are unvested at the date of termination without Cause or for Good Reason shall be accelerated as of the date of termination such that the number of option shares equal to 1/24

th

the number of option shares multiplied by the number of full months of Mr. Goulds employment will be deemed vested and immediately exercisable by Mr. Gould. Any unvested options over and above the foregoing shall be cancelled and of no further force or effect, and will not be exercisable by Mr. Gould.

Good Reason means, without Mr. Goulds written consent, there is:

a material reduction of the level of Mr. Goulds compensation (excluding any bonuses) (except where there is a general reduction applicable to the management team generally, provided, however, that in no case may the base salary be reduced below $250,000);

a material reduction in Mr. Goulds overall responsibilities or authority, or scope of duties (it being understood that the occurrence of a Change in Control shall not, by itself, necessarily constitute a reduction in Mr. Goulds responsibilities or authority); or

a material change in the principal geographic location at which Mr. Gould must perform his services (it being understood that the relocation to a facility or a location within 40 miles of the State Capitol Building in Denver, Colorado will not be deemed material).

Cause means:

willful malfeasance or willful misconduct by Mr. Gould in connection with his employment;

gross negligence in performing any of his duties;

conviction of, or entry of a plea of guilty to, or entry of a plea of nolo contendere with respect to, any crime, other than a traffic violation or infraction which is a misdemeanor;

willful and deliberate violation of any of our policies;

unintended but material breach of any written policy applicable to all employees adopted by us which is not cured to the reasonable satisfaction of the board within 30 days of notice;

unauthorized use or disclosure of any of our proprietary information or trade secrets or that of any other party as to which Mr. Gould owes an obligation of nondisclosure as a result of Mr. Goulds relationship with us;

willful and deliberate breach of his obligations under the employment agreement; or

any other material breach by officer of any of his obligations which is not cured to the reasonable satisfaction of the board within 30 days of notice.

The severance benefits described above are contingent on Mr. Gould executing a general release of claims.

In the event of a Change in Control, all stock options, restricted stock and other stock-based grants granted or may be granted in the future by us to Mr. Gould will immediately vest and become exercisable and all restrictions thereon will lapse.

Change in Control means the occurrence of any of the following events:

the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (the Acquiring Person), other than our company, or any of our subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power or economic interests of our then outstanding voting securities entitled to vote generally in the election of directors (excluding any issuance of securities by us in a transaction or series of transactions made principally for bona fide equity financing purposes); or

the acquisition of our company by another entity by means of any transaction or series of related transactions to which we are party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any issuance of securities by us in a transaction or series of transactions made principally for bona fide equity financing purposes) other than a transaction or series of related transactions in which the holders of our voting securities outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in us held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by our outstanding voting securities or such other surviving or resulting entity (or if we or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); or

the sale or other disposition of all or substantially all of our assets in one transaction or series of related transactions.

The employment agreement is filed as Exhibit 10.1 to this Report and is incorporated herein by reference. The foregoing description of the employment agreement is not complete and is qualified in its entirety by reference to Exhibit 10.1.

Mr. Gould has held senior management positions in the life sciences industry for over 20 years. Prior to joining Aytu BioScience on a full-time basis, he split his time between Aytu and Ampio Pharmaceuticals, Inc. from April 2015 until June 2017. Prior to joining Ampio Pharmaceuticals in June 2014, he provided financial and operational consulting services to the biotech industry through his consulting company, Gould, LLC. Mr. Gould was Chief Financial Officer, Treasurer and Secretary of SeraCare Life Sciences from November 2006 until the company was sold to Linden Capital Partners in April 2012. During the period from July 2011 until April 2012, Mr. Gould also served as the Interim President and Chief Executive Officer of SeraCare. Mr. Gould has held several other executive positions at publicly traded life sciences companies including the Chief Financial Officer role at Atrix Laboratories, Inc., an emerging specialty pharmaceutical company focused on advanced drug delivery. During Mr. Goulds tenure at Atrix, he was instrumental in the negotiation and sale of the company to QLT, Inc. He also played a critical role in the management of several licensing agreements including the global licensing agreement with Sanofi-Synthelabo of the Eligard product line. Mr. Gould was the Chief Financial Officer at Colorado MedTech, Inc., a publicly traded medical device design and manufacturing company, where he negotiated the transaction to sell the company to KRG Capital Partners. Mr. Gould began his career as an auditor with Arthur Andersen, LLP. He currently serves on the board of directors of CytoDyn, Inc., a publicly traded drug development company pursuing anti-viral agents for the treatment of HIV. Mr. Gould graduated from the University of Colorado with a BS in Business Administration and is a Certified Public Accountant.

There have been no transactions between Mr. Gould and our company other than the compensation that he has received for serving as our Chief Financial Officer on part-time basis since April 2015 and the purchase by him of our securities on the same terms as other investors at the time of such investment.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

Description

10.1

Employment Agreement, effective as of June, 2017, between Aytu BioScience, Inc. and Gregory A. Gould.

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: June 19, 2017

AYTU BIOSCIENCE, INC.

/s/ Gregory A. Gould

Name:Gregory A. Gould

Title: Chief Financial Officer

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