EMPLOYMENT
AGREEMENT
This
Employment Agreement (the "Agreement"), dated as of July
14, 2008, is made by and between Rexahn Pharmaceuticals,
Inc. (the "Company") and Rakesh (Rick) Soni (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
first 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
Business 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.
6.
Compensation
.
(a)
Base
Salary . During the Term, the Employee will
receive an annual base salary of $200,000 (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 his 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.
(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.
7.
Termination of
Employment .
(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.
(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.
8.
Compensation Upon
Termination of Employment .
(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 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
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.
9.
Confidential
Information .
(a)
Non-Use
and
