EMPLOYMENT
AGREEMENT
This Employment Agreement (the
"Agreement"), dated as of September 12, 2005, is made by
and between Rexahn Pharmaceuticals, Inc. (the "Company") and Tae
Heum Jeong (the "Employee").
W I T N E S
S E T H :
WHEREAS, the Company desires to
employ the Employee pursuant to the terms and conditions contained
in this Agreement; and
WHEREAS, the Employee desires to
accept such employment pursuant to the terms and conditions
contained in this Agreement;
NOW, THEREFORE, in consideration of
the premises, and of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as
follows:
1 .
Term . The Employee's employment under this Agreement
shall commence on the date first written above, and unless sooner
terminated pursuant to Section 7 below, shall continue through the
second anniversary of such date (hereinafter, such period of
employment is referred to as the "Term"). Should the Employee's
employment continue beyond the Term, such employment shall become
"at-will," unless the Company's Board of Directors (the "Board")
and the Employee agree to an extension of the Term in a writing
expressly referencing this Agreement.
2 .
Title . During the Term, the Employee will serve as
the Chief Financial Officer of the Company.
3 .
Duties . During the Term, the Employee will be
responsible for such duties and responsibilities as are consistent
with his position or past practices of the Company, or as may be
assigned to him from time to time by the Board. The Employee agrees
to devote his full time, attention, skill, and energy to the duties
set forth herein and to the business of the Company, and to use his
best efforts to promote the success of the Company's
business.
4.
Reporting . During the Term, the Employee will report
to the Chief Executive Officer of the Company (the
"CEO").
5.
Location . During the Term, the Employee shall be
based in the Company's Rockville, Maryland offices. However, the
Employee acknowledges that in order to effectively perform his
duties, he will occasionally be required to travel for business
purposes.
(a)
Base Salary . During the Term, the Employee will receive an
annual base salary of $160,000 (the "Base Salary"), payable in
accordance with the Company's normal payroll practices as in effect
from time to time. Such Base Salary shall be subject to periodic
review, and may be increased at the Board's sole
discretion.
(b)
Bonus and Stock Options . During the Term, the Employee
shall be eligible to receive an annual cash bonus for each fiscal
year, as determined by the CEO in its sole discretion. Such annual
bonus, as determined by the CEO in its sole discretion, will not
exceed 50% of the Base Salary.
Any such bonus must be paid to the
Employee within sixty (60) days after the date the CEO determines
to award such bonus. In order to receive any cash bonus payable
pursuant to this Section 6(b), the Employee must be actively
employed by the Company on the date on which such bonus is
scheduled to be paid to the Employee.
During the Term, the Employee shall
be eligible for awards of options to purchase shares of the
Company's stock (the "Stock Options"), such Stock Options to be
awarded in the sole discretion of the Board and in accordance with
the terms of the Company's Stock Option Plan (the "Plan"), as the
Plan may be amended, suspended, or terminated from time to
time.
In addition to the annual cash bonus
and stock option awards set forth above, additional bonus in the
form of cash and/or stock in the Board's sole discretion may be
paid to the Employee.
(c)
Vacation . During the Term, the Employee shall be entitled
to vacation benefits in accordance with the Company's vacation
policy for management and officers.
(d)
Benefits . During the Term, and provided that the Employee
satisfies, and continues to satisfy, any plan eligibility
requirements, the Employee shall be entitled to participate in, and
receive benefits under, any retirement savings plan or welfare
benefit plan made available by the Company to similarly-situated
employees, as such plans may be in effect from time to
time.
(e)
Reimbursement of Business Expenses . The Company will
reimburse the Employee for all reasonable and properly-documented
business-related expenses incurred or paid by him in connection
with the performance of his duties hereunder.
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(f)
Withholdings . All payments made under this Section 6, or
under any other provision of this Agreement, shall be subject to
any and all federal, state, and local taxes and other withholdings
to the extent required by applicable law.
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7.
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Termination of Employment
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(a)
Due to Death . The Employee's employment with the Company
will automatically terminate immediately upon his death.
(b)
Due to Disability . If the Employee incurs a "Disability"
(as defined below) during the Term, then the Board, in its sole
discretion, shall be entitled to terminate the Employee's
employment immediately upon written notice to the Employee of such
decision. For purposes of this Agreement, "Disability" shall mean a
physical or mental impairment that prevents the Employee from
performing the essential duties of his position, with or without
reasonable accommodation, for (i) a period of ninety (90)
consecutive calendar days, or (ii) an aggregate of ninety (90) work
days in any six (6) month period. The determination of whether the
Employee incurred a Disability shall be made by the Board, in its
sole discretion, after consultation with the Employee's
physician.
(c)
By the Board . During the Term, the Board shall be entitled
to terminate the Employee's employment with or without "Cause" (as
defined below) by providing written notice to the Employee of such
decision, provided that if the Board terminates the Employee's
employment without Cause (and not as a result of a Disability),
then the Board must provide at least thirty (30) days' advance
written notice of such decision to the Employee. No advance notice
period is required for a termination by the Board with Cause. The
Board reserves the right to withdraw any and all duties and
responsibilities from the Employee, and to exclude the Employee
from the Company's premises, during such 30-day notice period. For
purposes of this Agreement, "Cause" shall mean (i) the commission
by the Employee of an act of malfeasance, dishonesty, fraud, or
breach of trust against the Company or any of its employees,
clients, or suppliers, (ii) the breach by the Employee of any of
his obligations under this Agreement, or any other agreement
between the Employee and the Company, (iii) the Employee's failure
to comply with the Company's written policies; (iv) the
Employee's failure, neglect, or refusal to perform his duties under
this Agreement, or to follow the lawful written directions of the
Board, (v) the Employee's indictment, conviction of, or plea of
guilty or no contest to, any felony or any crime involving moral
turpitude, (vi) any act or omission by the Employee involving
dishonesty or fraud or that is, or is reasonably likely to be,
injurious to the financial condition or business reputation of the
Company, or that otherwise is injurious to the Company's employees,
clients, or suppliers, or (vii) the inability of the Employee, as a
result of repeated alcohol or drug use, to perform the duties
and/or responsibilities of his position.
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(d)
By the Employee . During the Term, the Employee shall be
entitled to terminate his employment with the Company by providing
the Board with at least thirty (30) days' advance written notice of
such decision. The Company reserves the right to withdraw any and
all duties and responsibilities from the Employee, and to exclude
the Employee from the Company's premises, during such 30-day notice
period.
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8.
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Compensation Upon Termination of
Employment .
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(a)
Termination By Reason of Death or Disability . If the
Employee's employment is terminated by reason of his death or
Disability under Section 7(a) or 7(b) above, then the Company shall
pay to the Employee (or his estate, as appropriate), within thirty
(30) days of his termination date, (i) his then current Base Salary
through the termination date, and (ii) any accrued but unused
vacation days as of the termination date. Thereafter, the Company
shall have no further obligations to the Employee.
(b)
Termination by the Board with Cause . If the Employee's
employment is terminated by the Board with Cause under Section 7(c)
above, then the Company shall pay to the Employee, within thirty
(30) days of his termination date, (i) his then current Base
Salary through the termination date, and (ii) any accrued but
unused vacation days as of the termination date. Thereafter, the
Company shall have no further obligations to the
Employee.
(c)
Termination by the Board without Cause . Subject to
Section 8(d) below, if the Employee's employment is terminated
by the Board without Cause (and not as a result of a Disability)
under Section 7(c) above, then the Company shall provide the
Employee with (i) a payment of his then current Base Salary
through the termination date within thirty (30) days of such
termination date, (ii) a payment for any accrued but unused
vacation days as of the termination date, within thirty (30) days
of such termination date, (iii) a payment of a pro-rata
portion of the Employee's bonus for the fiscal year in which the
termination occurs, within thirty (30) days of such termination
date, using the assumption that the Employee would have received a
bonus for that fiscal year equal to 50% of his then current Base
Salary ( e.g. , if one-third of the fiscal year elapsed
prior to the termination date, then the Employee would receive
one-third of his bonus, if any), (iv) a payment equal to his
then current Base Salary for a period of six months, payable within
sixty (60) days of such termination date, and (v) continued
coverage under the Company's health insurance plan for a period of
eighteen months, provided that the Employee makes a timely election
to continue such coverage under the federal law known as "COBRA"
(such continued coverage to run concurrently with the Company's
obligations under COBRA and any other similar state law). The
Company's obligations under clauses (iv) and (v) of this subsection
shall be subject to reimbursement by the Employee and be reduced by
any compensation or benefits actually earned or received by the
Employee as an employee of or consultant to any other entity during
the
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six-month period following the date
of termination, as applicable, and the Employee shall be required,
in good faith, to seek other employment in a comparable position
and to otherwise mitigate the payments and benefits set forth under
such clauses. The payments and benefits set forth under clauses
(iii), (iv), and (v) of this subsection are conditioned upon the
Employee's execution of a customary general release, in a form
satisfactory to the Company. Other than as set forth in this
subsection, the Company shall have no further obligations to the
Employee.
(d)
Termination by the Board Following a Change of Control. If
the Employee's employment is terminated by the Board without Cause
(and not as a result of death or a Disability) under Section 7(c)
above, and such termination date falls within the one-year period
immediately following a "Change of Control" (as defined in the
Company's Plan as in effect on the date hereof), then the Company
shall provide the Employee with (i) a payment of his then
current Base Salary through the termination date within thirty (30)
days of such termination date, (ii) a payment for any accrued
but unused vacation days as of the termination date, within thirty
(30) days of such termination date, (iii) a payment of a
pro-rata portion of the Employee's bonus for the fiscal year in
which the termination occurs, within thirty (30) days of such
termination date, using the assumption that the Employee would have
received a bonus for that fiscal year equal to 50% of his then
current Base Salary ( e.g. , if one-third of the fiscal year
elapsed prior to the termination date, then the Employee would
receive one-third of his bonus, if any), (iv) a payment of his
then current Base Salary for a period of one year, payable within
sixty (60) days of such termination date, and (v) continued
coverage under the Company's health insurance plan for a period of
eighteen months, provided that the Employee makes a timely election
to continue such coverage under the federal law known as "COBRA"
(such continued coverage to run concurrently with the Company's
obligations under COBRA and any other similar state law). The
Company's obligations under clauses (iv) and (v) of this subsection
shall be subject to reimbursement by the Employee and be reduced by
any compensation or benefits actually earned or received by the
Employee as an employee of or consultant to any other entity during
the one-year period following the date of termination, and the
Employee shall be required, in good faith, to seek other employment
in a comparable position and to otherwise mitigate the payments set
forth under such clauses. The payments set forth under clauses
(iii), (iv) and (v) of this subsection are conditioned upon the
Employee's execution of a customary general release, in a form
satisfactory to the Company. The payments and benefits set forth in
this Section 8(d) are mutually exclusive of the payments and
benefits set forth in Section 8(c) above. Other than as set forth
in this subsection, the Company shall have no further obligations
to the Employee.
(e)
Termination by the Employee . If the Employee terminates his
employment under Section 7(d) above, then the Company shall pay to
the Employee, within thirty (30) days of his termination date, (i)
his then current Base Salary through the
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termination date, and (ii) any
accrued but unused vacation days as of the termination date.
Thereafter, the Company shall have no further
