This EMPLOYMENT
AGREEMENT (“ Agreement ”), effective as of
January 1, 2009, is by and between EntreMed, Inc., a Delaware
corporation having its principal office at 9640 Medical Center
Drive, Rockville, MD 20850 (the “ Company ”) and
Mark R. Bray (the “ Executive ”).
FOR AND IN
CONSIDERATION of the mutual premises, agreements and covenants
contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1.
Employment; Position and Duties.
Subject to the
terms hereof, the Company hereby agrees to employ Executive during
the Term (as hereafter defined) to act as, and to exercise all of
the powers and functions of its Vice President, Research, and to
perform such acts and duties and to generally furnish such services
to the Company and its subsidiaries (if any) as is customary for a
senior management person with a similar position in like companies.
Among other things, and subject to change at the discretion of the
Executive Committee of the Board of Directors (the “
Board ”), the Executive shall be responsible for
leading the research support for the Company’s clinical
activities, including drug candidate trials for ENMD 2076.
Executive shall report directly to the Executive Committee of the
Board or such other senior officers of the Company as designated
from time to time by the Executive Committee, and have such other
powers, duties and responsibilities as the Executive Committee
shall from time to time reasonably prescribe. Executive will be a
member of the Company’s Senior Management Team and Business
Development Team. Executive hereby agrees to accept such employment
and shall perform and discharge faithfully, diligently, and to the
best of his abilities such duties and responsibilities and shall
devote sufficient working time and efforts to the business and
affairs of the Company and its subsidiaries.
While Executive
is employed by the Company during the Term, Executive shall conduct
his duties and responsibilities hereunder primarily from the
Company’s offices located in Toronto, Canada (except for
routine and customary business travel), or from such other location
in the Toronto, Canada metropolitan area as designated from time to
time by the Executive Committee. Executive shall travel to the
Company’s Rockville, Maryland offices for business matters
from time to time, as determined by Executive or as
requested.
a. Base
Salary. While the Company employs the Executive during the
Term, the Company shall pay to Executive an annual base salary
(“ Base Salary ”) of no less than USD$200,000,
payable in accordance with the Company’s customary payroll
policy for its Canadian employees. Such Base Salary shall be paid
to Executive in Canadian Dollars, based upon the exchange rate of
Canadian Dollars to United States Dollars in effect on
January 1, 2009.
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b. Base
Salary Adjustments. Executive’s Base Salary shall be
reviewed at least annually in accordance with the Company’s
customary practices for its executives. The Board or a committee
thereof may make such adjustments, as it deems appropriate in its
sole discretion; provided , however , in no event
shall the Company pay Executive a Base Salary of less than
USD$200,000, unless the change to Executive’s Base Salary was
applicable to the annual base salary of all senior executives of
the Company in substantially the same manner.
c.
Incentive Compensation. While the Company employs Executive
during the Term, Executive’s annual incentive compensation
(“ Incentive Compensation ”) shall be targeted
at 25% of base compensation, the exact amount of which shall be
determined by the Board or a committee thereof in its sole
discretion. Executive shall be eligible for Incentive Compensation
commencing at the start of the Initial Term. Such bonus, if any,
shall be paid within ninety (90) days following the last day
of each fiscal year of the Company.
d.
Certain Other Benefits. Throughout the Term, Executive shall
be entitled to participate in any and all employee benefit plans
and arrangements which are available to senior executive officers
of the Company, including without limitation, group medical,
disability and life insurance plans, and Company’s Directors
and Officers (D&O) insurance policy. Executive shall also be
afforded no fewer than twenty-three (23) days paid time off
(PTO) pursuant to policies fixed by the Company.
e.
Expenses. The Company shall pay or reimburse Executive for
all reasonable business expenses actually paid or incurred by
Executive while Executive is employed by the Company during the
Term subject to reasonable documentation and in accordance with the
Company’s business expense reimbursement policy.
The term of
this Agreement shall be the period commencing on January 1,
2009 and continuing for one year (the “ Initial Term
”); provided, however, that the Term of this Agreement shall
be extended automatically for successive one year periods (each
one-year extension a “ Successor Term ” and
together with the Initial Term referred to herein as the “
Term ”) unless written notice of nonextension is
provided by either party to the other party at least sixty (60)
days prior to the end of the Initial Term or any Successor Term. In
the event that this Agreement is not extended at the end of the
Initial Term or any Successor Term and thereby terminates, only
paragraphs 6, 7, 8(d), 8(g), 8(h), 8(i) and 11 shall survive such
termination, except that Executive shall be entitled to receive
compensation and benefits to the extent expressly provided herein
or by the terms of any of the Company’s compensation and
benefit plans, programs or policies or as required by applicable
law.
On
January 27, 2009, the Company granted stock options to
Executive covering 140,000 shares of common stock with a per share
exercise price equal to the closing price of the Company’s
stock on the date of grant. Such options will vest as to 25% of the
covered shares on the date of grant, and shall vest as to the
remaining covered shares in cumulative 25% share increments on each
of the first, second, and third anniversary of the date of grant,
if Executive is then employed by the Company. Other periodic stock
and incentive stock option grants to Executive, if any, while the
Company employs Executive during the Term shall be determined by
the Board or a committee thereof in its discretion.
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In the event of
a termination pursuant to paragraph 8(d) hereof or a resignation
pursuant to paragraph 9 hereof, for which purposes sections 10(a)
and 10(c) of this Agreement shall control, all vested options held
by Executive on the effective date of such termination or
resignation shall be exercisable in accordance with the terms of
such grants until the later of the date set forth in such grant or
twelve (12) months following Executive’s date of
termination, but in no event beyond the expiration date of the
relevant option. Upon a change in control, as defined in the option
agreement, all unvested options shall vest and become exercisable
immediately in accordance with the terms of the option agreement.
Except as set forth herein, the terms of the stock option grants
under this paragraph 5 shall be otherwise in accordance with and
subject to the terms of the Company’s 2001 Long Term
Incentive Plan or successor plan and such terms and conditions as
the Board or a committee thereof may specify.
6.
Unauthorized Disclosure.
During the Term
and at all times thereafter, Executive shall not, without the
written consent of the Company, or except as required by applicable
law, disclose to any person, other than a person to whom disclosure
is reasonably necessary or appropriate in connection with the
performance by Executive of his duties as an executive officer of
the Company, any material confidential information obtained by
Executive while in the employ of the Company with respect to the
businesses of the Company or any of its subsidiaries, including but
not limited to, operations, pricing, contractual or personnel data,
products, discoveries, improvements, trade secrets, license
agreements, marketing information, suppliers, dealers, principles,
customers, or methods of distribution, or any other confidential
information the disclosure of which Executive knows, or in the
exercise of reasonable care should know, will be damaging to the
Company; provided, however, that confidential information shall not
include any information known generally to the public or to persons
in the industry of which the Company’s business is a part (in
each case, other than as a result of unauthorized disclosure by
Executive) or any information otherwise considered by the Company
not to be confidential.
a. The
Company shall defend, indemnify and hold harmless Executive if he
is made a party, or threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, or investigative (a
“ Proceeding ”), because he is or was an officer
or director of the Company or any of its subsidiaries, affiliates,
or successors, or because he is or was serving in a fiduciary
capacity with respect to employee benefit plans of the Company,
whether or not the basis of such Proceeding is alleged action in an
official capacity or otherwise, against all Expenses incurred or
suffered by him in connection with such Proceeding to the fullest
extent authorized by the General Corporation Law of the State of
Delaware and any other applicable law in effect from time to time,
and such indemnification shall continue as to Executive even if he
ceases to be an officer or director or is no longer employed by the
Company, and shall inure to the benefit of Executive’s heirs,
executors and administrators.
b. As used in
this Agreement, the term “Expenses” shall include,
without limitation, damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements and reasonable costs,
reasonable attorneys’ fees, reasonable accountants’
fees, and reasonable disbursements and costs of attachment or
similar bonds, investigations, and any reasonable expenses of
establishing a right to indemnification under this
Agreement.
c. Expenses
incurred by Executive in connection with any Proceeding shall be
paid by the Company upon presentation of appropriate documentation
and a giving by Executive of any undertakings required by
applicable law.
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a. Upon
Death. If Executive dies while employed by the Company during
the Term, his estate shall be entitled to receive payment of Base
Salary through the last day of the six (6) months following the
month in which his death occurred, payable over six (6) months
at the Company’s normal pay periods. If, in respect of the
fiscal year in which Executive dies the Board or a committee
thereof determines in its discretion that he would otherwise have
been entitled to receive Incentive Compensation under subparagraph
3(c) by reason of the operations of the Company during such fiscal
year, Executive’s estate shall be entitled to receive a pro
rata portion of his Incentive Compensation for such fiscal year.
Such pro rata portion shall equa
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