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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.
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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.
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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.
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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.
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